In the words of Mark Twain, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure but ain’t so”. Today, many of our solid certainties feel much more liquid. So, it is with humility that I write about the emerging learnings from the COVID moment. The purpose of this series is to invite each other to share and make sense of what we are learning, with a strong bias to action and “what to do.”
The response to save lives has been immediate, vital and inspiring. As the world looks to minimise the social and economic damage of COVID-19, it’s imperative that we focus on the systemic actions that come next, and which increase our chances of rebuilding our society on more equitable, resilient principles. Our historic responsibility – to all those who suffer personal losses through the pandemic – is to learn, not repeat the same mistakes and to use this moment wisely and courageously.
Observing the Past Few Months
We did not use them well. There was a deep assumption in the West, that COVID-19 was like SARS or Ebola: someone else’s problem. Even when the virus arrived, many political leaders failed to act with conviction and seriousness.
Why? In part, because no-one likes to tell hard truths. But also because, despite the Global Financial Crisis, we are not psychologically open to rigorous risk analysis, and prefer to operate with growing degrees of cognitive dissonance. It leads us to dismiss or downplay more extreme, unthinkable scenarios.
However, COVID-19 was not a ‘black swan’ event – it was entirely predictable. In this, it is no different from the threats associated with growing social inequality, climate change or biodiversity loss.
We structurally under-estimate the probability and exponential costs of these systemic risks. And as a result, we fail to take preventive action. COVID-19 has shown us that our social, public health and economic systems are incredibly inter-dependent and only as strong as their weakest link. Public health systems (at least in the more individualistic West) are still geared to cure rather than prevention, even where the cure is typically the high-cost approach. It should come as no surprise that we have been short on testing equipment – or that we largely ignore the poor air quality which, through its impact on respiratory and cardiac conditions, causes around 9 million deaths a year.
Climate change, with its invisible CO2 molecules, falls into the same category. For too many with power, it is a distant, depersonalised threat. If COVID teaches us anything, it is to invest in more resilient systems which, by design, drive up social inclusion, improve public health, tackle climate change and regenerate nature.
Experiencing the Present
The threat to our public health systems has become the most effective rallying cry to action and solidarity. Our public health workers have been recognised as superheroes. We have learned about the need to flatten the curve and have taken on board how our health system needs to work in a predictable environment, where we can manage for known peaks in demand. At the same time, the sharpest critiques have been reserved for political failure to provide for front-line health workers.
Yet it’s early days in a deep social disruption that is likely to last in some shape or form for at least 18 months. It’s far too early to assess the real personal and economic costs of the COVID crisis. Many of the true costs will be hidden: the explosion of mental health problems and the devastating economic impact on poorer, more vulnerable people, along with smaller businesses. Many people who have just joined the middle-class will be thrown back into poverty; and those who remain trapped in poverty could experience another lost decade of development.
Public finances will be drastically weakened, threatening current commitments to international development and humanitarian assistance – and rendering more fragile our collective capacity to respond to the next challenge. There is a high risk that, despite the emergency pro-solidarity response, the medium-term result will be increased social division and polarisation. It will take courageous political leadership to mobilise the broad-based support needed to reset our social contract – in ways that put our most vulnerable citizens first and give sufficient voice to the next generation.
Anticipating the Future
The crisis appears more likely to provoke a nationalist than an internationalist response. In short, the nation state is back. National borders were initially perceived as the primary way to prevent the spread of the virus. Governments are concerned about international supply chains for medical equipment, basic pharmaceutical products and for food – and we are already seeing evidence of export bans and trade disruption. Businesses are concerned about their global supply chains, and the most advanced are considering how to combine the benefits of global diversification with more localised, circular models.
Meanwhile, the stability of the EU is potentially at risk. Even if formal arrangements survive, it will take strong political leadership and a bold, “better than before” recovery programme to rebuild trust – not another decade of austerity.
Yet given all that’s at stake, we need to find new forms of collective international action to address predictable crises. The new nationalism does not augur well for our joint responses to climate change, biodiversity loss or the next pandemic. We have seen that what we do (or fail to do) in one corner of the world has ripples everywhere.
We are consistently failing to serve the most vulnerable people and communities in our globally inter-dependent world. Maybe now is the time for a new, much more networked Bretton Woods model of global governance: one designed for 21st century challenges and capable of mobilising the best talent, capital and know-how from across public and private sectors.
We have been here before. And we did not meet the test. During the Global Financial Crisis, governments pumped in trillions, mainly through quantitative easing in the money markets, and pursued fiscal austerity.
The banking system and the wider economy did not fail, but nor did we see a ‘great reset.’ Social divisions grew; the economy became more leveraged and the banking system more concentrated. We failed to make our societies more resilient in terms of the environment, social equality or public health. It was mainly poor families and communities who bore the costs; those with capital had, until last month, benefited from an enormous, liquidity-fuelled boom in asset values.
So, what’s going to be different? Technology will help – especially around renewable energy, digital connectivity, medical equipment and vaccine discovery (both amazing), and other clean technologies. With oil prices low, maybe this is when the smart money really moves into the new economy: more resilient, circular and low carbon. Finally, the exogenous nature of this shock should help. There are not the same ‘moral hazard’ issues which got in the way of cross-border cooperation last time round.
Even so, it will take an exceptionally heavy lift to use the COVID moment wisely. But precisely because it requires all of us, as citizens, to step up, the truly big questions are back on the table.
It is now the time to start planning for a deep, fundamental reset. In practice, everyone has a role to play:
- Political leaders will be judged on their honesty, courage and competence. They will need a positive, practical vision which makes the sacrifices of the crisis worthwhile and helps to rebuild institutional trust.
- Public sector leaders will need to combine deep, accelerated, mission-directed innovation inside the public sector with much greater openness to the forms of public-private partnership that can strengthen system resilience
- Enlightened business leaders must keep faith with their “winning with purpose” strategies. They can accelerate their implementation through faster capital and talent redeployment, through new models of value chain collaboration, and by making the case for a properly resourced public sector with the necessary regulatory powers and expertise.
- Financial investors, especially the fiduciary owners of society’s long-term capital, must get on with developing and implementing the right metrics for allocating capital at scale: metrics that take proper account of externalities and systemic risks this time
- Philanthropy can be central to this global movement – but only by coming together in a radically different Its leading figures must support powerful coalitions to tackle our great challenges at both local and global levels.
- We all have the task of helping our neighbours in our local and global community. That means engaging more seriously with politics, spending and investing wisely, and voting with our conscience.
We have a responsibility to contribute to building a fairer and more sustainable world. And we already know what it looks like, because we collectively signed up to a vision, with concrete targets, in Sustainable Development Goals and the Paris Agreement on Climate Change in 2015.
For many of us, it may be our last chance to make a real difference.
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