• Economic recovery from the pandemic hinges on finding a way to contain the disease
• Governments and central banks have put together over $9 trillion in relief and stimulus measures, dwarfing the quantitative easing programmes after the global financial crisis
• COVID-19 will have permanent, long-term effects on how economies and financial systems operate in the future

The ongoing COVID-19 pandemic has become a health crisis of unparalleled magnitude that has wreaked an enormous toll on the global economy. It has caused millions of infections and hundreds of thousands of deaths, crippling the heath care systems of many countries, shutting down businesses and sending millions out of work. For the world economy to begin recovery, there has to be first an effective end to the spread of the disease.  

There may not be an early or a total end to the pandemic despite intense global efforts to develop vaccines for the virus. It is possible that a cure may not be found. We may have to learn to co-exist with it just like with other infectious disease such as the common influenza, which the disease has so insidiously been compared with. The end may not be an eradication of the disease but an effective containment of its spread through the adoption of personal hygiene practices and social distancing measures, including testing, tracing and isolating those infected. 

Since its declaration as a Public Health Emergency of International Concern on 30 January by the World Health Organisation (WHO) and its later characterisation as a pandemic on 11 March, the novel coronavirus has proven to be much more virulent and deadly than initially assessed. Much about the disease remains unknown. Nevertheless, the continuing downplaying of its severity by a small group of prominent world leaders, including United States President Donald Trump, and the failure to mount a coordinated and coherent response to contain the spread of the disease will further delay the end.

The US had in the past consistently stepped up to lead the world in times of crisis, but this time it has been conspicuously absent. Instead, its response has been disappointingly mired in domestic partisan politics, myopic nationalism, muddled messaging and international blame-shifting of China and the WHO. The US has now become the global epicentre of the disease. If it continues to fail to contain the disease, it risks becoming the source of future outbreaks, especially if an effective vaccine cannot be found within the next six to 12 months, which its COVID-19 strategy seems to only rely on.    

The situation in China and Asia Pacific, where the outbreak first erupted and spread, appears to be under control and the human tolls have been considerably lesser than in countries that have not reacted as robustly and swiftly. Nations and regions that have been successful in “flattening the curve” are preparing to restart their economies and resume some semblance of normalcy. The priorities now are to revive sectors, especially small businesses that have been worst hit, to restore jobs and the livelihoods of workers and to reconfigure the economy for a post COVID-19 world.

In less than three months, governments around the world have put together over $9.2 trillion in economic relief and stimulus measures, the largest ever in history. The estimated $6.6 trillion in quantitative easing (QE) programmes that world central banks introduced in the aftermath of the global financial crisis (GFC) from 2008 to 2014 pales in comparison. This time round, the international banking and financial system is in a much stronger position and state of preparedness to help the global economy recover. 

There will be long-term implications from COVID-19 that will permanently change how the global economy, international trade, commerce and financial system will operate in the future. There will be a rethink of the pace and effect of globalisation. Economies will be pursuing a wider and more diverse range of policies towards integration. The financial system will accelerate its digital transformation and the adoption of online and remote transactions.

The long-term consequences of low interest rates as a result of these stimulus and relief measures must be better managed to lessen the impact on banks’ balance sheets as well as to avoid the misallocation of capital and resources that was experienced from the last global economic crisis.

These measures should not reward c-suites and boards for orchestrating schemes with short-term financial outcomes, but to hold them to reinventing and building sustainable businesses that benefit workers, consumers and society at large in the long run. Will the leaders of today, whether in business, government or civil society, have the courage, wisdom and vision to take this unprecedented opportunity to collectively press the reset button on the future and leave a better, fairer and more sustainable legacy for generations to come?