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Recovery from the Pandemic Crisis : Balancing Short-Term and Long-Term Concerns (English)

The COVID-19 (coronavirus) pandemic crisis combines the worst characteristics of previous crises. It features a simultaneous supply and demand shock; domestic, regional, and global scope; a projected long duration; and a high degree of uncertainty. What can be expected for recovery from the pandemic crisis across the world? This brief first assesses the projections of economic activity in 2020 and 2021 and the domestic and international conditions that will constrain and drive a possible recovery. It then discusses the potential shapes of the recovery (or lack thereof) for specific country conditions. Finally, it explores the need to balance short-term and long-term concerns, arguing in favor of policies that focus on sustained recovery, rather than quick but debt-fueled and short-lived gains. Drawing on the lessons from past crises, the brief concludes that sustained economic recovery is possible only when the underlying causes are addressed and the foundations of growth are protected. For the pandemic crisis, this implies mitigating the spread of the disease to manageable levels while keeping the economy sufficiently active. In the short term, economic policy should focus on preventing further poverty, averting unnecessary business closures, and avoiding lasting damage to human capital and productivity. In the long term, policy reform should address the structural vulnerabilities that the pandemic crisis has exposed. This includes reforms to expand labor and business formalization; to improve the coverage and adequacy of social protection; to extend financial inclusion to elderly, rural, and poor people; to promote digital transformation across society; and, most basically, to improve access to and quality of public health care.

Details

  • Author

    Loayza,Norman V., Sanghi,Apurva, Shaharuddin,Nurlina Binti, Wuester,Lucie Johanna

  • Document Date

    2020/09/07

  • Document Type

    Brief

  • Report Number

    152797

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    World,

  • Region

    The World Region,

  • Disclosure Date

    2020/09/08

  • Disclosure Status

    Disclosed

  • Doc Name

    Recovery from the Pandemic Crisis : Balancing Short-Term and Long-Term Concerns

  • Keywords

    advanced economy; volatility in commodity prices; small and medium size enterprise; case fatality rate; public health policy; percent change; public health risk; public health concern; public health care; change in remittance; global value chain; public health measures; Type of Investment; central bank independence; boost to productivity; revenue from tourism; sovereign credit risk; emerging market economy; social protection policy; interest rate reductions; reduction in travel; weighted average; health care capacity; health care system; exchange rate crisis; development research group; rates of infection; reallocation of resource; output per worker; high public debt; availability of information; factor of production; Oil & Gas; exchange rate policy; decline in remittance; Oil and Gas; small island; trade in goods; loss of remittance; reduction in consumption; foreign direct investment; Exchange rate policies; economic recovery; external shock; global recession; merchandise export; advanced country; public policy; tourism receipts; economic vulnerability; Economic Policy; natural capital; infection rate; oil price; high share; monetary crisis; commodity exporter; renewable source; global economy; natural hazard; crowding out; private investment; business practice; sovereign bond; regional output; mitigation measure; average temperature; external condition; previous crisis; global financial; emergency measure; governance reform; Learning and Innovation Credit; natural asset; national wealth; Macroeconomic Stability; annual return; economic shock; macroeconomic mismanagement; borrowing constraint; debt level; currency depreciation; productivity growth; young adult; social capital; school closure; several months; anecdotal evidence; community structure; kinship structure; disadvantaged household; lasting peace; Public Infrastructure; digital business; long-term growth; urban slum; macroeconomic condition; prices fall; external balance; foreign exchange; oil exporter; common feature; volatile international; stimulus package; public resource; vulnerable household; global condition; conceptual framework; living condition; state capacity; elderly population; transit station; public place; severe cases; government intervention; household income; mass unemployment; social vulnerability; mitigation policy; increased spending; health systems; Economic Management; capital outflow; banking crisis; trade shock; manufacturing sector; trade disruption; export receipts; economic harm; export value; mining product; crisis management; income loss; trade balance; small economy; Travel Receipts; crisis resolution; emergency management; foreign capital; domestic factor; governance capacity; inclusive growth; business environment; natural disaster; policy uncertainty; credit line; Exchange Rates; Advisory services; debt borrowing; labor mobility; borrowing cost; social help; credit guarantee; institutional environment; digital transformation; productivity loss; future price; social transformation; in school; international tourism; output loss; south sudan; global response; income data; index base; cross-country data; positive correlation; northern hemisphere; trade tensions; sovereign debt; vietnam war; political risk; mobility pattern; international border; facilitating trade; human life; demand shock; trade performance; informal sector; Homebased Work; regional aggregates; negative growth; international arrivals; research assistance; recent history; financial disruption; shaded areas; debt crisis; cold war

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Citation

Loayza,Norman V. Sanghi,Apurva Shaharuddin,Nurlina Binti Wuester,Lucie Johanna

Recovery from the Pandemic Crisis : Balancing Short-Term and Long-Term Concerns (English). Research & Policy Briefs,no. 38 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/461391599582188306/Recovery-from-the-Pandemic-Crisis-Balancing-Short-Term-and-Long-Term-Concerns