GENEVA – The COVID-19 crisis has posed economic challenges and structural changes, all requiring multilateral and multi-stakeholder solutions, said Klaus Schwab, founder and executive chairman of the World Economic Forum.
“This was not just a cyclical crisis; it was a systemic crisis,” said Schwab in a recent interview with Xinhua.
The lasting impacts of the pandemic on global economy, he said, involve short term consequences like job losses, and structural influence as well as series of new risks.
Schwab noted that main industrialized countries have adopted positive fiscal measures to assuage pressures of liquidities, while the currency devaluation has been seen in some developing countries in South America and Africa.
“We have to make all efforts to ensure that the gap of the advanced economies and the emerging economies is not becoming bigger as a consequence of the crisis,” he said.
Small and medium-sized enterprises (SMEs) have been hit hardest by the pandemic, due to their high dependence on supply chains and less liquidities, compared with large companies, noted Schwab, adding that SMEs require “special care” during the economic recovery.
Some countries have worked to avoid short-term financial risks, which resulted in a higher debt burden that the next generation has to carry, he added, noting that those countries should speed up economic recovery and reduce the debt burden as fast as possible.
Indicating the silver lining of the coronavirus crisis in the digital economy, he said that “the coronavirus crisis will exercise pressures on companies to digitalize more, to robotize more, to use the internet of things even more.”
People will pay more attention to health, while digital learning and lifelong learning are booming in the educational field, Schwab added.
In Schwab’s view, the challenges posed by the “global virus” require the engagement of politicians, business community and particularly the young generation.
“All those risks can only be reduced if we strengthen global cooperation,” he said.
“The world order in the post pandemic era has to be shaped by all countries. We need not only a multilateral approach, we need a multi-stakeholder approach — what the Forum stands for,” he concluded.