Africa

As economies begin to orient themselves towards recovery and growth in a post-COVID-19 era, they will first need to disentangle themselves from their prior bedfellows, the state, whose courtship was necessary for survival during the pandemic.  Such bedfellow relationships have become increasingly common as government intervention is urgently needed for economic stabilization. Governments have also embraced their new role with vigor. According to the IMF, as of April 2020, countries have committed around $8 trillion to combat the pandemic and to remedy its ill effects on economies and societies. Decisions about how this money will be spent will undoubtedly recalibrate the logic of capitalism for years to come. 

Juergen Braunstein and Sachin Silva argue that sovereign wealth funds may be central to governments' efforts to balance public responsibility with private interests in post-pandemic economies.

As the divergent experiences of the US and South Korea show, testing can be the difference between disease containment and catastrophe. Rather than relying on national governments to ensure the rapid development, production, and deployment of diagnostics during outbreaks, the world needs a global coordinating platform.

Today’s economic crisis leaves us with an unsettling and perplexing regret. Why weren’t financial portfolios already adjusted for risks that stem from health events such as pandemics? After all, financial portfolios are adjusted for liquidity risks, market risks, credit risks, and even operational and political risks.

Could using the cash in your pocket have the potential to spread covid-19? That question has rarely appeared in the news, but many governments and leaders in the digital payments industry are wondering how the virus might impact the use of cash. Several countries have already taken drastic measures to limit circulation of bank notes. Could such interventions lead to the end of cash payments?

Because hand-to-hand exchange of physical currency could transmit the coronavirus, countries around the world are being forced to reconsider the use of cash. In fact, COVID-19 might turn out to be the catalyst that finally brings digital payments fully into the mainstream. Not surprisingly, the digital-payments industry is already focusing on the opportunities created by the crisis.

At the start of this year, things seemed to be looking up for the global economy. True, growth had slowed a bit in 2019: from 2.9% to 2.3% in the United States, and from 3.6% to 2.9% globally. Still, there had been no recession, and as recently as January, the International Monetary Fund projected a global growth rebound in 2020. The new coronavirus, COVID-19, has changed all of that.

The idea of a Swiss sovereign wealth fund (SWF) which could use a part of the country’s massive reserves for investments arose after Switzerland had established in 2011 its currency link to the Euro. Since then various sovereign wealth options have been discussed, from a SWF with a savings mandate to a fund with a strategic investment mandate, a private equity-type fund that invests in technology start-ups and protects against hostile foreign takeovers of strategic companies.