DUBAI: Global business leaders are overwhelmingly worried about the possibility of a prolonged recession because of the coronavirus disease (COVID-19), according to the World Economic Forum (WEF).
In a survey of corporate and business decision-makers, the WEF found that nearly 70 percent thought that a prolonged recession of the global economy was the most likely result of the pandemic, followed by a surge in bankruptcies and the failure of whole industries and sectors, with little hope of proper recovery.
“The crisis has devastated lives and livelihoods. It has triggered an economic crisis with far-reaching implications and revealed the inadequacies of the past,” said Saadia Zahidi, the WEF’s managing director. “As well as managing the immediate impact of the pandemic, leaders must work with each other and with all sectors of society to tackle emerging known risks and build resilience against the unknown.”
Also high up the list of worries was the possibility of another outbreak of infectious disease and greater protectionism threatening global trade, according to the report “COVID-19 Risks Outlook: A Preliminary Mapping and Its Implications,” published yesterday.
“Economic distress and social discontent will rise over the next 18 months unless world leaders, businesses and policy-makers work together to manage the fallout of the pandemic,” the WEF said.
Business leaders concerns range from “a prolonged recession, to the weakening fiscal position of major economies, tighter restrictions on the cross-border movement of goods and people, and the collapse of a major emerging market,” it added.
The non-economic consequences of the pandemic included “an avalanche of future systemic shocks such as the climate crisis, geopolitical turbulence, rising inequality, strains on people’s mental health, gaps in technology governance and health systems under continued pressure.”
Walter Jopp, CEO for the Middle East for insurance company Zurich, which helped compile the report, said; “It is clear that the actions of governments and regulatory bodies will divide the world into countries that experience significant decline and those who are more resilient and stronger.”
Another WEF report highlighted the “challenges and opportunities” of the post-pandemic world.
“We now have a unique opportunity to use this crisis to do things differently and build back better economies that are more sustainable, resilient and inclusive,” Zahidi said.
“As economies restart, there is an opportunity to embed greater societal equality and sustainability into the recovery, which would unleash a new era of prosperity,” the WEF said.