Eradicate Covid-19, stimulate economies, feed the poor, writes Rajendra Aneja
2020 has been a humbling year for the world. An invisible virus froze it. In 2021, nations united by the battle against Covid-19, will have three priorities. First, inoculate all citizens with the Covid-19 vaccine. Second, continue research into the vaccines to study side effects. Third, kickstart economies, so that people can regain livelihoods.
Governments should bury political hatchets and enable citizens to rebuild their lives. Hopefully, poorer nations will also be able to access the vaccines. We cannot create a world, where a tiger in India or a tree in Amazon, Brazil, matters more than the lives of the poor.
New Global Pilot: With Biden as global pilot, expect some balms to heal race and ethnic ruptures. Climate concerns will return to the agenda. WHO will get its funds. Iran may breathe easier. Expect Biden to mend fences, restore calm. Hopefully, globalisation will be respectable again. Biden should avoid tweeting.
Angela Merkel, the most respected global leader, will lead Germany to grow by three to four percent. She does not talk. She acts. Boris Johnson will have an arduous year, inoculating Britons and massaging Brexit.
Putin and Xi will seek global eyeballs by teasing the USA. Managing the blame game for the virus origin, (remember Trump’s Chinese virus?) and the trade wars will keep China preoccupied. Modi will sway with his oratory and technicolour vests. Other strongmen like Turkey’s Erdogan, will also prevail.
National leaders will have happy days till 2023. Michael Caine forsake all his indiscretions by saying “Blame it on Rio” in the 1984 movie. All leaders will “Blame it on Covid-19” till 2023. All the crisis in economics, welfare, health, even garbage collection, will be attributed to Covid-19. It’s honeymoon time.
Poor will Suffer: The global economy will continue to be in a tailspin, in 2021. Even with the vaccinations commencing in selected countries in December, it will take about 12-18 months to roll them worldwide. So, parts of the world will face lockdowns in 2021. Weaker nations may face bankruptcies and seek bailouts from the IMF. Countries should just print more currency to support the poor. Inflation and imbalances can be corrected in 2022.
The IMF predicts that global GDP will decline by 4.9 percent in 2020. It optimistically predicts a recovery of 5.2 percent in 2021. This will yet be 6.5 percent below the pre-Covid-19 level. Realistically, we can hope for a two to three percent recovery. Unemployment which has spiralled due to lockdowns, will aggravate, creating sociological issues. There could be violence in nations, without social security. The recent violence in Nigeria, was partly triggered by the 40 percent unemployment.
Africa may have positive growth. It has managed to blunt Covid-19, due to past lessons in managing Ebola. The Middle East will witness a flurry of contracts between new buddies Israel and UAE, Bahrain, etc., in desert farming, digitisation, etc.
About 9 percent of the global population or 700 million people live in extreme poverty. The World Bank’s forecasts that Covid-19, will push about 85 to 115 million people worldwide into extreme poverty. This is a gross underestimate. About 400 to 500 million people could face intense poverty in 2021. A billion people will struggle to buy food, in Asia and Africa. The poverty line of USD 1.9 per day, needs review. Who can manage food, clothing and shelter in USD 2 daily? The poverty line should be redefined at USD 5 to 10 per day.
Covid-19 will exacerbate disparities between the rich and the poor within countries. The pandemic has pummelled the underprivileged. Millions of citizens in India and China, who had been uplifted from poverty, will sink back into destitution. Governments should plan mass feeding programmes, cash benefits, etc., for the impoverished through 2021.
Economic disparities between countries will intensify. The world is fractured, due to stagnant economies. The stresses triggered by race and religion, are really due to the fact that the global economy has been growing stingily at two to three percent annually. Covid-19 has hurtled the world into a recession. When opportunities shrink, people fixate on tribe and religion. Leaders should boost global growth to five percent, to reduce racial brawls.
Melancholy Markets: Digital, online businesses will boom. Expect manufacturing, business travel and hospitality to grow after the virus is harnessed. The retail, leisure and real estate industries will stir only late 2021.
Oil, gold, stocks and real estate markets have been melancholy in 2020. The first-half of 2021 could be also be languorous. Oil price was USD 64 per barrel in January 2020. It dropped to USD 40 per barrel, due to lockdowns. Prices should climb to USD 55 per barrel in 2021, as factories start.
Gold prices increased sharply from 1,390 per ounce in 2019, to USD 1,840 per ounce in 2020. Gold is a safe haven, during economic uncertainties. Gold prices will hover around USD 1700 per ounce in 2021.
The stock markets have danced bullishly in the last quarter of 2020, with the discoveries of the vaccines. If the vaccines deliver, expect the rejoicing to continue in 2021.
Joys in Sports: Tokyo Olympics could bring some ebullience. If the vaccines deliver, the Olympics will proceed. Otherwise, expect a postponement and disappointment. The T20 cricket World Cup, in November, will see India or Australia shine. Europe’s quadrennial football tournament, should bring cheer.
We will see a James Bond movie and more. 2020 has been the year of OTT web series. Narcos, Fouda, Delhi Crime, have created new stars and riches. OTT will prevail.
Salute Scientists: The UN has proclaimed 2021 as the Year of Peace and Trust. Laudable. However, eradicating Covid-19, will suffice. The rest will follow. Let us also salute the scientists, doctors, nurses who fought Covid-19.
Hopefully, 2021 will be a year of healing and recovery. Nations must inoculate their populations within 100 days of the vaccine being available. Then, history will remember 2021 as the year, when the world heroically vanquished a virus that threatened mankind and proclaimed, “We will not go under.”
Aneja was the Managing Director of Unilever Tanzania. He is an alumnus of Harvard Business School and the author of books entitled, “Rural Marketing across Countries and “Business Express”. He is a Management Consultant