Blog: Prioritising priorities for economic recovery
We are moving into new phase of the Covid-19 public health crisis. The sudden and dramatic disruption of the shutdown triggered an economic shock far bigger than anything in recent years. Now thoughts are turning to the foundations for economic recovery. Will they be the same as before the crisis?
Blog by Susan Murray, Director, David Hume Institute
20th April 2020
We are moving into a new phase of the Covid-19 public health crisis and thoughts are turning to the foundations for economic recovery.
The sudden and dramatic disruption of the shutdown, triggered an economic shock far bigger than anything we have in recent years. In a webinar, Adair Turner said the number one priority should be increasing consumption to help GDP return to pre-coronavirus levels. Many economists are emphasing the need to make this a V-shaped shock, a sharp decline followed by a quick sustained economic recovery.
But the shutdown has also provoked much reflection on how we are living our lives, both individually and collectively.
Post-pandemic we will still have a climate emergency. The world’s resources are still finite. Encouraging those that have money to spend unsustainably might not be the best way forward.
There is a chance to think about established norms. For instance, will long complicated global supply chains still be desirable?
Food security has fallen off the Government’s radar in recent years but an increasing number of people have taken action to grow their own food according to figures from the Royal Horticultural Society. Is this a sign of loss of trust in supply chains?
Acting locally doesn't have to be a substitute for thinking globally, it can be an ally.
The Scottish Government was the first in the world to sign up to the Sustainable Development Goals. Now more than ever before, these goals need to underlie decision making and ensure that it is not just the industry that shouts the loudest or has the best lobbying that secures public funding.
Scotland would not be alone in considering this as a chance to rethink the path ahead. A group of 180 political decision-makers, business leaders, trade unions, campaign groups and think tanks urged the EU to adopt green stimulus measures. Amsterdam has already shown leadership in announcing it is working with economist Kate Raworth, author of Doughnut Economics on delivering a “Doughnut City”.
In Denmark bold leadership from the government means companies which pay out dividends, buy back own shares or are registered in tax havens won’t be eligible for any of the aid programs. Will other countries follow this lead?
Fears of the economic deficit must not be allowed to crowd out smart thinking. There are very strong reasons for not returning to business as usual so propositions aimed at taking us back to things as they were are particularly unlikely to constitute the best approach.
Constructing a positive way forward will involve embracing the complexity of our future choices.
The Scottish Government must hold strong to the UN Sustainable Development Goals and emissions reductions targets, and ensure any precious public money invested to reboot the economy, does maximum public good.