As the coronavirus (COVID-19) pandemic continues, governments and emergency services are focusing on urgent needs: increasing hospital capacity, eradicating hunger, and protecting businesses and families from bankruptcy and evictions. To date, the vast majority of funds received from the IMF, World Bank, other regional banks or central banks have been used to fund protective equipment in hospitals, stabilize banking institutions, and pay businesses to provide essential or essential workers Expenses for goods and services. Provide direct financial support to surrounding families.
Decisions by governments to revive their economic engines, especially the long-term economic, social and environmental benefits they aim to achieve through stimulus measures, will significantly affect their ability to rebuild stronger and better.
It involves two timescales: the urgent need to create as many jobs, money and economic needs as possible, and the long-term need to ensure long-term growth and prosperity.
In the short term, three main points need to be considered:
Create Career Opportunities
Factors to consider are the number of jobs created per dollar invested, the types of jobs created and beneficiaries, and the match between the skills needed and available in the local workforce.
Increased economic activity
Consider the economic multiplier that each intervention can provide, as well as the project's potential to immediately replace missing demand and its impact on import levels and the overall trade balance.
Risk and timeliness
Assess whether the move has created incentives and employment benefits in the short term, and whether they are long-term, even if local quarantine restrictions are reinstated.
A strategy must also benefit countries over the long term in three distinct ways:
Long-term growth potential
For example, some initiatives do a better job of strengthening human capital through future skills development and improved public health, especially when water and air pollution can be minimized or improved access to safe drinking water. Others may encourage the adoption of more efficient technologies, provide basic utilities such as modern electricity or sanitation, or address market shortcomings such as restrictive subsidies that hinder long-term progress.
Shock resistance of the future
Take steps to help societies and economies recover from economic shocks, such as today's COVID-19 and other natural disasters, and the future consequences of climate change.
Through initiatives that promote and disseminate green technologies, such as grid investments that make renewable energy and electric vehicles more accessible, or low-tech solutions such as landscape and watershed restoration and reforestation. It is critical to ensure that stimulus-related investments do not cause a major drag on the economy through asset losses in the coming decades, such as B. betting on failed technologies or investing in high-risk flood areas.
Pointing the Way for Policymakers to Recover
For starters, it can be used as a quick "yes-no-maybe" assessment to pinpoint the "worst offenders". This is to ensure that the government does not invest in stimulative appealing initiatives, but instead harms them in the long run.
In the second phase, the proposed metrics can be used to help policymakers choose among all remaining projects and find “best-in-class” projects that benefit society in different ways.
Authorities are currently very busy and efforts to address the current health crisis cannot be replaced by economic recovery measures. However, as governments turn their focus to recovery, national choices will determine how the future unfolds and whether we are better prepared for future global crises.