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Recovery Requires Greater Cooperation

Bovespa trading floor

The Bovespa during the 2008 financial crisis. (AP)

April 07, 2020

The coronavirus threatens thousands, possibly millions of lives across the globe. It is first and foremost a health crisis and the disease must be beaten, and the curve of Covid-19’s spread must be flattened for our lives to return to something approaching normalcy. But what of the economic damage, our governments’ responses, and the outlook going forward?

Should we expect a V-shaped recovery – a rapid rebound from an economic standstill? In our view it is increasingly likely that the world faces a longer, harder, much more fitful, difficult path to normalcy. We must gird ourselves for the long haul. That requires much greater coordination internationally of our responses to maximize the impact. So far that crucial piece of the puzzle has been missing.

The G20 response to date has been ineffective. Its weak statement on Covid-19 is a shadow of the 2009 London summit and the massive coordinated fiscal stimulus that UK Prime Minister Gordon Brown at the time secured from the world’s leaders acting in concert. This most global crisis needs global solutions, but a lack of strong leadership instead has resulted in name-calling, accusations of blame, and national inwardly focused partial solutions...

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