Gordon Brown warns of decade of economic disaster after ‘unprecedentedly bad’ global Covid response

Former UK prime minister Gordon Brown described the international response to the pandemic as “unprecedentedly bad” on Wednesday and called for an urgent G20 meeting early next year to tackle the global recovery from Covid-19.

Mr Brown, now the United Nations special envoy for global education, said leaders must offer hope that the post-Covid world in 2021 will be better and that the 2020s will not become a decade of low growth and high unemployment.

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“The G20 was nominated as the premier forum for economic coordination and therefore, in those areas where the economy has affected fiscal policy, monetary policy, dealing with issues of debt and debt relief, debt restructuring ... the political leadership has got to be provided,” Mr Brown told delegates attending the virtual Maryam Annual Forum, hosted by the London School of Economics.

“We cannot expect the IMF (International Monetary Fund) and the World Bank independently, without the support of the shareholders, to move ahead and do lots of things that really the political leaders are going to make a decision to do.”

Mr Brown said the focus around the handling of the pandemic has so far centred on national interests, taking the world back to the pre-Second World War 1930s, with the barrier to international action not caused by the “standoff between China and America", but by nationalism, "which must now be overcome".

“We have not seen the coordination of monetary and fiscal policy. We have not seen the coming together on matters of global health in the way that we had expected and we are riddled by rhetoric that is nationalist, protectionist, xenophobic, isolationist, and has all the tools of the 1930s when Churchill said that politicians were ... all powerful for impotence,“ he said.

Mr Brown offered two proposals to tackle Covid going forward, with the first a global recovery programme for the world economy.

“We've had a huge amount spent to stop businesses collapsing, to protect people in jobs, to keep economies in being, to keep companies in being, but we do not have a recovery plan for the world economy,” he said.

Such a programme would not focus on the medical roots of the crisis but also ensure the vaccine will be distributed to as many people as possible, he said.

“If 12 per cent of the population in the richest countries are going to have 50 to 60 per cent of the vaccine, people will see that this world is not working well,” said Mr Brown.

Mr Gordon’s second proposal is for a global growth plan, facilitated by his proposed G20 meeting early in the New Year, with President-elect Joe Biden in a position to call for it to be convened.

The meeting could address the funding of vaccines for poorer nations as well as coordinate fiscal policy to "maximise the growth that is possible across the world as happened in 2009-10", Mr Brown said.

While the IMF has put a proposal to the G20 to boost global economic activity by $2 trillion, Mr Brown said the plan does not address the needs of lower and middle income countries.

Minouche Shafik, director at LSE, said international tax reform was also needed to achieve a fair distribution of corporate taxation around the world to enable more countries to benefit from that revenue. She also urged governments to keep "aid programmes at a generous level to help other countries who cannot afford to provide a decent minimum for everyone".

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Her call comes weeks after UK finance minister Rishi Sunak cut the UK's foreign aid budget to 0.5 per cent of national income as he looked for ways to help pay for the Covid-induced economic crisis.

Mr Brown said the world has been "unduly defeatist about the possibilities of international cooperation" and that there should be more optimism around what can be achieved to ensure 150 million people do not end up in poverty.

"We managed to eliminate smallpox, we managed to deal with the worst of polio, we managed to deal with the worst of HIV AIDS, we managed also to deal with the ozone layer ... surely, in the biggest crisis of all in the last 100 years, it is possible for international cooperation to be more effective,” he said.

“With a new regime in America and also with the cooperation of all countries like China, we can actually make something of this in the new year," he said.

Gordon Brown warns of decade of economic disaster after ‘unprecedentedly bad’ global Covid response

Former UK PM calls for urgent G20 meeting to tackle global recovery