Leaders must ensure the post-pandemic economy benefits all segments of society across the globe, the World Economic Foundation said on Wednesday.
The WEF pinpointed six key areas on which policymakers should focus to ensure they build back on a much broader and more inclusive basis. These include a new approach to fiscal and monetary policy and shaping a new future of work, wages and job creation, a white paper found.
Other urgent economic and social challenges are developing skills for the new economy; ensuring equity and social justice by outlawing all forms of discrimination; creating new markets to drive long-term, inclusive and sustainable economic transformation and confronting frontier risks presented by new technologies such as space exploration, AI and genetic enhancement.
“The highly asymmetric impact of the pandemic has reinforced historical inequalities within and between countries and is now giving rise to a highly divergent recovery,” the WEF said in the report called Building Back Broader.
“Technological change has accelerated through the crisis, contributing to additional labour market polarisation. Furthermore, climate change and its mitigation, if badly managed, could exacerbate economic and social division. At the same time, long-term growth prospects remain subdued, following pre-crisis trends."
The white paper came a day after the organisation urged leaders to do more to help workers acquire the skills needed for the jobs their stimulus programmes are creating.
Both the US and the EU have triggered massive spending plans to transform their economies in the wake of the pandemic, with President Joe Biden proposing a $1.7 trillion infrastructure package. In Europe, officials are pursuing efforts to reduce carbon emissions and improve digitisation.
But WEF managing director Saadia Zahidi said current retraining programmes were insufficient to help people find work in those fields.
“What governments will need is to ensure that as their stimulus packages try to build these markets of tomorrow, there is an equal effort in building the jobs of tomorrow,” she said.
“For those who are already inside companies, this is going to be fairly easy to do. But for those who will be wholly displaced and looking for new opportunities, there’s going to need to be more guidance provided by governments.”
The global workforce lost an equivalent of 255 million full-time jobs last year, as well as $3.7tn in wages and 4.4 per cent of global gross domestic product.
Despite widespread vaccine distribution and the global economic outlook expected to improve, a socioeconomic recovery is far from certain, the WEF said, which is why the choices made by policymakers, business leaders and workers will shape societies for years to come.
“At this critical crossroads, leaders must consciously, proactively and urgently lay the foundations of a new social contract, rebuilding our economies so they provide opportunity for all,” the WEF said.
To help leaders achieve a fairer future, the forum said policymakers must rejig the overall fiscal and monetary system including tax architecture, fiscal spending to increase equality of opportunity and ways to bridge financing gaps in low and middle-income countries.
The WEF urged economies to invest in improving people’s capabilities through education, physical and digital infrastructure and innovation.
When it comes to jobs and wages, the WEF urged leaders to focus on creating quality jobs with "decent wages and working conditions", especially for young people and other vulnerable groups, such as women, who were adversely affected by the Covid-19 crisis.
It also advocated improving access to skills to ensure workers and students can thrive in an increasingly digitised world and create a new "green and equitable" economy by radically transforming the economy though public and private sector initiatives that focus on sustainability and societal benefit.