The Resilience First’s Honorary Chair, Dr Pippa Malmgren, has commented that: 'There is far more at stake now than just the virus. All economic activity is halting against the backdrop of record debt. This is a serious turning point in history.'
A severe global downturn looks real and a global recession cannot be discounted. A useful brief by McKinsey, dated 9 March, examines three broad economic scenarios that might unfold: a quick recovery, a global slowdown, and a pandemic-driven recession. The report states that ‘the prevalent pessimistic narrative (which both markets and policy makers seem to favour as they respond to the virus) underweights the possibility of a more optimistic outcome to Covid-19 evolution’. An accompanying ‘Facts and Insights’ summary suggests:
- Quick recovery scenario: Confirmation of the fatality ratio and disease severity rate in the population of those of working age and below, combined with strong public health measures with limited duration of economic shutdown. Expected 2020 global GDP growth drops from 2.5% to ~2%.
- Global slowdown scenario. Countries find it difficult to replicate strong public health measures, contributing to continued case growth. Ultimately, the spread of the virus is slowed down seasonally. The economy recovers in late Q2 but 2020 global GDP growth drops to ~1.0-1.5%.
- Global pandemic scenario. There is a global, generalised spread of Covid-19 which is not impacted by seasonality. The economy experiences a demand shock that lasts for most of the year. Overall, this scenario results in recession, with global growth in 2020 falling to between -1.5% and +0.5%.
The next Resilience First monthly newsletter (available only to members) will look further at possible long-term, strategic changes brought about by the pandemic.
As outlined in our Update 8, communities will be an important element in any recovery. Even as people self-isolate and adopt social-distancing measures, communities may prove to be the bedrock of our societal cohesion and can do much to provide mutual support under difficult circumstances.
There are three relevant aspects here:
- The power of local groups was highlighted in a Resilience First guidance document for building resilience in business communities. Local co-ordination groups in an urban area can emphasise the strength of togetherness at time of stress and reinforce the value of having a resilience plan to tackle the collective needs of the locality.
- The psychological and emotional support given to individuals and communities is critical when personal anxiety and societal fear are running higher. A Resilience First guide on emotional resilience for businesses when preparing for, and recovering from, major incidents – pandemics included – is designed to provide some pointers.
- Maintaining personal health will be essential as the outbreak runs its course. In addition to WHO advice on basis protective measures, it is worth protecting oneself from sickness by following basic tactics for strengthening your immune system such as exercising regularly, getting adequate sleep, keeping hydrated, and eating sensibly.