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The WEF suspended its ranking of the Global Competitiveness Index for 2020 due to the Covid-19 pandemic. (Fake images).
- The WEF suspended its Global Competitiveness Index for 2020, due to the health crisis and the socioeconomic consequences caused by the pandemic.
- Countries with advanced digital economies, strong social safety nets, and previous experience in managing epidemics could handle the Covid-19 pandemic well, WEF research shows.
- South Africa ranks highly in terms of progressive tax systems to drive future economic transformation.
Countries with advanced digital economies and digital skills, along with strong social safety nets and previous experience in managing epidemics, have been better positioned to handle the impact of Covid-19, according to research from the World Economic Forum (WEF).
WEF Wednesday released Global Competitiveness Report 2020 Special Edition: How countries are performing on the road to recovery. The report breaks down the conditions for countries’ recovery and reactivation and considers the characteristics that allowed certain countries to handle the pandemic well.
The WEF suspended its ranking of the Global Competitiveness Index for 2020, due to the health crisis and the socioeconomic consequences in the countries, caused by the pandemic.
This year’s report, tailored for the pandemic, shows that countries with advanced digital economies and digital skills allowed economies to keep running, as people worked from home. These countries that performed well in this regard are the Netherlands, New Zealand, Switzerland, Estonia and the United States.
The WEF report also notes that countries that successfully planned and integrated their health, fiscal and social policies were relatively successful in “mitigating the effects of the crisis.” Among them are Singapore, Switzerland, Luxembourg, Austria and the United Arab Emirates.
It shows that countries that had previous experience with coronavirus epidemics like SARS had “better protocols and technological systems” to manage the pandemic. These countries include the Republic of Korea and Singapore. They could contain the epidemic “relatively better” than others.
Countries like Denmark, Finland, Norway, Austria, Luxembourg and Switzerland with strong social safety nets were able to help residents who were unable to work. “Countries with strong financial systems, such as Finland, the United States, the United Arab Emirates and Singapore, could provide credit to SMEs (small and medium-sized enterprises) more easily to avoid insolvency,” the report read.
In South Africa, the government introduced supplements to existing grants, as well as a special Covid-19 social assistance grant in the amount of R350. The Unemployment Insurance Fund also provided an Employer / Employee Temporary Assistance Plan, which provides benefits to employees who are unable to work during the closing. President Cyril Ramaphosa has said these benefits will have to come to an end as the government has limited resources, Fin24 previously reported.
The National Treasury in partnership with the South African Reserve Bank and commercial banks also implemented a loan guarantee scheme of R200 billion to support distressed companies. However, adoption of the loan scheme has been moderate, and unions have criticized it for its strict requirements.
“During this time of profound uncertainty, the health crisis and economic recession have forced a fundamental rethinking of growth and its relationship to results for people and the planet.
“Policy makers have an extraordinary opportunity to seize this moment and shape new economic systems that are highly productive while increasing shared prosperity and environmental sustainability,” said Saadia Zahidi, WEF CEO.
By charting a way forward, the report indicates which countries are best prepared for future economic transformation. “While no country is fully prepared for economic recovery and transformation, some are better positioned than others,” the report reads.
The countries that rank high in terms of readiness for investments in digital infrastructure, to accompany a transition towards a greener and more inclusive economy, are Denmark, Estonia, Finland and the Netherlands.
Countries that are best prepared to green their economies by improving their energy infrastructure, transportation networks, and committed to multilateral agreements on environmental protection include Denmark, Estonia, Finland, and the Netherlands. Those least prepared are Russia, Indonesia, Turkey and South Africa.
Countries like Finland, Sweden, New Zealand, and Austria are better prepared to implement longer-term investments with the aim of strengthening stability and expanding inclusion. The United States, however, is least prepared among advanced economies, the report read.
South Africa, the Republic of Korea, Japan and Australia are better prepared for progressive taxes to fuel economic transformation. They have “relatively well-balanced and progressive tax structures.”
Countries willing to expand public services (future-proof education, labor laws and income support to expand social protection) are Germany, Denmark, Switzerland and the United Kingdom; that can combine their labor protection with new models of safety nets. “South Africa, India, Greece and Turkey are less prepared,” the report read.
Finland, Japan, the USA, the Republic of Korea and Sweden are considered the best equipped to create “markets of tomorrow”, as investments in research, innovation and invention. Greece, Mexico, Turkey and the Slovak Republic are considered less prepared.
