Pushing the Reset Button will not Change the Game
September 25, 2020
By Jens Martens
BONN, Sep 25 2020 (IPS)
Governments have responded to the COVID-19 pandemic with unprecedented intensity. They have taken far-reaching regulatory measures to contain the pandemic and mobilized financial resources on an enormous scale.
They have thus demonstrated that they are capable of action and need not leave the driver’s seat to the markets and the private sector if the political will is there.
In countless statements most governments have also affirmed that a return to business-as-usual after the crisis is not an option. Instead, the UN call to “build back better” has become a leitmotif of the multilateral responses to the COVID-19 crisis.
But does “building back” really lead to the urgently needed systemic change?
In the first phase, many COVID-19 emergency programmes contained certain social components that aimed to provide (more or less targeted) support for families in need, prevent unemployment and keep small businesses and companies financially afloat.
But aside from the fact that even these altogether huge amounts of money could not prevent the global rise in unemployment, poverty, and corporate bankruptcies, the temporary measures produced at best a flash in the pan effect that will quickly evaporate when the support ends.
The social catastrophe then comes only with a delay. Environmental considerations, on the other hand, played hardly any role in the first phase of COVID-19 responses. Most economic relief packages have been ecologically blind and ignored the structural causes and the interdependencies of the multiple crises.
It is therefore all the more important that now, in the second phase of policy responses, longer-term stimulus packages not only support economic recovery, but also promote necessary structural change, such as strengthened public social security systems, improved remuneration and rights of workers in the care economy, and the transition to circular economies, which seek to decouple growth from consumption of finite resources.
If used in the right way, such policies could offer the chance to become engines of the urgently needed socio-ecological transformation proclaimed in the 2030 Agenda for Sustainable Development.
In response to the COVID-19 crisis, the World Economic Forum calls for “The Great Reset” to enable “stakeholder capitalism.” But pushing the reset button just restarts the game, without changing the rules of the game – or even the game itself.
The reset button clears the memory and reboots the (old) system, a system that has proven that it could not prevent the current crises, but rather has caused them.
Our Spotlight on Sustainable Development Report 2020 offers as an alternative an “8 R”-agenda for systemic change.
The eight sections do not provide a comprehensive reform programme. Rather, they illustrate in a nutshell eight issue areas where not only policy and governance reforms but also changes in the underlying narrative are long overdue:
1. Re-value the importance of care in societies: The pandemic has revitalized the idea that essential jobs exist. Care-giving jobs are at the top of that list, even though historically they have been hardly recognized, socially devalued and badly paid, with little or no benefits or protection.
A recognition of the essentiality of care should foster a process of transformation in the way in which it is socially addressed.
Democratically expanding horizons of equal care arrangements, allocating public resources to building care infrastructure and recognizing and strengthening community care arrangements are essential elements in any process of building a different way out of the current global crisis.
2. Re-empower public services: Around the world, frontline public service workers continue to receive praise and support for their vital role in responding to the COVID-19 crisis. Yet, these underfunded public services and brutal working conditions are not inevitable. They are the result of decades of deliberate erosion of our public services through budget cuts, privatization and understaffing.
We must make sure these services are well financed. We need a better global tax system to ensure corporations and the very wealthy pay their fair share and do not use their economic power to exercise undue influence over public policy. The remarkable wave of re-municipalization in more than 2,400 cities in 58 countries shows how possible – and popular – it is to bring services back into public control.
3. Re-balance global and local value chains: The COVID-19 pandemic exposed once again the vulnerabilities generated by commodity dependence and overreliance on global value chains. They reflect the dominant model of a global division of labour which disregards the massive externalities related to resource exploitation, environmental degradation, displacement of communities, and the violation of human rights and labour rights.
The current crisis offers the opportunity to rethink and remodel these unbalanced export-driven development strategies, shift the centre of gravity away from the global economy and take bold public policy and investment decisions to strengthen domestic circular economies.
Three cornerstones of the necessary economic transformation are the strengthening of sustainable local food systems, enhanced regional (or subregional) cooperation to overcome the constraints of limited domestic demand, and systemic reforms in international trade and investment regimes to widen the national policy space for transformation.
4. Reinforce the shift towards climate justice: Against the backdrop of increasing climate change impacts that inordinately affect the poor, especially in the global South, and a potential deepening of the development gap and global inequality as a result of these and other crises, a more just and equitable approach to addressing climate change has to be undertaken.
In particular, countries of the global North should start phasing out and shifting subsidies and investments away from fossil fuel exploration, extraction and production immediately and commit to transition rapidly to a 100 percent use of clean and renewable energy by 2030. They should scale up the provision of climate financing to at least US$ 100 billion by the end of 2020 and increase that rapidly between 2020 and 2030.
5. Re-distribute economic power and resources: The relief and recovery packages being put in place by governments and international institutions are a critical means for tackling the structural inequalities exposed and perpetuated by COVID-19. In designing and implementing these packages, governments have the chance to start disrupting the status quo and breaking up the concentration of corporate and elite power at the root of these inequalities.
However, most governments are currently failing to take this opportunity. Redistribution is absolutely crucial for a just recovery from COVID-19, for realizing human rights for all, and for achieving the SDGs. But on its own, redistribution is not enough – we also have to think about how we create wealth, resources and power in the first place. Crucial “pre-distributive” policy areas in this regard include labour and wage policies and financial and corporate regulation.
6. Re-regulate global finance: The coronavirus crisis and resulting economic lockdown have made clear that fundamental steps need to be taken in financial regulation and reform of the international financial architecture. At least to some extent, they have also created new political impetus for such steps. One essential element would be a sovereign debt workout mechanism.
This requires an institution that makes independent and binding decisions on sovereign debt restructurings based on objective criteria and is able to enforce it in an impartial manner. To address the problems of tax dodging facilitated by financial secrecy jurisdictions and an unfair global tax system, an intergovernmental tax body – with universal membership and a strong mandate– should be created under the auspices of the United Nations.
7. Re-invent multilateral solidarity: Mobilizing support for international cooperation and for the UN must start with bending the arc of governance back again – from viewing people as shareholders – to stakeholders – to rights holders. There are many global standards and benchmarks that could be developed to measure this progression. These should be at the forefront of pursuing substantive, rights-based multilateralism and distinguishing it from multilateralism in name only. The UN should be the standard bearer at the global level, not a neutral convenor of public and private engagement.
This requires predictable and sustainable public resources, currently undermined by tax evasion and illicit financial flows and detoured to servicing undeserved debt burdens. The necessary but not sufficient condition for multilateral solidarity, the fuel to change direction, is a new funding compact at national level and to finance an impartial, value-based and effective UN system.
8. Re-define the measures of development and progress: SDG target 17.19 of the 2030 Agenda urged the international community “to develop measurements of progress on sustainable development that complement GDP”. COVID-19 shows that this is not a statistical subtlety but a matter of life and death.
The example of the Global Health Security Index (GHSI), an analytical tool intended to identify gaps in epidemic and pandemic preparedness, shows that largely ignoring the social and environmental determinants of health and concentrating instead on the infrastructure, advanced technologies and liberalized regulatory frameworks, can lead to misinterpretations and misguided policy conclusions.
The still dominant development paradigm’s main message is that countries need to get richer, not more sustainable, and that to climb the ladder and become “developed” they should follow the advice—and example– of their richer peers. This mindset must be overcome once and for all.
The Spotlight Report is published by the Arab NGO Network for Development (ANND), the Center for Economic and Social Rights (CESR), Development Alternatives with Women for a New Era (DAWN), Global Policy Forum (GPF), Public Services International (PSI), Social Watch, Society for International Development (SID), and Third World Network (TWN), supported by the Friedrich Ebert Stiftung.
Spotlight on Sustainable Development 2020
Shifting policies for systemic change – Lessons from the global COVID-19 crisis
Global Civil Society Report on the 2030 Agenda and the SDGs
Beirut/Bonn/Ferney-Voltaire/Montevideo/New York/Penang/Rome/Suva, September 2020
Key messages of the Spotlight on Sustainable Development Report 2020 as September 25 is the 5th anniversary of the adoption of the 2030 Agenda and the SDGs.
Jens Martens is Director, Global Policy Forum, Bonn
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