While the 2008/2009 global economic crisis had many negative consequences, one positive effect was that it massively accelerated international cooperation on tax matters. This is the kind of impetus that we also need for tackling the Covid-19 pandemic. The focus is not on generating more revenues, but rather primarily on achieving greater equity in the way that revenues are generated. This requires more public discussion of fair taxation. After all, the way that resources are mobilised and deployed to tackle the crisis will also have an impact on state legitimacy and social cohesion.
The impacts that Covid-19 has brought about in our daily lives are very apparent. Less apparent is the immediate implications of the pandemic for global poverty. In terms on the effects on livelihoods, however, impacts are going to hit vulnerable communities the hardest. Any net loss for them represents a larger share of their already limited income and the effects will be felt well beyond shocks to their income.
Beginning in July, Germany will hold the European Council Presidency until the end of the year, a term that will be characterised by the effects of the corona pandemic and the efforts to manage it. The Council Presidency should be used to mould the processes of the EU recovery plan and the MFF in a way that delivers decisive impulses for an orientation towards climate and sustainability goals. A further summit of the EU heads of state and government will take place in July, tasked with reaching agreement on the EU recovery plan.
The lockdowns in response to the outbreak of COVID-19 have had immediate effects on the environment and caused a dip in global CO2 emissions. Germany may even reach its climate target for 2020 according to forecasts. However, there is no reason to be cheerful. The pandemic and its consequences may seriously set back climate action around the globe.
The COVID-19 pandemic is affecting all of us, but to differing extents. Overstretched health care systems, curfews, unemployment and school closures are posing challenges and pushing people beyond their ability to cope. The consequences of the pandemic will be felt in both, the short and long term. However, the longer term health, economic and social impact can only be estimated at present.
The Covid-19 pandemic not only threatens to undo development gains and reverse progress in achieving the sustainable development goals of the 2030 Agenda. It also presents an early and serious test for the reform of the UN development system (UNDS), where major reform decisions were taken in 2018 to reposition the UNDS for improved, integrated and strategic support in line with the 2030 Agenda’s interlinked nature.
Governments around the world have restricted basic democratic rights such as freedom of assembly, stepped up state monitoring of citizens, muzzled the media with new laws and arrests, and expanded their own powers as part of their Covid-19 policy. Those making foreign and development policy must monitor this carefully. The Covid-19 pandemic is a catalyst for democracy’s demise.
World Bank Group President David Malpass expects the corona crisis to result in a deeper global recession than the Great Depression of the 1930s. The pandemic will hit the world’s poorest countries even harder than industrialised nations, especially as the former have barely any fiscal leeway. Their social-security and healthcare systems are not sufficiently robust.
The corona crisis has grave consequences for health, the economy and society. Pandemics such as COVID-19, Ebola and cholera will return repeatedly unless we understand what causes them. New infectious diseases in humans are often unleashed by viruses and bacteria in wild animals. The destruction of undisturbed ecosystems brings humans into closer contact with animal species that could transmit hitherto unknown pathogens. Consequently, the only way to successfully prevent localised epidemics and continental pandemics is to view human, animal and environmental health as one unit, as it is in the One Health concept.
The international community bears joint responsibility for the world’s poorest countries during this pandemic. For this reason, both temporary, immediate liquidity support and long-term measures that address the root causes of indebtedness are important in order to enable these countries to prevent a financial catastrophe on top of a humanitarian one.