The COVID-19 pandemic has fundamentally changed our global economy. The pandemic’s economic and health consequences have led to a wave of job losses, shuttered businesses, school closures, and – most sadly – an unprecedented loss of life. Over a year and a half into the COVID-19 pandemic, offices remain empty, travel is limited, and businesses – especially small and medium-sized enterprises (SMEs) – continue to struggle.
Sadly, there is not a “one size fits all approach” to the mountain of complex problems facing our world today. The era of responding to COVID-19 through tactics based on fear, distrust, and isolation is over. To fully address these persisting challenges, we need policymakers and business leaders to come together to build the foundations of a truly inclusive and sustainable global economy for all.
The most immediate priority for policymakers and business leaders should be to expand vaccine access for people everywhere. As policymakers in Europe and the United States consider plans for booster shots, much of the rest of the world has not received a single vaccine dose. According to the World Health Organization, low-income (LIC) nations have received less than 1 percent of vaccines administered globally. The most efficient way to reopen our global economy is to widen vaccine access for people around the world, especially those in developing economies in Asia, Africa, and Latin America.
Instead of shoring up vaccines for their own citizens, we need governments to contribute to a multilateral solution for vaccine access. Most notably, we need more countries to sign up to the World Health Organization’s Act-Accelerator – an unprecedented collaboration between intergovernmental organisations, industry and civil society – to ensure equitable access of health tools to fight COVID-19. As the only private-sector representative on the ACT-Accelerator advisory committee, ICC will continue to work together with WHO Director-General Dr Tedros Adhanom Ghebreyesus to reduce the spread of the pandemic through expanded access to health tools.
The expansion of vaccines and tools to fight COVID-19 will, of course, require governments to do away with their protectionist trade measures. Unfortunately, governments have reverted to the deployment of trade restrictions to protect their own economies from the consequences of the COVID-19. However, as with past crises, the results have been disastrous in containing the spread of the pandemic and have severely damaged the international trading system.
Governments must step up and publicly pledge to avoid enacting trade barriers – including export restrictions – that could limit access to medical equipment and vaccines. Even better, we need governments to support the efforts of Director-General Dr Ngozi Okonjo-Iweala in reforming the World Trade Organization (WTO) into a forum of effective dispute resolution for the transformed post-COVID-19 recovery. For businesses, the WTO represents an immediate opportunity to create an updated rulebook fit to address the most pressing challenges facing our global economy, including climate and sustainable initiatives.
Governments must also work cooperatively to ensure that there are adequate trade financing options available for SMEs. In the face of a worrying shortfall of trade finance, we need governments, intergovernmental organisations, and banks to take concrete steps to support SMEs to ensure their survival. Unless financial institutions intervene to backstop the supply of credit, from commercial banks, SMEs will suffer from liquidity shortages that could disrupt their operations altogether. In particular, the G20 is best placed to expand credit guarantees and rally global support from government agencies and development banks to backstop global trade transactions.
In the absence of global governance, ICC has called on governments to reform laws to enable electronic transferrable records to be handled in digital form and align legal frameworks to the UNCITRAL Model Law on Electronic Transferrable Records. This is a fundamental building block to digitalising the trade ecosystem by removing unnecessary cost and complexity from the system and enabling greater access to trade finance. Launched in April 2020, the ICC Digital Standards Initiative promotes greater economic inclusion through the development of open trade standards.
ICC has also launched our TradeNow campaign to offer SMEs with innovative trade finance solutions to tackle the global trade finance gap. The digitisation of trade finance and technology solutions offer new opportunities for banks and non-bank financiers to provide SMEs with the required capital to keep their trade operations moving forward. In partnership with leading fintech firms, ICC is developing solutions that will reduce trade barriers and simplify cross-border transactions for SMEs.
Most notably, ICC is working with Finastra, the London-based financial software company, to launch ICC TRADECOMM™, an alternative financing platform that will provide SMEs with immediate capital to complete their trade transactions. The ICC TRADECOMM™ is currently being piloted by ICC and Finastra in Ecuador with the assistance of the Quito Chamber of Commerce. Solutions provided under the umbrella of ICC TradeNow will equip SMEs with the required solutions and funding to build back to pre-pandemic levels.
At the local level, the COVID-19 pandemic has also caused unprecedented disruption to our youth, especially young entrepreneurs. The private sector can and should work in collaboration with governments and international organisations to provide the next generation of innovators with the support they need. The private sector can work together with governments and educational institutions to encourage and support an entrepreneurial mindset among young people. Most notably, the private sector can provide young entrepreneurs with basic support services that they often cannot afford, like marketing, legal, and accounting resources.
ICC has launched the ICC Centre of Entrepreneurship to provide specialised training, mentoring, and support services to help entrepreneurs establish, fund, manage, and expand their start-ups. The first regional ICC Centre of Entrepreneurship was launched in Istanbul to serve the Central Asia and Caucus region in early 2020 and was followed by a hub in Beirut to serve the Arab region in October 2020. This year, ICC has already launched four hubs in Africa and plans to launch future hubs in South America and Asia.
In the coming months and years, governments must resist the temptation to resort to policies driven by protectionism, isolationism, and fear itself. Policymakers and business leaders must take bold action to commit to the virtues of multilateralism and cooperation. If not, we will ultimately fail to contain this virus and our global economy will continue to suffer from constant uncertainty. We must turn the page on this difficult time by building a more resilient and sustainable world together.