The Covid-19 crisis is a rare event with large social and economic consequences that will most
likely exceed what the optimists are expecting, but not be nearly as dramatic as what the pessimists
predict. Human history is an incessant sequence of crises that shape the evolution of societies, but
the effect is never detached from the past. Societies, cultures or economies mutate in an
evolution
...[Show More]
The Covid-19 crisis is a rare event with large social and economic consequences that will most
likely exceed what the optimists are expecting, but not be nearly as dramatic as what the pessimists
predict. Human history is an incessant sequence of crises that shape the evolution of societies, but
the effect is never detached from the past. Societies, cultures or economies mutate in an
evolutionary process that major disruptions accelerate, presenting new challenges and
opportunities.
The crisis will have short- and long- term consequences on a range of social domains and economic
sectors. The short-term consequences are related to the need to manage the easing of the
restrictions, the necessity to maintain social distancing, or the expected drop in consumption that
will profoundly affect the prospects of sectors dependent on physical presence, such as tourism,
culture or education. For many, especially smaller, organizations, the aftermath of the crisis will
pose difficult questions related to survival and the need to reduce budget shortfalls. Governments
will have an active role to play at this stage, though this role is naturally constrained by the reduced
tax revenue. As economists are already warning, cranking up the money printing press can help
maintain employment and prop up viable businesses in the short run, but is perilous in the long
run, given the inflationary pressure it generates and elevated rates of indebtedness. Juggling
between these contrasting imperatives is the new normality for governments. Elected on promises
of sustained growth and lower unemployment, they are now facing the need to manage the opposite
scenario – of rising unemployment, a slowing economy, and a pervasive expectation that things
will get worse before they get better. This is what deep, penetrating crises do - they change
convictions, invert perspectives and reinforce contradictions that up to now appeared manageable.
[Show Less]