Can Capitalism Survive the Corona Crisis?
The value of capitalism has been eroded in emerging markets and populations are demanding a different model that is fairer and more equal. Many have been questioning the ability of capitalist societies to address challenges rising from the current health crisis. Some argue that the actual system poses a threat to populations’ physical health since it leaves millions of workers vulnerable due to increased inequalities. In this case, the system is deemed to be both inefficient and immoral. Karim el Aynaoui, president of the Policy Center for the New South, has given his analysis during a session on capitalism and the Corona crisis in the Brussels Forum, organized online, on June 22nd, by the German Marshall Fund of the United States (GMF) with three other experts : Adam Posen, president of Peterson Institute for International Economics, Karolina Ekholm, professor at the Economics Department of Stockholm University, and Ira Kalish, chief global economist at Deloitte.
"With a trend to adopt protectionist measures, there was a bit of backlash regarding globalization, even before the Corona crisis hit the American trade policy, and of course in Europe, Brexit", adds Karolina Ekholm. The debate in question has been present since the financial crisis of 2008 which has put it into question and linked it to the amplified impact of the last crisis. In this case, the pandemic accelerated the consequences of globalization and put forward again the discussion about its efficiency.
Over the last few months, the pandemic has revealed several flaws in powerful economies, such as the USA and Europe. On the other hand, some begin to favor multilateralism and trade. Africa will implement the African Continental Free Trade Area (ACFTA), explained Karim El Aynaoui. Under the current circumstances, the president of Policy Center for the New South expresses his worries regarding the consequences of power rivalries on the continent: "There is a need for leadership in Africa to lay ground for a strong alliance to promote an average of 5-6% of growth over the next 30-40 years". In short, capitalism is evolving, but will not disappear. It will last, even if expected to undergo several changes to adjust to current context and needs.