Divisive, damaging era of Trump’s presidency comes to end; how will global economy fare in 2021?

While the coronavirus pandemic has led to disruptions in almost all corners of the global economy, the re-election defeat of US President Donald Trump is believed to have opened a new window of opportunity for the world leaders. The defeat of Donald Trump marked the end of one of the most divisive and damaging presidencies in American history, said Zanny Minton Beddoes, editor-in-chief, The Economist. However, the question still exists if the politicians are bold enough to take advantage from the scope of an economic and social reset?

Covid-19 has not just pummelled the global economy but has changed the trajectory of the three big forces that are shaping the modern world. Globalisation has been truncated; the digital revolution has been radically accelerated; and the geopolitical rivalry between America and China has intensified, Beddoes added in “The World in 2021” report by The Economist. The pandemic has also worsened the situation of inequality across the world. Further, amid the misery of a resurgent second wave, attention in many countries will still be focused on controlling the virus, the report said. 

What changes in 2021?

It is expected that the post-covid world will be far more digital. From remote working to online retail, the pandemic has compressed years’ worth of transformation into months, bringing with it a dramatic shake-up in how people live, what they buy and where they work. Winners from this bout of creative destruction include the tech giants and large companies more broadly as they have the biggest troves of data and the deepest pockets to invest in digital transformation. Also, it is suggested that big cities will have to reinvent themselves. 

While many businesses have already suffered closure, it is further expected that a flood of closures, especially among small businesses and in the retail, travel, and hospitality industries are on the way. Though globalisation will still be in place, people will travel less. The inference comes out from the fact that the Asian countries that controlled the virus most effectively were also those that shut their borders most strictly. 

15 crore people may fall into extreme poverty

While the border restrictions and quarantines will stay in place long after covid-19 caseloads fall, migration of workers may significantly fall, which will further dent the prospects of poor countries that rely on flows of remittances from their migrant workers abroad. In the report, it is estimated that nearly 15 crore people may fall into extreme poverty by the end of 2021.