As the Covid-19 pandemic spreads and in many places deepens across the world, and efforts to revive our economies flounder, some sobering questions arise: how deep is the recession going to be? How many companies are going to go bankrupt before we see light at the end of the tunnel? And just how many people are going to lose their jobs , or see their incomes sharply cut, for the foreseeable future? Without immediately turning to specific answers, there is one quick and easy response: things are almost certainly going to be worse than any forecasts you have read. Only last week, the International Monetary Fund further downgraded growth prospects. It now says the world economy is likely to contract by around 4.9 per cent, compared with its previous forecast of 3 per cent. US Federal Reserve chairman Jerome Powell says the American economy is likely to contract by 6.5 per cent this year, with the extent of the downturn and the pace of recovery “extraordinarily uncertain”. The World Trade Organisation director general Roberto Azevedo says the organisation estimated that global trade shrivelled by 18.5 per cent in the second quarter, sweetening his comments with the recollection that earlier forecasts had warned the contraction might be as high as 32 per cent. We are only at the earliest stages of discovering how massive the bankruptcy tsunami might be. As I predicted in March , Hong Kong bankruptcies have soared , without any really big names yet falling among the casualties. There were 2,079 filings in May (there were very few in March and April because of court closures), the worst number by far since the severe acute respiratory syndrome crisis of 2003. Hong Kong firms struggle to revitalise factories in Greater Bay: report The highest monthly number of bankruptcy filings during the 2008-09 global financial crash was 1,872 in March 2009. In January 2003, the very worst point of the Sars-related recession, filings peaked at 2,099, and I wager with confidence that we will see much worse numbers this year. Total bankruptcy orders made in 2002 and 2003 were around 25,000 each year, and I predict they will be significantly higher as the pandemic asphyxiates the global economy, in spite of funds being dispensed in coming months under the government’s Employment Support Scheme. Unemployment in Hong Kong has already risen to 230,400, or about 5.9 per cent – the highest level for 15 years – and continues to head higher. The only comfort is that most other economies are staring at even grimmer numbers – both for bankruptcies and unemployment. In the US over the past month, we have seen JC Penny, Neiman Marcus, J Crew, Chuck E Cheese and Hertz file for Chapter 11 protection. Hertz, which planned to lay off 10,000 people across the US, is likely to be one for the record books, with liabilities of US$24 billion. The US insolvency tracker BankruptcyData.com reports thousands of companies filing for Chapter 11 protection – with restaurants (513 filings), the construction sector (470 filings) and real estate (466 filings) reporting the worst casualties. Asian-Americans hit hard by job losses in New York Which reminds me that Hong Kong still lacks any corporate rescue framework equivalent to the US’ Chapter 11. James Lau, until recently the secretary for financial services, announced in March that the government was planning to introduce such a law – but not until 2021, after September’s Legislative Council election. This strikes me as abysmally inept timing, since it is exactly at a time like now that Chapter-11-type arrangements are critically needed. Most companies filing for bankruptcy in the coming months will be undeserving victims of the pandemic lockdown. Queues of expensive and protracted litigated settlements seem inappropriate when no one party is any more culpable than another as the pandemic has frozen businesses and business partners alike. Anticipating this dreadful bankruptcy trap, we, in the Asia-Pacific Economic Cooperation forum’s Business Advisory Council, have been pressing for economies across the region to resort to fast and cheap mediated settlements for companies – in particular small and medium-sized enterprises – that find themselves innocent victims of the pandemic. Will Hong Kong continue to fall behind Singapore in competitiveness rankings? Given that cross-border business disputes take an average of 15 months to resolve, with legal fees of more than US$1,000 an hour, a cheaper and speedier settlement process has been a high priority. The aim has been settlement within a couple of months, and total legal costs of no more than US$1,000. We have, in particular, been exploring how the online dispute resolution platforms in the process of being established across the region might be used to minimise the inappropriate pain so often arising from bankruptcy proceedings. This makes the imminent launch in Hong Kong of a Covid-19 online dispute settlement scheme both timely and a rare source of good news. The Hong Kong platform, operated by the eBRAM International Online Dispute Resolution Centre, will be offering online mediation of Covid-19-related disputes involving any claim up to HK$500,000, with a HK$200 registration fee for each party. So, most of the news is grim. The pandemic is likely to last longer, and inflict more harm both on lives and livelihoods than anticipated. The current global tally of some 10 million cases and 500,000 deaths is likely to be but a staging post en route to a much grimmer total. Governments worldwide must work more closely together to limit the harm, and to speed up the recovery. That includes minimising the companies that crash and burn, and the number of innocent staff who find their jobs in jeopardy. If technological innovation linked with online dispute resolution can reduce that pain, and speed recovery, then that makes it an important force for good. eBRAM’s initiative, and Hong Kong’s regional leadership, should be applauded. We need similar platforms to be launched across the region. The livelihoods of thousands of companies and the jobs of millions depend on it. David Dodwell researches and writes about global, regional and Hong Kong challenges from a Hong Kong point of view