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Workers work next to solar panels in an integrated power station in Yancheng city in Jiangsu province on October 14. Governments should consider focusing their support on public capital investment programmes, such as Infrastructure building, health facilities, education, and for the alleviation of climate change. Photo: AFP

Published: 4:00am, 19 Oct 2020Updated: 4:16am, 19 Oct 2020

There was none of the usual champagne-doused atmosphere at last week‘s annual meetings of the International Monetary Fund and World Bank, only a sobering litany of reports and speeches underlining the precarious state the global economy is in now, mainly because of the pandemic but also because of pre-existing conditions.

The meetings were held nominally in Washington but in fact in cyberspace because they were (for the first time) virtual. This gave them a highly focused atmosphere with the usual tentative economic scenarios being replaced by a consensus that things look grim, and need to be changed.

As someone who has covered these Bretton Woods institutions’ gatherings for 30 years, often in times of crisis such those in Hong Kong during 1997 at the peak of the Asian financial crisis or in Washington during the global financial crisis in 2008, I have never seen such brutally sobering assessments.

Never has it been clearer that facile optimism (such as that evinced even now in leading stock markets) is out of place as the global economy faces the long, hard slog of of climbing out of the Covid-19 pit. The spectre not only of continuing recession but also (ominously) of social unrest developing in some countries hung heavily over the annual meetings.

Asia can no longer bask in the glory of being an economic miracle. China is demonstrating a remarkable if not exactly miraculous ability to bounce back and move forward from the crisis but elsewhere – most notably India – the picture looks grim. It seems to be a case of discipline versus democracy at different ends of the Asian spectrum.

The IMF’s World Economic Outlook set the tone. “More than one million lives have been lost to Covid-19 since the start of the year and the toll continues to rise. Many more have suffered serious illness. Close to 90 million people are expected to fall into extreme deprivation this year.”