Business-As-Usual Goldin’s Worst Nightmare

    Stockholm (NordSIP) – For decades now, Skagen’s New Year’s Conference has been one of the highlights of going back to work after the holidays for many Nordic investors. Tuning in to the digital version of the event earlier this week proves to be as exciting as ever. The line-up of speakers is impressive, featuring names like those of Nobel prize (twice-)laureate Joseph Stiglitz and former Secretary of State Hillary Clinton, among others.

    One of this year’s speakers, however, leaves us with a particularly uplifting and thought-provoking message. According to Ian Goldin, Professor of Development and Globalisation at the University of Oxford, the ongoing pandemic has opened a window of opportunity for the rescue of humanity. His thesis should be already familiar to those who have read the book he published last year, Rescue: From Global Crisis to a Better World. The pandemic has created an inflection point. It has demonstrated that united, humanity might avoid calamities that the pre-pandemic trajectory would have made inevitable, such as increased inequalities, environmental destruction, and other cataclysms tearing our societies apart.

    “We all yearn to go back to some sort of normality,” acknowledges Goldin at the conference. “Yet going back to business-as-usual scares me,” he adds. Then he proceeds to explain why. Business-as-usual got us to where we are and if we go along the same road as before the pandemic, we are headed towards a cliff. “We need to embrace the lessons of the pandemic,” emphasises the professor.

    Goldin likes to compare the current pandemic situation to the Second World War. He argues that the devastation and many lives lost in the war were not in vain because it led to creating a new world order and heralded a long period of peace and prosperity. “The architects of this new world order were aware that they needed to do things differently and understood the importance of fairness and equality,” Goldin points out. And now we need to do the same. Preferably while we are still in the midst of the crisis, just as during WW2, and not afterwards.

    Change is always scary, asserts the professor, and COVID19 has imposed severe changes to all our lives. The good thing is that we now know just what enormous behavioural and political changes we are capable of. We have witnessed monetary stimulus on an unprecedented scale. We have seen people willingly submitting to restrictions and sacrificing personal freedoms. We have compressed twenty years of technological development into two. Change is possible in a state of urgency.

    Prompted by the moderator to list the first step we need to take now, Goldin responds that plenty of steps, or even leaps, have already been taken by governments, companies, and citizens all over the world. There are, however, a few items on his list of priorities going forward. One is making sure to prevent the next pandemic. The world’s crisis management system needs to be reformed and refunded, and a new rapid-response task force is in order. Then, according to him, the two biggest challenges that we need to address urgently are the growing inequality and the geopolitical tensions in the world.

    “We might yet create a better world out of this crisis,” concludes Goldin.



    Julia Axelsson, CAIA
    Julia Axelsson, CAIA
    Julia has accumulated experience in asset management for more than 20 years in Stockholm and Beijing, in portfolio management, asset allocation, fund selection and risk management. In December 2020, she completed a program in Sustainability Studies at the University of Linköping. Julia speaks Mandarin, Bulgarian, Hindi, Russian, Swedish, Urdu and English. She holds a Master in Indology from Sofia University and has completed studies in Economics at both Stockholm University and Stockholm School of Economics.

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