Coronavirus: world 'must reset or risk violent shocks', says Davos founder

A new book co-authored by the founder of the World Economic Forum argues that the pandemic has revealed a great and collective desire for change that governments and companies around the world must urgently address or risk "violent shocks", such as revolutions and conflicts across countries.

Professor Klaus Schwab and French author Thierry Malleret's Covid-19: The Great Reset, published on Monday, explores what the post-pandemic world could look like barely six months since the outbreak started. It has triggered "momentous changes and magnified the fault lines that already beset our economies and societies", they say.

The global outrage expressed over the killing of George Floyd and the wider Black Lives Matter movement are evidence of “the urgent necessity” to fix economic and societal issues, Prof Schwab and Mr Malleret write.

The crisis “may compel us to act faster by replacing failed ideas, institutions, processes and rules with new ones better suited to current and future needs”.

While there remains very little certainty about what the future might bring, the authors are sure that “questions of fairness will come to the fore”. There will also be concerns raised more frequently about damage to the environment and the pace of how new technologies are being applied.

“All these issues pre-existed the pandemic, but Covid-19 has both laid them bare for all to see and amplified them. The direction of the trends hasn’t changed but … it got a lot faster.”

Commodity-rich countries are most vulnerable to any geopolitical shocks, the authors say.

“The triple blow of Covid-19, the collapse in oil prices (for some), and the freeze in tourism (a vital source of employment and foreign currency earnings) could trigger a wave of massive anti-government demonstrations,” Prof Schwab and Mr Malleret write, citing Lebanon’s recent unrest amid its financial crisis, as an example of what could play out.

Food security has become more pressing an issue as a result of the “combination of movement and trade restrictions caused by the pandemic with an increase in unemployment”.

A lack of access to food could be a trigger for unrest and another refugee crisis.

History has shown, the book argues, that pandemics are a force for radical and lasting change. Rising youth activism, mobilised via social media platforms, will be the catalyst this time. However, the “chaotic end of multilateralism” and nationalism are making it more difficult to deal with the outbreak. There will be resistance to any efforts to make big changes.

“One path will take us to a better world: more inclusive, more equitable and more respectful of Mother Nature. The other will take us to a world that resembles the one we just left behind – but worse and constantly dogged by nasty surprises,” the authors argue.