South Africa: The World After Covid-19 - Redefining the Global Social Compact

South African currency

In the worst-case Covid-19 scenario there will be whole towns, or even countries, facing mass immiseration, and it's not clear that the IMF or the World Bank will have nearly the funds to offer them all the chance of redemption. Hopefully, though, things won't get quite so bad -- and in that case there will be an opportunity for an epoch-defining social compact.

There are two problems when it comes to assessing the economic impact of the coronavirus. The first is that the word "recession", in its ordinary usage, is good only for textbooks and not for practical policy-setting. And the second is that the crisis we're facing is of such a nature, and magnitude, that regular words and concepts are of very little help.

About a month ago economists started telling us that South Africa was "on the verge of a recession". What they meant by this was that we had experienced a full quarter of negative growth and that it was looking like the next three-month period would end with a similar result. In other words, come the end of March we will have experienced two consecutive quarters of decline in GDP and then we would be "officially...

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