LONDON — The global economy must fundamentally transform in order to avoid going back to the status quo that got us here, global finance leaders said Tuesday.
As policymakers around the world attempt to plot an economic recovery from the Covid-19 crisis amid a resurgence in infections in the U.S., Europe and various countries around the world, leading figures at the World Economic Forum (WEF) Jobs Reset Summit called for an overhaul of the global economy.
European Commissioner for the Economy Paolo Gentiloni told a CNBC-moderated panel that the coronavirus could be used as a "driver for transformation."
"We had a strong response from the European Union, unprecedented, and the issue is will we be able to use this common response to transform our economies, not only to go back to normal?" Gentiloni said. He added that a push toward sustainability, greater digital competitiveness and progress toward economic inclusiveness would be essential in facilitating this transformation.
Angel Gurria, secretary-general of the OECD (Organization for Economic Co-operation and Development), told the same panel that the global economy was not in great shape going into the crisis, with trade tensions having a knock-on effect on confidence, investment and ultimately growth.
Gurria suggested that Covid had exposed the fundamental flaws in the global economic structure, from production to trade to inequality and "the way in which we are leaving many people behind."
However, he argued that controlling the virus is the first priority in order to mitigate the long-term economic consequences, including rising deficits, debt and unemployment.
"We don't want to go back to the status quo that you had before because it was the status quo that got us here, that made us be unprepared, that did not invest enough in vaccines, that did not invest enough in health," Gurria told CNBC's Steve Sedgwick.
"We are not out of the woods yet, we are actually just starting to walk into the woods, I'm afraid, because the economic and social consequences will last a lot longer than the virus itself."