Covid pushing world towards digital economy

CNN anchor and columnist Fareed Zakaria thinks that after the Covid-19 pandemic struck, the world has greatly moved to digital economy with an explosion in online shopping and viewing of movies, Amazon taking market shares each day from other companies, and book sales going up.

Covid pushing world towards digital economy

By Irfan Aslam

Elaborating his point further, he said Amazon had 30 per cent of the market share before the pandemic but it now stood at 60 to 65pc.

He was speaking to Lahore Literary Festival’s chief executive officer (CEO) Razi Ahmed during the launch of his book, Ten Lessons for a Post-Pandemic World, on Sunday. Journalist and diplomat Maliha Lodhi was the other panelist.

“This may be the most significant event of our lives. 9/11 had a great effect on the countries like Pakistan and the US but it was still limited to a number of countries that faced its repercussions. This pandemic has impacted the life of every human being on the planet, including the change in the nature of work, the shift to digital economy,” Mr Zakaria continued.

Speakers at Lahore Literary Festival see explosion in online shopping, movie watching

He said the impact of the pandemic would be greater than what people thought and the world was going to be in this situation for a while. The development of the vaccine in nine months was a miracle and it had astonishing success, but the process of vaccination was different and slow, he explained.

Mr Zakaria pointed out that the great difference between Covid-19 and the last pandemic, the great influenza (Spanish Flu) in 1918/19, was that then the latter was followed by the Jazz Age and the roaring 20s because there was a pent-up desire to return to normalcy.

Former US president Warren Harding’s slogan for his election campaign was ‘return to normalcy’. But this time around, he went on to say, people had an alternative because now they had this virtual option whose result would be hybrid and there was an enormous ease provided by the digital world.

“I imagine a new hybrid world. I imagine one in which we move greatly into the digital economy. And unfortunately, I imagine a much more unequal world, particularly for a place like Pakistan, because when we talk of digital economy we talk of a small digital elite, well-trained, connected, educated people that can generate income using the virtual economy whereas a large number of people are locked out of that right now and that reality has been exacerbated by the pandemic,” Fareed Zakaria pointed out the other side of the picture.

To Razi Ahmed’s question why the US and the UK could not deal adequately with the pandemic despite having big pharmas, universities and infrastructure, the anchor and author replied that America was two things at the same time.

It was extraordinarily dynamic in the realm of private sector but its government had always been burdened by a kind of push-back mentality, adding that the Pentagon had always wanted to keep government limited, constrained and under-funded and that situation was given enormous energy over the last 40 years by the Reagan-Thatcher revolution that was a period whose effects the people were living through.

“We have gone through 40 years of defunding and disrespecting the government. Its agencies are badly staffed,” he said and added that capacity to quickly fulfill public functions had not been built.

Giving examples of the nations of Hong Kong, South Korea, Singapore, Taiwan and Vietnam, he said they did well to control the pandemic because they had good governments. “Taiwan had only 10 Covid deaths, US had 40,000.”

Liberal democracies

To the question why certain countries had managed Covid-19 well¸ Maliha Lodhi pointed out the notion of government and what did it take to govern well.

“It’s not a type of political system that has been developed in a way to manage the pandemic well. The South Asian countries cited in the case of pandemic are not liberal democracies but what they do have is a competent state, trust in the government and a degree of national resilience,” she explained.

Mr Zakaria predicted that the governments were going to be much more involved in providing cash to the people in the coming days, which was going to be a great experiment.

“If it does not work well, there are going to be currency collapses, huge inflation and things like that and if it is effective and stabilises the economy, a lot of people (governments) are going to ask themselves why we should not do it more. We are beginning to see that markets are not enough as it is producing a great deal of instability and monopoly. Look at the tech space where the market has provided you the companies that are almost 90pc of market share which is bad for competition”.

He questioned whether buying everything on Amazon was a good social model. “What does it do to little shops and businesses and what does it do to a town with a small economy. These questions can’t be answered by the market but by politics and the people through social and political movements.”

To the question of the world bodies’ involvement in the solution to control future pandemics, he said the pandemic was global and needed a global solution.

“We need greater international cooperation. Ideally the US, EU and China should get together and announce a plan to vaccinate the world. It would not cost much money because most of the rich countries have overpaid for the vaccines. Canada has five times more vaccines in order than it needs. We have enough vaccines to vaccinate 60pc of the world.”

Ms Lodhi pointed out the paradox of the present era in the form of the growing multi-polarity and undermining of multilateralism. With the great multi-polarity, there was a greater need for international cooperation which was missing due to unilateral policies of leaders like Donald Trump, Vladimir Putin and Narendra Modi, she said.

Originally published at Dawn