Global Economy

Global Impact of the Covid Pandemic

Mr. Hultin and Mr. Dhruv Katyal, Partner and COO, ScaleneWorks discussed the latest economic changes in the world and shared their opinions and views on India-China relations, reform policies, and the fate of globalization.

Göran Hultin
Founder & CEO, Caden Corp. SA
Former Assistant Director General ILO (UN)
COVID19 has had a massive impact on every business and India has seen a major loss of 50 million jobs post the horrid pandemic. To understand the pandemic’s global impact, ScaleneWorks invited Mr. Göran Hultin, CEO and Chairman of Caden Corporation for a webinar.Mr. Hultin has worked on labour policies, employment market development, and industrial relations for Europe, China, Vietnam, Mongolia, and the Middle East.

Changes in the last 6 months

Mr. Hultin expressed that the pandemic and the consequential lock down has had different effects on every country. Every country in the past few months has been trying to reduce the impact that the pandemic has had on its economy.

Over 300 million full-time jobs have been lost and the worst affected sectors have faced budget cuts and shutdowns. Of all the industries, the tourism and the hospitality sectors have been the most affected ones. He said that only the industries that can work remotely, for example, Information Technology, are the ones who haven’t faced devastating changes in their sector.

The Fate of Globalization

Recently, the World Trade Organization forecasted that world trade is expected to fall anywhere between 13% to 20%. In response to this, Mr. Hultin expressed that globalization will end as we know it. Our perception will be altered in the coming months due to the policy reformations that will be implemented.

He spoke about the two countries that responded differently to globalization. In the US, 40% of the population view globalization negatively in comparison to only 27% viewing it positively. Whereas in Singapore, only 12% of people view it negatively and 71% of people think that globalization is good for the economy.

In every country, policies on trade are the driving forces of business. New trade policies will have a long term effect on globalization for which the world remains unprepared.    

Parallels between India and China

China has been at the forefront of every media coverage in India and the US. With the shift in its role in the global market, Mr. Hultin said that in the past, “China started as a humble student.” It kept a low profile but was constantly planning an ambitious move.

China has achieved an essential role in the global market, once dominated by the U.S. It is now setting the tone and principles of globalization that was predominantly controlled by the western nations.

When asked about the relations between India and China, he added, “India is where China once was.” Mr. Hultin believes that one of the main similarities between the two nations is the population size and the opportunities that come along with it. He also added that China in the past, “formalized its informal sectors.” He gave the example of Shanghai and how the government gave their non-taxpaying citizens help and relief. They provided them with training and development which has led to significant growth in their GDP. This growth is noticeable since China’s GDP is 5 times of India’s GDP.

Mr. Hultin believes that with the right infrastructural development and support to the informal sectors, India will also at some point be at par with China’s current standpoint.

He said that India can either choose a multilateral approach to globalization much like China or have a nationalistic and unilateral approach like the western nations. With either of these approaches, India can flourish as a strong economy like countries such as the US, Russia, and the European Union who are, “moving from open market globalization to a nationally driven globalization.

The Notice Period Economy

Mr. Dhruv said that we are currently in a notice period economy. This is a time period full of uncertainties and confusion, much like the economy during a pandemic. 

When asked about the future of our country after the Indian government taking several steps towards curbing the effects of the economic crises, Mr. Hultin said that no one can assure a positive future. Countries have been releasing a large amount of capital to protect the economy and its citizens. We will only witness the truth pan out after countries cannot afford to spend anymore. 

He further stated that there are 2 parts to a notice period economy. There is the business side and the employment side. Based on how the world economy enfolds, companies will have to either focus on expansion or retention of limited clientele and employees.

Future is full of New Opportunities

With the constant growth in automation and digitization, several backend jobs will be lost in the coming years. Mr. Dhruv poses a question about how workforces deal with such a dynamic shift.

Mr. Hultin responded saying that due to several uncertainties, no one knows what the job market will look like in the future, but he remains positive about it. In the coming years, there will be a surplus of innovation and new opportunities that will be created. We must not think that the future is bleak. Every time one industry grows, it gives other industries a chance to grow as well.

Mr. Hultin also shared his own experience in context to Finland, the country that saw the rise of the telephone business which ultimately paved the way for new jobs and businesses. Overall, he focused on a very significant point saying that the new opportunities will arise with the growth of the technology and automation industry since no industry can function in isolation.

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