As the Covid-19 pandemic risks intensifying the move away from globalisation and towards isolationism, the managing director of the Monetary Authority of Singapore (MAS) urged for more connectivity, not less.
Speaking via video at the Caixin Summer Summit, Ravi Menon kicked off by saying that the economic recovery from the coronavirus will be dependent on how well each nation has dealt with the coronavirus.
“Those countries that have put in place strong safe management measures and a robust regime of testing, contact tracing and swift isolation of infected persons, are more likely to minimise a second outbreak of infections and sustain their economic recovery,” he said. “China’s experience is encouraging in this regard. It has been taking decisive steps to contain new outbreaks of infection while lifting movement restrictions and restoring economic activity.”
While it is understandable that some countries may want to close up their supply chain and introduce other measures to flatten the curve, Menon warned against shutting other nations and businesses out.
“It is important that as countries seek to contain the pandemic, they do so in a way that does not undermine connectivity among them,” he said. “Closer integration – through trade and investment – has underpinned the prosperity and poverty reduction we have seen globally since the Second World War. We must preserve this.
“I think there are two priorities for international co-operation in the wake of Covid-19: [firstly to keep] supply chains open [and] [secondly to strengthen] digital connectivity.”
Instead of limiting supply chains, he encouraged more diversified chains that could build more redundancies.
“The pandemic has shown how important it is for countries to keep markets open, trade flows smooth and supply lines intact,” Menon said. “But each country will do this only if it has an assurance that others will do the same. We must therefore make a renewed commitment to keeping supply chains open.”
He also argued for more digital connectivity, especially in terms of cross-border data connectivity.
“Our economies and societies are deeply intertwined: Covid-19 has demonstrated that,” Menon concluded. “The way forward should be one of even closer co-operation and deeper integration – keeping global supply chains open and strengthening digital connectivity across nations.”
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