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Mapping an Equitable Recovery

COVID-19 Insights Conferences May 07, 2021
COVID-19 Insights Conferences May 07, 2021


Economists are forecasting a powerful rebound as the world emerges from pandemic, in the same way business, nations and government came together to combat COVID-19, they will need to work together just as hard to ensure the recovery is equitable and does not leave behind those most affected by the global crisis.

Speaking to BMO’s annual Global Reserve and Asset Managers Conference, BMO Chief Executive Officer Darryl White said that the same vulnerable groups who were most impacted by COVID-19 run the greatest risk of being left behind in the recovery.

“The pandemic has laid bare society's greatest weaknesses,” White said in a lunchtime keynote conversation to mark the first day of the conference. “The folks who were the most vulnerable on the way down are also the most vulnerable in the recovery.” As an example, he pointed to likely wage inflation for people with skill sets who were already the highest paid and, as such, most protected during the pandemic.

Likening the global economy to a tightly-wound coil ready to spring, White said the initial rebound may take some six months or so to occur, and while it may not be globally synchronized, when it happens, it will be profound, with 6%-plus growth globally. At that rate, the world will have recovered and even built upon what it lost in GDP growth in 2020. After the initial rebound, White said, the sustainability of the recovery will be challenged by pockets of volatility across geographies and sectors.

The challenge, said White, will be to ensure the recovery is equitable and does not leave behind the same, most vulnerable populations that have been most impacted by the pandemic and its economic fallout.

“What about those people that are getting left behind?” said White, pointing at the vulnerability of women and racialized populations. “We, as senior people at the top tables of organizations, have to drive this, because otherwise, if we don't pay attention, we'll end up not only not fixing this problem where the most vulnerable have been laid bare, but we'll be responsible for exacerbating it.”

Key Learnings Are Reasons For Optimism

But there are reasons for optimism, said White, pointing to three key learnings from the past year that may help the world build back better from the pandemic. The first, building on the experiences of the Global Financial Crisis of 2008, is the power of a coordinated response, among fiscal and monetary policymakers and among business leaders.

“It doesn't mean that all of those decisions get made identically, but it does mean that the coordination on response gives the outcome a much better chance of being a positive outcome faster when the coordination is there,” he said. “This time, I saw coordinated response in a matter of weeks that took months, and months that took years, frankly, in the global financial crisis.”

Second, White pointed to a consistent imperative to invest not only in the business and policy response for the sake of jobs in the economy, but also social resilience and the social licence. “That's been a really tricky balance … I think it'll continue to be to be a tricky balance, particularly as we look at the outcomes and the unevenness of the recovery.” He said the third key learning has been around speed and adaptability, both in technology acceleration and human resilience, and that will also have implications on the return to work.

In the case of BMO’s employees, White says the return to work will see a hybrid rather than a one-size-fits all model, predicting that many of the changes made possible by the new ways of working enabled by technological innovation will endure long after the pandemic.

“There'll be parts of the organization that will feel a lot like they were before, because there is a deep need for constant human connection or because, frankly, it was just working so well,” he said. “In other areas, I think that we will see a radically different environment relative to the way people worked before, and that goes to technology, it goes to work location, it goes to density and mobility as people think about how much time they spend going around the world.”

 

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Darryl White Chief Executive Officer, BMO Financial Group

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