New International Economic Order Under Covid-19 – Whither Sri Lanka

This concept termed ‘new international economic order’ is not a new one – it’s a 50-year-old concept to promote the interests of developing countries vis-à-vis developed countries in early 70s.

- Jayampathy Molligoda

This is relevant now because the international economic order, like an organism, continues to evolve especially in the context of the current pandemic situation.

Many countries suffered the external shocks of COVID-19 without social protection, public health systems, a plan to reach sustainable real economy, with quality jobs, etc.

How will COVID-19 affect the developing countries, especially Sri Lanka’s economic growth prospects? The answer will depend on how globalisation, meaning increased trade and investments between the countries, evolves in the pandemic’s aftermath.

The World Health Organisation, International Monetary Fund (IMF) and other expert organisations claimed that there are large unknowns about how long it will take to develop and deploy effective vaccines, the duration and likelihood of repeat outbreaks and lockdowns and the eventual economic ramifications.

According to Arvind Subramanian, Chief Economic Adviser to the Government of India, Ministry of Finance of India, there is every reason to worry that a historic process of deglobalisation is underway, threatening to scuttle the growth models of poor countries that previously used trade and investment as a path to economic development.

The IMF, which has called the current situation “a crisis like no other”, also slashed its growth forecast for the world economy, expecting the global GDP growth in 2020 to be minus at -4.4 percent.

How deglobalisation is hurting world’s emerging economies