The unpredictability of a twilight zone

Since the World Bank has as many tools as any other organization with which to fashion projections regarding the likely behaviour of the global economy, going forward, it is altogether reasonable to assume that some measure of seriousness will be attached to its projections and predictions in the period immediately ahead.

A few days ago, in its customary ‘looking ahead’ report Global Economic Prospects: 2021 the Bank, as is customary, produces its ‘crystal ball’ and seeks to take a look ‘down the road’ to provide us with its own assessment of what we might expect of the global economy this year.

World Bank Annual Reports are intended to serve as guidelines if only because their pronouncements are usually predicated on assumptions which it makes clear and which seek to make the point that its prognoses are not set in proverbial stone.

For obvious reasons the Bank’s 2021 ‘looking ahead’ Report was probably a great deal more speculative than those which it proffered in previous years, a circumstance which one need hardly say was a function of a clutch of imponderables and variables that clearly stand in the way of anything resembling what one might call reassuring predictability.

Thumbing through summaries of which, customarily is a pretty formidable document, one finds that the issue of the COVID-19 pandemic and its impact on the global economy the past year or so is repeated with monotonous regularity, a ploy used by the Bank to make clear to readers that such projections as it articulates are not set in stone, but, in fact, are shrouded in imponderables. 

Projections about global and regional economic growth, for example are garbed in assumptions that have to do with the liberties that will be afforded us this year insofar as economic growth is concerned. Particularly, the World Bank makes no secret of the fact, first, that the performances of the respective economies, the world over, are likely, this year, to be contingent on the effectiveness of the mechanisms employed by the respective countries to respond to COVID-19 and just how effective those measures turn out to be. From a global perspective the Bank makes no secret of its belief that the stepping up of a search for and the effective global administering of a vaccination is critical as much to global economies as to human health.

If the World Bank seeks as best it can to invoke a measure of assurance and assertiveness into its pronouncements, the sense of caution about the need to tackle the pandemic head on as a corollary to grappling with the economic challenges is unmistakable. Here, what it acknowledges, is that the pandemic, by its nature and its characteristics, is as much an economic phenomenon as it is a human health phenomenon. Not only has it, in the instances of countries like Guyana, placed unbearable strain on our health system on account of the rapid spread of the infection, but it has also struck at our economy by limiting the effectiveness of our work force by forcing the slowing down and in some instances the closure of the productive sector. The knock-on effect in terms of both the direct and indirect impact of economies at all of their various levels need hardly be stated here.

So that by its own admission, the World Bank concedes that its projections, this year, would have to contemplated against the backdrop of an assortment of imponderables, a grim reminder of the fact that in a whole range of respects COVID-19 has steered us into a kind of twilight zone out of which we are still far from finding our way.