COVID-19 accelerates already existing trends in society
The world after COVID-19 will see materially changing governance in the world and accelerate the already existing themes and trends in society, the global economy and geopolitics, including an increasing focus on climate change and a technology-led reinterpretation of business models, according to Martin Currie.
On top of that, the role of the state would be expected to change even in mature and stable democracies which meant that the harsh reality was that “big government” was better placed to deal with pandemics.
Further to that, societies would reassess priorities and change attitudes to economic systems, at least for a generation, with one component of that being the treatment of risk and the marginal cost of doing nothing. At the same time, there would be an increasing rejection of government and of globalisation and societies would continue to focus on inequality and nationalism and these themes will drive policymakers in many countries.
Kim Catechis, head of investment strategy at Martin Currie, said climate change policies could benefit from higher prioritisation, given the global extent of the cost of COVID-19, in human lives and in material losses, and a recalibration of attitudes to global threats.
Catechis also expected that every geopolitical risk would increase, with every dormant or low-intensity geopolitical stress point in the world becoming more amplified.
“It is already in the process of materially changing governance in the world. In most cases these changes appear to be an acceleration of themes and trends that were already underway. It naturally follows that there will be far reaching impacts and behavioural changes which may prove permanent,” Catechis said.
“At this point, it is hard to build conviction on when or how the emergency subsides; but the nature of markets is to constantly strive to quantify and identify cause and effect, trend and secular change.”
AUTHOR
Oksana Patron
Recommended for you
With an explosion of private credit managers appearing in the market, two alternatives experts believe a consolidation is needed to maintain the quality of the sector.
Bentham Asset Management has become the latest fund manager to expand its distribution team as it reports increased interest in its credit strategies.
L1 Capital, which is in talks to merge with Platinum Asset Management, has indicated it will be voting against a deal to convert a Platinum LIC into an ETF.
Evidentia Group has hired a head of quantitative investments who joins the investment firm and managed account provider from AMP.
