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Building back better together: resilience cannot be achieved by turning inwards

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The COVID-19 pandemic is putting globalization to the test.

In this context, the key challenges of assessing risks to global value chains and developing strategies to increase their resilience were the focus of the fifth edition of the Forum on Globalization and Industrialization, the joint initiative of the United Nations Industrial Development Organization (UNIDO) and the Kiel Institute for the World Economy (IfW Kiel). This year’s Forum was held virtually under the title, “Globalization at the Crossroads: Risk, Resilience and Recalibration in Global Trade and Value Chains”, and brought together more than 300 participants from over 60 countries.

In his opening words, UNIDO’s Director General, LI Yong, said, “The pandemic has led to increased scrutiny of some of the established economic paradigms. Globalization, which relies on the premise of international production, trade and investment flows, and which has widened the economic opportunities of millions of people, has been called into question.”

He also highlighted the supply chain disruptions caused by the pandemic which prompt firms to make their supply chains more resilient. “Reinforcing regional operations by shortening supply chains and staying closer to the consumer is one of the possible strategies. Yet, resilience is not a call for self-sufficiency, and reinforcing regional integration is not a call for anti-globalism,” stated Li.

Professor Felbermayr, President of the Kiel Institute for the World Economy, said, “In the spring (of this year), scepticism was looming large but today we see that certain problems that we saw are solved. Personal protective equipment is no longer scarce at all.” He further highlighted the relevance of multilateralism for the development of the COVID-19 vaccine, taking the example the cross-border cooperation between Biontech and Pfizer that produced the first supplies of a COVID vaccine. But although multilateralism has proven to be efficient during the pandemic, Felbermayr still sees a danger of economies turning inwards in their search for resilience and independence.

Rania Al-Mashat, Egypt’s Minister of International Cooperation, discussed the future of global value chains in Egypt and the MENA region. Talking about potential trends towards localized supply chains, Al-Mashat raised doubts about the feasibility of moving supply chains to new regions. She further addressed the concept of green recovery as an international trend, mentioning that both governments and companies increasingly attach importance to Environmental, Social and Governance (ESG) criteria. “This also pushes, implicitly, a globalized agenda because ESG are rules and guidelines that everyone is reading about, talking about, writing about and trying to comply with.”

“Forty-four percent [of executives surveyed] said they would start to consider resilience at the cost of short-term efficiency,” said Susan Lund, from the McKinsey Global Institute. Lund gave insights into firm-level policies to increase resilience and remarked that the actions to increase resilience, such as dual sourcing, may offer development perspectives for new markets. “We will see trade flows shift more over the next three to five years than we have in the past, as companies seek to diversify their supplier base. And I think this is good news for countries that haven’t participated as heavily in global value chains in the past,” concluded Lund.

Drawing on his long experience as a researcher, Ricardo Hausmann, Professor at the Harvard University, discussed industrial policy implications of the pandemic. Since the pandemic has hit middle-income countries harder than high-income countries in terms of debt growth and GDP reduction, and as the distribution of the vaccine is expected to be later in emerging economies, Hausmann expects adverse effects on the recovery of middle-income countries. “My concern is that there is too little fiscal room in middle-income countries. […] They have been too cautious from a global optimum point of view. There has been an enormous destruction of jobs and firms. So, I think we need more international finance,” said Hausmann.

Based on recent experiences, all panellists agreed that one of the main lessons learned from the pandemic is that value chains have to become more resilient. However, resilience cannot be achieved by turning inward. Instead, companies should focus on building up diversified supply chains which can create development potential for new regions. All panellists also agreed that the road to a sustained recovery requires a strengthening of international collaboration and alignment efforts at different levels and across multiple stakeholders.

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Women in Albania to Gain Greater Access to Global Digital Jobs Market

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“Digital Jobs Albania” is a new World Bank initiative that will help women in Albania gain better access to online work opportunities and connect with the global economy. The initiative will provide intensive 3-month training in digital skills for women aged 16-35 years, empowering them to access online freelancer job opportunities in graphic design, web development and digital marketing.

The emergence of online freelancer job markets is creating new opportunities for Albanians to connect with the global economy. Websites such as Upwork, Fiverr and People Per Hour allow Albanians with the right skills to access online project work commissioned by companies and individuals anywhere in the world, while staying in their local communities.

Women in particular stand to gain. The female labor force participation in Albania is still 14.6 percentage points lower than for males. The gender pay gap remains 6.6 percent, according to 2020 data from the Albanian National Statistical Authority (INSTAT). The emerging online freelancing work model can play an important role in narrowing these gaps. Flexible work hours and the ability to work from home can help more women with the right skills stay in the labor market and gain financial independence.

The Digital Jobs Albania initiative, implemented in partnership with the Government of Albania, Coderstrust (an international digital skills training provider), and EuroPartners Development (a local consulting company), will provide an online training program to equip selected participants with in-demand technical skills. It will also provide mentorship to participants and help them develop the soft skills needed to successfully compete for project work on online freelancer websites. 

“This initiative offers an exciting new opportunity for Albanian women to acquire digital skills and join the online economy – a blueprint to inspire future projects in this space,” says Emanuel Salinas, World Bank Country Manager for Albania. “No one can afford to be left behind in the ongoing digital transformation.”

The initiative is part of broader ongoing World Bank engagement in Albania to help the country leverage the economic opportunities associated with digital trade in goods and services.

“Albania has recognized the importance of digital markets as an opportunity for economic development. We have mobilized a team from across the World Bank to support this effort, through this new initiative and others in the future,” says Christoph Ungerer, the World Bank task team leader for the Albania Digital Trade Project.

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World Economic Forum Plans 2022 Annual Meeting in Davos-Klosters

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The World Economic Forum plans to convene the world’s foremost leaders for the Annual Meeting 2022 in Davos-Klosters, Switzerland. Taking place in person from 17-21 January, the Annual Meeting 2022 will be the first global leadership event to set the agenda for a sustainable recovery.

The pandemic has exacerbated fractures across society. It is a critical year for leaders to come together and shape necessary partnerships and policies. The meeting will bring together forward-thinking leaders to drive multistakeholder collaboration and address the world’s most pressing economic, political and societal challenges. Further details will be announced in due course.

The wellbeing of our participants, staff, service providers and hosts is a priority. Therefore, the World Economic Forum is working closely with the Swiss authorities, as well as with experts, national and international health organizations to put in place measures for the Annual Meeting 2022 that are appropriate and adapted to the context.

Klaus Schwab, Founder and Executive Chairman, World Economic Forum said “The pandemic has brought far-reaching changes. In a world full of uncertainty and tension, personal dialogue is more important than ever. Leaders have an obligation to work together and rebuild trust, increase global cooperation and work towards sustainable, bold solutions.”

Progressing cooperation on tackling climate change, building a better future for work, accelerating stakeholder capitalism, and harnessing the technologies of the Fourth Industrial Revolution will be important topics on the agenda.

Ahead of the Annual Meeting 2022, the Forum will host the fifth Sustainable Development Impact Summit to take place virtually from 20 to 23 September 2021 in the context of the United Nations General Assembly. The summit will convene under the theme Shaping an Equitable, Inclusive and Sustainable Recovery. It will welcome almost leaders from government, business and civil society who will work together to drive action and build momentum for a more sustainable and inclusive future.

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Spain’s PM Speaks with Global CEOs on Strategic Priorities in Post-Pandemic Era

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The World Economic Forum today hosted a “Country Strategy Dialogue on Spain with Prime Minister Pedro Sánchez” for its partners, chaired by Børge Brende, President of the Forum. The session gave CEOs from around the world an opportunity to hear directly from Sánchez on the factors behind Spain’s remarkable resilience to the economic shocks of the pandemic and its post-COVID-19 recovery strategy.

In the virtual session, Sánchez explained his government’s policy priorities and answered questions from CEOs on promoting innovation, a digital economy, a green transition and social justice in Spain, and on improving the enabling environment for long-term investors.

“After deploying unprecedented economic, financial and social measures to protect our economies, Spain is experiencing strong recovery. We want to build the economy of the future, and to do it in an inclusive way, leaving no one behind. We want to attract top talent and quality, innovation-centric investments. In summary, we want to transform the Spanish economy and we want to do it together with the private sector,” he said.

“The world economy is again growing. Spain is on track to be one of the fastest-growing economies among G20 countries. With Spain being among the key stakeholders in the European Union recovery fund, Prime Minister Sánchez and his government have provided important leadership on how to use the current momentum for a truly transformative agenda, for Spain, but also for Europe.” said Brende.

More than 80 partners of the World Economic Forum from around the world participated in the virtual session.

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