Pandemic’s impact to influence economy, social order for long time
Global Business Forum told virus has accelerated and amplified trends they were already seeing.
BANFF, Alta. — The COVID-19 pandemic is fundamentally changing the way the world’s economic and social orders function and some of those effects will be permanent, speakers at the Global Business Forum in Banff said on Sept. 24.
In a series of online sessions broadcast to a ballroom at the Banff Springs Hotel with just three people per table to prevent spread of the disease, subject experts from around the world said the virus has accelerated and amplified trends they were already seeing, as well as taking a few surprising turns.
The pandemic has drawn attention to food security and that stands to boost a technological revolution in agriculture in Canada, said Murad Al-Katib, CEO of Saskatchewan food processing giant AGT Food and Ingredients Inc.
The expansion of plant protein crops such as peas, lentils, and other legumes in Prairie fields has boosted productivity of the industry, and processing those crops into value-added products will continue to grow, he said, while calling on government to help that process.
“Governments are paying attention now. COVID has everyone spooked,” he said.
“COVID wasn’t a slap in the face, it was a punch in the nose for governments to recognize that they can’t just leave food and food systems entirely to fragmented private sector imports and distribution.”
South of the border, meanwhile, recent civil unrest and violence has been escalated by a pandemic that has disproportionately hurt poorer families and Black people, while adding greatly to the fortunes of the richest Americans, said Trevor Noren, executive director of New York analytics firm 13D.
He said COVID-19 is “gasoline for a fire that had already been lit” that could accelerate generational change in ways that historically have been caused by wars.
“We believe COVID could prove to be that catalyst today, the event that forces a reckoning with the inefficiencies and vulnerabilities of excessively concentrated wealth and power,” he said.
“It will mean a backlash against the three primary forces that have driven consolidation: globalization, digitization and financialization.”
World oil demand has recovered to about 90 million barrels per day and that’s less than the 100 million bpd that existed before the COVID-19 slump, but it doesn’t mean the world has reached “peak oil,” said Michael Tran, managing director and energy strategist for RBC in New York.
“With COVID comes the idea of slower mobility, the demise of travel, we’re all working from home, this has really altered how we think about oil demand, but in my experience, acute events that impact oil demand have a shorter term impact than (government) policy shifts do,” he said.
He said events like the 9-11 attacks sharply affected oil demand, but it was short-term, while former president Barack Obama’s fuel efficiency standards had a more lasting affect.
Demand in the developed world peaked long ago, he added, but oil demand in the developing world is expected to continue to grow.
Cross-border trade between Canada and the United States has remained strong despite restrictions on in-person travel, said Kirsten Hillman, Canada’s ambassador to the US, adding she expects the partners’ traditional ties to recover fully when those restrictions are lifted.
She said the recent decision by the US to withdraw threatened tariffs on aluminum shows that the new US-Canada-Mexico trade agreement is working as a defence against protectionism.
The pandemic first erupted in China and that’s where it is expected to begin to meet its end, said Jeongmin Seong, a partner with McKinsey Global Institute in Shanghai, in a presentation.
Dealing with the pandemic forced the country, already an earlier adopter of digitization, to take it in new directions such as using remote communication in health care, real estate and education, and many of those applications will continue, he said.
He added Chinese business leaders have become more focused on its domestic customers and less interested in developing markets with the rest of the world, while Chinese consumers have become more financially prudent and more debt averse.