CENTRE FOR SELF-HELP DEVELOPMENT

Institute of micro-finance and cooperative development.

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Post-Corona Reconstruction Programme - No Going Back

The extent of the damage that the novel coronavirus pandemic is causing is mind-boggling. However, the situation also offers us an unparalleled opportunity.We have experience in managing the recovery process fairly well. But the big question now is whether we take the world back to where it was before thepandemic. Or, do we redesign it?

Needless to say, the pre-Covid-19 world was not good to us. Before SARS-CoV-2, the whole world was literally counting the days until the whole planet wouldbe unfit for human existence due to a climate catastrophe. We were under serious threat of massive unemployment created by artificial intelligence. Wealthconcentration was reaching a tipping point. We were reminding each other that this is the decade of last chances, after which all our efforts will only bring marginal results, inadequate to save our planet.

                                                   - Muhammad Yunus

The choice is ours.

The novel coronavirus suddenly changed the context and calculus of the world. It has opened up audacious possibilities which never existed before. Suddenly, we are at the tabula rasa. We can go in any direction we want—an unbelievable freedom of choice.

Before we restart the global economy, we must agree on what kind of economy we want. First and foremost, we have to agree that the economy is a means. It facilitates us to reach the goals we have set ourselves. It should not behave like a death trap designed by some divine power to punish us. We should notforget that it is a tool made by us. We must keep on redesigning it until we arrive at the highest collective happiness.

If we want to create a world of net-zero carbon emissions, we build the right system for it. If we want a world with no unemployment, we do the same. If we want a world where there will be no concentration of wealth, we do the same. When human beings set their mind to get something done, they just do it.

One simple unanimous global decision will help us tremendously: a clear instruction that we don’t want to go back to where we were before. We don’t want to jump into the same frying pan in the name of recovery. To make our purpose clear, we may call it a reconstruction programme, instead of calling it recovery.

Businesses will have to play the key role to make this happen. The starting point for a post-Covid-19 reconstruction programme must be to put social and environmental consciousness firmly at the centre stage of all decision-making. Governments must ensure that every dollar it spends will bring the maximum social and environmental benefit to society. We must start with ‘reconstruction’ packages for social consciousness-driven plans and actions. We must designour plans right now, in the thick of the crisis. When the crisis is over, there will be a stampede of old ideas and old examples of bailouts that will require rushed decisions. Strong cases will be made to alter new initiatives by saying they are untested policies.

Social business at the centre In this comprehensive reconstruction plan, social businesses should be placed at the centre. A social business is a business created solely for solvingpeople’s problems, without any personal profit taken by investors except to regain the original investment. After the original investment comes back, all subsequent profits are reinvested back into the business.

Governments will have many opportunities to encourage, priorities, and open up space for social businesses to undertake major redesigning projects. At the same time, governments should not expect social businesses to show up everywhere they are needed. Where social business options are slow to come forward,governments must first launch traditional welfare programmes to support those who lost their jobs, as well as to revive essential services and support businesses in need.

To speed up the entry of social businesses, governments can create social business venture capital funds, centrally and locally, and encourage the private sector, foundations, financial institutions, and investment funds to fund them. Governments should encourage traditional companies to launch their own socialbusinesses or to create joint ventures with partners.

Under the rebuilding programme, governments can finance social businesses to buy companies and tie-up with needy companies. Central banks can allow social businesses, like other businesses, to receive financing from financial institutions to invest in the stock market.

Social business investors are everywhere. We don’t see them because our existing economic textbooks don’t recognize their existence. Only recently haveeconomics courses started to discuss topics like social businesses, social entrepreneurship, impact investment, and non-profit organizations as side issues inspired by the global admiration for microcredit. As long as economics remains a science for profit maximization, we cannot rely entirely on it.

As soon as government policy starts recognizing social business entrepreneurs and investors, they will come forward enthusiastically to play the important social role demanded by this historic opportunity. The social business ecosystem is already a significant and global one that includes giant multinationalcompanies, big social business funds, talented CEOs, corporate bodies, foundations, and trusts, with many years of experience in financing and running global and local social businesses.

When the concept and the experiences of social businesses start receiving government attention, many profit-makers will be happy to bring out their unexplored talent to play very valuable roles in times of social and economic crises.

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