(Apr 6): More than 180 countries and territories have confirmed a case of coronavirus, and the number of cases worldwide has reached more than 870,000. Like a massive storm front, the crisis threatens not only to overwhelm health-care systems but also to collide in unpredictable ways with childcare, education, employment, and transportation.
The question for national leaders is whether their countries can weather this unprecedented crisis as it crosses borders. Addressing it requires accepting two fundamental axioms. First, global risks such as pandemics are expressed at both the national and local level. Second, no country alone can prevent such occurrences or mitigate their impact.
Unfortunately, many leaders do not seem to understand these rules. What they mostly agree on is that unprecedented economic measures are needed to address a simultaneous demand and supply shock of this magnitude and duration. As citizens wait for these measures to be implemented, each community is being tested.
Governments and businesses can confront these challenges by learning about – and strengthening – their resilience, a term associated historically with stress testing materials or structures in engineering. Following the post-2008 Great Recession, resilience emerged as a core concept for addressing global financial risks. For example, in the 2013 edition of the World Economic Forum’s Global Risks Report, resilience was defined as the capacity for “bouncing back faster after stress, enduring greater stresses, and being disturbed less by a given amount of stress.”
The report also highlighted that as “global risks can be expressed in many countries at the same time, they can spread through countries that share borders, have similar fundamentals, or depend on the same critical systems.” The WEF proposed a novel framework for assessing financial resilience. Using qualitative and quantitative indicators, the diagnostic tool functioned as an X-ray that national decision-makers could use to reveal weaknesses in global risk readiness that were not apparent through more traditional risk-assessment methods.
A crucial lesson for leaders (particularly at the local level) is that resilience is most important when it comes to risks that are difficult to predict or, owing to a dearth of knowledge, manage effectively. The most important lesson is to avoid examining these risks in isolation. Instead, leaders should adopt the mindset of systems thinking, relying on a multi-layered process to determine risks.
Leaders now need to think of their country as a system that is comprised of smaller systems and is a part of larger systems that affect their country’s resilience. Global risks can have profound effects on politicians’ ability to govern, business-government relations, the efficiency of government spending and reform implementation, public trust, anti-corruption measures, and provision of services to improve business performance.
Unlike predicting stresses on a building in a hurricane, predicting those related to COVID-19 is a Sisyphean task. Systems like health care or education are too complex for mathematical calculations to determine the risk and fallout. But systems thinking can provide a foundation to assess resilience by considering a system’s – and a country’s – robustness, redundancy, resourcefulness, response, and recovery.
Some definitions are in order. “Robustness” means designing fail-safes and firewalls into a nation’s critical networks and making decision-making chains of command modular to respond to changing circumstances. “Redundancy” involves having excess capacity and back-up systems so that the core functionality of critical infrastructure and institutions can be maintained during disturbances. Resourcefulness” is the ability to adapt flexibly to crises so that industries and communities can build trust and discover solutions to resolve unanticipated challenges. “Response” refers to the ability to mobilize quickly in the face of crises, equipped with sound methods for gathering relevant information from all parts of society and communicating it to others. “Recovery” is the ability to regain a degree of normality after a crisis or event.
It is imperative that leaders increase resiliency. To do so, governments must ensure public trust in order to act effectively and efficiently, and the private sector must work with governments to ensure local preparedness and response. Another way to increase resiliency is for civil society to be a watchdog on corruption, wastefulness, and transparency. The WEF’s COVID Action Platform, in partnership with the World Health Organization, is mobilizing stakeholders to protect lives and livelihoods and enhance these efforts around the world.
For those countries around the world already facing serious COVID-19 outbreaks, the solidarity, compassion, and collaboration that we are witnessing are a testament to the power of local resiliency. For countries or communities that have not been hit hard so far, leaders must act now. © Project Syndicate
Lee Howell is a member of the Management Board of the World Economic Forum.
