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The next big themes: Supply chain resilience and the end of low-wage as a competitive tool

Tong Kooi Ong and Asia Analytica
Tong Kooi Ong and Asia Analytica10/28/2021 5:26 PM GMT+08  • 14 min read
The next big themes: Supply chain resilience and the end of low-wage as a competitive tool
The capacity of rich countries to spend on record fiscal stimulus has long-lasting implications.
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The Covid-19 pandemic took us all unawares, inflicting severe damage on the global economy and killing millions of people. We now have better tools and knowledge to manage the virus as an endemic disease, in a sustainable way — with highly effective vaccines and, soon, easy-to-administer treatment. But the fallout from the pandemic is significant. And, due to disparities in countries’ responses during and after the pandemic, the longterm repercussions will turn out to be equally unexpected.

The pandemic has, without doubt, given businesses — big and small — a much greater appreciation of the digital economy. It will spur new investments and hasten digital transformation, and the resulting advancements in technology will have long-lasting, negative implications for developing countries.

We have alluded to this in previous articles. This week, we will bring together all the pieces and present what we think is a picture of the future. We foresee increased technology-driven investments, reshoring and capital flows into developed markets (DMs), leading to higher growth potential and job creation — at the expense of emerging markets (EMs). It will be, to a certain degree, a reversal of globalisation and the flow of trade of the past three decades.

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