Predictions regarding the economic fallout from the COVID-19 pandemic run the gamut. Some reports liken the prospects for the world economy to the Great Depression; others describe a shock followed by speedy recovery.

A March 24 webinar hosted by the Global Network for Advanced Management tackled the question of our collective economic future with a conversation among experts in finance, economics, and global health. Their discussion looked at many aspects of a situation defined by uncertainty and rapid evolution, but several key considerations emerged, ranging from what we need to focus on right now to the large-scale institutional changes we may see when the world emerges on the far side of the pandemic.

The Healthcare Priority

Though an economic crisis is unfolding, COVID-19 is first and foremost a public health crisis. Dr. Howard Forman, jointly appointed at the Yale School of Management, the Yale School of Medicine, and the Yale School of Public Health, noted that you cannot tackle mounting economic concerns if you lose sight of the basic fact that people are getting sick and dying.

“The one immediate threat to everyone is the healthcare system,” Forman said. “If you overwhelm the healthcare system, then people die of heart attacks, strokes, missed surgeries, trauma—the first thing we need to do is mitigate the massive wave that is occurring throughout the country, whether we’re measuring it or not.” Once this is under control, then countries can begin slowly and experimentally easing up on the blunt economic restrictions needed to suppress the coronavirus.

This cautious return to life as usual is already taking place in many Asian countries hit earliest by the pandemic.

The Big Challenge of Small Business

But as countries around the world struggle to treat the sick, the economic challenges are also real and pressing. Yao Zhiyong, a faculty member at the Fudan University School of Management in Shanghai, noted that China’s economic growth in the first quarter would surely be negative. “We haven’t seen that in decades,” he said, describing the “ugly statistical data” coming to light as the country restarts its economic engine.

Andrew Metrick, a professor of finance at Yale SOM and the director of the Yale Program on Financial Stability, said that he was “very concerned about financial stability,” likening the landscape today to the months leading up to the 2008 financial crisis. Financial institutions face a liquidity problem, he said, but not yet a solvency problem. The probability of a full-blown crisis like the one that sparked the Great Recession depends simply on how long the current situation lasts.

Beneath these macro concerns are deep and various challenges at the national level. Jamil Francisco of the Asian Institute of Management in the Philippines walked through the plight of the average worker in the Philippine economy. A quarter of the population lives below the poverty line and possesses essentially no savings. “Imagine if there’s lockdown and you’re a daily wage-earner,” he said. “What does that mean?”

A second growing concern for Francisco is the terrible blow to small businesses, which employ 60% of the Philippine workforce. “If we make it out alive after a month, the problem is whether people will actually have work to return to,” he said. “This economic fallout can quickly turn into a social and humanitarian crisis,” something particularly true in a country like the Philippines. The survival of these small businesses, he said, will determine the shape and nature of recovery.

Focus on small businesses was a central theme in the conversation. Jörg Rocholl, president of the ESMT Berlin, described the same fears in Germany, where the government is willing to inject up to a trillion dollars into the economy. “We worry the most about very small entrepreneurs, even single-employee businesses, as they will suffer the most,” he said. “It’s very important that the money doesn’t simply go down to everybody, but that it targets these small entrepreneurs.”

The Need for International Coordination

One issue that has largely, and problematically, been ignored, is the need for globally coordinated health and economic policies. Jérôme Adda of SDA Bocconi School of Management in Milan said that he had witnessed in recent days one of the world’s hardest-hit regions start to turn a corner and allowed himself to be hopeful about Italy’s recovery. But now cases are flaring up in Spain and in the U.S. The southern hemisphere is likely to be hit next.

“That’s one of the dangers of this crisis,” Adda said. “It’s just unfolding, and once it’s solved in one part of the world it may come back, so you have to spend a lot of resources to keep the virus out.” Effectively galvanizing the global economy will be very difficult without clearly coordinated policies across countries; though China may now be emerging from the worst of the health crisis, Europe and the U.S. are not in a position to resume trade as usual, Adda said. (Yao urged those in the West to take advantage of recovering manufacturing capacity in China; for example, he pointed out, medical protective gear in short supply in the United States is available from Chinese manufacturers.)

Francisco noted that direct assistance may also need to be part of this international coordination: “Aid is a bad word these days, but it could be relevant for developing countries.”

After the Flood

Ignacio de la Vega, dean of Mexico’s EGADE business school, raised the possibility that positive change that could be sparked by the crisis. First, the pandemic has illuminated the potential frailty of global supply chains. Vega thinks that this experience may push companies to move manufacturing to closer shores—a good regional opportunity in, say, Latin America. Second, a crisis like this could spur a shift in capitalism, pushing companies to have a more public-minded role in society. And third, “as people all over the world come to understand the importance of cooperation,” the current pandemic could help reverse a dangerous slide toward populism and nationalism, Vega said. “There is no way out of this thing without collaboration and we need to step out as a completely different world.”

David Bach, deputy dean at Yale SOM and the conversation’s moderator, agreed that the crisis could help remake global structures. “Comparisons have been made to the Great Depression, to World War II, and the fact is global calamities often produce new institutions, new types of policies,” he said. “Recovery doesn’t necessarily bring us back to where we were.”