As countries seek to control the COVID-19 pandemic, it is important that they "do so in a way that does not undermine connectivity among them," said Ravi Menon, Managing Director of Monetary Authority of Singapore (MAS).
Closer integration – through trade and investment – has underpinned the prosperity and poverty reduction since the second world war, and it is something that needs to be preserved, he added.
Speaking in a keynote address at the Caixin Summer Summit 2020 via video conference from Singapore, Menon highlighted two priorities for international co-operation in the wake of Covid-19.
They are: keeping supply chains open, and strengthening digital connectivity.
Amid the lockdowns and disruptions in global supply chains during the pandemic, countries are realising how dependent they are on these networks. The dependence also results in vulnerability. "There is naturally a temptation to shorten supply chains, or bring onshore the production of essential goods, or impose export controls to conserve supplies for domestic use," said Menon.
"There will likely be a shift in supply chains, with a rebalancing from efficiency to resilience."
However, building resilience is not about retreating behind our respective borders, but through greater diversification of supplies and building redundancies in global value chains, he emphasised.
The second area countries must co-operate on is that of digital connectivity. It is something that is relatively new but is growing rapidly in importance, Menon said.
"We all know how the Covid-19 pandemic has accelerated the use of digital services."
Amid safe distancing measures and movement controls, many firms have shifted to digital channels to conduct business. Areas such as e-commerce, online education, tele-medicine, remote working, internet banking have all taken off spectacularly.
Moreover, the ability to conduct business on digital platforms, especially across borders, has allowed people and businesses to tap onto a global market for sales, supplies or solutions.
"We need to deepen digital connectivity across countries, to expand opportunities for our people and businesses," Menon said, adding that digital connectivity – as well as – trusted data corridors – are to the digital economy what free trade agreements were to the traditional economy.
