Inequality Is a Business Risk
Managing the fallout from recent global crises will require not just solidarity and collective action but also a stronger commitment to reducing inequality in all its forms. But governments can't do everything, while businesses – particularly banks and financial institutions – will need to do more.
PARIS – “We live in a more shock-prone world,” IMF Managing Director Kristalina Georgieva recently observed, “and we need the strength of the collective to deal with shocks to come.” She’s right. In the space of just a few weeks, Russia’s invasion of Ukraine has already shifted geopolitical lines, plunging the world into widespread uncertainty and opening new diplomatic rifts. Societies will need to redefine their choices to account for new global dynamics affecting fundamental issues such as food, energy, and digital security, and the organization of global trade.
While globalization may not end imminently, its acute vulnerabilities certainly have been exposed. Structural changes in how business is done are already materializing, as demonstrated by the complex reorganization of manufacturing infrastructure associated with near- and re-shoring. Companies and governments alike are assessing their dependencies.
In such a challenging environment, building collective resilience is of the utmost importance. But it will require solidarity and political cooperation at all levels: global, supranational (particularly in Europe), national, and between businesses, public authorities, and civil society. Success will depend on our ability to achieve not just energy and food security but also equity and fairness in decision-making. After all, existing inequalities have continued to deepen, jeopardizing the capacity for collective action. We will need to put aside arguments about the pros and cons of globalization and start to work toward a more sustainable and inclusive economy.