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13 May 2020

Has austerity led us to the COVID-19 pandemic?

The COVID-19 pandemic could have been prevented if not for decades of austerity measures, says Professor Alfredo Saad Filho.

Stock market floor, New York

The pandemic was predicted and could have been prevented, argues Professor Saad Filho in the latest WORLD: we got this in conversation episode. He fears neoliberalism could be leading us to adverse developments at a global level.

“One of the major lessons from this pandemic is that the neoliberal restricting of the state, before and after the 2008 financial crisis, has led to a loss of state capacity that is directly responsible for the inability for a number of states to respond appropriately to the pandemic itself.

“[The NHS] has been degraded for the past couple of decades by successive reforms that have tended to marketise the service, to try to make it as commercial as possible. And then when the NHS is confronted with a huge health challenge, it has difficulty responding appropriately.”

Although the pandemic may well be bringing about a radical shift in global economics, it remains uncertain what is to come in both the economic and political spheres. And while we may not necessarily be witnessing the end of neoliberalism, we are perhaps entering a fourth phase, says the Professor of Political Economy and International Development, from the Department of International Development.

“We’ve arrived to an extremely fragile position […] with states that remain in a perilous financial situation – in many cases more indebted than they were before – and with a lack of legitimacy in the political process,” says Professor Saad Filho.

This has contributed to political instability in many countries, he adds. However, he also notes that this is not a left-right issue.

“Without state capacity, without state resilience, without planning, without capacity for implementation, without legitimacy of the state, it is impossible to minimise the loss of life.

“In countries where the state had capacity, planning, prompt intervention, legitimacy, and where people were paying attention to guidance coming from a central government – then those states have been more successful containing the pandemic and saving people’s lives.”

This, he argues, has to be the central goal for any government in this moment in time.

In this story

Alfredo Saad-Filho

Professor of Political Economy and International Development