Our latest ‘Critical Conversation’ podcast features an exclusive interview with Professor Sir Paul Collier.
Sir Paul is Professor of Economics & Public Policy at the Blavatnik School of Government, University of Oxford, and is widely recognised among the world’s leading experts on African and resource-rich economies. His latest book is The Future of Capitalism: Facing the New Anxieties (2018). He is also a member of Critical Resource’s Senior Advisory Panel.
In this 20-minute conversation, recorded on 20 May 2020, Sir Paul addresses the ramifications of the unfolding Covid-19 crisis – an example of ‘radical uncertainty’, with multiple variables and unpredictable outcomes – on less developed economies, in particular in Africa.
Among the key points raised by Sir Paul are:
- African economies will suffer a ‘triple whammy’ due to a sharp drop in commodity prices, a fall in remittances from diaspora communities and the substantial impact of reduced travel and tourism.
- The large drop in foreign exchange earnings will further erode the ability to conduct effective deficit financing or design stimulus packages. Many African countries will be forced to devalue their currencies to manage the fall-out, and the impacts will be felt for years to come.
- The ESG agenda will continue accelerating and the risk of divestment by investors in the resources sector will intensify.
- Companies’ response to this crisis has thus far been disappointing – there will be growing scrutiny in their home countries and where they operate.
- Despite short-term pressures, the long-term route to economic survival for resource companies is to preserve and strengthen their reputations as responsible operators. They will be defined by their engagement with and contributions to the needs of local communities and host countries.