This led to the displacement of more than 25,000 people, loss of lives and significant economic damage. Last year, 53 weather disasters across the world racked up more than USD1 billion in economic losses 1. In fact, it is estimated that altogether, economic losses from natural disasters were more than a quarter of a trillion US dollars in 2020 2. These events are prompting a renewed determination around the world to achieve a new balance of economic, social and environmental progress. Indeed, the pandemic presents a once-in-ageneration opportunity to place sustainable development firmly at the core of recovery plans. To date, Governments of more than 120 countries have committed to “Net Zero” by mid-century or earlier. Among the countries are some of Malaysia’s major trading partners such as the EU, South Korea, Japan and China. Similarly, more and more companies are also adopting net zero targets. It is noteworthy that in 2020 – during the pandemic - such commitments by regions increased by ninefold, and threefold by corporates. This is significant. A fast growing number of countries have also introduced climate change legislation and carbon management programs. Global climate change laws are reported to have increased twenty-fold since 1997 across 164 countries, up from 99 countries just 6 years ago 3. Climate-related laws and frameworks are also being strengthened in many countries, in ways that could significantly alter the course of economic development going forward.
But the intention – the international commitment to macro-economic stability – is clear. Acceptance of the aim of macro-economic stability served to bring into sharper focus the structural, supply side, of the economy – that is the whole raft of influences that can affect the underlying growth rate of capacity and thus the growth rate of aggregate demand that can be sustained. And here, too, there has been a strengthening international presumption in favour of open markets and free competition – both domestically and internationally – with a continuing strong presumption against predatory trade or exchange rate manipulation. The justification is that undistorted competition contributes to potential global economic growth through increased efficiency and the more effective allocation of productive resources. Faster growth in turn provides a more favourable context for addressing social concerns, including the issue of poverty. The international presumption in favour of free markets in itself is somewhat remarkable, given that, at the micro-economic level, increased competition invariably constitutes a threat to established producers – and their employees – who might well be tempted to urge protection in one form or another on their national governments. Consumers, who benefit from such competition, tend to be less vocal or well organised. The threat of protectionism is never, therefore, far away. But in fact the presumption in favour of competition has proved encouragingly robust. And that is not just in relation to international trade.