Governments may make different choices when prioritising between preservation of existing businesses and net new creation. However, each is likely to evaluate and deploy a combination of the following interventions to support economic recovery.
All governments need to reduce debt and stimulate growth, but few governments aside from those with the largest economies have the option to simultaneously tackle their balance sheets and their economic recovery. Most will take actions that enable economic recovery by minimising expenditure or creating a positive return on investment, in ways that consider their global worldview, country context, legislative structure, political will and national ideology. Countries can make two decisions to help them understand the approach best aligned with their needs.
What will best drive my country’s immediate economic recovery—an approach that’s more locally orientated or globally orientated?
Countries that are at risk for acute and systemic insolvency, that have high levels of domestic inequality and/or disgruntled citizens, or whose supply chains for vital industries are at risk will probably prioritise local economic recovery. Countries that rely on global supply chains and financial flows, and believe global problems require global solutions, will probably lead with a globally orientated recovery.
What’s the best option for stimulating national economic growth—active involvement and oversight of issues or enablement of the private sector and local institutions?
This choice may be based on a government’s political party affiliation or structure and operating model. Other determinants include how deeply a government thinks it can trust in businesses and citizens to drive decisions, how agile it thinks public and private institutions are, and what core skill sets the government possesses.