Massimiliano Castelli Philipp Salman Arturo Bris

By Massimiliano Castelli, Head of Strategy and Advice, Global Sovereign Markets, Philipp Salman, Director, Strategy and Advice Global Sovereign Markets, UBS Asset Management

Arturo Bris, Professor, Director IMD World Competitiveness Center, Professor of Finance

Globalization, already slowing before the COVID-19 pandemic, will likely take multiple hits in its wake. The pandemic and health emergency measures introduced will lead to a prolonged recession, which will be worse than the one experienced in 2009. But will the impact be strong enough to turn an already ongoing post-Global Financial Crisis (GFC) ‘slowbalization’ into outright deglobalization?

One should always be careful not to extrapolate long-term implications from single big events. We live in a very complex and interconnected world, and some of the long-term implications of massive events such as COVID-19 are very uncertain. What is certain is that—as has been the case with every major crisis in the past—there will be winners and losers. We therefore explore the key drivers of globalization, analyze the impact that COVID-19 might have, and leverage the IMD Country Competitiveness Framework to assess the winners and losers. Long-term investors such as Sovereign Wealth Funds and other sovereign institutions should pay attention to these trends and adjust their portfolios for the post- COVID-19 world.

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