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Finance Global Briefing

Post-Pandemic Economy

Post-Pandemic Economy

As the world begins to see light at the end of the COVID-19 tunnel, thoughts are turning to what the post-pandemic economy will look like. Many organisations and even entire sectors will not come out the other side – either redundant or squeezed to death, while others will limp on for a while, until such time they acknowledge times have changed and their model is no longer relevant. On the flip side, there are those standing ready to fill the void, having spent the enforced lockdown adapting and future proofing, while new births with no baggage and informed by the new market realities, are poised to compete to inherit the Earth. Equally, there will be countries that flourish and others that flounder. Here we look at some locations that should be on investors’ radars.

Caribbean Queen
One country set fair to bounce back after the pandemic has been brought under control is Antigua & Barbuda in the Caribbean, with the twin-island nation well-positioned to prove that being small in size need not be an obstacle to success. The nation’s financials pre-pandemic were impressive – especially given it was ravaged by Hurricane Irma as recently as 2017 – and have helped the country provide support where necessary during COVID-19’s darkest hours without precipitating a national existential crisis. The strong fundamentals will also see it recover swiftly and strongly without a dastardly legacy.

Gaston Browne’s leadership over the last decade has seen the nation become a regional leader, assisted by his ability to articulate and stand up against bigger nations with greater lobbying power. A prime example of this is when he pushed back against the US regarding Antigua’s gambling industry’s right to service US customers, backed by a WTO ruling.

He has also nurtured strong relations with China, so helping to bankroll various economic development initiatives, not least the St. John’s Port redevelopment, which will serve to cement Antigua’s status as a logistics hub for the region and a cruise gateway to the Eastern Caribbean.

“The pandemic has shown how important diversification of the economy is to make it less heavily reliant on tourism, which has translated to numerous investment opportunities.”

The pandemic has shown how important diversification of the economy is to make it less heavily reliant on tourism, which has translated to numerous investment opportunities, and also served to place the country’s Citizenship by Investment Programme and its Blue Economy centre stage.

Nordic Power
States like Antigua and Barbuda have long acted like ‘canaries in the coal mine’ for larger economies, since they are so sensitive to trade, economic and extreme weather shocks. In effectively foreshadowing wider global challenges, they make for valuable analysis. Yet, here we see a country that is shaking off its dependent past marked by endless bail outs and showing the big boys how to act with responsible ambition. It puts one in mind of the Nordic Model which delivers practicable, progressive, prosperity-delivering solutions to its people that take into account all Environmental, Societal and Governance (ESG) considerations. As economist, Jeffery Sachs describes it, the model is “the proof that modern capitalism can be combined with decency, fairness, trust, honesty, and environmental sustainability”.

The Nordic region has become perhaps the premium stage for the transition to net zero, possessing as it does all the right conditions. This fundamental shift away from fossil fuels is gathering pace and there is an increasing clamour from the market for significant new resources of rare earth minerals, copper and nickel that are stable, isolatable and meet ESG requirements.

Investors in metals and mineral extraction are set to see their fortunes grow as the race to cut carbon emissions requires massive investment in commodities other than oil and gas. World economies are shifting to more electrification and away from fossil fuels to reach net-zero carbon emissions by 2050, equating to more copper mining and interest in metals like cobalt and nickel essential to battery production.

Jurisdictions with mineral policies that are inherently investor-friendly, transparent and accountable will prosper, as investors seek to swiftly and efficiently transition from prospects to projects, and identify the best infrastructure investments and advanced mining projects.

Greenland scores highly in this regard. It enjoys an enviable and unique geological profile, while the flexible nature of its governing legislation and regulation evidences its competitiveness. In addition, it has an increasing volume of skilled and specialized local labour, from which investors can draw, as this geological utopia seeks to fully leverage its largely untapped mineral resources.

Greenland’s fellow Nordic nation, Finland, is also somewhere with striking green and brownfield mining opportunities and a unique mining ecosystem and cluster. It can point to a cheap energy supply, an abundance of skilled labour, excellent training opportunities, high productivity, and robust social, legal, regulatory and political credentials. Furthermore, Finland is at the vanguard of technological innovation enabling the automation of all sorts of processes, leading to huge potential economies for investors.

Euro HQ
Away from mining, major source investment markets in the East e.g. China, Japan, Russia and the Middle East looking for European locations will continue to be struck by Germany, and in particular, Dusseldorf. Boasting comprehensive international air links and access to both markets and suppliers, the city and surrounding region’s commercial and industrial sectors are highly integrated.

Moreover, with very strong established business communities within the Dusseldorf region from China, Japan, Russia and the Middle East, interested parties can see that success is there to be had. In addition, there is German state assistance on hand to make any relocation straightforward, combined with comprehensive aftercare services, making Dusseldorf a difficult prospect to beat.