Virus has created a different economic system, says Finland’s pensions chief | News

The Managing Director of the State Pension Fund of Finland (Valtion Eläkerahasto, VER), said that the economic conditions caused by the pandemic will stay with us, and that digitization and medicine being the main drivers of this new system This is where governments need to allocate resources.

Timo Löyttyniemi, CEO of VER, the €22.9 billion fund that balances pension spending for central government staff, said in a blog post: “COVID has given rise to a different economic system where only change is constant”, but people got used to everything and to the human. the beings were fortunately an adaptable species.

On the question of where governments should allocate their political and financial resources, he said: “The answer must be clear: digitalization, medicine and a huge amount of other research to solve social, economic and environmental problems” .

Effective medical research, health care and education would provide the keys to an exit and a return to normality, he said.

“Digitalization helps us adapt and succeed in the context of the COVID economy. The benefits of research funding are very tangible. If these efforts bear fruit, the future of the COVID economy or a out of it could prove promising,” Löyttyniemi said in the blog post.

The biggest dangers facing the COVID economy, he said, were risks to cybersecurity and the functionality of IT systems.

“If digitization failed in an economy devoid of any physical contact, it would mean a setback that would set us back several decades,” the CEO said.

He said the Omicron variant had upended all plans for a gradual return to normality, and now a number of countries were again lifting restrictions, and new coronavirus strategies were hatching as and when. as the data accumulated.

“However, the COVID economy will stay with us, one way or another,” he said.

At the start of the pandemic, he said, people counted the waves of infection, but not now because there was no end in sight.

“In theory, a new corona strategy will allow a return to a near-normal life, accompanied by a full awareness of the disease and the understandable and constantly changing constraints it entails. The only constant would be perpetual change,” he said.

While the inflation debate has recently focused on whether it’s temporary or permanent, Löyttyniemi said, “COVID inflation can be a permanent temporary development.”

This would not imply a permanent rate of inflation, but short-lived price hikes caused by supply chain disruptions, he said.

Taxation was the unwritten economic policy chapter of the COVID economy, not something people were eager to bring up in political debate.

“Even so, it is one of the keys to managing the COVID economy. Now funds continue to pile up in savings accounts at the same time as governments go deeper into debt,” Löyttyniemi wrote.

The latest digital edition of IPE magazine is now available.