In 2020, the Covid-19 pandemic hit the United States economy in a way that was not experienced for generations.
With the election of Biden, it is expected that the American economy in 2021 will get a new push as the president pushes vaccination. According to The New York Times, this mandate is not only a preventive action against the Delta variant, but also an attempt to put the $20 trillion economy back in its full performance.
Overall, economists are optimistic about the recovery of the American economy, but for specialists like Joao Vale e Azevedo, chairman of KUNST Global (one of the largest equity firms in the world), there are still more challenges to be faced in the long run. “We are in a situation in which in most of the major economies of the Western World, States are still intervening with subsidies and extraordinary measures,” he explains. “Consequently, we do not have an objective picture of the situation, especially from an employment and social point of view.”
In spite of some small and family businesses surviving the 2020 crisis, Azevedo believes that they are still facing grave risks. Since Western governments have intervened heavily in the economy during the Covid-19 pandemic, the conditions of the free market have also changed, and, according to the chairman of Kunst Global, this is one of the reasons why the stock market, especially the American one, has recovered and is setting records. However, Azevedo stresses that one thing is the stock market, and another is the real economy and the rates of unemployment.
Industries like entertainment, hospitality or tourism have suffered radical changes during the pandemic, so they could adapt to the so-called “new normal.” However, for Azevedo, it is the urban development industry that reaches crossroads as offices have well adapted to remote work. With costs cut and employees already used to the system, the chairman of Kunst sees no comeback to the way financial districts used to function back in the day.
In the long term, the fact that people will be using less public transportation to go to work will prompt benefits for the environment, but in the short term, these changes in habits are very negative as they decelerate city businesses. In other words, the lack of consumer flow in the city will possibly cause less tax revenue to feed the coffers of the municipalities.
Still, Joao Vale e Azevedo wants to think positively and believe that Western countries have learned with history how to react to times like these. For him, the Covid-19 crisis will cause a general reduction in costs, and this will create the ideal condition for investments in innovation. “If governments support entrepreneurs and businesses, I am sure that we will be able to turn the crisis into opportunity, in ways that we cannot even imagine at this time,” he concludes.
Based in London, Geneva and Luxembourg, Kunst Global invests in various sectors from energy to telecommunications, from fashion to entertainment.