As the impacts of the Covid-19 pandemic accumulate across the world, it is clear that, other than assessing the global impacts, it is necessary to model its implications and the challenges it poses for planning resilient local communities. This article makes an argument for reintroducing local resilience as a relevant goal for local economic and urban policies, and outlines an analytical model to assist decision making.   

Globalization and local community weaknesses

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The pandemic exposes how globalization created three weaknesses for local economies (defined here as either state, municipal, city or even neighborhood levels):  I) It fostered integration of international supply chains, II) it gave value to economic efficiency and innovation based on competitiveness achieved by relying on long-distance links between producers and consumers, even in agriculture and food-processing industries; III) the whole system was supported by a complex network of mass air and urban transport systems. 

Before the pandemic, there were voices alerting about the vulnerabilities of such a system for communities and local economies.  The social distancing policy, adopted to reduce the speed of the disease, simply adds evidence of the relevance of such claims.  

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Criteria for policy design for resilient local communities

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New policies aimed to tackle the short and long term impacts of the situation require a new approach based on three criteria: I) tackling the vulnerability created by global production chains, II) increasing the resilience of local economic agglomerations, and, III) creating a virtuous relationship between economic and urban or regional policies. 

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To assess the vulnerability of local economies, and even to design short-time interventions during the pandemic, it is necessary to start modeling how they work considering the following dimensions: 

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1. Position on production chains (P). Dependency on the production of final goods.

2. Industrial Mix (M). Proportion of on-site consumer services on total sales.

3. Locational burden (L). Dependency of the local economy on consumers arriving from long distances, use of mass transportation systems and rent burden. 

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From these factors, it follows that vulnerability of a local economy can be specified as a function of (P), (M) and (L). There is no space for elaboration of the model, but it suggests that the most vulnerable local economies and communities to the Covid-19 pandemic and the social-distance policy, are remote island tourist destinations, with almost no production of foodstuffs and a very high dependency of tourists arriving on ships or planes. Global cities such as New York or Los Angeles are also vulnerable, but size and diversity are favorable factors.  The model may be used to assess the impact of the pandemic on local urban districts or communities in big cities, or small towns in regions. By the same logic, as suggested in figure 1, neighborhood business centers are less vulnerable than urban gastronomic tourist districts, or small towns with a strong interaction with diasporas sending remittances or receiving visitors from global centers infected by the disease. 

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Policy implications

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The vulnerability model has several implications for policy development to mitigate impacts of a pandemic, when social distancing seems to be the only available policy in the short term. The longer this policy is used, the more necessary the following recommendations are. 

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Attend short term implications of economic vulnerability. Policies aimed to protect firms, business units and employment are needed. Policy makers will need to find the proper mix of policies targeted to rescue businesses (Supply driven policies), or providing income to consumers (Demand driven policies). Three specific recommendations can be used: I) Apply a mix of instruments to support first companies producing goods that may disappear either for excessive demand or for the lack of it; II) Prioritize assistance to companies or establishments providing services to final consumers, particularly those offering on-site services where economies to scale will never compensate for losses; III) Provide assistance to companies with a vital dependency on the presence of on-site customers arriving from distant places or using mass transportation. 

Consider location to foster the resilience of local economies. Localization matters when designing rescue packages under conditions of social distancing. High on the goals list, should be to save economic communities, not just businesses in particular. When trade-offs are needed, the goal should be to maintain a functioning network to retain the capacity of coming back from the crisis. Losing whole districts or local communities is more disrupting than losing businesses leaving just gaps on a former economic community.

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Integrate economic and urban policy

From the standpoint of urban and regional policy, while designing instruments to mitigate the impacts of Covid-19 and social distancing, the problem is not just choosing allocation of resources between members of the demand, or supply sides of the economy. Urban policy changes are also needed on this situation and others that may come in the future.  This includes the following: I) reviewing policies that have fostered export-oriented crop monoproduction and the decline of locally-oriented food supply-chains. Regions where such chains have disappeared are more vulnerable to a pandemic, than those where they are still strong; II) Land use regulation established for industrial cities has been modified to foster urban and social segregation. Policies to create resilient communities need to review land use criteria to change those opposing the configuration of mixed-use socially diverse communities; III) In some countries more than in others, there is an urgent need for better regulation of land markets, not just buy/sell transactions, but also the lease market. Paying rents is a daunting task for both business owners and families who see their income disappear during a pandemic. Several instruments can be used on this issue: having better information systems and regulations that consider the social implications of leasing contracts, are certainly a good start.  

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Conclusion

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The world needs not to stop globalization. But, to remediate the economic and social impacts of the Covid-19 pandemic, demands integrated approaches for economic and urban policy, and making community, and local economy resilience as the central goals for a mix of policy instruments.  

Social Science Perspectives