The great reset: how governments reimagined citizen engagement in response to covid

February 18, 2022 | By Lim Kok Kee


This byline first appeared in the Financial Times on January 19, 2022. 

The pandemic has spurred a moment of great reckoning for governments across the globe. One that many would say has been a long time coming and has ultimately led to governments re-looking at their approach to everything from social to economic to healthcare inequality. Of course, these disparities existed long before Covid-19 entered our collective lexicon. While that may be the case, never before has a spotlight been shone quite as brightly on those who suffer disproportionately from being left out of formal digital and financial ecosystems. As governments acted swiftly to protect people, businesses and economies, they have adopted stronger measures that enable far-reaching impact and expedited outcomes that boost inclusion on both fronts.

The most effective tool in a government’s pandemic recovery toolbox? Digitization. 
Over the past two years, digitization advanced more quickly than it has in decades. As a result, it has played a monumental role in reengineering the way nations think about bridging inequalities. With nearly every government embracing a digital agenda to guide their path to an inclusive recovery, a silver lining has emerged: Administrations have rejuvenated how they interact with the public. 

Digital services became an economic lifeline

In the first two months of the pandemic, governments worldwide distributed USD10 trillion in emergency relief aid1. Much of this was made possible by the support of payments technology firms that streamlined digital payment structures. In many instances, often for the first time, digital systems were utilized to deliver economic stimulus and welfare payments to citizens, or to extend credit lines to small businesses, helping to mitigate shock, alleviate hardships and accelerate recovery. 

In Thailand, the government used its real-time payments system to facilitate welfare payments while partnering with a state-owned bank to enable a digital wallet that delivers stimulus payments. In Argentina, 1.5 million families received digital meal vouchers.

Taking a related yet different approach, the governments of Singapore and India further utilized their digital identity systems, called Singpass and Aadhar respectively, to extend social support and improve citizen services by enabling easy, secure online access to essential government and private sector services. 

Across the globe, countries are incorporating similar digitization measures – such as promoting contactless payments and remote services – in their economic recovery plans. Whilst governments contemplate ways to digitize at scale, private financial institutions and fintech innovators have stepped in as enablers to build or expand sustainable digital economies.

Digitization kept the lights on for small businesses

While businesses of all sizes were adversely impacted by the pandemic, lack of digital infrastructure saw brick-and-mortar and small- and medium-sized businesses (SMBs) experiencing far greater hardships at the outset. At the peak of the crisis, sales at SMBs lagged larger companies by up to 20 percentage points. Against a backdrop of lockdowns and mobility restrictions, e-commerce became a lifeline for businesses to ride out the pandemic. As economies reopened, the number of businesses going online each month tripled from pre-pandemic levels, peaking in July 2020, reflecting increased demand for online sales channels. The shift to digital has persisted at an elevated level since.

Consequently, governments are using payments technology to target spend and investment back into communities, ensure maximum reach and appropriate usage of stimulus funds. In Jersey in the United Kingdom, 105,000 prepaid cards were distributed to every citizen, pre-loaded with £100. The funds could be spent at points of sale, over the phone and online with locally registered businesses. The scheme reported having a £10 million multiplier effect on the local economy, benefiting over 2,000 businesses.

In India and the Philippines, we partnered with the public sector to digitize Kirana shops and sari-saris (or neighborhood stores) respectively. This was made possible by building ecosystem partnerships with FMCG suppliers, mobile platform providers and fintechs that would ultimately help community shops, many of them women-owned, to grow their revenue streams and electronic payments adoption, expanding digital and financial inclusion.

Looking at the bigger picture, governments are increasingly democratizing financial services by enabling and integrating different payment modes such as real-time payments (RTP), contactless cards and e-wallets. We’re seeing this in places like Hong Kong SAR, where the government’s Consumption Voucher Scheme is digitally distributed via stored value or wallet providers, boosting total retail sales by 11.9% year-on-year.

How digital skills training is readying the workforce

To enable citizens’ direct participation in the digital economy, governments are increasingly emphasizing STEM subjects as a key tenet of national education curriculums. Often in collaboration with the private sector, many are extending professional upskilling programs that combine foundational elements and real-life cases to facilitate self-learning. Within such programs, participants are taught everything from coding to programming and practical financial and business skills.

One such initiative is Mastercard Academy 2.0, a flagship program designed to equip 100,000 Indonesians with digital skills by 2023. Now at 86% of our goal, we’re working with the Government of Indonesia and 573 primary and vocational schools to further scale the program across more provinces. Similarly, a new partnership with superapp Grab will provide millions of their driver-, delivery- and small business partners across Southeast Asia with access to digital upskilling opportunities.

Ultimately, the world has experienced a once-in-a-lifetime shift as citizens embrace technology like never before. As we tentatively return to some semblance of normality, the focus of governments is shifting from short-term relief to long-term economic recovery. Yet, the shared goal remains the same – to create a world where people’s wellbeing is prioritized and opportunity is equally distributed. While a global pandemic is not the catalyst anyone would’ve hoped for, it has presented a golden opportunity to create a more inclusive, digital and sustainable world; it’s now on all of us to seize it.

Photo of Lim Kok Kee
Lim Kok Kee, Senior Vice President, Government Engagement, Asia Pacific, Mastercard