Global solidarity needed to tackle common threat
While the epicenter of the outbreak is now in Europe and the US, only a few major economies have effective battles against the virus. The explosive health and economic challenges can only be overcome with global cooperation.
Yesterday the number of accumulated confirmed cases worldwide soared beyond 380,000. In the absence of adequate testing, even these official figures might be the tip of the iceberg.
Outside China, epidemiologists currently anticipate a peak around June. If that’s the case, economic damage in China would be largely limited to the first quarter, but international economic damage would endure well into the second quarter, and in the most-affected countries well beyond.
Due to the uncertainty of current data in Europe and, particularly in the United States, one plausible scenario is that the battle against the novel coronavirus may last through the ongoing year and possibly through 2021.
Obviously, the early economic defense has been by the major central banks to cut down the rates, inject liquidity and restart major asset purchases.
But as the post-2008 decade has shown, monetary responses cannot resolve fiscal challenges.
Avoid nightmare scenarios
Following China’s response, most countries do seek to contain the virus, then mitigate it and finally deter secondary infection crises. To think that China had to develop its stance almost overnight in mid-January.
Other major economies had weeks to mobilize, yet many missed the opportunity, due to complacency and inadequate preparedness. Containment will be only partial in these countries, which will compound their mitigation challenges.
So, when restrictive measures are phased out in major economies, some countries are likely to record odd spikes in death rates, particularly in the virus risk groups. It is a discrete modern-day version of the old eugenics, which permits certain policymakers in the West to bury their mistakes, literally.
At home, virus carriers may or may not gain adequate immunity. As poorly enforced quarantines in some countries are phased out, flows of people, many of which may be infected or carriers, will show up in the borders of countries that have successfully managed the crisis.
Thus what is needed to avoid further nightmare scenarios is multipolar cooperation among major economies and across political differences.
Dr Dan Steinbock is an internationally recognized strategist of the multipolar world and the founder of Difference Group. For more, see https://www.differencegroup.net