Lightening before the Thunder

 

Humanity has survived the Black Death – the second of three major outbreaks of the bubonic plague, the worst pandemic on earth (peaking 1347-1351) killing somewhere between 75 and 200 million people (half the planet) in Europe and North Africa – and the Spanish Flu that peaked from 1918-1920 killing an estimated 50 million people all over the globe. Just a few of the major pandemics that have assaulted humanity over recorded history. We’ve seen our share of outbreaks in the last two decades, from nasty flus, SARS and MERS (related to COVID-19) to the Ebola virus. HIV slammed into the earth in the 1980s and to this date, while it can be contained, it has not yet been cured.

Will this novel coronavirus be eradicated, prevented, cured or at least contained? And if so, when? Russia, having hacked their way into research in other countries, is preparing to launch a vaccine with barely any clinical trials. For traditional epidemiologists, this careless effort of deploying a truly untested vaccine is fraught with risk and danger. Russia will have no understanding of the consequences, across the demographic spectrum, of this “I hope it works” effort. Side effects? Effectiveness? Long-term immunity? But everyone, almost everywhere, is racing to develop that vaccine. Whatever else is said and done, the harsh reality is that the President’s belief that there will be a widely deployable, safe and effective vaccine by the November election is almost certainly nothing more than political posturing without a shred of realistic hope for success.

Over a million people have died worldwide from this incredibly contagious disease. The United States is cursed with both the highest infection and mortality numbers on earth. Compared to so many other countries – from Taiwan, Germany, Korea, Sweden, Germany, Singapore and even China – we are pretty much a failure at containing this virus. There are currently 87 countries with bans or severe restrictions on receiving American travelers. See the above map from Yahoo Finance. They are terrified at how we have dramatically failed at containing this virus within our own borders.

Yet, one way or the other, this pandemic will pass and be contained or sufficiently eliminated for the world to move on. There have already been dozens and dozens of mutations. Will one of these mutations move the disease to another outbreak? Are we remotely ready for an even more infectious mutated relative? We’re so consumed with the present problem that we just might not be preparing for the inevitable “next.”

There is so much talk about recovery… everywhere. But what does that really mean? Getting back to the way it was? Sadly, as history teaches us, that is not going to happen. There are both permanent and long-term realities that require all of us to expect some rather dramatic changes in how we live and make our livings. Authors Parag Khanna (founder and managing partner of FutureMap and author of numerous books including Connectography and The Future Is Asian) and Karan Khemka (a strategic investor and founder of the strategic consultancy The Parthenon Group) address the post-COVID-19 world in the August 9^th FastCompany.com:

“If we are lucky, the world will pass ‘peak virus’ within the next six months. But the economy, governments, and social institutions will take years to recover in the best-case scenario. Indeed, rather than even speak of ‘recovery,’ which implies a return to how things were, it would be wise to project what new direction civilization will take. That too will be a bumpy ride. The next 3-5 years will remind us that COVID-19 was the lightning before the thunder.

“We should therefore be cautious about forecasts suggesting we face only a U- or V-shaped recession. Numerous factors militate against this sanguine view. Most importantly, supply chains and markets are more integrated than commonly appreciated, and near-shoring is more difficult than the wave of a pen. The current American debacle with surgical masks and ventilators is a case in point. Emerging markets and developing countries are critical both as suppliers and markets. Their demise weakens the world economy as a whole.

“Furthermore, domestic unemployment is reaching Depression-era levels, and the current relief packages don’t yet amount to the stimulus that many Western publics may need for years to come. Precautionary savings and muted consumption will govern household spending decisions, and business investment will sag. A long-drawn-out W shape is therefore the most likely economic scenario for the years ahead.

“At a human level, the current economic nosedive is so steep that GDP figures are the last thing on most people’s minds. For governments and corporates, however, spiraling debt is a matter of immense concern. Once revolving credit lines are tapped out, numerous large firms will collapse or be consolidated. Industries from commercial real estate to aviation will suffer enormous write-downs on office buildings and shopping malls, airlines and airports. While European social policy keeps households afloat far better than America’s meager welfare, America’s single market is far more efficient than the eurozone, where leaders won’t agree to a sufficiently large mutualized debt scheme. As large employers (and the states or provinces that depend on their tax revenue) collapse, governments may fall.” Including our own.

Khanna and Khemka remind us of other macro-trends, which have already reared their ugly heads will before the current pandemic, that are growing. For example, mass migration. If nations fall or if they are ill-equipped to deal with restoring food chains and providing necessary medical care, we can expect large scale movement of peoples escaping tsuch desperate scenarios. Another casualty, one we have witnessed right here in the United States, is the rise of highly exclusionary nationalism and populism. “Me” and “Not you.” Increasingly autocratic politicians using this viral outbreak to defy democratic institutions and seize power.

Further, despite the fact that global pandemics absolutely require global cooperation, that ugly vector of “Me First and You Not at All” also makes containment of pandemic-level outbreaks exceptionally difficult. “Before many countries contemplate jump-starting migration, however, they will likely first undertake a serious review of their food and medical supplies and perhaps engage in the kind of stockpiling or ‘food nationalism’ that Russia has done in limiting grain exports and Vietnam with restricting rice exports. A decade ago, the agricultural price volatility exacerbated by Russia’s banning of wheat exports helped push Egypt and Tunisia over the edge. We should not be surprised for this recent history to repeat itself in numerous countries.

“It would be wildly optimistic to predict, even to hope, that multilateral institutions will be upgraded by great powers to better cope with future shocks. China’s recent manipulation of the WHO and admission to the Human Rights Council, as well as the complete sidelining of the UN Security Council, suggest the United Nations will continue its terminal decay. While the IMF has temporarily restored its relevance, macroprudential supervision will fall by the wayside. The World Bank is woefully slow and underresourced.

“The most optimistic scenario, then, is a revival of regional organizations. The EU has a chance to bring about the fiscal union it needs more than ever, but it remains unclear whether it will take it. Asian countries have just passed a Regional Comprehensive Economic Partnership (RCEP) and will need to deepen their internal trade to cope with the global demand shock. North America’s three states already trade more with each other than with China or Europe. Regionalization will be the new globalization…

“[Investments in prevention are equally necessary and require global cooperation]. “Greater investment in biotechnology and healthcare are obvious places to start—but not in their current form. Healthcare is being defined as a social good worldwide (as is already the case in Europe), but its cost is coming under scrutiny. Cost-effective universal provision can only be achieved through a model that emphasizes telemedicine and localized clinics and treatment centers. The push being made in this direction even in poor countries such as India and Indonesia may be instructive for much of the world. Fragmentation of life sciences regulation must also be overcome if we are to sustain the ‘science diplomacy’ that has sprouted amid this pandemic and reverse the decades-long trend where the cost to produce a new drug has doubled with every passing decade.”

We can create opportunity, spur new research and resulting job growth and rise to rebuild in a new and more globally coordinated effort to solve problems that do not stop at international boundaries. Or we can follow the dictates of “America First” and watch our reality spiral further into the abyss. Insanity is often described as repeating the same behavior and expecting a different result. And then there’s the marching peril of climate change that did not stop while humanity has turned to face the pandemic.

            I’m Peter Dekom, and while there are impediments to global cooperation from stubborn autocrats, the solutions to “moving on” are dramatically mired in commitment, the acceptance of permanent and longer-term change and a willingness to find solutions within a global context.