Eye on the future
Chair of Chatham House gives his views on a world after COVID-19
Editor’s Note: (O’Neill),
Jim O’Neill an economist who coined the term “BRIC,” former chairman of Goldman Sachs Asset Management, and chair of British think tank Chatham House, shared his views with Global Times reporter Sun Wei (GT) on the status of European and American pandemic control and the impact of COVID-19 on globalization in an exclusive interview as he calls for efforts in supporting both the WHO and the IMF to play an effective, leading role in the global response.
GT: The pandemic has hit the global economy hard. How do you evaluate cooperation between countries? Was the G20 video summit on March 26 a positive sign?
O’Neill: I would describe it as a “relief” that the G20 held a video call on March 26, given the general antiphony of President Trump towards international cooperation.
I do worry about international cooperation, and the contrast with 2008, which saw the G20 at its best. It is really disturbing that the G20 can’t agree on what is now a relatively small sum of money, around $10 billion, to accelerate the finding of vaccines, new diagnostics and therapeutics.
GT: A report by the UK-based think tank the Henry Jackson society claimed that “China should be sued for $6.5 trillion for coronavirus damages.” Has there been any other situation in which a country is held accountable for a global epidemic, such as ZIKA, MERS, H1N1?
O’Neill: I have no idea about this question, nor the Henry Jackson foundation, but the idea that a country is punished for the global consequences of the virus, possibly, is rather odd.
As I wrote in a piece recently, it is clear that the US was responsible for the global credit crisis due to its massive house price bubble, and the inevitable breaking of it, and the consequences it had for the rest of the world.
No one ever suggested suing the US, and indeed, people were eager for the US to discover strong growth again.
We should all hope China learns from this crisis, and soon returns to the growth it has been delivering for its own people, and the world.
GT: After Italy became the first severely affected country in Europe, Undersecretary of Italy’s Health Ministry Sandra Zampa said that Italy saw China as “a science fiction movie that had nothing to do with us.” Do you think this reflects the problems of this world?
O’Neill: I think if you look at indicators of sustainable economic development, many of which I am familiar with, countries and regions who score best on these indicators, have coped with this crisis more than others. I created one when I was at Goldman Sachs, which I left seven years ago, and their last index was published in 2014. But of the top 10 scoring countries and regions, eight have the lowest deaths/population ratio as a result of this crisis. The top three were Hong Kong, Singapore,
and South Korea, and not surprisingly, the Scandinavian countries and Germany are in that list.
GT: China implemented strict measures to support Wuhan, but there were still people who died and medical staff were exhausted. Why didn’t these tragedies raise the alarm for other countries?
O’Neill: Because I have been in infectious disease research, primarily on antimicrobial resistance (AMR), I was aware for the past five years that such challenges can cause devastation around the world, and sadly, will do again.
Hopefully, this crisis persuades everyone to spend more money, and more wisely on infectious disease prevention and controlling AMR.
We need the likes of the IMF to start regularly opining on health disease and system preventiveness as part of its annual article IV series, to force countries to pay more attention.
GT: Many countries in Europe are gradually relaxing restrictions amid concerns that this might bring back the epidemic. How do we strike a balance between life and economy? O’Neill: It is going to be a huge challenge, but it is no different for European countries than it is in Asia, including China. You can see even with the best performing countries initially such as Singapore having fresh challenges.
The key would appear to be in testing, testing and testing, and tracing, before of course, we get a usable vaccine.
GT: The pandemic has brought more reflections on globalization. Could coronavirus bring about the “waning of globalization”?
O’Neill: I am not sure if I agree with these very popular views. At the end of the day, globalization has been essentially driven by consumers wanting to buy the best things they can from around the world, and crucially, at its lowest price.
If consumers are prepared to pay higher prices for many items they desire, then of course, globalization will reverse and ease, but I am far from convinced.
I think we may see different patterns as some countries become more important at the center of global trade, and as trade partners, as China has become in the past 20 years, and India, others including Africa, may in the future.
GT: Some experts said that the world may return to the traditional investment and trade patterns from before the 1980s. What do you think?
O’Neill: I think there is a great danger in overpredicting massive persistent changes as a result of this crisis. This said, I also believe that how each of us behave during a crisis, and as a result of a crisis, is often the main determinant of our influence, contentment and so on.
I suspect AngloSaxon countries will become more Scandinavian, with a greater recognition that the state can play a more useful role in society.