Global Outlook
A LESS UNIPOLAR, INCREASINGLY DIGITAL, ACCELERATED WORLD AWAITS US ON THE OTHER SIDE OF THE PANDEMIC. BUT THE STRESSES OF CHANGE AND INCREASED INEQUALITIES WILL DEMAND A RETURN TO INTERNATIONAL COOPERATION TOO
When I wrote Ten Lessons for a Post-Pandemic World at the height of the pandemic’s first wave in mid2020, we were living through the first phase of the Covid-19 crisis. It was a public health crisis that left governments scrambling to lock down—and the public sector, especially in the US, largely failed. That phase will soon be behind us. Vaccines for the novel coronavirus—some using innovative mRNA techniques, and developed by international teams at a breakneck pace never before seen—have begun rolling out. Therapies have cut the death rates down, and new and cheaper tests are being developed each month. We have entered the second phase of the crisis, which will be led by the dynamism, innovation and competence of the private sector. There are still challenges of distribution and we must navigate a difficult winter. But on the horizon, a true post-pandemic world is now in sight.
The private sector has delivered, but we should not forget the indispensable role that the state played in funding vaccine research and development at “warp speed” (even if many governments have since fumbled the roll-out, administering vaccines). Only in East Asia and a scattered handful of other countries have we seen an effective public and private sector response.
While fumbling health care, in economic policy the state played a critical role, intervening to stabilise the market—as in 2008 and 2009, and many times in the past. Washington, in particular, handled the economic crisis well, passing bipartisan relief bills of some $3 trillion and pressing the Federal Reserve to act, the biggest government support anywhere. But
many countries worldwide could not afford such safety nets for their economies. As I argue in my book, we can expect the gap between the world’s haves and have-notes to widen.
Covid shone a spotlight not just on inequality but on globalisation. The nine-month sprint that produced Covid vaccines with 95 per cent efficacy is an astonishing tribute to science today—a truly global endeavour. Information and best practices move around the world with instantaneous ease. The ability to innovate, test, develop and then manufacture billions of vaccines is possible only because of global supply chains and international collaboration. We often overlook the benefits of globalisation and only consider the costs. The vaccine is one of the great benefits of living in a global era.
Despite some travel bans and much talk of onshoring, as I predicted in the book, far from dying, globalisation has actually picked up steam during the pandemic. In November 2020, a trade pact covering 30 per cent of global GDP was struck in Asia, larger than Nafta (North American Free Trade Agreement) or the European Union. Notably absent from this new grouping were India and the US. For years, populist leaders have turned inward, narrowing their visions to a strictly nationalist conception of selfinterest, resisting or ignoring global trends. Under a new management, Joe Biden’s America has a chance to embrace—and be empowered—by advances in trade and technology that are relentlessly remaking our world.
We must remember that a Covid vaccine is not a panacea to what ails us. The structural forces that empowered populism will not go away (just as constant vigilance against pandemics cannot wholly prevent future outbreaks). Threats of future pandemics and climate disasters, rot at the heart of global capitalism and governance, many allies’ lingering distrust of America’s reliability on the world stage, the risks of a Second Cold War—all these will remain. Accelerated by climate change, the threat of wildfires, droughts, hurricanes—and, yes, new diseases beyond Covid—will not relent. As I advise in my book, it is time to buckle up.
While we are still working through the disease, a world beyond Covid is fast coming into view. To help grapple with its complexity, I have outlined lessons in my new book.
Here are five of those lessons for our post-pandemic world. [The following is adapted from Ten Lessons for a Post-Pandemic World]
1 Buckle Up
We now all recognise how a tiny viral particle, circulating in a bat in China’s Hubei province, has brought the world to its knees—a real-life example of the butterfly effect, whereby the flapping of a butterfly’s wing might influence weather patterns on the other side of the world. Small changes can have big consequences. In power grids or computer networks, if one tiny element breaks and then shifts its load to another, which then breaks, it can produce a chain reaction that grows ever larger, like a ripple that becomes a roaring wave. It is termed a “cascading failure”.
What exactly are the consequences of this pandemic? Some have suggested that it will prove to be the hinge event of modern history, a moment that forever alters its course. Others believe that after the vaccine, we will quickly return to business as usual. Still others argue that the pandemic will not reshape history so much as accelerate it. This last scenario seems the most likely outcome. Lenin is supposed to have once said, “There are decades when nothing happens, and then there are weeks when decades happen.” The post-pandemic world is going to be, in many aspects, a spedup version of the world we knew.
Our world, especially since the end of the Cold War, has been open, fast—and thus, almost by definition, unstable. We see this in the three great crises of the 21st century— 9/11, the financial crash and Covid-19— one political, one economic and one natural.
Pandemic diseases leaping from animals to humans are one form of backlash from a world in constant overdrive—species’ habitats shrink and they jostle up against human settlements. So too are hurricanes, droughts and wildfires arising from climate change. A 2019 UN report found that 75 per cent of Earth’s land mass and 66 per cent of ocean environments have been “severely altered” by human development.
Some on the Right and the Left have called to slow down growth or stop the global flow of people and goods. But it is neither feasible nor desirable to choose stability over openness and speed, and expect the world’s poorest billion to resign themselves to poverty. If human society keeps developing this fast, we need to buckle up and provide buffers offering security, resilience and anti-fragility to cushion the public against shocks—or else they will turn against the openness and dynamism that drive growth.
2 Inequality will get worse
Since 1990, the decline in global inequality was in large part caused by sustained economic progress in China, India and other developing countries, which grew much faster than developed countries, lifting hundreds of millions of people out of poverty. The pandemic could erase much of this progress. After initially escaping largely unscathed, the developing world suffered greatly from Covid-19.
In India, the early epicentre was in Mumbai, where one slum, Dharavi, houses about a million people and has a population density that is nearly 30 times that of New York City. Hospitals in lower-income countries are sparse. In Bangladesh, there are fewer than eight hospital beds for every 10,000 people, a quarter the capacity in the United States and an eighth the capacity in the European Union.
In many developing countries, large segments of the population make just enough each day to feed themselves and their families. So governments faced a dilemma: if they shut down the economy, people would starve. If they kept it open, the virus would spread. Given that these governments don’t have the money to pay people to stay home or subsidise shuttered businesses, the wisest course, in retrospect, was probably not to impose full-scale lockdowns. India, partly as a result of the lockdown, is on track to see its economy shrink by some 10 per cent in 2020, the worst decline in its history. And yet, as of December 2020, the number of Indians confirmed to have died from Covid-19 was about 144,000, fewer than the 180,000 Indian children who die of malnutrition every three months.
Even supposing, as seems plausible, that deaths from the disease are being vastly undercounted, this horrifying figure puts Covid-19 in perspective for the developing world. Though intended to save lives, the shutdown of nearly all activity led to economic collapse. This has caused untold hardship and, ironically, exacerbated many health problems, from hunger to depression. Was it worth it?
These are difficult decisions, but one cannot but think that in many developing countries, not enough thought was given to the calamities that would follow a lockdown. This is probably why, when cases spiked after quarantines were lifted, few developing countries even considered reimposing them. Even without further lockdowns, economic pain from the pandemic looks set to exacerbate global inequality for the foreseeable future.
3 Digital life is life
Covid-19 will serve to accelerate the digital revolution—particularly the mobile revolution. The iPhone was launched in 2007, and smartphones now connect the majority of the world to the Internet. For most people, their phone is their computer. To best understand this shift, look at India. Like the citizens of most poor countries, Indians until recently had largely been left behind by the Information Revolution. Computers are expensive and wi-fi is rare.
In 2010, the majority of India’s billion-plus people couldn’t go online with their phones, which were usually simple handsets. Then along came 4G, which allowed a $30 smartphone to connect easily to the Internet. Now over 550 million people in India have a minicomputer in their hands. They use it to buy and sell products, watch the news, entertain themselves, join groups and work remotely. India leapfrogged the digital divide with astonishing speed. In 2015, it ranked 155th in the world in mobile broadband penetration. By 2017, it was consuming more mobile data than any other country on earth.
Covid-19 came onto this stage and obliterated the one remaining obstacle to a digital future—human attitudes. Many people were stuck in their old ways. Some were still reluctant to send credit card information over the Internet. Others would never think of taking a class online. Most would not have agreed to a doctor’s appointment via video chat. The pandemic and the lockdowns that followed compelled changes in behaviour, and not just from people, but businesses too. Hollywood studios would never have dreamed of debuting a big-budget movie through a streaming service. Michelin-starred restaurants thought they were above takeout and delivery. Health clubs didn’t want to be in the business of creating YouTube videos. But all these taboos have been broken, the barriers crossed, and now a new normal exists. It is unlikely that we will ever fully go back to the past. The pandemic served as a forced mass product testing for digital life—and, for the most part, our technological tools passed.
4 Globalisation is not dead
Prior to the pandemic, globalisation was thriving, especially in the developing world. As economists Susan Lund
SOME ARGUE THE PANDEMIC WILL NOT RESHAPE HISTORY SO MUCH AS ACCELERATE IT. THIS SEEMS THE MOST LIKELY OUTCOME
and Laura Tyson write, “More than half of all international trade in goods involves at least one developing country, and trade in goods between developing countries—so-called South-South trade—grew from seven per cent of the global total in 2000 to 18 per cent in 2016.” But shortages of essential goods during the pandemic led many governments to consider restructuring global supply chains in favour of “reshoring”. Predictably, populist nationalists like Donald Trump and Narendra Modi approached the pandemic with a distrust of any kind of global efforts or multilateral solutions. Modi reminded Indians of the dangers of global supply chains and urged that they be “vocal for local”, buying and promoting all things Made in India. But tariffs and subsidies would be exactly the wrong measures at a moment when growth is slowing around the world.
A better, more targeted solution than protectionism would be strategic stockpiles of drugs, masks and other personal protective equipment, as savvy East Asian states created after SARS. The shortages are usually short-term, right when the crisis hits—after which the private sector ramps up to fulfil demand. This is exactly what happened during the Covid-19 pandemic. For a few months, face masks were running desperately low worldwide, prompting many governments to ban exports of protective equipment. India did so and, over the following months, Indian manufacturers boosted production capacity of N95 masks to 57 times their pre-pandemic level. By July, many places faced massive oversupply. In China, wholesale mask prices fell 90 per cent.
Beyond goods, consider the human scale of globalisation before the pandemic hit: 5 million international students, 270 million migrants, 1.5 billion tourist trips. Is all this movement going to be unwound? More likely is a specific decoupling from excessive dependence on China. The beneficiaries are likely to be other relatively low-cost manufacturers like India, Vietnam and Mexico that largely embrace globalisation.
We may be in for a pause, or even a modest trend of de-globalisation, but it’s more likely to be a blip than a catastrophic plunge. Right now, globalisation is not dead... but we could kill it. After all, it has happened before. Conflict between economically intertwined great powers seemed irrational and self-defeating to European observers in 1913—but it didn’t stop World War I from ripping apart interdependent markets and hardening borders. Trade and travel did not return to their preWorld War I levels until the 1970s, 60 years later.
5 Sometimes the greatest realists are the idealists
“Over more than two centuries, the United States has stirred a very wide range of feelings in the rest of the world: love and hatred, fear and hope, envy and contempt, awe and anger,” the Irish commentator Fintan O’Toole wrote in April 2020. “But there is one emotion that has never been directed towards the US until now: pity.”
Covid-19 and the United States’ abysmal response did not just accelerate talk about American decline; it did so in the context of concerns about the rise of China. When I was growing up in India, people criticised American foreign policy but still saw the American model as the most advanced and successful in the world. Today, they look at that model with much greater scepticism and, yes, sometimes even pity.
But a post-American world is unlikely to be dominated by China. With the “rise of the rest”, this world would be more multilateral if not truly multipolar. A new multilateralism would come with advantages—it is based on greater participation for other countries, large and small. It recognises the genuinely global character of the international system, stretching from Brazil to South Africa to India and Indonesia. If it works, an international system that gives greater voice to more countries would result in a more vibrant democratic system. Let’s be clear. It all rests on a wager: that the ideas underlying the American-led international order can survive the end of American hegemony. The alternative, a restoration of that hegemony, will not happen.
But there is reason for rational hope. The drive for multilateralism is not purely idealistic. The US, Europe, Japan, South Korea, and especially China, have gained immeasurably from being part of an open, rules-based system. All of them—even Beijing— would have every incentive to uphold that system rather than bring the house down. India and most other emerging powers should welcome a system in which China is constrained by a web of institutions and rules, even if it also constrains them. They will find greater stability and prosperity in such a world.
It is not a flight of fancy to believe that cooperation can change the world. It is common sense. ■
Fareed Zakaria is a journalist, host of CNN’s Fareed Zakaria GPS and the author, most recently, of Ten Lessons for a Post-Pandemic World (ALLEN LANE PENGUIN, `599, 320 pages)
A POST-AMERICAN WORLD IS UNLIKELY TO BE DOMINATED BY CHINA. WITH THE ‘RISE OF THE REST’, THIS WORLD WOULD BE MORE MULTILATERAL IF NOT TRULY MULTIPOLAR