Covid-19: a threat and a wakeup call

The virus is a test of how well states are run. It is not without reason that East Asia’s response is better than in other parts of the world. On the one hand, there are science deniers, and on the other, states acting on evidence and what they know about dealing with disease. The East Asian success shows the strength or weakness of societies, effectiveness of their governing structure, social capital, and investment in people.

Covid-19 has also generated a debate on the pros and cons of authoritarian versus democratic states. This is a false binary. More likely, East Asia’s success comes from the trust between state and its citizens made possible by a caring and responsive government. With leaders not sowing the seed of doubt about science and common-sense matters, citizens there responded sensibly. On the other hand, missing toilet paper is 2020’s enduring symbol of the West.

Many experts have shared their views on what the world may look like after the pandemic. Human suffering from the virus, and job losses, could lead to social unrest. We may have seen its onset in Africa, but it may spread. Again, Fareed Zakariya warns us to “expect political turmoil, refugees, even revolutions, on a scale we have not seen for decades”. Poor countries and those overly dependent on oil revenue may suffer the most. Pressure on developing economies will be especially high. If they fall short in meeting citizens’ needs, which is more than likely, alienation and state fragility would deepen. This will have both economic and social consequences.

Will the world learn to become a more humane place with compassion for fellow beings? That is unlikely. The blame game is in full force in some countries. In fact, the initial reaction to the virus in the West bordered on racism and name calling.

Even before the virus, the US had begun to undo the structure for global trade and capital transfers put in place in the 20th century. That trend seems unlikely to reverse and may gain force. With logistics disrupted, firms relying on global value chains and just-in-time stocks may prefer to have future supplies closer to home. Also, both major parties in the US agree on the need to decouple with China. So far it appears that a zero-sum game will prevail over economic rationale. The crisis is unlikely to cause the US to think differently.

The virus has restored belief in government, an idea that has been out of favour for years. The 2008 crisis had also brought home the government's role in addressing what was entirely a market crisis. As soon as the crisis was over, there was a push back. A neoliberal alliance of big money and some economists has captured state decision-making. They will continue to have a hold. As IFIs also work on the same philosophy, developing economies too are forced to make these policy choices. One difference this time could be selective belief in the virtues of open markets by the West. The world will be poorer for such a narrow-minded approach.

Another aspect of government power is reliance on intrusive technology to track and surveil. Put in force during a crisis, there is a danger that it may stay as a tool in the hands of governments and large corporations. Many people may not like to cede their privacy easily.

In Pakistan, there is a positive trend not seen before. Rather than depend on the centre, provinces have taken ownership of the fight against the virus. The centre too, after some stumbling, has been decisive and forthcoming in its action. I hope it moves further and begins much-needed structural reforms to put the economy on a firm footing to bring about sustained growth. We may use this opportunity as even the IFIs may agree to our plan during this emergency.

Another trend already in place and which should accelerate is the shift of power from the West to the East. In 2003, Western leadership lost the world’s trust as it launched the Iraq war. That war made clear that the West could not be relied upon to use wisely the immense power it enjoyed in a unipolar world. These doubts strengthened in 2008, with the financial crisis. The onset of the 2008 crisis was clear to everyone except Western governments. Now the West’s handling of the pandemic has brought home again its leadership deficit.

The shift, if at all, will be gradual. The US still has a huge lead in technology and military ability. With a strong and astute leadership, it may regain its status as a symbol of progress. Yet, there is every possibility now of a divided world. History teaches us that there are unquantifiable costs that insular and closed societies must bear. Those who build partnerships and open economic opportunities prosper. In a divided world everyone loses.

My last thought is whether or not the world has the leaders to lift us from this age of despondency into a period of hope and prosperity. Major world problems have a global footprint. Climate change needs concerted effort. Though there is much that countries can do on their own, it needs the major powers to work together for a long-term solution.

While recognizing its great benefits, Richard Danzig of the Center for a New American Security lists also technology’s danger. So far, the West has sought tech superiority. The history of nuclear weapons informs that with its best effort the West could not keep other countries from gaining access to it. The same is true for new technology. The West would do well to work with other countries to prevent accidents and other more malevolent effects of technology. Rather than control AI, synthetic biology, and other systems, the West should open discussion with other nations to guard against accidents, he says.

We do not have the leaders today who can make the best of all the challenges and opportunities. Elections and better awareness of the cost of a divided world may bring leaders with the vision to save us. A crisis is a time for leaders to show their mettle. They must inspire, build trust, rally the people, and share empathy and compassion. This is an opportunity for them to transform their country and the world. So far, this is just a hope.

The pandemic is a threat but also a wake-up call. We cannot act as though the world works in silos. Our future depends on how all of us respond.

Concluded

The writer is chair and CEOInstitute for Policy Reforms, and a former commerce

minister.