In countries around the world, many global connections were suddenly severed — or at least put on an indefinite pause — due to the spread of coronavirus. With flights cancelled, travel bans enacted and global trade upended, will coronavirus end globalisation as we know it?
In late February, Rana Foroohar wrote that the novel virus was already speeding up decoupling of global economies. Less than two weeks later, Donald Trump closed off direct US travel to the European continent for the first time since the second world war — a decision that contradicted expert guidelines, Edward Luce pointed out.
On April 13 and April 14 Rana and Ed answered your questions about how the outbreak has already, and will continue to affect, globalisation in the comments of this story. Here are some of the highlights:
FT commenter Dondo 1: Given the emergence of surveillance capitalism, cyber security risk, decoupling the China relationship, and the pandemic, do you see a way where we can use technology for the good, for example contact tracing, while controlling for the downsides, for example, privacy infringement?
Rana Foroohar: While Covid-19 is in many ways strengthening the surveillance state (see a wonderful piece in the Weekend FT on that, here), there are also examples of countries that are managing to use data and tech tools without infringing on privacy or democracy — Taiwan would be a leading example, thanks to the efforts of Audrey Tang, their digital minister (see a piece I did on her a while back, here). If the US and Europe move to a tracking system in which viral status is uploaded via mobile apps, we need to make sure to have strict public oversight on the deletion of data after we are out of the crisis.
FT commenter West Hammers: What do you think could be the potential geopolitical impact of countries reviewing and potentially “in-housing” more of their supply chains related to medical equipment? Could this cause conflicts with western allies such as India?
Edward Luce: There is bound to be more localisation of medical supply chains, and particularly of pharmaceutical active ingredients, which is currently dominated by China. Democracies cannot tolerate a potential adversary’s stranglehold on such critical resources. I would see this drive to become less dependent on China as a market opportunity for India, rather than a threat.
FT commenter Patnaik K V: Are central banks better prepared now, in terms of ammunition at their disposal, to respond to the economic fallout of this pandemic than they were in 2008?
Foroohar: Sadly, no. A lot of the ammo was used post-2008, in terms of the effectiveness of lower rates and the power of QE — and perversely, the fact that central bankers were, as Mohamed El-Erian would put it, “the only game in town” is one reason that we are seeing such a steep downturn now. Easy monetary policy buoys asset prices, but it can’t really fix what’s wrong with the real economy; you need fiscal policy for that, and we didn’t get it. My fear now is that central banks are still the only game in town — they are buying anything and everything, and we seem to be on the road to the monetisation of debt and central bank financing of state budgets, which historically ends in tears. I expect gold to go up, and the dollar to go down in this environment.
FT commenter FTreader12: Do you think that the UK’s decision to leave the EU, puts it in a weaker or stronger position to tackle the economic challenges that lie ahead? Would Brexit make it any easier for the UK to implement the fiscal and monetary measures required?
Luce: In general, Brexit has weakened Britain’s economy by, among other things, depriving it of key positions on the steering committee of the world’s largest market. Britain’s economic position will thus be less robust than if Brexit had never happened. I doubt it will have that much impact on how Britain handles the pandemic from now on. You could argue that the Johnson government’s slowness to learn from what was happening in Italy and Spain — or South Korea and Germany — is a facet of the same British exceptionalism that led to Brexit. But that’s probably a debate for another time.
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FT commenter NancyK: One of the things that the pandemic is highlighting for me is a “single-issue” mindset in the US. A comprehensive approach would consider healthcare, employment support, poverty, racism, the opioid crisis, capitalism, etc. Can you imagine a reframing of American values, maybe even world values?
Foroohar: Great point, and a big challenge. I think what you are really calling for is a kind of new social compact for the US, which is something that the FT has advocated for. As I have written in my own columns, I think we are entering a new era in which we will see a swing in the pendulum of power from the private to the public sector, which is much needed in the post-Covid era. This is something that happens every several decades or so, and we are certainly overdue. The younger millennial voting base, which is slowly but surely replacing the Boomers, is more inclined towards the mindset you sketch.
FT commenter Manofmode: In terms of policy effectiveness and political judgment, which US president from history would you choose to substitute for Trump for the Covid-19 crisis and why?
Luce: Almost any, including George W Bush (lest you think I’m being partisan). But the three I’d highlight are Dwight Eisenhower, George Bush Senior and Barack Obama. Each listened attentively to their advisers, respected expertise and science, and prized diligence in their White Houses. Those are qualities singularly lacking in Trump. But it is very hard to imagine any US president, other than Trump, championing unproven therapies, or confusing a virus for a bacteria, as he did last week (!!), let alone attacking legitimate media questions as propaganda, or proclaiming his emergency powers to be absolute. There is no road map in American history for leadership as unhinged as this.
FT commenter Cap: China and Iran were under a considerable amount of stress even before the Covid crisis — economically and politically. Do you see Covid-19 as a precursor to geopolitical upheaval, which may result in political and directional change in these countries?
Foroohar: The ruling classes were underestimating globalisation and the move towards a more bipolar world even before the Covid-19 crisis. I believe that the pandemic will only speed up that trend and that we’ll see two poles. One will be led by China and another by the US, with a tremendous amount of new Great Game politics in the Mena countries and Europe — which will be under pressure to choose sides. I expect that China will exert more influence in Iran and other Mideast countries, as it attempts to shift the dynamics of global energy politics, trade, and diplomacy in a post-dollar world.