Session 1: Strategic implications of the coronavirus crisis
Since its emergence a few weeks ago, Covid-19 has already fundamentally changed the fabric of our society and impacted the global geopolitical landscape, but in what ways?
Covid-19 Crisis: Global Crisis, Global Risk and Global Consequences is a new webinar series that examines various possible and visible consequences of the current crisis including its strategic and economic implications, impact on global governance, on gender or the role of technology.
Dr Jean-Marc Rickli
Hello and welcome for this first webinar series on the impact of the coronavirus crisis from the Geneva Centre for Security Policy. The GCSP is a non-profit international foundation physically based in Geneva, Switzerland, but we have a global network of experts and participants. Our activity or mandate and mission is to promote international peace and security and also prepare and transform individuals and organizations so that they can create a safer world. We do that through different activities, executive education, public discussion, research, as well as an innovative fellowship programme for executives in transition. Our community is comprised of more than 6500 alumni and friends. Our Foundation Council is comprised of 52 states, among which are the permanent members of the Security Council. The values that we promote are impartiality, independence and inclusivity.
The current crisis that is approaching, at the monument an infection with 50,000 deaths, is a crisis of enormous magnitude. Two days ago, the UN Secretary General Antonio Guterres said COVID19 is the greatest test that we have faced together since the formation of the United Nations. Some would say it is a black swan, characterized by an extreme rarity but with a very severe impact. But if we look carefully at what happened, we see that this crisis was in a way already foreseen by some organizations. For instance, the CIA Global 2025 Trends Report, published in 2008, mentions that the emergence of a novel highly transmissible and virulent human respiratory illness, for which there are no adequate countermeasures, could initiate a global pandemic. If a pandemic disease emerged by 2025, internal and cross-border tension and conflict will become more likely as nations struggle with degraded capabilities to control the movement of population seeking to avoid infection or maintain access to resources. If a pandemic disease emerges, it probably will first occur in an area marked by high population density and close association between humans and animals, such as many areas of China and Southeast Asia, where the human population lives in close proximity to livestock.
Several intelligence agencies, as well as academic papers, have warned us about an incoming pandemic, so that was not completely unforeseeable. What is taking us by surprise is the exponential growth of this pandemic situation. And exponential growth is characterized by a growth that, for instance, doubles every iteration. And so if we take this simple rule, for instance, we see that, very quickly, the magnitude which the end result reaches is beyond imagination. If you think about something that doubles every iteration after 50 iterations, the magnitude is really difficult to process mentally. To give you a more visible manifestation of what exponential growth is all about: you can see here that, for a long time, you don't see much uncertainty; you then have what we call the exponential explosion.
In a way, if we look at the current curve of development, we are seeing that it is matching exponential growth. The UN, two days ago, the WHO mentioned that we are approaching exponential growth. Obviously, exponential growth will not continue forever, because once you have enough people that have contracted the disease, then it will recede. The whole question is: what are the strategies to put in place in order to flatten the curve, so that the health system could cope with this crisis?
But beyond that, what is important to note is that most of us are thinking in linear terms, as well as government. The problem is that when we're faced with exponential growth, the more time passes, the more the measures that we can take, if we think in linear terms, are becoming irrelevant.
So, what are already the possible visible developments that we can see when it comes to international politics? One of the most visible ones is what happened in Europe. Jacques Delors, the former president of European Commission, said a few days ago: “the climate that seems to hang over the heads of states and governments, and the lack of European solidarity, poses a mortal danger to the EU”. Enrico Letta, former prime minister of Italy, said that the EU faces a deadly risk. A few days ago, finance ministers gathered through digital means to discuss what could be done to support the European Union by personally issuing so-called “Corona bonds”, a proposed joint debt instrument which all member countries would guarantee. Nine countries, including France, Spain, Italy and Portugal, back the idea, while others, like Germany and the Netherlands, rejected it. The Dutch finance minister called for the European Union to prepare a report on which EU countries would have to be in financial buffers. This was met by remarks by the Prime Minister of Portugal, who said that that statement is repugnant in the framework of the EU. So we can see that there are already visible manifestations in terms of European solidarity and stability. A poll conducted in Italy found that 88% of Italians felt Europe was failing to support Italy, while 67% saw EU membership as a disadvantage. We have seen developments like in Hungary, where loads of emergency [measures] were taken that give unlimited power to the head of state. And there are no boundaries to that.
The issue of the role of technology is something that has to come also on our radar screen, especially since states are taking emergency measures to conduct surveillance through different digital means. Currently, there are more than 24 countries in the world that have taken some measures in that field. Today, a convention of 103 private and civil society organizations issued a call to warn states that the COVID19 crisis should not... warn governments not to use this crisis and virus as a cover to introduce invasive and pervasive digital services. This technology is also being used as a global war for narratives. We've seen that after the EU came to help the Chinese authorities in January and February, the Chinese have reciprocated, but have used that as a strong PR exercise to demonstrate Chinese influence in the world. Russia has done the same over the last few days, has sent some medical aid to the United States. So here we're seeing a global reshaping of the geopolitical rivalries based for now on a lot of public relations.
The economic impact could obviously not be dismissed. A report by the Department of Economic and Social Affairs that was published yesterday mentioned that the global economy could shrink by up to 1% in 2020 due to the coronavirus pandemic, a reversal from the previous forecast of 2.5% growth for this year. Finally, a famous Harvard economist, co-author of a book called “This time is different: eight centuries of financial crisis” [?], Kenneth Rogoff, was interviewed by the New York Times and said that “I feel like the 2008 financial crisis was just a dry run for this. This is already shaping up as the deepest dive on record for the global economy for over 100 years. Everything depends on how long it lasts. But if this goes on for a long time, it's certainly going to be the mother of all financial crises.”
Obviously, these remarks are just introductory remarks: he showed the extent of the current financial crisis. Today we have gathered a very distinguished panel of experts to look at different aspects of this crisis. We have Gilles Poumerol with us, fellow at the GCSP; David Horobin, the head of Crisis Management at the GCSP; Professor Curzon Price, emeritus Professor of Economy at the University of Geneva; and Nick Davis, Associate Fellow, also at the Geneva Centre for Security Policy. Gilles, we'll start with you. Can you just share your insights and your views on the future of global health security?
Dr Gilles Poumerol
Thank you for your introduction. And good morning. Good afternoon. Good evening to everyone. It's a pleasure to be part of this panel and I will try to give you an overview of global health security’s (maybe) future, or at least how we could evolve from the very hard experience of this pandemic. And first of all, let me remind you that when we talk about global health security, we talk about protection, detection, corrective actions in front of a serious public event, and in order to reduce the vulnerability of the people in the world, or at least on a very large scale.
As you said, it was not unexpected that this pandemic would happen. Many alerts took place in the past few years, not only through new emerging germs that we observe like HIV or SARS, reemerging Ebola spreading in West Africa, and many influenza epidemics. So we were expecting this to happen. And there were many alerts from experts in the world to politicians about the need to prepare adequately for this type of event. And the last one was the Global Preparedness Monitoring Board, which issued a report in September 2019 saying that the world is absolutely not prepared for this type of epidemic and pandemics, and that it will create not only loss of life, but also an epidemic economics and create social chaos. So that was not very long ago. And I think we can expect that such events will continue in the future. So it's maybe not going to be the one “century event”. It's going to be probably reoccurring and very soon. So we have to think in terms of how we reshape and enforce global health security globally.
So, I would say from this pandemic experience... I would start first by how I see some positive aspects. First of all, I will say we observe that there is an unprecedented mobilization and support of citizens in the world. And this is absolutely extraordinary. The solidarity we observe everywhere is amazing. We also see a very high level of government commitment, and this is very encouraging obviously. We have a very good role, I would say, of the media. Well, you can say the media are spreading fear, but I think the media have done much more in terms of spreading knowledge and prevention methods to everywhere, to everyone. And I think they have played a very crucial and positive role.
Okay. Now, what have we seen in terms of, I would say, unsatisfactory responses? First, we have seen the delay in detection, because, as you know, it was about a month between the appearance of this virus and the time it was reported and actions were taken. We've seen the delay in response in many countries, many countries were denying the problem very recently still, and that obviously has built the ground for the spread of the virus. We have also seen a huge amount of inappropriate actions, such as the closure of borders between countries, while we know that the virus doesn't stop at borders; this has obviously affected the economy, but also the capacity to respond effectively.
We've seen some inappropriate political and technical judgments on this epidemic. You know, not too long ago, I was hearing “oh, this is just a little flu and no one will really be at risk” and “we don't need to take specific actions”. This was up to the highest level of some governments. And we see now that the huge vulnerability and inequalities in the world, especially for marginalized populations, the ones who have poor access to care, who are at greatest risk (in addition to countries who also have access to care), but we see how we have to deal with this very high vulnerability and no one had really prepared for that.
And finally, I think we see that the public healthcare response has sometimes not been fully appropriate. I will take an example, a very small example. Singapore has monitored a very good indicator, which is the interval between symptoms detection and isolation. And this shows how well the public health programme and the health system is operating to respond to this epidemic. Well, there are very few countries in the world nowadays which have such indicators, so there is a need to really refine the public health response. Another area is a weakness of stocks of equipment for protection. We know that most countries are lacking masks, most countries are lacking tests and other protective equipment.
So this is the picture that I see in terms of the lessons we can learn so far from the response to this epidemic. Certainly not the least is we've seen, unfortunately, political interference in these responses and decisions. For example, we know that the public health emergency declared by the WHO was delayed following some political pressure, and so on.
Now, where could we go and where should we go for the future? Well, I think there are, I would say, four key areas where we should start thinking for the future. The first one I'm missing is really ambitious, probably, but I think it has to be considered: we have to look now for, maybe, a strong global governance for health, with as little as possible political interference. This is for the management of epidemics, pandemics, obviously, but also to work on issues like access to care. I mean, there are no reasons that a French person like me has the capacity to access very sophisticated care, and an Indian person doesn't; I mean, we live on the same planet. We live in the global world nowadays, and we have to make everything we can so everyone has access to quality care, and that should be prioritized everywhere.
The development of medical tools is also important. When I talk about medical tools it’s, for example, vaccines or tests. This is in the hands of the private sectors, but there may be a need now to have a global control and capacity to produce on a large scale, and quickly, this type of tools, which are badly needed in such cases. And also to make sure that they are distributed everywhere in the world, whatever the income of countries is. Then, it will be also [up to] this global governance to promote access to essential equipment globally and to promote global research, with the development of networks to collaborate globally for the needed research in these areas, which are not always money-making business but which need to be done for the security of the world.
The second point I wanted to make is that we need to revise the International Health Regulations. International Health Regulations is this agreement that was made between all countries a little bit more than 10 years ago, after the SARS outbreak and in light of the impact that this outbreak had on the world. But it appears through this pandemic that there are many weaknesses in these regulations and that, in fact, many of the agreements that were made are not applied and respected at all. So we need to work on a more global, international agreement between countries on how to react to these events.
A third point is that we need to have a global task force for health security. A 911 that we could call everywhere in the world if something happens, even at the community level, to alert and take very, very quick actions. And this should be developed not only at international level, but at national level, provincial level and eventually even community level. It should be able to be deployed in a matter of hours everywhere in the world.
And as a last point: we need money. There is very little money for the work on epidemics, the budget of WHO was about $100 million dollars. And we have, for example, the Global Fund that now raised billions of dollars, even 13 or 14 billion dollars for their various programmes, which are very important; but we need this equivalent for epidemics and pandemics prevention and control. This is my overall view of the situation now and where it should go in the future. Thank you.
Dr Jean-Marc Rickli
Thank you very much. So for me, the main takeaway is that we need to create a global health body that is apolitical, that is able to function independently. Because as you mentioned, governments were late to respond because on the one hand, they had to deal with this crisis, and on the other hand, they also have to deal with the impact on the economy. And that is also the difference between what academics should request and the possibilities that are offered to a government. I saw that some of the viewers are already asking questions, and today we have Ashley, who is the moderator, and she will just explain to all our viewers how you can interact with the speakers for question & answer. Ashley.
Thanks, Jean-Marc. Yes. So, for those of you who are tuning in on Zoom: at the bottom of your screen, you will see a Q&A tab. And it is there so that you can ask questions. I will be filtering them through for the end of the Q&A session, when the speakers have a chance to respond. And for those that maybe are incomplete sentences, I will dismiss them automatically. Please do state your name and affiliation, so when asking the question we can circle back to you. And for the question, we kindly ask you to make it as short and concise as possible so that we can add as many to the queue as possible. What I will do is respond privately to the questions that are asked, but then remove them from the Q&A lineup so that I can archive them, group them and categorize them and ask the correct experts at the end of the session. Thank you very much!
Dr Jean-Marc Rickli
Thanks Ashley. David, do you want to share your views about the future of crisis management and what has worked in this crisis? What has not worked and the next steps?
Okay. Yeah, thank you Jean-Marc and welcome to everybody. I can well imagine that there are a lot of people viewing this who are involved in crisis management in one way or another. So let's just take a step and have a think where we are on all of this. And certainly, for many, we are in the realms of existential threat, coupled with the complexity, as Jean-Marc mentioned, in terms of exponential growth. We need to look at this in phases. What we have is countries, organizations and indeed, you know, looking at the commercial sector, lots of these organizations doing things in a different way across the globe. And that in itself is a challenge. So when we talk about the phasing of the crisis management aspects, the characteristics of vulnerability, uncertainty, complexity and ambiguity are very much to the fore. Right now, all of those four tenets of crisis management are still very strong and, as you don't know the end state in play at the moment, I'll come back to that issue in a minute.
But when we look at the phasing part, we have a cluster of activity that's going on in Southeast Asia, including China, and lessons learned from what's happening in South Korea. We have now Europe as a centre, along with the United States. But there's a third sector, geographically, which is still pretty much unknown, which are countries who are still needing to find out the extent of the pandemic impact. And we are only just beginning to, perhaps, see the tips of some of this, and that's obviously an area of concern. So depending on where you are in that phasing, you know, it's not going to go away very quickly.
That’s from a geographical perspective, but when we look at it from a crisis management perspective, depending where you are on that phasing, certainly here in Europe we are very much at the alert and containment phase. But very soon, we need to be moving into (and some are, depending on where you are in that phasing) the response part. This relates to issues such as testing, all these issues that Gilles also mentioned, in terms of medical supplies, which is looking to be, potentially, a problem, when everybody is chasing after the same material.
And then the third phase is around the whole recovery and reconstruction. I think one of the challenges that we have is, you know, what are the trigger points moving into these different phases? So that that's definitely a challenge in itself. I'd like just to look at that in terms of those phases of crisis response here; for many, who've been working hard over the last 2, 3, 4 weeks, depending on where you are, we can see now that the challenges are coming in, in terms of those teams managing that, whether it's at government level or at organizational level, stress beginning to come into play, finger pointing coming in, recriminations coming in. And, you know, that's a challenge. I think that what we need to be thinking about now, from the crisis management team perspective, is how are we going to address the second phase around the response, where decisions need to be made, but probably in slower time with a degree a bigger degree of deliberation and reflection, (which will also help feed into the third phase, the recovery phase)?
So those priorities set out initially around safety, security of staff and of citizens. Now, I think that we need to try to identify some of those tipping points into the second and third phases. One that may well be very important is that if we look at the end state, what is the end state? Well, the end state at the moment looks a long way away, because it's probably related to some sort of vaccine. But I think we all know, and Gilles, you may have some comments, that that may be 12-18 months away; and with a series of lockdowns applied in different ways, this is not going to be sustainable over that kind of period of time. So, from a crisis management perspective, what are those potential trigger points that can move us into the response and then the recovery phase? One certainly will be related to testing. But, you know, other things could happen.
The third point I would be encouraging the crisis managers to be thinking about now is: now we're moving out of the alert and containment phase. One of the very good ways, or well known way of trying to move forward, is to start thinking about forward-thinking cells. That may be new to many people in crisis management. But when we talk about moving from one phase to another, a very good way to think about it is having a forward thinking approach. That means four things can happen from where we are right now, in the emergency phase. What if things get worse? What if this virus decides to mutate? Or if there is a second spike? And that hopefully is not going to happen, but it could happen and we need then to reflect, from an organizational perspective, what actions or what mitigating measures could potentially be taken.
The second part is: what if something else happens? What if, for example, there is another disaster? Maybe not related to where we are currently, but with resources stretched, how are we going to potentially manage another disaster? We could look at Ebola: whilst there was a lot of work done in terms of the medical teams, when the medical team suddenly were attacked, for different reasons, that caused a disaster within an existing disaster. I think that there are risks of social unrest that may be there and that needs to be considered.
The third one is: what if it just continues to go on in the current status that we are now, with all of the financial implications around that in terms of business continuity, supply chains? And then the fourth thing to be thinking about is: what if we have a very slow recovery? That also means unhappiness within organizations, within staff, or a loss of trust in the leadership. And that slow recovery, I think, is also a risk that needs to be considered. When we're looking at the leadership part, it's very interesting to see how different countries have approached that. But leaders are having to make, typically, in a crisis, decisions with not necessarily a clear standard operating procedure to help them make those decisions. They are rightly having to rely on good technical support, especially in the medical field, but they're also challenged in that sometimes that medical advice can be ambiguous or contradictory. So this makes, you know, the decisions that leaders have to make, even more complex.
Those would be the three issues that I would be looking at in terms of the phasing of the response itself to where we are now; the issue about how teams running those different phases need to be considered; and then looking at the concept of a forward-thinking, forward-looking crisis management. Thank you very much.
Dr Jean-Marc Rickli
Thanks, David. So you mentioned a lot of different appointments for the future, but I think one of the key messages is not to exhaust all the resources in the current phase, because there are possibilities that we might see another crisis of a different nature emerging, or that the virus can mutate. So one of the key issues right now is to last over the longer term.
Now let's move to the financial and economic perspective with Victoria, honorary Professor of Economics at the University of Geneva. Victoria, can you share your insights about the current crisis, please?
Don't forget to unmute yourself.
Victoria, could you please unmute yourself?
Oh, here we go.
It's good. That is correct. Okay, thank you.
Prof Victoria Curzon-Price
I'd like to first of all say what a pleasure it is to join the panel, and hello to everybody. You know, economics is uncertain in the best of times, and it's even more uncertain now. I'd like to divide my introduction into two parts. First of all, a very quick overview of what's the main policies that have been adopted now to manage the emergency phase, which David was referring to. And then, what is being thought about for the response and recovery phase, which I've merged into the same thing.
So let me first of all say that, of course, the first thing that almost all governments have done, certainly in the West, has been to just open the cash gates and use the helicopter money to save whatever firms needed for the moment. The question is whether it should be grants or loans; I can go into that later. But most of the time, it's in the form of grants, not loans. It depends. Apart from that, we've had a truly massive, massive response in the United States where, in two phases, we've had first of all President Trump coming in with a cares’ [?] bill, for $2.2 trillion to be dispersed across the country to save all sorts of things, from health services to businesses. Everything seems to be covered, including the Kennedy Research Center Library. That is in addition to the Federal Reserve, which announced that it would put in $1.5 trillion right away, basically buying up whatever bills the economy produces. Private debt is being bought up by the Fed in exchange for money. If you add these two together, it comes to something like 3.75 trillion. Trillion. We’re talking trillions. You can add to that an ongoing deficit of 1 trillion anyway. And then there's loss of federal revenue. So I think, at a minimum, we're talking about 5 to 6 trillion US dollars going into the economy very shortly, some of it in the form of straightforward helicopter money and some of it in the form of loans, cash grants or whatever. That is about 30% of US GDP. 30%. It's huge! I've never seen anything like it.
If you come to China, China has a different approach. As far as I can make out, China has simply rolled out a pre-existing big project, big infrastructure, a plan to spend $6 trillion. Okay, funnily enough, so much money, but over 10 years; so that comes out at about, what, 650 billion? Just taking my back-of-the-envelope calculation... that comes out at about 4-5% of China's GDP. That was coming anyway, big infrastructure projects. And, you know, the difference between helicopter money and infrastructure projects is time. Helicopter money, you just drop the money into the system. And it'll go somewhere. Infrastructure projects need a lot of planning ahead of time, and to roll them out. You can't expect any quick action unless you have them in the drawer, ready to go. I have a feeling that the Chinese have their big infrastructures projects not only in the drawer, ready to go, but actually being initiated right now. So China was first off the mark with the virus and they're definitely first off the mark with the response.
The rest of us? Okay, so now we come to Europe. Jean-Marc, you mentioned it: Europe has yet to produce anything in the way of response. There's a little bit of helicopter money coming in from the European Central Bank. But we don't really know how much it's going to be and what's going to happen to it, and then Germany continues to complain that they don't like paying for other people's mistakes... The old division in Europe between the grasshoppers and the ants remains: the grasshoppers, who just spend and spend, and the ants work away and toil and look after the grasshoppers. That continues in Europe, and it doesn't really seem to be producing anything to prepare for the recovery phase.
So this is the scene at the moment, if I were just to summarize: China is pure Keynes; the United States is pure Milton Friedman, with the helicopter money; and Europe is nowhere, in the middle of doing nothing in particular. The Swiss and the Brits, you know, they're doing their own stuff.
Now, what about the future? One thing you have to do, as you move to the response and recovery phase, is that you have to be careful, that people are going to be worried. They've gone through a very traumatic period and fear is going to be one of the problems we're going to have to deal with. Because if you want an economy to revive quickly, basically there's animal spirits: you want people to invest, you want people to take risks; you want to, you know zoom away. In theory, you could possibly expect that, because unlike war damage, the virus hasn't damaged the physical infrastructure.
On the other hand, there's psychological damage. First of all, somebody mentioned the supply chains, the networks, these extremely long chains of contracts. It takes time to re-establish them, they can be broken and the alternatives are not that quick or easy to find. There's also psychological damage in the sense that if people have had savings, they've been dispersed and blown out of the water by just having to survive for two months without earning money. So no savings. No wealth, since the stock exchanges have lost wealth. And remember your old friend Arthur Pigou, who said that if people feel their wealth is going up, then they start spending more (what's known as the wealth effect)? Well, the reverse is going to affect our economies.
So there are many reasons to be worried about the recovery phase, because the animal spirits are not going to be there necessarily, which is why I would favour governments offering grants and not loans. Because if a business emerges from this trauma with a heavy load of debt, I think the entrepreneurs are just going to sit back and say, “well, let it go bankrupt. I'm not going to sweat for 10 years to pay this loan off. I'll just go bankrupt.” I think they have to be grants. It's like an insurance company: the state has to step in as a major insurer of last resort, not as a lender of last resort. That's one thing I would suggest.
What else could I say? I think that we need to think of our structure. The economic structure will probably have to change, because the trauma and the existence of this crisis is going to change things. I don’t know, I haven’t got a crystal ball, but for instance, there probably is going to be a move away from globalisation, some kind of re-centering protectionism, cocooning. Okay, well, why not, but people are not going to like the implications of higher costs. And so they might probably escape from higher costs with more robotics, more artificial intelligence; all these things will change the kind of economic structure that we have. We entered the crisis with an economic structure, and we want some change to that structure as we emerge. How do you get that to change during the recovery phase? My suggestion would be that when a firm goes bankrupt, the central bank steps in and buys it up, you have to nationalize the bankrupt firms. And then, in the recovery phase, sell them back at whatever the market will bear, and that will in itself create a structural change in the economy which will be more or less in line with what the economy needs. Because by that time, hopefully, relative prices will be sending the more or less correct signals back. Otherwise, I don't see how... you can't just save all the firms and say, okay, we just continue as before in recovery, because you'll still have some that will go bankrupt.
Anyway, I would simply say that it will be hard getting back to normal because of the fear factor and the wealth factor, the loss of wealth. I do think that to deal with the fear factor, our governments should start thinking about putting out rather more optimistic assessments of the situation if they possibly can. Right? It was fine to scare us to bits in order to keep us in our homes. But once that phase is through, then there has to be some kind of psychological help for the population, because otherwise we'll just remain depressed and unwilling to do much to help the recovery. Thank you very much for your attention.
Dr Jean-Marc Rickli
Thanks, Victoria. If I may say so, you're not a Keynesianist by training, you're rather liberal and the measures that you are advocating for, which is to provide grants, is quite a difference from what you normally taught in the past, which shows also the extent of the scope of this crisis.
Prof Victoria Curzon-Price
Can I just say that it's not Keynesian to have grants. Keynes always said borrow and spend. But this is quite different. It's using the state as an insurance policy. And that, it seems to me, is the role of the state. Because if it's not good for that, what is it good for?
Dr Jean-Marc Rickli
What is also important in what you said is non-tangible factors, fears and the psychology, and that governments have to deal with that because if you have to kick start the economy, you have to have people who are willing to spend. Thank you, Victoria, for this.
Now let's move to our last speaker, Nicholas Davis, a fellow at the GCSP. Nick, would you share your insights about global governance and where we're heading?
Sure. Thanks Jean-Marc, and hello everyone. Thank you for joining us today. Look, I'll try and cover, in 10 minutes or less, five questions around international cooperation, looking at dynamics and patterns rather than specific details. So I'll start by just a couple of words on why I think we see less international cooperation than we'd expect in such a crisis and pandemic. I'll touch a little bit on where it has occurred and what we're seeing. And then I'll reinforce some of the points that the other speakers have made of where it's essential moving forward. And I'll finish by talking a little bit about how the pandemic could change the dynamics of international cooperation, and what we can actually do about that.
Starting with why it's been far less intense and evident than one would expect. A few points here. You know, I think it's pretty clear if you've been following state relations over the last, let's say, five years, that neither the spirit of the times nor the state of international engagement mechanisms are supporting a deepening of cooperation and coordination across national borders. Two things have happened that’s made that the case. One is that international cooperation has been politicized and made to seem risky. The days are well and truly over when it was routine for the UK to cooperate deeply with the EU, unfortunately, or for the US to cooperate with almost anyone on first instance. And that has had an effect in many countries. The administrative state, in terms of those interconnections of cooperation, have been really hollowed out. Cross-border cooperation is not about grand statements and political commitments. It's about practical actions, where someone who trusts someone else in another part of the world can pick up a phone, or send them an email, or wire a transfer, or create incentives that then drive action. Unfortunately, we've seen an undermining of global institutions that support that cooperation. The individuals within governments that have traditionally played those roles have really disappeared in many parts of the world. I'm talking particularly here about those that are typically expected to lead in these areas, so the US in particular, and, to a certain extent, the UK, those aspects have been lost or degraded.
I also think that the dynamics of a pandemic are very different to most other types of crises. There are barriers to cooperation that are created by the nature of the pandemic itself. One that I think Gilles mentioned is that a knee-jerk response to the spectre of transmissibility is to break interconnections where you have power to break them. The first set of powers that a national federal government has is to break border connections, because it's within their authority to do so. So you get these interconnections breaking, that actually then reduce the ability for states and for communities to cooperate after the fact. You also get transmissibility promoting finger pointing and blame, that incentivizes politicians and pundits to blame other countries or communities or groups as sources; and anticipated global shortages. So, when people can already anticipate that a pandemic of this nature will overwhelm systems, it will incentivise people to shut down connections, put export bans around hydroxychloroquine, as we saw in medical supplies, and in some cases, seeking to get material from other territories at almost any cost, including deception, which increases distrust and reduces cooperation. That's before we get to the fact that the extent of the pandemic has reduced our capacity for cooperation.
I guess I'd finally also add that the data is still not clear. There are incentives to lie, unfortunately, in a crisis of this nature, to minimize panic, to look like you're doing a better job, or to avoid blame. So that's one of some of these elements that are contributing to why we're not seeing this cooperation. Now, where we have seen cooperation, international organizations are really at the front. My view is that the WHO has done a great job under very difficult conditions in public communication and leadership; of course, sensitivities and issues around things such as the status of Taiwan. Groups like IOM and [?] are also doing great work, but their funds and resources are way too small. We've seen bilateral relationships, so not regional cooperation, but bilateral relationships around repatriation and some agreements over treatment and exchange of material. But again, not systematic. We've seen far less from regional blocs than I certainly would have expected: vague statements from the G20, some interesting discussions between ASEAN and China and really, as David and others put forward, and Victoria just then, a really kind of a lackluster response from the European Union.
So, where is it absolutely essential that international cooperation takes place to move forward through the crisis and into recovery? I think, first and foremost, economic and health care assistance to vulnerable countries and vulnerable populations is a matter of international concern and international cooperation. Immediate support is going to be needed, particularly in least developed countries. The age profile of most LDCs and developing economies actually makes them more resilient to the health effects of the coronavirus, and compared to others. In India, the median age is 27, compared to Italy's 45, which means that cohorts that will be more affected by the crisis are smaller, relatively speaking. But the health system shortages in those countries more than offset these age related advantages, and there's a huge systemic economic impact both on those countries, but also in vulnerable populations, even in countries like the United States, and I expect that today the US will announce that another 5 million US citizens filed for unemployment in the last week, which adds to the 3 million announced last week. The St. Louis Fed is predicting 32% unemployment, or positing that that's possible, in the United States; that's one of the world's most competitive economies. So, international cooperation around economic and assistance of those types is absolutely critical. I think Victoria's points and insights around the heterogeneity of those approaches is really important for us to understand and track moving forward.
I also think that the reopening of the international movement of people is a critical aspect for international cooperation, particularly for recovery. Air travel alone contributes about $3 trillion to the global economy, and migrants more than double their economic contribution. Stopping migration and incentivizing people to move home is a massive cost to the global economy: migrants contribute around $7 trillion to the global economy, more than double what they would contribute in their home countries, according to IOM and others. And finally, for vaccine development, pricing and distribution, it's essential to make sure that any vaccine is effective across diverse populations, so relevant globally, and scaled, and allocated, and distributed well. It's going to be pretty, pretty clear.
So with a couple of minutes left, what could we see as a result of the pandemic here? Well, in the short term, I think we do need to learn the lessons from history, that the virus itself may well hamper international cooperation in very direct ways. Woodrow Wilson was affected by the Spanish Flu when he attended the Paris Peace Conference at the beginning of 1919. And the assessment is that him being ill seriously affected his ability to negotiate on behalf of the United States during the Paris Peace Conference, which influenced the fact that he was unable to convince the US Senate to join the League of Nations. That's a pretty long bow to draw, but I will say, if we see world leaders being affected by the virus, which we already have started to see, that will impact international cooperation. We could also, as Kemal Derviş and Sebastian Strauss have argued, see a crisis of global governance, a major extension of isolation and a rise in fear and bias among national populations. As a result of this, one of my friends was recently assaulted in LA for being an Asian American. We are seeing the response to the virus, invoking tribalism that is not in favour of cooperation. We will undoubtedly see that the pandemic leads to new configurations and limits in terms of movements of people and relationships. And I really expect to see an explosion in bilateral corridors of trade and movement of people. Not to mention the fact that international movement will feel very different after the crisis than it did before. Much like a 9/11 type event, but with the healthcare impact. We could see the emergence of private systems of movement, which will further entrenched inequality in terms of international movement. Jean-Marc, you mentioned at the beginning that the pandemic is also likely to shift the role of the state. So more authoritarian governments could be more likely, which will impact state relations. But you also could see effects like huge investments in digital public goods that will equally change those relationships.
So, to finish, what can we do? Let me throw out four ideas here. I think first of all, we really need to be politically engaged as well as economically and socially engaged. But I would urge that political engagement is constructive policies, not divisive politics. Politicizing the crisis is very tempting, but not helpful, particularly in the middle of this. We also personally need to behave in ways that reduce infection rates for ourselves and others and support solidarity that Gilles mentioned in his discussion earlier. Third, I think we should be creating narratives that support collective resilience rather than isolationism. As David mentioned, global risks, more often than not, cluster. We need better healthcare cooperation. But we also need more embedded strategic foresight. And the fact that, as Jean-Marc mentioned, so many leaders completely overlooked the warnings and assessments of the threat of a pandemic, despite the work that had been done, is really a lesson to take for the future. And finally, and I think this is Victoria's key point, which is spot on, we need to invest in people. The physical equipment that you would expect to be degraded during, say, a wartime footing or other natural disasters, that's likely to be kept largely intact during the course of this crisis. But people’s skills will degrade, people's mental health will degrade, and they will be more fragile and risk averse. So investing in skill development and social benefits will be absolutely critical for those countries who feel ready and able to really take those animal spirits and create a steep recovery rather than a long depression coming out of this pandemic.
Dr Jean-Marc Rickli
Thanks, Nick. So, basically, your message is that to recover, we need to keep the system working. We cannot go back to autarchy and we need to let people travel, to resume air transportation. Unfortunately, what we're seeing right now is that there are impediments to that, there are discourses that are going against that. If I look at the four presentations, what we see is that there are very diverse responses so far, and a lack of coordination.
Ashley, I will turn to you for a Q&A. We have about 15-20 minutes left, we have more than 30 questions that have been raised by people watching this webinar. Obviously, we won't be able to address all of them. But at least we try to address one for each speaker. Ashley, can you just let us know?
Yes. We also have questions coming in from the YouTube stream as well, so we'll try to categorize them all together. The first question is directed towards Gilles Poumerol: may you please answer the question on how do you see things evolving in Africa, especially where there is still ongoing conflict from Catherine Rompato [??]? Thank you.
Dr Gilles Poumerol
Well, if you look at the recent data from Africa, it seems that the virus has started to spread. Obviously, we are facing, in many of these countries, healthcare systems which are very limited in their capacity to handle difficult situations like intensive care. We observe that they are facing a lot of difficulties with implementing social distancing measures, for many reasons. First of all, obviously, the income of the population is very limited, people cannot just live on their savings that they don't have. I think there is a real fear that this epidemic might really be very destructive in Africa in the next couple of months. So, obviously, when we have war situations, it doesn't improve the situation, so a lot of concern with Africa at the moment.
Thank you. So I'm gonna ask the other speakers as well, so you also have time to prepare your answers. The next question, David, putting you on the spot here, is from Stefan Brem, Federal Office for Civil Protection. How can trust be maintained and regained if lost? The frank and transparent communications can sometimes be very problematic.
Yeah, well, a good question from Stefan. I mean, you know, trust is a tricky issue. It takes years to build and can be lost in five minutes. And I think this is what leaders are going to struggle with as we move out of this phase of alert and containment into the response and then into the recovery phase. I think there are a number of reasons for that. One, I think they're struggling with contradictory information. And that's hard. That's hard to navigate through. And, you know, at the end of the day, the leaders need to get rid of the political agendas. There needs to be honesty, and if they don't know, they should say they don't know. If there is contradictory medical advice coming in, they should say that there's contradictory medical advice coming in. But there is a need to have good, competent, technically knowledgeable and experienced people around, responding quickly to the situation as it develops; so, to be agile. But I think above all, it's about being honest. If there are emerging issues coming up, be they supply chain issues, whether they be vaccination issues, then I think there is a need to be as honest as possible. This trust can be measured and it can be built; it's something that we do at the GCSP in crisis management teams, but it takes time and it takes certain skills.
Thank you, David. I'm gonna ask now Victoria and Nick. Victoria, first one for you, and then I'll ask the question directly to Nick after so he can prepare as well. Victoria, from B. Samuel from the Ministry of External Relations in Cameroon: America is putting money into boosting economic response, while China is putting money to boost health response. Which is more important in the case of the COVID19?
Prof Victoria Curzon-Price
Well, I was referring to the recovery phase when I was describing the Chinese situation. The Chinese are not just investing in health, they're investing in transportation, new cities, big university expansion, a lot of investment in artificial intelligence and robotics. So China is essentially investing in the future, what they see as the future for their country and their economy. It's not focused on health in particular. And if you look at the US, the big expenditure packet which President Trump signed into law a couple weeks ago by now, it goes everywhere. It's not into health in particular, a lot of it goes to support the unemployment benefits. A lot of it goes into academic research, into building roads, repairing bridges, it's a real Christmas tree. What's been happening, as we were saying, as David was saying, is that there's several phases in this story. The immediate emergency phase, we do what we can, and scramble around for masks and all the rest of it. But the real issue is what comes next. And what comes next is everything. It's not just health, it's everything else as well.
Thank you, Victoria. Okay. So Nick, I'm going to give you your question and then Gilles, you're coming up with the next one. I will just make sure before you start to ask the question directly. So, Nick, the question for you is: there is talk about international collaboration. But prior to COVID19, multilateralism has been hit hard by certain countries. Will COVID19 change this trend? And for Gilles, I have a question: are we expecting a common worldwide public health policy during or after COVID19? Thank you.
Thanks for the question. I think that COVID will necessarily force us to consider different forms of cooperation. But I'm not sure that it will reverse the impacts that we've seen so far on the multilateral system. One specific question that I was discussing with some colleagues the other day was: would one of the impacts of the COVID crisis be that the US reinvests in the WTO as an institution? Would it start to reappoint judges to the Appellate Body, for instance? We were trying to build scenarios where that would be the case, but it turns out to be quite tough. It looks like, and I work with a lot of different foresight and scenario techniques, it looks like a predominant set of dynamics here is for countries to go forward with rather ad hoc approaches to bilateral and multilateral agreements as a response to the crisis, rather than building up or investing in existing systems such as, for instance, dramatically increasing funding for the WHO, which we haven't seen. So that's my primary answer. I will say that as an example of some of those ad hoc initiatives, you can look at what Prime Minister Modi of India did recently in calling for a data platform amongst the SAARC countries, or South Asian countries, to share information and approaches to COVID. So I think my main opinion is that, actually, we're seeing more innovative and ad hoc systems rather than a massive reversal and reinvestment in the multilateral system, as you've suggested, as much as I would like to see that being the case.
Thank you. Now to Gilles about the worldwide policy on public health. Thank you.
Dr Gilles Poumerol
Well, I think my answer is very short. It's yes. We should have the development of a common policy, a worldwide policy on public health. And as I said, we should revise the International Health Regulations, which could be the basis of this worldwide public health policy in terms of epidemics at least, and it could be more than epidemics. Let's take a chance to make a big step forward for health in the world at this time. Thank you.
Thank you very much. David, a question from Commander Carlos Garzon, Ecuadorian Marines. What can we do for psychological help for military and police that are deploying help during the crisis? They are away from their families and exposed to the virus and stress is high. What can we do to support them?
Look, I think that these people that are very much in the frontline of this emergency response phase now, this alert containment phase, they do need a very special support. They need prioritisation in terms of vaccine or antibody tests or indicative tests. They also need to have their family supported. If you want to have huge commitment, risk taking in certain instances for these people, it's not just about them, because their principal worry is going to be their family. This has been shown several times. So look after their family and their interests, and then you will get the commitment and the support. I think psychological support needs to be very practical: transportation; if there is some form of test or vaccine, then that's not just about the individual themselves, it's about their family, and then they will go to work and turn up for work energized and supported. But if in the back of their mind, they're worried about their family, then it's not going to work.
Thank you, David. A question now for Victoria and Nick, the last for this round. Victoria, a question on how developing countries, in the regions such as Latin America, how their economy can prepare for the virus. How can they get ahead?
Prof Victoria Curzon-Price
Oh, if I may say so, I think that many Latin American and other developing countries are going to find it very difficult to have a sort of massive, rich country response. Now, that may not be a bad thing, in a sense, because everybody will be sort of thrown back on their own ideas, and it creates an individual responsibility for everyone. There may be some virtue in this and certainly one has to make the most of it, because I don't see how a developing country can go out and raise a lot of money in extra debt. These countries already have a problem with debt. So they can't borrow money to save firms. They can print money to save firms, but it'll soon fly off in inflation. So I would say that the response in developing countries should be - and the government has quite a big role there - is to inform people, tell people what they can do to help themselves and be inventive. And it may turn out to be the best way forward. We don't know yet.
Thank you, Victoria. Nick, over to you about a question from Chris, a former ESC participant with the GCSP. He's asking: do we really need better foresight? Pandemics have been in the books for centuries. What about better politics and preparation?
I think they go hand in hand. I don't think we need more foresight, exercises that get done by groups and then never read or never practiced in different ways. But I do think we need... even when we have a report like the Global Risks Report that the World Economic Forum produces, what we should avoid is an instant rejection of any risk that isn't in the top five or the top 10. Pandemics haven't been in the top five or top 10 for 15 years in that report. And yet, in terms of when any of those 40 or 45 or so global risks emerge, they're in the report because they need preparation, and resilience, and political support behind plans for them to be done. I also think that a lot of states prepare for events like this by creating mechanisms of accountability and communication. If you look at the UK preparedness report for the pandemic that they published in 2013, it's a fantastic battle plan for assigning who does what, but it had no strategic impact on assessing what steps might be needed at each point in time. In other words, it was a great way of setting up being able to rapidly assemble the right groups of people. But you had to start from scratch in terms of determining at what point maybe schools would need to be shut or what kind of data would need to be gathered to make those assessments in the first place. So I don't think it's more foresight in terms of pure research, but I do think a deeper integration of global risks and the interconnections between global risks, as David pointed out, I think is very important.
Dr Jean-Marc Rickli
Thanks Nick, and thanks to all of you. Time is running fast and we’ve already reached our 1:15. So I would like to thank you for your insights. Thank you to all the people who watched this first episode of this webinar on the consequences of this coronavirus crisis. As you've seen, we touch upon a lot of different topics. We did not exhaust all the issues, probably you are frustrated because we could not address all the questions. But we will continue this webinar. And next week, we'll have a specific episode on the impact of coronavirus on the Middle East, with a very distinguished speaker. It will be on Thursday, the ninth of April, at 3pm Central European Time. In the meantime, thank you for tuning in to this webinar channel. You can find more information about the activities of the GCSP, as well as the publication of our staff, experts, fellows on our website. Tune in also on our social media channels. For those who registered, you will also receive an email that will provide you more information about different activities, as well as a survey about what you would like us to improve or topics that you would like us to deal with. Until next week, I wish you all the best. Be safe. And I will see you next Thursday at 3pm CET, thank you very much for tuning in.