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Is the pandemic a moment of promise or peril?

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The defining characteristic of our world is its fluidity. Whether the context is international relations, new political and business practices that erase or ignore borders, or technologies that make possible previously unimaginable connections a mainstay of the day to day, life is changing in fundamental ways.

Technologists have for some time noted that the pace of change has been accelerating, but we are about to make a historical step — forward, I hope — as a result of the COVID-19 outbreak.

While there is a range of possible outcomes, let me offer two — one on either end of the spectrum — to tease out what is unfolding and the implications.

If all goes well, the outbreak is contained in the near future. Contagion is limited, the disease proves less lethal than feared and health care systems are not overwhelmed. While painful, the economic damage is on the lower range of estimates: A recent Asian Development Bank (ADB) study advanced three scenarios, and the least severe one postulated a global impact of $77 billion, about 0.1 percent of global gross domestic product. For reference, the moderate case resulted in losses of $156 billion, or about 0.2 percent of global GDP.

Fortunately, central banks worked together and the Group of Seven and Group of 20 adopted fiscal stimulus programs that sustain demand. Coordination extended to multilateral safety nets so that particularly hard-hit countries retained access to credit and liquidity.

Political systems prove resilient. Despite initial slow responses and a seeming inability to learn from others’ mistakes, mastery of the outbreak generated public support for governments. Asian governments got great credit for their ability to contain the contagion and used this experience to stake new claims to global leadership. An Asian renaissance is underway.

The crisis prompts a reckoning in the West about governing philosophies. Never before had the downsides of small government been more obvious as countries wrestled with the effects of the systematic denigration of expertise and the steady stripping of surge capacity to deal with crisis. The impact of rotting and neglected infrastructure was plain.

The idea of self-help, which dominated conservative thinking, was exposed as empty and frivolous when confronted by a disease that leveled........

© The Japan Times