Tag Archives: Pandemic

The Coming Post-COVID Anarchy

The Pandemic Bodes Ill for Both American and Chinese Power—and for the Global Order
By Kevin Rudd – In January and February of this year, there was audible popping of champagne corks in certain quarters of the U.S. foreign policy establishment. What some observers had long seen as this era’s giant geopolitical bubble had finally begun to deflate. China’s Communist Party leadership, the thinking went, was at last coming apart, a result of its obsession with official secrecy, its initial missteps in responding to the novel coronavirus outbreak, and the unfolding economic carnage across the country.

Then, as China began to recover and the virus migrated to the West in March and April, irrational jubilation turned to irrational despair. The commentariat greeted with outrage any possibility that the pandemic might in fact help China emerge triumphant in the ongoing geopolitical contest with the United States. This concern was a product of China’s seemingly cunning remolding of the narrative on the origins of the virus, the brutal efficiency of the Chinese authoritarian model in containing it, and Beijing’s global COVID-aid campaign. China’s own nationalist commentariat happily piled on, delighting in the United States’ distress and noting the supposed contrast between Chinese largesse and American indifference: the “people’s war” against COVID-19 had been won, and the virtues of China’s political model had been vindicated.

Yet despite the best efforts of ideological warriors in Beijing and Washington, the uncomfortable truth is that China and the United States are both likely to emerge from this crisis significantly diminished. Neither a new Pax Sinica nor a renewed Pax Americana will rise from the ruins. Rather, both powers will be weakened, at home and abroad. And the result will be a continued slow but steady drift toward international anarchy across everything from international security to trade to pandemic management. With nobody directing traffic, various forms of rampant nationalism are taking the place of order and cooperation. The chaotic nature of national and global responses to the pandemic thus stands as a warning of what could come on an even broader scale.

As with other historical inflection points, three factors will shape the future of the global order: changes in the relative military and economic strength of the great powers, how those changes are perceived around the world, and what strategies the great powers deploy. Based on all three factors, China and the United States have reason to worry about their global influence in the post-pandemic world.

Contrary to the common trope, China’s national power has taken a hit from this crisis on multiple levels. The outbreak has opened up significant political dissension within the Chinese Communist Party, even prompting thinly veiled criticism of President Xi Jinping’s highly centralized leadership style. This has been reflected in a number of semiofficial commentaries that have mysteriously found their way into the public domain during April. Xi’s draconian lockdown of half the country for months to suppress the virus has been widely hailed, but he has not emerged unscathed. Internal debate rages on the precise number of the dead and the infected, on the risks of second-wave effects as the country slowly reopens, and on the future direction of economic and foreign policy.

The economic damage has been massive. Despite China’s published return-to-work rates, no amount of domestic stimulus in the second half of 2020 will make up for the loss in economic activity in the first and second quarters. Drastic economic retrenchment among China’s principal trading partners will further impede economic recovery plans, given that pre-crisis, the traded sector of the economy represented 38 percent of GDP. Overall, 2020 growth is likely to be around zero—the worst performance since the Cultural Revolution five decades ago. China’s debt-to-GDP ratio already stands at around 310 percent, acting as a drag on other Chinese spending priorities, including education, technology, defense, and foreign aid. And all of this comes on the eve of the party’s centenary celebrations in 2021, by which point the leadership had committed to double China’s GDP over a decade. The pandemic now makes that impossible.

As for the United States’ power, the Trump administration’s chaotic management has left an indelible impression around the world of a country incapable of handling its own crises, let alone anybody else’s. More important, the United States seems set to emerge from this period as a more divided polity rather than a more united one, as would normally be the case following a national crisis of this magnitude; this continued fracturing of the American political establishment adds a further constraint on U.S. global leadership.

Meanwhile, conservative estimates see the U.S. economy shrinking by between six and 14 percent in 2020, the largest single contraction since the demobilization at the end of World War II. Washington’s fiscal interventions meant to arrest the slide already amount to ten percent of GDP, pushing the United States’ ratio of public debt to GDP toward 100 percent—near the wartime record of 106 percent. The U.S. dollar’s global reserve currency status enables the government to continue selling U.S. treasuries to fund the deficit. Nonetheless, large-scale debt sooner or later will constrain post-recovery spending, including on the military. And there’s also risk that the current economic crisis will metastasize into a broader financial crisis, although the Federal Reserve, other G-20 central banks, and the International Monetary Fund have so far managed to mitigate that risk.

Chinese leaders have a simple Leninist view of the United States’ power. It rests on two fundamentals: the U.S. military and the U.S. dollar (including the depth and liquidity of the U.S. financial markets that underpin it). Everything else is detail.

All states are mindful of what Leninists call “objective power” and the willingness of the great powers to deploy it. But the perception of power is equally important. China is now working overtime to repair the enormous damage to its global standing that resulted from the geographical origin of the virus and Beijing’s failure to contain the epidemic in the critical early months. Whatever China’s new generation of “wolf-warrior” diplomats may report back to Beijing, the reality is that China’s standing has taken a huge hit (the irony is that these wolf-warriors are adding to this damage, not ameliorating it). Anti-Chinese reaction over the spread of the virus, often racially charged, has been seen in countries as disparate as India, Indonesia, and Iran. Chinese soft power runs the risk of being shredded.

For different reasons, the United States does not come out of the crisis much better. The world has watched in horror as an American president acts not as the leader of the free world but as a quack apothecary recommending unproven “treatments.” It has seen what “America First” means in practice: don’t look to the United States for help in a genuine global crisis, because it can’t even look after itself. Once there was the United States of the Berlin airlift. Now there is the image of the USS Theodore Roosevelt crippled by the virus, reports of the administration trying to take exclusive control of a vaccine being developed in Germany, and federal intervention to stop the commercial sale of personal protective equipment to Canada. The world has been turned on its head.

The crisis also appears to have shredded much of what was left of the U.S.-Chinese relationship. In Washington, any return to a pre-2017 world of “strategic engagement” with Beijing is no longer politically tenable. A second Trump term will mean greater decoupling and possibly attempted containment, driven by Trump’s base and widespread national anger over the origins of the virus, although this strategy will be rendered incoherent at times by the president’s personal interventions. In a Biden administration, strategic competition (and decoupling in some areas) will continue, likely to be executed on a more systematic basis and leaving some scope for cooperation in defined areas, such as climate, pandemics, and global financial stability. On balance, Beijing would prefer Trump’s reelection over the alternative, because it sees value in his tendency to fracture traditional alliances, to withdraw from multilateral leadership, and episodically to derail the United States’ China strategy. Either way, the U.S. relationship with Beijing will become more confrontational.

In Beijing, China’s response to the United States’ ever-hardening posture is now under intense review. This process began in 2018, during the first full year of the U.S.-Chinese trade war. It has now been intensified, because of the pandemic and its international consequences. The review is part of a broader internal debate in Beijing about whether China’s national strategy, at this stage of its economic and military development, has in recent years become insufficiently reformist at home and excessively assertive abroad.

Prior to Xi, the strategy was to wait until the correlation of economic and military forces shifted in China’s favor before seeking any major adjustments to the regional and international order—including on Taiwan, the South China Sea, and the U.S. presence in Asia. Under Xi, Beijing has become significantly more assertive, taking calculated—and so far successful—risks to bring about changes on the ground, as demonstrated by island reclamation in the South China Sea and the Belt and Road Initiative (BRI). The United States’ reaction to this approach has been deemed to be manageable, but that calculation could change in a post-trade war, post-pandemic world. Xi could seek to ameliorate tensions with the United States until the pandemic is lost to political memory; or facing internal challenges, he could take a more nationalist approach abroad. Both of these tendencies will likely appear in Chinese policy behavior until China’s internal policy review process concludes, which may not happen until shortly before the 20th Communist Party Congress in 2022. But if Xi’s style thus far is any indication, he is likely to double down in the face of any internal dissent.

That would mean hardening China’s posture toward the United States, including on issues such as Taiwan, the single most destabilizing element in the U.S.-Chinese relationship. Beijing is likely to sharpen its strategy of shrinking Taiwan’s international space, even as U.S. efforts to secure Taiwan’s readmission to the World Health Organization intensify. Given that this comes on the heels of other recent U.S. efforts to upgrade official-level engagement between Washington and Taipei, the understandings of the “one China policy” that underpinned the normalization of U.S.-Chinese relations in 1979 could begin to unravel. If these understandings collapse, the prospect of some form of military confrontation over Taiwan, even as the inadvertent result of failed crisis management, suddenly moves from abstraction to reality.

Prior to the current crisis, the postwar liberal international order was already beginning to fragment. The United States’ military and economic power, the geopolitical fulcrum on which the order rested, was being challenged by China, first regionally and more recently, globally. The Trump administration was adding to the order’s problems by weakening the U.S. alliance structure (which in conventional strategic logic would have been central to maintaining a balance of power against Beijing) and systematically delegitimizing multilateral institutions (effectively creating a political and diplomatic vacuum for China to fill). The result has been an increasingly dysfunctional and chaotic world.

The current crisis is likely to reinforce such trends. Strategic rivalry will now define the entire spectrum of the U.S.-Chinese relationship—military, economic, financial, technological, ideological—and increasingly shape Beijing’s and Washington’s relationships with third countries. Until the current crisis, the notion that the world had entered a new Cold War, or Cold War 2.0, seemed premature at best; the two countries’ financial systems were so intertwined that true decoupling was unlikely, and there seemed to be little prospect of geopolitical or ideological proxy wars in third countries, a defining feature of the U.S.-Soviet rivalry.

But the new threats that both sides are making as COVID-related tensions grow could change all that. A decision in Washington to end U.S. pension-fund investments in China, restrict future Chinese holdings of U.S. Treasury bonds, or start a new currency war (exacerbated by the recent launch of China’s new digital currency) would quickly remove the financial glue that has held the two economies together; a decision in Beijing to increasingly militarize the BRI would raise the risk of proxy wars. Moreover, as U.S.-Chinese confrontation grows, the multilateral system and the norms and institutions underpinning it are beginning to falter. Many institutions are themselves becoming arenas for rivalry. And with a damaged United States and a damaged China, there is no “system manager,” to borrow Joseph Nye’s phrase, to keep the international system in functioning order. It may not yet be Cold War 2.0, but it is starting to look like Cold War 1.5.

There are better alternatives to this scenario. They depend, however, on significant political and policy change in Washington; a reformist and internationalist readjustment in Beijing; the development of a new architecture of détente between the United States and China (drawing on the U.S.-Soviet experience), which places clear parameters around competition in order to avoid military disaster; and efforts by other countries to pool political and financial resources to preserve the essential multilateral institutions of the current system as a form of institutional triage until there is a return to geopolitical stability. History is not predetermined. But none of this will come about unless political leaders in multiple capitals decide to change course. With the wrong decisions, the 2020s will look like a mindless rerun of the 1930s; the right decisions, however, could pull us back from the abyss. more>

Updates from McKinsey

Beyond contactless operations: Human-centered customer experience
As we look forward to the next normal, consumers are already demonstrating a preference for companies that deliver great service while reducing risks all along the customer journey.
By Melissa Dalrymple and Kevin Dolan – As the global fight against COVID-19 continues and much of normal daily life remains on hold, organizations are trying to navigate a rapidly evolving landscape. Many have moved beyond initial actions to protect the lives and livelihoods of their people and are working to tackle the concerns of the estimated millions of consumers who expect the effects of COVID-19 to be long lasting—customers who are making decisions about whether or not to engage with a company based on its actions to address safety concerns and the way it communicates changes. Beyond addressing safety concerns, organizations that find ways to rebuild the human experiences that existed before COVID-19—among everyone from suppliers to employees and customers—within a contactless world will differentiate themselves and gain customer loyalty.

Companies are moving quickly to institute new policies and processes that will allow them to reopen—or in some cases, remain open. Many are investigating opportunities to shift toward contactless service and operations, allowing the cores of their businesses to continue operating while assuring both employees and customers of their safety. Companies that develop a long-term strategy now to mitigate risks while delivering distinctive and human-centric experiences will emerge from the pandemic with stronger operational resilience, more agile organizations, and sustainable competitive advantage that can better respond to a changing economic context and any future shocks.

It will be important that companies work across silos to provide solutions that deliver effective, end-to-end employee and customer experiences, maintaining the value of their brands through the operational adjustments they make. A new, data-driven perspective, summarized as IDEA (identify interactions, diagnose and prioritize risks, develop and execute solutions, and adapt and sustain), can provide crucial structure and rigor in helping an organization see risks, assess their intensity, and create solutions to address them iteratively as the external environment evolves.

Leaders can then develop interventions and redesign critical customer and employee journeys, enabling their organizations to reopen or sustain operations while also building trust with both customers and employees, such as redesigning the way hotel guests check in by developing a completely digital experience without a check-in counter. Over time, IDEA can flex to include more human elements while keeping safety and security at its core. more>

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Challenges for international institutions during COVID 19

By Erol User – International institutions still represent a compromise between the power capabilities of their participants and the need for relative civilizational interaction between them. Institutions cannot be effective or on their own. It always depends on the ability of states to agree and the presence of objective structural prerequisites.

In the latter half of April, disputes between China and the United States led to the disruption of a tele-meeting by the G20 countries.

Due to the fact that this grouping is considered the most representative and, at the same time, the least binding in terms of decision-making, until recently it was considered the most promising in the context of a crumbling world order and the growth of national egoism.

However, the first round of the most important interstate confrontation of the new era already called into question the very possibility of discussions between the leaders of the 20 most economically and politically important countries of the world. Somewhat earlier, the US government announced that it plans to stop funding the World Health Organisation, where it is the main donor. Washington does not like much at the WHO. But the main thing is that China has so far been able to exert more influence on its work than the United States itself. Donald Trump is trying to correct this imbalance in the ways characteristic of his policymaking. The result is not yet obvious.

Such course of events makes more than relevant the question of the future of international institutions, the most important achievement of international politics in the 20th century.

Mankind went without constant norms and rules for most of its political history. Since the formation of the first states, collectives of individuals have reflected nothing but their own conscience and the strength of other collectives in their actions. In Europe, the role of arbiter was for a short time, less than 1,000 years, played by the Catholic potentate in Rome. The church did not have its own armies, but it did have moral authority. Moreover, the popes’ lack of their own military power, as well as their claim to the universality of spiritual power, did not allow the Holy See to become one of the ordinary states.

Accordingly, the values ​​and rules that Rome tried to impose during the Middle Ages did not directly express anyone’s values ​​or interests. Therefore, they were relatively fair, for the most part. At the beginning of the 16th century, European states became so strong that they became nonplussed with the power of Rome. Over the next 400 years, they lived practically without any institutions embodying the need to follow the rules. As a result of the Thirty Years’ War of 1618 – 1648, at least general rules of conduct appeared, therefore Kissinger in his book World Order defined the Westphalian system as “having not a substantive, but a procedural character.” This was a great achievement for its time, but it was far from an attempt to establish genuine, civilized relations between peoples. more>

Updates from McKinsey

A CEO’s guide to reenergizing the senior team
In today’s tough and fast-changing environment, CEOs must help their top leaders to work through fear and denial and to learn new rules.
By Derek Dean – When business conditions change as dramatically as they have in the past year, CEOs need to be able to rely on their best leaders to adapt quickly. But what should they do when their strongest executives seem unable to play a new game? The costs—organizational drift, missed opportunities, unaddressed threats—are so big that it’s tempting to replace leaders who are suffering from paralysis. But this is a mistake when, as is often the case, these executives possess valuable assets, such as superior market knowledge, relationships, and organizational savvy, that are difficult to replace.

Before sending promising executives off the field, CEOs should try to help them learn to play by new rules. While part of the task—making a compelling case for change, helping him or her meet new job demands—involves appealing to an executive’s rational side, there’s also frequently an emotional element that is at least as important. Empathizing with the complex emotions executives may be feeling as the assumptions underlying their business approach unravel can be a critical part of overcoming the fear, denial, and learning blocks keeping them stuck.

Helping senior managers swim through this thick stew of challenges is a perennial problem that has become more acute for many organizations over the last year. The credit crunch and global economic slowdown didn’t just cause the unraveling of many business models. They also unsettled the assumptions and confidence of many senior managers. Mopping up the collateral damage in the executive suite is now a mission-critical task for many CEOs and is likely to remain one even when business conditions begin to recover.

Among the many emotions that can influence how executives interpret and respond to events, there’s one worth addressing on its own: plain old white-knuckled fear. In times of rapid change, when the actions that used to lead to success don’t any more, even strong leaders can experience intense, unproductive levels of fear caused by threats to their identity, their reputations, their social standing, and even their basic survival needs of a job and a paycheck. Ironically, leaders with the strongest track records are often more susceptible to fear during tumultuous periods because they have less experience facing adversity than their colleagues with more checkered pasts do. more>

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Updates from McKinsey

To emerge stronger from the COVID-19 crisis, companies should start reskilling their workforces now
Adapting employees’ skills and roles to the post-pandemic ways of working will be crucial to building operating-model resilience.
By Sapana Agrawal, Aaron De Smet, Sébastien Lacroix, and Angelika Reich – Imagine a crisis that forces your company’s employees to change the way they work almost overnight. Despite initial fears that the pressure would be too great, you discover that this new way of working could be a blueprint for the long term. That’s what leaders of many companies around the globe are finding as they respond to the COVID-19 crisis.

Consider the experience of one pharma company with more than 10,000 sales reps. In February, it switched from an offline model to a 100 percent remote-working one. As the containment phase of the crisis gradually recedes, you might expect remote working to fade as well. However, the company now plans to make a 30 percent-online–70 percent-offline working model permanent, thus leveraging the freshly developed skills of its sales reps.

Even before the current crisis, changing technologies and new ways of working were disrupting jobs and the skills employees need to do them. In 2017, the McKinsey Global Institute estimated that as many as 375 million workers—or 14 percent of the global workforce—would have to switch occupations or acquire new skills by 2030 because of automation and artificial intelligence. In a recent McKinsey Global Survey, 87 percent of executives said they were experiencing skill gaps in the workforce or expected them within a few years. But less than half of respondents had a clear sense of how to address the problem.

The coronavirus pandemic has made this question more urgent. Workers across industries must figure out how they can adapt to rapidly changing conditions, and companies have to learn how to match those workers to new roles and activities. This dynamic is about more than remote working—or the role of automation and AI. It’s about how leaders can reskill and upskill the workforce to deliver new business models in the post-pandemic era.

To meet this challenge, companies should craft a talent strategy that develops employees’ critical digital and cognitive capabilities, their social and emotional skills, and their adaptability and resilience. Now is the time for companies to double down on their learning budgets and commit to reskilling. Developing this muscle will also strengthen companies for future disruptions.

In this article, we offer six steps leaders can take to ensure that their employees are equipped with the skills critical to their recovery business models. more>

Updates from Chicago Booth

How to lead organizations through the COVID-19 crisis
By Gregory D. Bunch and Tom Gaines – Experts say they have no idea how the COVID-19 crisis will play out. Our usual ways of life have been disrupted, and we have all been thrust into a world in which intelligent and reliable predictions are difficult to make. We have been left questioning our basic assumptions, with very little sense of what will happen from day to day, let alone next week or next month.

Many organizations—from big corporations to nonprofits—suddenly find themselves facing existential threats. Facilities have been shut down, supply chains have been disrupted, and demand has collapsed. While this is all officially temporary, many organizations will not make it through the crisis.

The warfare analogy has been used by politicians, public-health officials, and the media, so it makes sense to look to military strategy for a sense of how to navigate. Military thinkers have described the battlefield as a VUCA scenario—volatile, uncertain, complex, and ambiguous. We—an entrepreneur, and an executive officer with US Army Special Operations Command—have been working to translate these VUCA insights to a civilian setting, to help leaders think strategically during times such as these.

The process Major Gaines followed that night consists of three simple steps: get your people and yourself to safety, put your people to work, and enter your decision space. It’s only when leaders have done these three things that they can begin to focus on strategic thinking. These steps provide the groundwork for effective decision-making.

Strategy involves addressing primary and secondary questions. The first questions for a business to answer in normal times include: How do we grow, and, how do we win? But in moments of existential threat, secondary questions take priority: How do we defend? How do we stay alive so that we can win in the future?

This is a time to focus on defense first. This three-step process can help leaders improve the likelihood that their organizations will survive. Even if you have already taken one or two of the steps on your own, it’s important to keep the whole framework clearly in mind. more>

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Authoritarianism and state surveillance cannot become a post-pandemic acceptable norm

By Nicholas Waller – In the space of just a few weeks, the COVID-19 pandemic has plunged much of the world into a state suspended paralysis. What’s more, this crisis has laid bare just how unprepared we in the developed world are when a major global catastrophe strikes at the very heart of our way of life. But if the coronavirus pandemic has taught us anything, it is that delaying prudent policymaking has deadly and economically ruinous consequences.

When the first signs of an outbreak began in China in late 2019, the earliest warnings were first covered up by a paranoid Communist regime that was intent on keeping the world uninformed about the deadly nature of the disease. Despite multiple alarms in Europe and the United States shortly after the new year, those warnings went unheeded.

While the lessons to be learned from the COVID-19 pandemic await an in-depth review once the worst phase of the crisis passes, the world is now left with finding a way to somehow tame the disease while at the same time picking up the pieces of the world’s economies and forging ahead with a more secure post-pandemic existence.

In order to do that, the world’s democracies must acknowledge the disturbing speed by which aggressive and heavy-handed measures were enacted by officials in nations with little-to-no-history of authoritarianism as part of their efforts to combat the spread of the virus. This has led to many of the core tenants of modern liberal democracy becoming the main casualties of the COVID-19 crisis as strict lockdowns, curfews, restrictions on the press, public shaming of those who question the authorities, and restrictions on the right to assemble became the order of the day.

The distinctly Orwellian character of each of the aforementioned acts is impossible to ignore. This means that each of the leading nations of the free world must come to the harsh realization that once certain inalienable rights are stripped away, it is nearly impossible to ever recoup what has been forever lost – the post-9/11 world taught each and every one of us that simple but fundamental lesson.

When the world moves into the next uncharted phases of the post- COVID-19, Europeans must be at the forefront of how to demonstrate the means by which democratic principles can be preserved.

As national economies contract, resources will shrink, and governments will struggle to provide for their own populations. But by pooling together the vast scientific, manufacturing, and innovative resources that the EU possesses – and working in tandem with its close allies in the US, UK, and Canada – Europe can produce and store vital medical and telecommunications resources that would wean itself off a destructive dependence on Chinese supplies, part of which contributed to the sense of malaise and outright hubris that contributed to the severity of the pandemic. more>

Updates from McKinsey

From surviving to thriving: Reimagining the post-COVID-19 return
For many, the toughest leadership test is now looming: how to bring a business back in an environment where a vaccine has yet to be found and economies are still reeling.
By Kevin Sneader and Bob Sternfels – The 1966 World Cup marked a low point for Brazilian soccer. Although the winner of the previous two tournaments, the team was eliminated in the first round, and its star player, Pelé, failed to perform. Fouled frequently and flagrantly, he threatened never to return to the World Cup. Many wondered if Brazil’s glory days were over. Four years later, however, Brazil won again, with such grace and style that the 1970 team is not only widely regarded as the best team ever to take the pitch but also as the most beautiful. And Pelé was named the player of the tournament.

Making this turnaround required innovation, in particular, the creation of a unique attacking style of soccer. It required building a cohesive team, even as most of the roster changed. And it required leadership, both in management and on the field. The result: by reimagining everything, Brazil came back stronger.

As businesses around the world consider how they can return from the torment inflicted by the coronavirus, Brazil’s journey from failure to triumph provides food for thought. In a previous article, McKinsey described five qualities that will be critical for business leaders to find their way to the next normal: resolve, resilience, return, reimagination, and reform. We noted that there would likely be overlap among these stages, and the order might differ, depending on the business, the sector, and the country.

In this article, we suggest that in order to come back stronger, companies should reimagine their business model as they return to full speed. The moment is not to be lost: those who step up their game will be better off and far more ready to confront the challenges—and opportunities—of the next normal than those who do not.

There are four strategic areas to focus on: recovering revenue, rebuilding operations, rethinking the organization, and accelerating the adoption of digital solutions. more>

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Updates from Chicago Booth

No one has all the answers for COVID-19 policy
By Joseph L. Pagliari, Jr. – The COVID-19 epidemic and the policy response to it have already become a wellspring for new economic research, and economics will no doubt emerge from this unprecedented global moment with new evidence for important macroeconomic phenomena. But however the crisis informs economics, it has also reaffirmed one of the science’s core tenets: important decisions involve trade-offs.

The notion of trade-offs, or the idea that there is an opportunity cost to any choice, is central to much of economics. The study of these trade-offs is often associated with traded quantities (the dollar value of things such as domestic production, interest rates, workers’ salaries, etc.), but the COVID-19 pandemic places economists in the uncomfortable position of examining things such as the economic value of human life, the quality of such lives, and the human stresses related to attending to a pandemic. Despite the natural discomfort most people (many economists included) feel about quantifying these things, these economic exercises still play an important role in our understanding of the situation and our crafting policy to address it.

Consider this illustration highlighting the trade-offs inherent in the current pandemic: (see diagram).

As has been much discussed elsewhere, the intention of the stay-at-home (or shelter-in-place) measures in effect throughout the United States is to “flatten the [epidemiological] curve,” or to slow the rate at which the virus spreads, thereby reducing the likelihood of a surge in demand for medical services that leads to sorrowful, triage-like decisions about whom to treat. The “COVID-19-related costs” curve illustrates the all-in costs of mitigating the adverse effects of the coronavirus as a function of the length of the government’s quarantine measures. These all-in costs include not only those who unfortunately perish due to the virus, but also the economic and human costs of providing these medical services, including the extraordinary efforts of the medical community in responding to the pandemic. To state the obvious, these costs are exceedingly difficult to quantify. more>

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Leadership Reconceptualized: A Compass for the Leaders of the New Global Era

By Vassili Apostolopoulos – Deconstructing the New Era, is a formidable task. As I am writing these lines, the world has nearly stopped, with more than 180 countries fighting the Coronavirus, imposing different forms of social distancing and lockdown measures. The pandemic of COVID-19 has changed the world in ways and to lengths that we can still not begin to fathom.

Economics, politics, international relations, and governance, on all levels seem to be fundamentally changing. The ways in which firms, governments, international organizations, societies, and even families and individuals operate will change forever. Until a fully-fledged and widely available vaccine alleviates the health risk and contributes to efficiently managing the crisis, social distancing, restrictive measures in work and travel, fear and insecurity, instability and uncertainty will be part of our lives. And, even after the vaccine, the major global effort of preventing the next pandemic, by building a sustainable early warning system with solid safeguards and rapid response mechanisms across the globe and within states and societies will need to become our top priority.

Averting the next Pandemic, is the foremost collective responsibility, for leaders of all fields; from politicians to doctors, from health experts to corporate leaders, from researchers to philanthropists; we all need to contribute to the race for a vaccine, for effective and accessible cures, but also, to develop the action plan which will change the habits and the vicious cycles that generate new viruses. In our interconnected world, where poor hygienic conditions in a wet market in China, can within months bring the world into a standstill, global governance undoubtedly requires an overhaul.

The same applies to dealing with the root causes of infectious diseases such as influenzas, the bird flu, and then the swine flu -the previous pandemic- for which we had been warned a year in advance, in 2008 and had failed to act. More systematic global monitoring, early warning and proactive prevention models, need to be developed on a global level. Crucial institutions like the World Health Organization and the United Nations will need to be revamped, strengthened and upgraded. Shortcomings in global leadership during the COVID-19 pandemic came at a great cost, and a major global crisis was treated very poorly and highly unsystematically in some of its most decisive phases.

Leadership cannot be a la carte, and global cooperation in the face of existential global crises cannot be elective. more>