For years in the newsroom, while covering business news, there was this particular phrase that was used when the People’s Bank of China or PBOC (the central bank of China in Beijing) made any monetary policy announcement. Markets would react sharply, and ergo the phrase followed “when China sneezes, the rest of Asia catches a cold”.
It’s a bit surreal and eerie that something so analogized has become literal in the spread of the COVID-19 (Coronavirus) from a seafood market in Wuhan, Central China to the rest of the world. But this has long stopped being a China problem. Like virus, like conundrum; this has mutated, percolated, transferred from host to host and pervasive from coast to coast. The problems too have changed shape and size in drastic proportions. It started from a health scare, to cautionary travel to China and the region, to then an epidemic, to a worry in a slowdown over China’s economy, to now being declared a global pandemic with unprecedented health and economic ramifications.
The World Health Organization (WHO) in a manner akin to almost locking the barn door after the horse has bolted declared that the Coronavirus epidemic to be a global pandemic. Days later, President Donald Trump declared this to be a national emergency with the crisis continuing to escalate infecting more victims and adding on to the obituary pages. In the immediate short run, President Trump’s announcement would free up nearly $50 billion in disaster money for states to not only preclude the spread of the virus but also add much needed financial armory to the strained healthcare system.
The administration has been excoriated for its slow response in dealing with crisis. The incredulity goes on as reports continue to emerge of how several individuals (despite being UK and US citizens) traveled back from China and Italy and were able to waltz into Dulles and Heathrow airports with no temperature checks and no health screenings. It’s befuddling to see the juxtaposition of how such governments on any fine day will remain paranoid about immigration but have been lackadaisical in screening their own citizens on their recent travels.
As the WHO declared Europe to be the center of the pandemic, it begs the question as to the efficacy in the manner of how the west has approached tackling the novel Coronavirus. The New York Times recently reiterated this in a column titled China bought the West time, but the West squandered it. This is no hagiographic title of China’s politburo but merely highlight the consequences of a delayed response. The troubling analogy that I draw here is that the west’s initial view of virus is similar to its pre-9/11 view on terrorism. That terrorism was an isolated incident that occurred in far-flung dystopian lands and would never plague an economically thriving, robust and politically stable democracy like the United States or its closest NATO allies in the west. For six weeks or so, this was first seen as a China problem, then a Southeast Asia problem, as cases picked up in Iran and South Korea, it was seen as a wider Asian problem and until Europe reported an outbreak and Washington State reported its first case, the United States saw little reason to press alarm bells.
The initial euphemisms were along the lines of the Coronavirus being less deadly than the Ebola outbreak of 2014, which had a higher death rate of 50 percent as compared to COVID-19’s near 4 percent mortality rate.
The fundamental difference being the Ebola outbreak originated in countries in West Africa. Nations such as Sierra Leone and Liberia are far less populated and majority of their citizens do not have the same purchasing power parity as compared to their Chinese counterparts. Furthermore, these countries do not have the same economic clout and are not as globally intertwined as China.
Chinese tourists make up some of the largest global travelers and thus acted as potential carriers. Meanwhile, China as an economic behemoth and home to several cultural landmarks makes it a premier tourist destination, thus enhancing the risk for several tourists who contracted the virus and unknowingly spread it back home. And perhaps the timing of it all, coinciding with the auspicious Lunar New Year, where millions of people, who travelled back home and abroad eventually accentuated the spread.
If the world wasn’t already reeling from a potential US-China trade standoff, the virus has metamorphosed from a China’s slowdown to a potential three trillion hole in the global economy. To put that in perspective, that’s the size of Indian economy, the fifth largest in the world. China and Italy (the epicenters of the virus in Asia and Europe) both claim a shared history for the origin of the dominos game and the domino effect for the economic slowdown that started in China has begun to spill over.
Airlines that saw losses for limiting flights into China are now seeing less air traffic with tourism disrupted and several companies strictly limiting or cancelling business travel. In an era of social distancing, shopping malls and retail stores remain empty. There are likely to be more staff than patrons across many restaurants. Movie theatres ironically will resemble horror movie scenes that feature empty movie halls. Trade and supply chains halted in China means trade and supply chains disrupted globally.
Businesses across sectors are not only faced with making sure their employees are safe, but also battling the coming losses. The entertainment giant, Disney, for one.
was expected to take a $175 million dollar hit for its closure of theme parks in China and Hong Kong, that number is set to snowball with activity disrupted across California, Florida and Paris. It’ll take more than Uncle Scrooge’s gold to make up those numbers.
As the CDC recommends cancelling gatherings of 50 or more people, most events have been called off, large scale sports tournaments such as the NBA, NHL, Boston Marathon and the Golf Masters have either been postponed or cancelled. The elephant in the room remains to be seen as to what happens with the Tokyo Olympics in July. Companies continue to telework; maybe teleworking software tools stand to profit in a sure shot era of economic losses. In an election year, the President and Presidential candidates will not have any rallies for the foreseeable future.
We live in strange times laced with present day irony where a coronavirus conference gets cancelled for, you guessed it, coronavirus. Where ironically students are learning about the coronavirus, but not in school as schools and colleges have been closed. We live in an era of historical irony, where Africa, a continent that has been negatively caricatured as the epicenter of epidemic outbreaks now finds itself the least infected. Nationals of African countries, who have ever so often had to prove their health status just to get visas to Europe and other parts of the world, now impose travel restrictions on people flying in from the United States and Europe.
This has been unprecedented on so many levels, from Melbourne to Madrid, Seoul to Seattle, Tehran to Tuscany, seldom has the world been confronted with the same geopolitical, economic, national security and health conundrum that the COVID-19 disease has presented. For a country such as the United States, that spent most of the twentieth century vigorously acting as the bulwark against communism, now finds its stores looking like the Soviet era stories with emptied shelves; albeit only for certain supplies such as hand sanitizers and disinfectant wipes.
In another year, China, Korea, Iran and Italy would seem like the starting pool of the Round of 32 in a FIFA World Cup, but in 2020 they are the four most affected countries with the highest number of Coronavirus cases. In another year, with Spain, Germany and France being ranked number 5, 6 and 7 respectively would just be the global FIFA rankings for teams, and the United States, Switzerland and United Kingdom ranked at 8, 9 and 10 would be the rankings on an Ease of Doing Business Index, but they all follow on the heels of Korea and make up the top ten of the countries most infected. In another year, Italians wouldn’t have to rally around their own rendition of “Keep Calm and Carry On” with the phrase ‘Andrà Tutto Bene’ (everything will be alright), even though ironically there can be no rallies in the country. And in another year, India wouldn’t outpace the United States to close its borders to the rest of the world.
At a time of economic nationalism, protectionism, xenophobia towards immigrants, there is a virus, that just like the ancient Silk Road has traversed from China to Italy and is ironically more vicious than any politician but has not distinguished in race, class, nationality or ethnicity in its attacks. It has been ageist though, taking more lives of the elderly. It needs no visas to cross borders, can’t be kept out by walls and can’t be shut out by protests or elections.
As the clarion call drums for social distancing and as we make our conscientious efforts to keep away, we are reminded through our fragile healthcare system, our intertwined economies, our common national security concerns that we are all more connected than ever.
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Akshobh Giridharadas is a Visiting Fellow based out ofRead More +