More than 7,500 people around the world have died after contracting Covid-19, the disease caused by the novel coronavirus. The infection has spread to more than 180,000 people in more than 100 countries, and shows no signs of slowing down. The intensity of its impact signals fundamental shifts in the way humans will live and work.
Consider the sheer scale of the crisis.
Even as China and South Korea are starting to get a handle on the disease, cases are spiking in other countries. More than 2,000 people have died in Italy. Over 850 deaths have been recorded in Iran. Cases have turned up everywhere from French Polynesia in the middle of the Pacific to Ladakh in the Himalayas.
In response, India has quarantined itself from the world – keeping out all foreigners, with a few exceptions, and even telling Indian citizens to stay put abroad. The European Union has proposed to shut off its borders to outsiders. Several African countries have banned European travelers. Other countries have temporarily halted all international flights. Global travel is a mess of flight restrictions and mandatory quarantines.
All of Italy and France are under lockdown, with the latter deploying 100,000 police personnel to enforce restrictions requiring most people to stay indoors. The US government has advised against gatherings of 10 people or more. The US Centers for Disease Control estimate restrictions will have to be in place for another eight weeks. Others expect this to go on for much longer, with a vaccine realistically expected only in 2021.
A study by the Imperial College in London found that in the best case scenario “social distancing and school closures would need to be in force some two-thirds of the time – roughly two months on and one month off – until a vaccine is available, which will take at least 18 months”.
With entire countries on lockdown potentially for weeks and months, financial markets have recognised just how dire the situation is for the global economy. Last week saw Wall Street’s worst day in more than a decade. Indian markets have been in freefall. More than $5 trillion was wiped out of global stocks in the last week of February alone – and traders everywhere had their heads in the hands, exactly the opposite of what health guidelines say you should do.
The economic impact was so large, that NASA satellites recorded a marked drop in atmospheric emissions across countries like China and Italy.
Central banks all over the world have opened up the taps in the hopes of containing the fallout, even though a global recession seems unavoidable. From the US Fed to the Bank of Japan to European Central Bank, there were emergency rate cuts – America’s is now at near zero – as well as a huge amount of money pumped into the system. Countries are beginning to announce stimulus packages that amount to several percentages of their Gross Domestic Products, even as the crisis is still growing in size.
With a vaccine still many months away and with the unconfirmed spectre of reinfection looming, the question no longer seems to be, “When will this end?” Instead, some are starting to say that the impact of such a contagion, one that is truly global and may not be brought under control until next year, could enormously alter how our societies are structured.
“We all want things to go back to normal quickly,” writes Gideon Lichfield, editor-in-chief of MIT Technology Review. “But what most of us have probably not yet realised – yet will soon – is that things won’t go back to normal after a few weeks, or even a few months. Some things never will.”
Writer Pankaj Mishra compared the current moment to what the globe saw around the time of the World War I, which was also when the Spanish flu infected 27% of the world population and led to millions of deaths.
“As global supply chains break, airlines slash flights, borders rise within nation-states, stock exchanges convulse with fear, and recession looms over economies, from China to Germany, Australia to the United States, we can no longer doubt that we are living through extraordinary times,” Mishra wrote. “The last such churning occurred almost exactly a century ago, and it altered the world so dramatically that a revolution in the arts, sciences and philosophy, not to mention the discipline of economics, was needed even to make sense of it.”
Who would have expected a Republican president in the US – Donald Trump, no less – to endorse the idea of sending $1,000 cheques directly to Americans? That the most hawkish of European players would endorse economic programmes that will see deficits balloon? That policymakers everywhere are beginning to rethink the fundamentals of globalisation?
“Globalisation calls for an ever-increasing specialisation of labor across countries, a model that creates extraordinary efficiencies but also extraordinary vulnerabilities,” write Henry Farell and Abraham Newman. “Shocks such as the COVID-19 pandemic reveal these vulnerabilities... The result may be a shift in global politics.”
An associated outcome of a world is the willingness to accept more surveillance.
Lichfield imagines a world where,
“There would be temperature scanners everywhere, and your workplace might demand you wear a monitor that tracks your temperature or other vital signs. Where nightclubs ask for proof of age, in future they might ask for proof of immunity – an identity card or some kind of digital verification via your phone, showing you’ve already recovered from or been vaccinated against the latest virus strains... We’ll adapt to and accept such measures, much as we’ve adapted to increasingly stringent airport security screenings in the wake of terrorist attacks.”
We are yet to come close to this level of concern in India. Confirmed case numbers remain relatively low in the country, though many argue that this is because India is simply not testing enough. Some areas within the country have imposed social distancing rules, although the capacity of the state to enforce these is limited.
The government has sought to aggressively carry out contact tracing to establish who those with infections could have passed it on to, though the density of population and India’s woeful healthcare system mean the country will remain extremely vulnerable until a vaccine has been developed and is freely available.
Even if India manages to avoid the worst and keep the number of infections and deaths low, it will not be able to avoid the economic headwinds generated by the coronavirus. The government is currently touting a potential “positive shock” in the form of extremely low global oil prices.
But, saying we should all “prepare for mammoth coronavirus-induced recession”, SA Aiyar writes, “do not celebrate the crash in oil prices. It is a consequence of the growing coronavirus disaster that threatens a deep global recession.”
Aiyar writes that the oil price bonus will be offset by lower tax collections, disinvestment amounts and a general revenue drought that will cause India’s fiscal deficit to grow.
“The sale of Air India looks impossible. Auctions of toll roads, coal mines or railway routes will attract much lower bids. The revenue drought will mean less money for government investment at a time when private investment has frozen... GDP growth could plunge below 4%.”
For a country already struggling to tackle the Great Indian Slowdown, with no semblance of deft economic policymaking at the helm, such an outcome is ominous. But the pain will be deep, widespread and not limited to India.
Taking a cue from Prime Minister Narendra Modi’s decision to revive the South Asian Association for Regional Cooperation in this time of crisis, C Raja Mohan writes, “Unlike many natural disasters, which are mostly one-shot events, the coronavirus crisis could have deep and lasting impact on the global political economy and inevitably trigger new equations among nations. Is India ready to seize the new possibilities for reconstituting the South Asian region?”
Economy, health care, politics, foreign policy and even the fundamentals of globalisation and the global order: the overall impact of coronavirus will significantly alter how we lead our lives. And, with the crisis still growing, we are only starting to see what shape the future will take.