redicting the future is always a risky proposition but turning to history as a guide can give us valuable perspective. The world is living through arguably the most significant crisis since World War II or the Great Depression, and there are many predictions of what it will mean for the post-COVID-19 order. While the pandemic will undoubtedly create some changes—some temporary and some long-lasting—current facts and historical comparisons suggest the world won’t be fundamentally different.
COVID-19 is tragedy with sickness and loss of life spreading across the planet and a global economic impact as dire as the world has seen since the 1930’s. Yet its long-term impacts are unlikely to be felt as keenly as in the case of the Spanish Flu pandemic, the Great Depression, World War II, or the Cold War. The latter two events led to a rethinking and realignment of the global order and global governance that we’re unlikely to see from COVID-19.
The aftermath of the COVID-19 crisis is likely be defined by its lack of scale, intensity and impact compared to the defining global events of the 20th century. This shouldn’t minimize the terrible nature and impact of the pandemic, which is already more deadly and disruptive that SARS, H1N1 and Ebola combined. Instead, let’s admit that the COVID-19 pandemic won’t create the global changes or develop the clarity of purpose that defined the aftermath of the 20th century’s defining events.
That is not to say that COVID-19 won’t bring major changes. It will significantly accelerate the trends that existed before the pandemic, locking current dynamics into place. But COVID-19 will not reverse or reinvent the years that preceded it. The framework established over the post-World War II era of globalization and the end of the Cold War remains in place, despite globalization’s relative decline—was already in motion.
A useful way to examine the aftermath of COVID-19 is to look at trends in economics, governance, and human capital that existed before COVID-19 and imagine the extent to which they will fundamentally be different than today. While admittedly non-scientific, this approach can lead to some informed conclusions.
Trends in the Private Sector
In the economic realm, big tech will continue to dominate as more consolidation occurs, market share increases and innovation grows. Tech will drive the global expansion of wealth creation and displace or disrupt traditional businesses. In entertainment, the creation and distribution of content was already moving online. In energy, the abundance of fossil fuels combined with alternative sources of energy was already undermining oil markets, but they will bounce back when economic activity resumes. In finance and securities, stock markets are likely to remain dependent on big tech to drive growth, track with the disruptive impact of technology and geopolitical instability, keep faith in central bank policies, and rely on the stable value of the U.S. dollar. Since the 1930s, the stock market has been in negative territory for three consecutive years only once, from 1956-1958.Banking will continue to be defined by the post-2009 global framework and how to cope with changing demographics, government regulation and technology.
For global trade, the World Trade Organization’s most dire estimate of a reduction in trade is 32%, putting the global economy at its 2006 trade peak after non-stop growth since 1950. While agriculture, food service and traditional retail are in serious trouble and may experience the greatest changes after COVID-19, they are essential and getting government support in some countries. Traditional retail’s market decline, which was moving quickly before the pandemic, will accelerate, as will the diversification of supply chains that began prior to the current trade wars and the pandemic.
Governance During and After the Pandemic
Governments are currently being defined by their responses to the COVID-19 pandemic. These performances may predict their post-pandemic approaches, but they are also reminiscent of trends seen in those countries before COVID-19. Countries like the United Kingdom, South Korea, the United States, Germany, and New Zealand have sought to balance civil liberties and pandemic response. Countries like Hungary and China have responded in ways that critics worry undermine the rule of law, diminishing human rights and civil liberties. Many other countries, such as Poland or Brazil, are somewhere in-between. These are essentially the trend lines the world was experiencing before COVID-19, which suggests geopolitical trends aren’t changing in the way they did after World War II or the Cold War.
Individual governments are responding to the worst pandemic in 100 years by considering domestic implications almost exclusively. There is no major coordinated global response by global powers and there are few incentives for leadership. China’s attempts to lead are compromised by their initial involvement and potential hidden motives, while the U.S. focus is domestic due in part to concerns about global institutions and the EU lacks a hard consensus or the true global capacity to lead. This situation is unchanged from a year ago and is likely to characterize global cooperation after the pandemic.
Human Capital After the Pandemic
Healthcare and education will continue to be disrupted by technological innovations like distance learning opportunities and health treatments, but that is also is creating classes of people who have access and can benefit and other classes of people who don’t have access and can’t benefit. Climate change has naturally abated with less economic activity, but this experience has not produced the moment of clarity that will fundamentally change industry or public attitudes. Immigration and migration have been seriously disrupted by COVID-19 but will resume as economic activity resumes. In short, the world’s success on the human capital agenda will be mixed at best, with the same inherent contradictions and gaps that existed in 2019.
What Won’t Change After the Pandemic
The pandemic crisis is dire and should not be minimized, but we should be clear that the post-pandemic world will resemble the world we live in today in important ways. The pandemic will not alter the fundamentals of the global system because there is no international consensus on its causes, severity, and outcomes. At the moment, key parts of the global responses to COVID-19 are being led the medical, scientific, business, and NGO communities. These communities are the most likely to adjust and develop their own resilience programs for the next pandemic, but they have little hope in leading a global movement.
Over the past 10 years, populations across the world have increasingly viewed globalization and multilateralism with distrust. This sentiment is now mature and expanding as the world suffers its second major economic crisis in a decade. However, the world will continue to be defined by the current globalization framework.
The durability of the post-World War II and post-Cold War framework is not by accident. Central banks and monetary policy were derived in part to deal with crises like COVID-19. So were organizations like the G7 and G20 blocs, GATT and the WTO, the UN and WHO, the World Bank and IMF, and regional alliances like the EU, ASEAN, and NATO. The irony of the current situation is that these institutions, which were designed to create global peace and security and have done so fairly well, are being called into question by populations around the world.
In late 1945, the world was in crisis as millions of lives had been lost or destroyed and economies and entire nations had to be rebuilt. We don’t know what the world will look like a year or two years from now, but based on what we currently know and what history has taught us, we can be hopeful that it will resemble much of the world we left behind in 2019.
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What Will Not Change and What It Means for Governing
May 19, 2020
P
redicting the future is always a risky proposition but turning to history as a guide can give us valuable perspective. The world is living through arguably the most significant crisis since World War II or the Great Depression, and there are many predictions of what it will mean for the post-COVID-19 order. While the pandemic will undoubtedly create some changes—some temporary and some long-lasting—current facts and historical comparisons suggest the world won’t be fundamentally different.
COVID-19 is tragedy with sickness and loss of life spreading across the planet and a global economic impact as dire as the world has seen since the 1930’s. Yet its long-term impacts are unlikely to be felt as keenly as in the case of the Spanish Flu pandemic, the Great Depression, World War II, or the Cold War. The latter two events led to a rethinking and realignment of the global order and global governance that we’re unlikely to see from COVID-19.
The aftermath of the COVID-19 crisis is likely be defined by its lack of scale, intensity and impact compared to the defining global events of the 20th century. This shouldn’t minimize the terrible nature and impact of the pandemic, which is already more deadly and disruptive that SARS, H1N1 and Ebola combined. Instead, let’s admit that the COVID-19 pandemic won’t create the global changes or develop the clarity of purpose that defined the aftermath of the 20th century’s defining events.
That is not to say that COVID-19 won’t bring major changes. It will significantly accelerate the trends that existed before the pandemic, locking current dynamics into place. But COVID-19 will not reverse or reinvent the years that preceded it. The framework established over the post-World War II era of globalization and the end of the Cold War remains in place, despite globalization’s relative decline—was already in motion.
A useful way to examine the aftermath of COVID-19 is to look at trends in economics, governance, and human capital that existed before COVID-19 and imagine the extent to which they will fundamentally be different than today. While admittedly non-scientific, this approach can lead to some informed conclusions.
Trends in the Private Sector
In the economic realm, big tech will continue to dominate as more consolidation occurs, market share increases and innovation grows. Tech will drive the global expansion of wealth creation and displace or disrupt traditional businesses. In entertainment, the creation and distribution of content was already moving online. In energy, the abundance of fossil fuels combined with alternative sources of energy was already undermining oil markets, but they will bounce back when economic activity resumes. In finance and securities, stock markets are likely to remain dependent on big tech to drive growth, track with the disruptive impact of technology and geopolitical instability, keep faith in central bank policies, and rely on the stable value of the U.S. dollar. Since the 1930s, the stock market has been in negative territory for three consecutive years only once, from 1956-1958.Banking will continue to be defined by the post-2009 global framework and how to cope with changing demographics, government regulation and technology.
For global trade, the World Trade Organization’s most dire estimate of a reduction in trade is 32%, putting the global economy at its 2006 trade peak after non-stop growth since 1950. While agriculture, food service and traditional retail are in serious trouble and may experience the greatest changes after COVID-19, they are essential and getting government support in some countries. Traditional retail’s market decline, which was moving quickly before the pandemic, will accelerate, as will the diversification of supply chains that began prior to the current trade wars and the pandemic.
Governance During and After the Pandemic
Governments are currently being defined by their responses to the COVID-19 pandemic. These performances may predict their post-pandemic approaches, but they are also reminiscent of trends seen in those countries before COVID-19. Countries like the United Kingdom, South Korea, the United States, Germany, and New Zealand have sought to balance civil liberties and pandemic response. Countries like Hungary and China have responded in ways that critics worry undermine the rule of law, diminishing human rights and civil liberties. Many other countries, such as Poland or Brazil, are somewhere in-between. These are essentially the trend lines the world was experiencing before COVID-19, which suggests geopolitical trends aren’t changing in the way they did after World War II or the Cold War.
Individual governments are responding to the worst pandemic in 100 years by considering domestic implications almost exclusively. There is no major coordinated global response by global powers and there are few incentives for leadership. China’s attempts to lead are compromised by their initial involvement and potential hidden motives, while the U.S. focus is domestic due in part to concerns about global institutions and the EU lacks a hard consensus or the true global capacity to lead. This situation is unchanged from a year ago and is likely to characterize global cooperation after the pandemic.
Human Capital After the Pandemic
Healthcare and education will continue to be disrupted by technological innovations like distance learning opportunities and health treatments, but that is also is creating classes of people who have access and can benefit and other classes of people who don’t have access and can’t benefit. Climate change has naturally abated with less economic activity, but this experience has not produced the moment of clarity that will fundamentally change industry or public attitudes. Immigration and migration have been seriously disrupted by COVID-19 but will resume as economic activity resumes. In short, the world’s success on the human capital agenda will be mixed at best, with the same inherent contradictions and gaps that existed in 2019.
What Won’t Change After the Pandemic
The pandemic crisis is dire and should not be minimized, but we should be clear that the post-pandemic world will resemble the world we live in today in important ways. The pandemic will not alter the fundamentals of the global system because there is no international consensus on its causes, severity, and outcomes. At the moment, key parts of the global responses to COVID-19 are being led the medical, scientific, business, and NGO communities. These communities are the most likely to adjust and develop their own resilience programs for the next pandemic, but they have little hope in leading a global movement.
Over the past 10 years, populations across the world have increasingly viewed globalization and multilateralism with distrust. This sentiment is now mature and expanding as the world suffers its second major economic crisis in a decade. However, the world will continue to be defined by the current globalization framework.
The durability of the post-World War II and post-Cold War framework is not by accident. Central banks and monetary policy were derived in part to deal with crises like COVID-19. So were organizations like the G7 and G20 blocs, GATT and the WTO, the UN and WHO, the World Bank and IMF, and regional alliances like the EU, ASEAN, and NATO. The irony of the current situation is that these institutions, which were designed to create global peace and security and have done so fairly well, are being called into question by populations around the world.
In late 1945, the world was in crisis as millions of lives had been lost or destroyed and economies and entire nations had to be rebuilt. We don’t know what the world will look like a year or two years from now, but based on what we currently know and what history has taught us, we can be hopeful that it will resemble much of the world we left behind in 2019.
