COVID-19 has transformed our lives in ways that will leave a permanent mark on all of humanity. While it is impossible to predict the exact type of scar that Covid-19 will leave, we do know that the world after this catastrophe will look very different. The big question is: in what ways? This is an incredibly tough question, but recent developments provide us with some hints.
First, an economic recession isn’t just about to arrive, it is already here. With countries going into lockdown and non-essential businesses shut down, it is no surprise that we are already experiencing an economic slump. The consequences of this economic downturn are straightforward: increase in unemployment and poverty, decrease in average income and productivity.
The depressing list goes on. The worrying part is that the economic impact of Covid-19 will be worse for developing countries like Pakistan. Since the developed world has more fiscal space, they are able to afford a situation where businesses shut down for a significant amount of time while their governments foot the bill. The recent examples of the fiscal packages by the US and countries in Europe signify this point. The US fiscal package amounts to a whopping $2 trillion which is equal to 10 per cent of their GDP. Developing countries unfortunately do not have the fiscal space to pay for people to stay home for a long duration.
This lack of fiscal space leads to a situation where countries like Pakistan have to choose between a lockdown they cannot pay for and the countless lives that will be lost if Covid-19 is allowed to run amok. So far, most countries have chosen a lockdown in the hopes that this will help stop the virus in its tracks.
In what ways will the world be different?
But if a situation arises where Covid-19 persists in spite of a lockdown, developing countries will have no option but to start opening up some parts of their economies. If this happens, developing countries will bear more of the human cost too. Healthcare facilities in developing countries aren’t great, which makes it easy to see this. As a result, we might have an entire world that is battered both in terms of human and economic costs. But the impact will be disproportionately shared by developing countries.
Second, government power has been used in unprecedented ways across the world which will have implications for how governments function in the future. Sacrosanct freedoms such as freedom of movement and religion have taken a back seat, at least temporarily. In East Asia, concerns about data privacy have been ignored to tackle the virus. The main question is whether this unprecedented use of power will change governments permanently.
If temporary measures are being used today, having a precedent would help governments set aside freedoms and rights to pursue other goals. This might very well be the right approach to prevent future catastrophes, but a big concern remains that such powers can be abused. The same data that can be used to prevent a pandemic can be used for other more nefarious purposes. It is quite likely that governments in the post-Covid-19 world will be bigger and more powerful. This is something that citizens around the world need to guard against.
Third, international trade and globalisation might take a hit. The fact that the impact of Covid-19 was made possible through an interconnected world system is not likely to be forgotten. Supply chains around the world have come under stress as a result of this same interconnectedness in this crisis. We can see a situation where governments around the world are spooked by this factor and decide to roll back some forms of globalisation and trade. For instance, it is not unimaginable that countries decide to produce strategically important commodities at home, even if these commodities are at a higher cost. A lot depends on the response of leaders around the world and their commitment to globalist or anti-globalist values.
Fourth and finally, Covid-19 might shift the global power structure from the Western world towards East Asia. Ignoring the possibility of a second wave of infections in the future, current evidence has pointed towards the effectiveness of countries like China, South Korea, Taiwan and Singapore in ‘flattening the curve’ even when these countries had less response time compared to Western nations. Power shifts in the global world order are unlikely to happen quickly, but the Covid-19 crisis can certainly act as a potent catalyst in this process.
These four major changes could give birth to a completely new world after the current crisis is over. As frightening as the implications of these changes might be, it is important to confront them because, soon enough, we might have to inhabit this new world.
The writer is a PhD candidate at the University of Oxford and a graduate of Harvard Kennedy School of Government.
Published in Dawn, April 9th, 2020