The recent news of Pfizer’s COVID-19 vaccine that is 90% effective has sparked hope in stock markets that a global economic recovery from the Great Lockdown might be in the horizon.
Nonetheless, it would still be useful to reflect on the resilience of today’s countries in the face of the risk of such hybrid health-economic crises. The question to ask is, should novel infectious diseases like COVID-19 occur in future, whether the world economy can withstand another year-long wait for a vaccine (in spite of the best efforts of the private sector), and whether the international community is resilient enough to mitigate the damage from such disruptions.
This draws our attention to three facets of the global economy which need to be revisited.
The first facet is international economic interdependence, and trade-offs this brings. Growth and job creation in the world economy depend on the continued movement of people and exchange of goods that globalisation allowed. The vulnerability exposed by the pandemic, however, is that the global economy is only as strong as its weakest link. The stability and prospects for world economic growth will no longer depend on the growth performance of the G-20 countries alone. The first global public good, is thus global health diplomacy, or the international community’s ability to ensure that all countries, regardless of income status, are capable of health governance in managing future pandemics.
Secondly, cities are also critical in mitigating such risks at the country-level. Just like the global economy, the competitiveness, job-creation and growth potential of cities also depend on their highly networked nature. High densities of individuals and businesses in close proximity to one another allow for millions of person-to-person interactions on a daily basis, in the office and in malls/grocery stores, in public transport and along alleyways. As the authors of this article argued in a recent article on the Interpreter, lockdowns are no longer a matter of choice when a pandemic as contagious as COVID-19 hits cities, because the density of transactions occurring within them allows for exponential growth in infections. The next global public good will be the transformation of urban infrastructure, industries and ways of life at the country-level, in preparing for the next global pandemic.
Finally, the societal importance of social safety nets needs to be reframed in the face of hybrid health-economic crises. Within a capitalist free market, those who have more resources, stand to gain more over the long-term from savings and interest; conversely, those having less will have poorer prospects of growing their savings to weather future economic perturbations. Yet, the plight of less economically secure groups poses a risk to the country as a whole in the face of future pandemics, since the decision to self-quarantine at home translates to inability to work and to provide for the food and economic security of their households, as a previous RSIS Commentary argued. In this case, the provision of social safety nets no longer becomes a necessity for individuals alone, but a public good, since it enables the country to impose the necessary lockdowns to address the pandemic.