The defining characteristic of our world is its fluidity. Whether the context is international relations, new political and business practices that erase or ignore borders, or technologies that make possible previously unimaginable connections a mainstay of the day to day, life is changing in fundamental ways.
Technologists have for some time noted that the pace of change has been accelerating, but we are about to make a historical step — forward, I hope — as a result of the COVID-19 outbreak.
While there is a range of possible outcomes, let me offer two — one on either end of the spectrum — to tease out what is unfolding and the implications.
If all goes well, the outbreak is contained in the near future. Contagion is limited, the disease proves less lethal than feared and health care systems are not overwhelmed. While painful, the economic damage is on the lower range of estimates: A recent Asian Development Bank (ADB) study advanced three scenarios, and the least severe one postulated a global impact of $77 billion, about 0.1 percent of global gross domestic product. For reference, the moderate case resulted in losses of $156 billion, or about 0.2 percent of global GDP.
Fortunately, central banks worked together and the Group of Seven and Group of 20 adopted fiscal stimulus programs that sustain demand. Coordination extended to multilateral safety nets so that particularly hard-hit countries retained access to credit and liquidity.
Political systems prove resilient. Despite initial slow responses and a seeming inability to learn from others’ mistakes, mastery of the outbreak generated public support for governments. Asian governments got great credit for their ability to contain the contagion and used this experience to stake new claims to global leadership. An Asian renaissance is underway.
The crisis prompts a reckoning in the West about governing philosophies. Never before had the downsides of small government been more obvious as countries wrestled with the effects of the systematic denigration of expertise and the steady stripping of surge capacity to deal with crisis. The impact of rotting and neglected infrastructure was plain.
The idea of self-help, which dominated conservative thinking, was exposed as empty and frivolous when confronted by a disease that leveled entire countries. The very real prospect of mass infection and inundated hospitals prompted a rethink of national health care systems and a strengthening of social safety nets to protect against future outbreaks. Democracy is renewed and re-energized.
As part of this effort, governments redefine “national security,” a concept that had been held hostage by hard-power theorists who insisted that the best measure of national defense is military hardware — which does nothing to protect against disease. They shift focus to nontraditional security threats that are not posed by specific adversaries and demand different modalities and methodologies of response.
The result is a new emphasis on international cooperation and a retreat from zero-sum calculations. Governments embrace the approach that Stephen R. Nagy outlined in these pages a few weeks ago, and develop programs and projects to “build in” disease detection, surveillance and response capabilities to the connectivity initiatives that are being promoted throughout the region.
Japan is a beneficiary of this new outlook. Prime Minister Shinzo Abe’s initial fumbled response to the outbreak looked better after it was compared to those of other leaders. His decision to postpone the 2020 Tokyo Olympics won him applause since all knew how painful and difficult that decision was. His readiness to prioritize national well-being over glamor and spectacle and ensure that all athletes had a chance to compete fairly elevated his international stature.
The economy was hard hit by lost tourism, but Abe’s leadership and images of Japan, a country that remained open and calm throughout the outbreak, inspired many more to visit. Japan’s soft power grew. The emphasis on nontraditional security played to Japan’s strengths as a longtime advocate of human security. Tokyo made disease protection efforts a pillar of its regional engagement — the government rapidly developed capacity and expertise at home, used that focus to build stronger ties with China and ASEAN, and leverage its leadership in regional infrastructure programs.
The negative scenario starts with a disease that refuses to be tamed. Initial progress was soon erased by the virus’s persistence and second and third waves of outbreaks. Health care systems were overwhelmed and the draconian quarantine measures that were first thought successful were redeployed for purposes of triage. Death tolls mounted in tandem with skyrocketing economic costs. The third ADB scenario estimated the damage at $347 billion (0.4 percent of global GDP), but that seems light if economies around the world contract, waves of infection destroy demand, supply chains are truncated and globalization is halted.
Failure to contain the infection fatally undermined support for governments around the world. Social strains intensified as the developed world’s social contract was shredded. Closing borders confirmed that it was right to be suspicious of foreigners, reinforcing the xenophobia that sparked nativist and nationalist surges in the West. This fear combined with a pervasive sense of inequality — evident in unequal access to tests and health care and relief programs that reward those with money and who are better off (as occurred in responses to past crises) — to create a tidal wave of ugly populism. Elections were challenged (when they were held) for improper administration and voter suppression. Authoritarianism appeared to be the only way to maintain social order.
Similar calculations dominated international relations and undermined efforts to work together to confront the viral threat. Governments engaged in name-calling and scapegoating, looking for ways to distract domestic audiences from their own failures. The enmity between the United States and China intensified and reached levels not seen since the worst days of the Cold War.
Zero-sum logic prevailed and nations scrambled to lock down critical resources such as masks, ventilators and even vaccines. Scientific research was inhibited as collaborative initiatives were shut down and programs were nationalized, the work jealously guarded and protected. Economic nationalists used the outbreak to call for new supply chains, emphasizing the need for domestic manufacture of certain products, regardless of redundancies, inefficiencies and waste.
Asia was rocked as North Korea stepped up its provocations — missile launches and cyberattacks — to reclaim U.S. attention and change the balance of power on the Korean Peninsula as South Korea was distracted and jittery following renewed outbreaks. China used the crisis as cover to step up pressure on Taiwan, concerned that the Taipei government’s (comparatively) successful handing of the situation would drive a deeper wedge in cross-strait relations. Some analysts fear an attack on the island to reunify Taiwan with the mainland.
The worst-case scenario for Japan is grim. Abe resigned after a second wave of infections and his successor struggled to deal with a crippled economy, which descended into full-blown recession after declining without pause since the end of 2019. Failure to contain the disease meant that the 2020 Olympics, initially delayed, were finally canceled, leaving the country with a huge bill that angered a public that saw the event more as a vanity project that a celebration of Japan’s rejuvenation under Abe and the Liberal Democratic Party. The prospect of an actual depression — two years of negative growth — along with political dysfunction led the Japanese people dispirited and listless; social pathologies — hikikomori, excess drinking, abuse — skyrocket.
Amid rising tensions in Northeast Asia, Japan is increasingly uncertain about the U.S. commitment to its defense, especially in the wake of Donald Trump’s re-election as U.S. president. This prompts intense discussion of strategic options with growing consideration of the indigenous nuclear option. This reinforces frictions in relations not only with China and South Korea, but with Southeast Asia and Australia, too. The combination of rising external tensions and a listless and disengaged public raises fears of a return to the authoritarian past.
Scared? You should be. It is easy to dismiss this scenario as fear-mongering and farfetched, but equally absurd six months ago was the notion of a pandemic disease sweeping the globe and threatening to undo decades of progress, economic development and the very fabric of societies.
Brad Glosserman is deputy director of and visiting professor at the Center for Rule Making Strategies at Tama University as well as senior adviser (nonresident) at Pacific Forum. He is the author of “Peak Japan: The End of Great Ambitions.”