Nationalism and protectionism could lead to “an even bigger” and “more deadly” pandemic in the future, according to a policy expert.
Ian Goldin, professor of Globalisation and Development at the University of Oxford, former advisor to Nelson Mandela and ex-vice president of the World Bank, stressed the potential far-reaching negative impact of global politics following the pandemic.
“If what comes out of this is more nationalism and protectionism, the result is going to be an even bigger pandemic in the future, which could be more deadly, climate change, more financial crises, cyber-attacks, more tension, Cold War 2.0, and that is extremely worrying,” Goldin said.
“So we face a choice. Either the pandemic teaches us to be more globalized in politics, to stop the next pandemic, to cooperate, to restore global growth, or we get more national, in which case we’re in a downward spiral.”
Goldin has been forecasting a widespread pandemic for a long time. According to his 2014 book “The Butterfly Defect” and a 2018 BBC series, a disease outbreak was the most likely reason for the next global economic crisis.
In his interview with CNBC, Goldin pointed out that the the adoption of nationalistic politics and a failure of global governance had worsened the Covid-19 pandemic and its economic effects.
“I don’t blame the WHO (World Health Organization) — I think it’s done the best it can under the circumstances, but it has been under-resourced, it hasn’t been given the powers it requires. And the people to blame for that are the shareholders, the big governments of the world who fund and direct it,” he said, speaking to CNBC in a phone call.
“This is a failure to manage the system, particularly by the leading powers, and it’s really the U.S. turning its back on the world which has exacerbated it,” he said. “So at the biggest level, this is a reflection of the failure to manage globalization.”
Goldin believes that the pandemic should emphasize the importance of greater cooperation between countries as a lesson for the world.
“We’re seeing countries try to set up firewalls. Unfortunately, there’s no wall high enough to keep out a pandemic or climate change or any of the great risks,” Goldin said. “But what the high walls do keep out is the ideas, the people, the technologies, the investments, the markets that we need to thrive.”
No more full lockdowns
Suresh Tantia, senior investment strategist at Credit Suisse’s APAC CIO office, explained that the situation is unlikely to return to its condition in March. This was when the pace of virus cases began to spread in the US and Europe, following the emergence in China last December.
“The second wave of virus is a concern for investors… but I think the key difference is that unlike last time in March, this time it’s highly unlikely that we would see a shutdown of the global economy,” he said.
“If you look at the March selloff, the reason why markets sold off was not because of the virus concerns, it was mostly because the global economy shut down,” Tantia, speaking to CNBC, noted.