So I think coming out of this, you’re going to see an intensification of that reality, that the Chinese are going to have much more influence in terms of soft power, in terms of tech power, in terms of economic power, and the willingness of other countries, including American allies, to hedge towards them. Most importantly, in descending order, that’ll be Southeast Asia, then sub-Saharan Africa, then east and southern Europe– and that means that Europe is going to feel much more divided– and then Latin America.
So that’s clearly something you’ll see. You’ll see a move away from globalisation towards regionalization, local supply chains, more nationalism, more populism as a consequence. And then the big question is whether we end up in a US China Cold War. And again, we’re trending in that direction. But I wouldn’t make that argument quite yet.
Coronavirus: Ian Bremmer on tackling a global pandemic in a leaderless world
https://www.ft.com/video/326aea1f-ac58-4040-a072-e61f1de0d288
VANESSA KORTEKAAS: So I want to start with the US. Has the Trump administration shown leadership on the global stage during this crisis? And if not, where is that leadership coming from? Is it international institutions like the World Health Organisation? Or is there a power vacuum?
IAN BREMMER: It’s pretty clear the United States has not shown global leadership. I mean, mostly the questions I’m getting about President Trump right now are to what extent he’s showing domestic leadership and where he’s failed in the United States.
But certainly internationally– and that’s a mixed answer. But internationally, the United States has been absent– so radically different than after 9/11, so radically different than after the 2008, 2009 financial crisis. This is a United States that is increasingly not aligned and not trusted by its allies. It’s one that’s blaming China. And I understand why the US is blaming China.
But this is a time when we need coordination and cooperation. It’s an America that’s paying more attention to its borders and more attention to its own multinationals. So it’s really a move away from globalisation. And I think that’s been largely true for the Europeans also, hit very badly and in the teeth of this crisis right now.
You could make the argument that the Chinese, to the extent that leadership is being provided, it’s coming from China. And obviously, it’s easier to say that, number one, because they’re restarting their economy. And by May, their supply chain will be fully operational when the Americans and Europeans are still shut down.
Plus, the Chinese are responsible for most of the key supply chain for relevant pharmaceuticals and medical supplies. So I mean, given all of that, easier for China to provide some leadership, but nowhere close to what we would have seen from the Americans historically.
China, very good at blowing their own horn in terms of propagandising just how much they’re doing for all these countries and making sure that every piece of humanitarian aid, every member of medical personnel that’s going to Europe or going to emerging markets is being well covered. But really the answer is that there is a profound vacuum. This is the first g zero global crisis. And it’s unfortunately a really big one. And we’ve going to pay the price for that.
VANESSA KORTEKAAS: And let’s talk more about China. I mean, it started this crisis being accused of suppressing information. And now, as you say, many countries are turning to it for help. Can it move on from where it started to becoming a helper on the global stage during this crisis?
IAN BREMMER: I think the real point is leading more by example, again, something the Americans used to do much more effectively. And that’s less about how much humanitarian aid the Chinese offer or whether or not they’re going to fill the gap that will exist for the developing world when the IMF only so much, $1 trillion available in funding and loans, and there’s going to need to be a lot more than that.
But I do think that, despite the initial China cover up, which meant that, for nearly a month, we had five million Chinese travelling from Wuhan, business as usual, allowing for an explosion of cases, both across China as well as around the world– that since then, the Chinese shutdown has been extraordinary.
And this has been the Chinese private sector and the state sector. This is both the incredible authority of the Chinese government and being able to ensure that their rules are implemented for social distancing and for quarantine, but also their surveillance that the technology companies have, the data that they collect on every Chinese individual in an urban centre, and just how much the Chinese population is reliant on that and doesn’t really have the privacy concerns that you see in the United States or certainly in Europe.
Put those things together. It not only allowed them to monitor and control the outbreak from spreading the way it did in Wuhan across places like Beijing and Shanghai but also has allowed them to restart the economy incrementally in developed economies, in democracies. It’s going to be so much harder when you restart the economy to stop it, so much more painful for elected officials to make that decision. And they won’t do it in coordinated fashion.
So I think that, to the extent that China is being perceived as more of a superpower today than it was six months ago, in large part it’s because of what they’re showing that they’ve been capable in doing domestically to respond to the crisis less than the money and the aid that they’re providing to the Italians and the Spaniards.
VANESSA KORTEKAAS: And what does all this mean for the US-China relationship? I mean, the trade war started long before the outbreak of COVID-19. And we’ve had Trump calling it the Chinese virus. This is a volatile relationship anyway. Is this the kind of crisis that could tip them over the edge? Or is it an opportunity for them to work together? And could you see that happening?
IAN BREMMER: It’s certainly not an opportunity. I mean, you’d like it to be. It’s a global virus. It doesn’t even come from humans. It comes from animals. If there’s ever a crisis you’d want to see the Americans and Chinese coordinating a response, it would be this.
And the Chinese will need the West in short order because they’ll probably be ahead of the United States and Europe in terms of treatment. But for a vaccine, that’s not going to come from China. That’s going to come from the West. That’s probably going to come from the United States. So they’re going to need help.
And it’s going to be unfortunate if the relationship is as broken as it is today or worse. Now you already mentioned that Trump has referred to the virus as the China virus. But of course, he stopped after he talked to Xi Jinping. Mike Pompeo, the Secretary of State, particularly on banging the drum on the Wuhan virus– he stopped, too, because he was ordered to by Trump.
Now in part, this is a wait and see mode for the United States because Trump’s approval ratings are comparatively high right now. He’s gotten a bit of a bump because everyone’s in panic mode and he’s dominating the airwaves. But as the US unemployment spikes through, say, 15% and the markets continue to take these big hits, you certainly think that the impact on Trump’s approval ratings in an election cycle is going to be significant. It’s going to be downward and significant. And then he’s going to want to blame people more. China will be that place.
Also, as you mentioned, there were big problems between the US and China before all of this, not just on trade but on technology, a decoupling between the United States and China. We say no business with Huawei or ZTE and our allies better not do it either or we’re going to punish you. We won’t cooperate with you on intelligence. For example, the UK saw a lot of that.
And the Chinese of course, weren’t allowing companies like Google or Amazon or Facebook or Twitter to operate in China. So that was a decoupling of a big piece of the global economy. Well, we’re now going to see that decoupling deepen and broaden to include manufacturing sector, service sectors.
I mean, as you see Western corporations get bailouts from the government and, particularly the United States, some of them maybe even denationalised because, otherwise, they go bankrupt, the conditionality will be, you’ve got to hire a lot of Americans. They’re going to reduce their footprint in China.
They don’t like the just in time supply chain. It’s very profitable, but it’s also very disruptable, as we see. So they’re going to want to have supply chains that are closer to the customers. All of that means less interdependence between the Americans and the Chinese at a time that there’s no trust between these two countries.
VANESSA KORTEKAAS: I want to talk more about the World Health Organisation in a minute. But you mentioned there the US election cycle. Is it too early to say what impact this crisis will have on the US election coming up because so much happens every single week?
IAN BREMMER: It’s too early to say whether or not this is a real advantage for Biden. I mean, obviously come November, old people tend to vote the most in developed nations. And they’re also the most susceptible to coronavirus to dying from coronavirus, having serious illness from coronavirus, which means they’re going to be less likely to turn out to polling places.
Swing states in the United States, a lot of the key ones, a majority, are actually controlled by Republicans in terms of the election procedure. That’s important because, as we’ve seen from President Trump and the Republicans, they think they benefit from lower turnout. They think they’d benefit from not having an easy vote by mail scenario.
So one thing we can definitely say is that the likelihood that this election is highly politicised, the process itself and seen to be rigged, seen to be delegitimized is going up a lot. And that’s before we talk about Russian interference, before we talk about any efforts of Trump to launch politicised investigations against the soon to be nominee on the Democratic side, Joe Biden.
So I mean, right now I think the likely winner of the election is close to a coin flip. And it’s too early to say. But I promise you that this election is going to be decided more by the courts than it is by the voters. And that’s a bad thing. I mean, you just don’t want an election like that in the midst of this kind of a crisis.
VANESSA KORTEKAAS: That’s a really good point, something that I’m sure we can explore getting closer to the time. But going back to the World Health Organisation, how much pressure do you think they’re under from powerful countries, from the US, from China in terms of shaping their response?
IAN BREMMER: Well, the Americans put a lot of pressure on the WHO. And they are the largest funder for the WHO. But China’s also critically important. And if you want to operate in China, you need to operate by Chinese rule. So for example, Taiwan, which had one of the most effective responses to coronavirus in the world, the WHO could not work with them, could not work with their scientists, their doctors because Taiwan is not, of course, recognised as a member. Can’t even take questions about Taiwan in interviews or press conferences.
So clearly from that perspective, the WHO is going to seem to be carrying water for the Chinese government. Also back on January 14, the World Health Organisation, which was not getting adequate access on the ground from the Chinese government in terms of assessing the cases that they had at that point, the WHO publicly gave the Chinese an all clear in saying that there was no human to human transmission in China, in Wuhan.
It turns out that was not true, but the WHO was relying uncritically on Chinese government data at that point. That’s a real problem.
VANESSA KORTEKAAS: And what about how this crisis is affecting political dynamics more generally? So in the past few years, there’s been a lot of focus on the rise of populism in Europe, also in the US. Does a crisis like this entrench those views or do you think it will change them?
IAN BREMMER: I think it expands them because the rise in populism and nationalism in the US and in Europe and in much of the developing world democracies came because of inequality, because there was a feeling that the system was rigged against them.
And it was a broad anti-establishment sentiment that hit the mainstream media. It hit the corporates. It hit the banks. And of course, most importantly, it hit the political leaders. And that was even when the United States was experiencing the longest, most robust bull market since the Great Depression. It was experienced even when the global economy was doing comparatively well.
So now suddenly we’re experiencing a massive crisis, the worst dislocation since World War II. And it’s more on the back of poor people. I mean, certainly these are the people that can’t work from home. I mean, you and I are doing this interview in the safety of our homes right now. We’re the knowledge economy. We’re less exposed to this disease as a consequence.
The people that don’t have that capacity in the working and middle classes, either they’ve lost their jobs or their jobs are much more dangerous for them to now do for themselves and their families, especially the older members of their families. And then what happens as we return to work?
Well, a lot of multinational corporations are going to be looking to work more efficiently with a smaller labour force. I’ve heard this from many of our CEO clients over the course of the past few weeks. Who are the people that will take that the worst? It’s going to be, of course, the working and middle classes.
On the back of all of that, yes, we can keep these people whole or close when the crisis is in its worst. We can ensure that they have money for a few months. But what about when they don’t have jobs? What about when we lose 10% of our working population from productive employment and a way to feed themselves in a year’s time, in two year’s time?
What happens when the fourth Industrial Revolution becomes the post-industrial revolution for large pieces of our populations? They’re going to get a lot angrier.
VANESSA KORTEKAAS: You made a point about multinational companies. Is this an opportunity for them to step forward and to take leadership where governments are not delivering? Or are they just too consumed to actually help enough in this crisis?
IAN BREMMER: I mean, obviously many of them are consumed and many of them are just trying to avoid bankruptcy and keep their lights on. And some of them already are closed. But big multinationals with deep pockets can do a lot more. We’re certainly seeing that for those that have the ability to provide the medical equipment and supplies.
And I do see leadership from a lot of them in making sure that there’s no price gouging, in fact, that there’s a lot of volunteerism. I think that’s important. But most importantly is the growing power that will come from the technology companies because that’s the way we’re doing business right now. It’s only because of the very robust capacity to have a digital economy, to have a virtual economy.
I mean, Amazon, at the expense of the big box retailers, at the expense of the malls, thank god that they exist now. And you’re not going to see people saying, let’s break these up, right? And I think when you talk about coming back into a functional economy, you’re talking about big tech companies that are providing the ability to tag individuals citizens– who does and does not have the virus, who did and did not, and who’s immune, where are they, what buildings are they in.
Providing that information with the government, that’s going to make these companies absolutely critical even strategic for the West. And by the way, that also means that the power of the United States compared to allies, like in Europe, is going up because the Americans dominate this field. And the Europeans the Canadians and Japanese do not.
And in terms of the people that are setting the rules and the people that are getting out of this economic crisis quickly, the American companies are going to be very important, critically important in that environment.
VANESSA KORTEKAAS: And finally, just going back to the big picture here, how do you think this crisis will affect the world order? Do the previous dynamics that existed before the coronavirus outbreak, like the US China trade war, like the rise of strong man politics in Latin America, do these dynamics just fall to the side? And are you starting from scratch when this is over? Or how do you see that world order shaping?
IAN BREMMER: Well, as I said, I mean, I’m not someone who believed that we had the American order coming into this. I mean, I first wrote about the coming g 0 world about eight years ago and the idea that the United States no longer wanted to provide the global leadership as the world’s Sheriff militarily or as the architect of global trade or even as the cheerleader of global values. But that’s less obvious, absent a crisis, than it is right now when it’s put on very bold and vivid display.
So I think coming out of this, you’re going to see an intensification of that reality, that the Chinese are going to have much more influence in terms of soft power, in terms of tech power, in terms of economic power, and the willingness of other countries, including American allies, to hedge towards them. Most importantly, in descending order, that’ll be Southeast Asia, then sub-Saharan Africa, then east and southern Europe– and that means that Europe is going to feel much more divided– and then Latin America.
So that’s clearly something you’ll see. You’ll see a move away from globalisation towards regionalization, local supply chains, more nationalism, more populism as a consequence. And then the big question is whether we end up in a US China Cold War. And again, we’re trending in that direction. But I wouldn’t make that argument quite yet.
VANESSA KORTEKAAS: Ian Bremmer, thank you for your time.
IAN BREMMER: My pleasure.