The Global Situation: Threats & Opportunities/Scenarios

Fr. Amado L. Picardal, CSsR, STD

Executive Co-Secretary, Commission for Justice, Peace & Integrity of Creation (USG/UISG)

The current global situation brought about by the pandemic is characterized as volatile, uncertain, complex and ambiguous (VUCA). There is fear, panic and uncertainty in face of an invisible enemy. The virus which started in Wuhan in December 2019 has spread rapidly all over the world and has created an unprecedented global crisis. It is not just a health crisis but an economic, political and social crises.

Compared to the last devastating pandemic - the 1918 Spanish flu -- the rate of infection and fatality of COVID-19 is relatively low. But the reaction and impact are unprecedented. Everything has shut down - whole countries and states are on lockdown or quarantine. The damage and changes that follow will depend on how long this pandemic last and the direction those in leadership will make.

There is uncertainty when the lockdown will completely be lifted and when the health crisis be over. It could take years to contain and totally defeat this virus. Like in the past, the virus with its various mutations will continue to be a threat. A second or third wave cannot be ruled out unless the vaccine and cure is found and made available. Thus, there will be a gradual and calibrated lessening of the lock-down and community quarantine. Social/physical distancing will have to be observed. Large gatherings will be avoided. This could become the new normal.

We are facing a great uncertainty. We cannot be sure what will happen next. This is a global crisis. The longer this crisis persists, the worst the repercussions and the more radical changes can be expected. We hope for the best and prepare for the worst. Everybody hopes that the pandemic will end soon. Even if the health crisis subsides the global economic crisis will continue to exacerbate. The shutdown of the economy has led to economic recession and could lead to a global economic depression if the trend continues. Many companies and businesses are going bankrupt and closing down. Millions have lost their jobs and do not have enough to eat. According to IMF, 260 million people are facing starvation especially in Africa, Latin America and Asia. Trillions of dollars have been lost in the stock-market. The global neo-liberal capitalist system is collapsing. There is disruption of the global supply chain and less demand and consumption which makes economic recovery difficult. The so-called V-shaped recovery where the economy can quickly bounce back to normal has been ruled out. 

Thus, an economic crisis and a political crisis can be the consequence of the health and humanitarian crisis. How governments and civil society respond to this crisis will determine what kind of world will emerge. For better or for worst, the political and economic crisis could lead to new economic and political systems and configurations accompanied by cultural and social changes. As the saying goes, a crisis is not only a time of danger - it is also a time of opportunity. The greater and deeper the crisis, the greater the opportunity for radical and long-lasting change. This is what happened in Europe after the Black Death in the 14th century. This could happen once again in our lifetime.

Times like this requires strategic thinking and acting on the part of those in leadership position in various institutions whether government, ecclesiastical, religious, etc. This means looking at the big picture and the long view. One the most important things that needs to be done is to assess the present situation - the threats and opportunities, the strengths and weaknesses. Since it is difficult to predict or forecast what will happen, building scenarios could be helpful. These can be the basis for strategic directions and plans. No planning can be done without going through this process. It is not enough to dream of what kind of world we want to have after this pandemic. We also have to look at what is happening and what could happen. This should be done at both the global and local levels. This paper is an initial attempt to do this from a global perspective. Hopefully, this can spur further efforts to understand the situation and the possibilities for the future.

Threats and Weaknesses

The coronavirus continues to spread all over the world as the number of cases and fatalities increase. Even with an apparent containment and decreasing rates of infection, a second and third wave cannot be ruled out unless a cure or vaccine is found and made available. 

The situation worsens as many governments with inept leadership are incapable of dealing effectively with the health crisis as well as the consequent economic crisis. This paves the way for increasing authoritarian rule from the national to the local levels. A virtual martial law is imposed to enforce the lock-down or quarantine. Abuse of authority and violation of human rights are prevalent. 

The economic recession and possible depression can result in the breakdown or collapse of neo-liberal globalized capitalist economic system. De-globalization is underway. The disruption of supply-chain and the slow-down or stoppage of production as well as the decline of consumption and demand makes it difficult to recover. This leads to bankruptcy, shut-down of businesses, rise of unemployment, increasing poverty, and food scarcity. The pandemic manifests the widening gap between the haves and the have-nots. 

The developing economies in Latin American, Asia and Africa will suffer the most even if the rate of infection and fatality is lower than the developed countries. East Africa is facing not just the pandemic but also the locust plague. Europe which has been on a long-term recession before the pandemic is not spared from the economic crisis. Italy, Spain, France and Great Britain are being hit hard. While the German economy appears to be stable it cannot be sustained in the long run since it is 50% export-oriented. The collapse of the oil industry is affecting not just Saudi Arabia, Iran and Russia but also Nigeria and Venezuela. China, which is touted as the second largest economy is not spared from the economic crisis as production slows down and the demand for its products decline. With capital flight, rising unemployment, and inability to take care of a billion citizens who remain poor the ruling Communist Party tries to tighten its hold on power as anti-China sentiments spread globally.

All over the world, there is growing apathy and feeling of helplessness and hopelessness of so many people, on one hand and a growing anger and social unrest especially from the lower class on the other.

The ecological crisis continues and more zoonotic viral diseases (e.g. the coronavirus which has been traced to bats and pangolins) are expected to appear due to the continuing destruction of the eco-systems and the wildlife-human contact.

The realization of the lethal impact of viruses can lead to their development and future utilization as biological weapon more destructive than nuclear arms. If this comes to the hands of rogue states like North Korea and extremist groups like ISIS and Al-Qaeda could make use of this. 

There is an absence of a coordinated, global response to the health and economic crises. The United States which has the status of the sole global superpower maintains an isolationist (America-first) stance, unwilling to exercise leadership at the global stage. It sees NATO as irrelevant after the dissolution of Soviet Union and is only interested in keeping the threat of Russian expansion in check by propping up Ukraine and Poland economically and militarily. The European Union fails to maintain a united approach to the crisis leaving each nation-state to fend for itself and resurrecting national borders. G7 is history and G20 does not function. The United Nations, the Security Council and the World Health Organizations cannot address the crisis and thus the absence of international coordination and solidarity. The dream of an interconnected global political and economic order is threatened by fragmentation and the resurgence of nationalism and protectionism. 

A spiritual crisis could accompany the health, economic and political crisis. As people make sense of the tragedy and grieve over the countless suffering, death and devastation of the pandemic, theological questions will emerge: Where is God in all of this? How could God allow this to happen? Is this God's punishment? Does God really answer our prayers?

Opportunities and Strengths

Several countries in the European Union led by Germany has pledged to raise $8 billion for the development and distribution of vaccines. 

Each nation-states/government are acting to contain the spread of the virus and address the immediate needs of the people and the economy (e.g. release of state funds, aid, stimulus rescue package, etc.). Inept and authoritarian political leaders and systems responsible for the spread of the virus are unmasked and will be held accountable. Effective and democratic leaders and political systems are emerging. Countries like Taiwan and Sweden are successful in containing the virus without draconian measures and resorting to authoritarian rule. In the long run, the citizens will be more discerning in choosing competent and compassionate servant leaders with clear strategy for addressing crisis that society face (health, economic, ecological, etc). 

Church and civil society groups are mobilized to give aid to the poor who are mostly affected and to front-liners. This crisis in bringing out compassionate response. Big business corporations are engaged in charitable contribution. International Financial Institutions like Asian Development Bank, World Bank and IMF have expressed willingness to write off debts of developing countries.

There is maximization the use of digital communication and information technology (remote work, online meetings, online masses, etc.). The digital-based commerce and industry survives and thrives. This can lead to the acceleration of the 4th industrial revolution.

The UN and the pope's global appeal for ceasefire has been heeded in some areas as warring parties are unable to carry out offensive in places where the virus has spread.

There is less GHG emission due to the shut-down of factories and less use of vehicles - a temporary reprieve for global warming with less demand for fossil fuel and the collapse of the oil industry.

Since the situation is volatile, uncertain, complex and ambiguous, it is very difficult to forecast what is going to happen in a post-pandemic world. It is better to build scenarios which may or may not happen. Seeing worst-case and best-case scenarios can be helpful in helping develop flexible strategies and responses. 

Scenario 1: Short-term Pandemic followed by Rapid Recovery

The pandemic ends before the new year 2021, with the rapid discovery and production of vaccines as well as coming up with effective cures. The cases and fatality rates are kept to a minimum. The lock-down and quarantine is lifted all over the world. There is a short-term economic recession and a U-shaped economic recovery is on the way by the first or 2nd quarter of 2021 due to successful government-led recovery program. Full economic recovery is achieved in three years.

There is rapid growth of digital-based commerce, communication, etc. (Amazon, Zoom, etc). China's status as global hub of manufacturing is reduced as anti-China sentiments grow with effort to hold it accountable for the spread of the coronavirus. The process of decentralization of supply chain starts with the withdrawal factories and investments from China and transfer to Vietnam, Thailand, Philippines, India and Mexico. 

The transfer of the manufacturing hub to Mexico is beneficial to North America and prevents future disruption of the supply chain. 

The election of a new US president who is more competent and compassionate can pave the way for the US to exercise global leadership in coordinated international response to the health and economic crisis. This will benefit the developing countries and preserve stability in the various regions.

Tensions arise as China continues to expand and consolidate its influence in the South-China Sea by ongoing military build-up in the disputed islands. However, it is unable to attain regional hegemony as it fails to fully recover economically. 

The release of GHG as fossil-fuelled industries and vehicles goes back to normal and even doubled to make up for loses. Climate change and ecological crisis continues as the governments are unable implement the Paris agreement regarding the reduction of GHG emission.

With the containment and disappearance of the virus, the authoritarian/totalitarian control is eased in many countries while it remaining entrenched in other countries.

Scenario 2: Long-Term Pandemic (Economic-Political Depression)

The pandemic continues to spread, no effective cure and vaccines have been discovered and developed. The virus keeps coming in waves for several years, number of cases and fatalities continue to rise. The pandemic continues to be a threat for the next 4 to ten years or even longer with intermittent quarantine or lock-down and disruption of economic activities. More zoonotic pandemics are expected due to the destruction of eco-systems.

The global recession turns into economic depression. Bankruptcy, unemployment, growing poverty and widespread hunger. Collapse of various the following industries: oil, airline, tourism, hotel, restaurants, malls, small-business. Economic depression is accompanied by political depression as US is unwilling and unable to exercise global leadership and the major powers fail to get their act together. The European Union fails to address the economic crisis collectively and European unity unravels as each nation-state assert self-determination. Italy, Spain and France are hard hit by the depression with the ranks of the unemployed and poor grows. Germany's economy is heavily affected as the lack of demand and consumption from its European neighbors weaken its export-oriented economy.

Russia continues to decline due to the collapse of the oil industry, ongoing corruption and aging population. Tensions in the South China Sea continues as China asserts its dominance and hegemony in the region and US Naval forces conduct freedom of navigation exercises. This could trigger skirmishes with neighboring countries (e.g. Japan, Vietnam and Indonesia) or war if China try to occupy Taiwan. At the same time, power struggle erupts within Chinese Communist Party due to ineptitude of preventing the pandemic as various countries strive to hold China accountable. China loses its role as the global manufacturing hub and fails to recover economically as US, Europe, Japan and other countries distance themselves and isolate China. Dissent and social unrest grow that threaten the collapse of Chinese autocratic regime and the consequent fragmentation into regions. China's aging population, inequality, and export-oriented economy prevents it from attaining its ambition to be a superpower. 

Justifying the continuing threat of the virus, authoritarian and totalitarian regimes all over the world continue to rise and consolidate to enforce social order. Surveillance and control of all aspects of life is maintained. Human rights and civil rights - including religious rights - are violated to justify the defence of the populace against the virus. The spiral of violence continues as resistance grows. This can lead to rebellions and civil disobedience as the government fails to address the health as well as the economic crisis and starvation effectively.

Greater government intervention can lead to either a fascist/state capitalist model or a social-democratic model. Inept authoritarian regimes fail to address the multiple-crisis and collapses. This can lead to the emergence of more competent, compassionate leaders and political systems. 

Meanwhile, there is acceleration of the 4th industrial revolution (digital-based economy, e-commerce, 3-D printing, local manufacturing, remote work, etc.). New normal: online-education, meetings, conferences.

The long-term threat of the pandemic and intermittent lockdown and lessened GHG emission gives a chance for the environment to rest, slowing down climate change. There is change in lifestyle and patterns of consumption due to frugal living.

Scenario 3: Utopian/Best-Case Scenario: Emergence of a New World

The pandemic and its long-term impact accelerate the collapse of the global neo-liberal capitalist economic order. Vaccines and effective cure to the virus are produced and distributed world-wide. A new multi-polar political-economic order capable of responding to the pandemic and ecological crises emerges. As the de-globalization of the economic system continues, new forms of interconnections and international cooperation emerges. No nation exercises global hegemony, each one focusing its primary efforts in rebuilding its economic-political and social institutions and systems. Developed nations who are first to recover from the crisis provide humanitarian and economic aid to less fortunate nations who are hard hit.

Nation-states adopt a system of mixed-economy accompanied by strong government intervention to promote social justice following the social democratic model. Incompetent and corrupt politicians who have been unmasked during the crisis are replaced by new leaders who are more competent and who are more concerned about the common good. There is state intervention to jump-start the economy, address poverty and hunger, and ensure universal health-care, food security, creation of new jobs with job-security, support for small-scale industries, actively engaged in planning for rebuilding the economy and redistribution of wealth.

With the break-down of the supply-chain dependent on China as manufacturing hub of the global neo-capitalist economic system, nationalist and self-sufficient policies are adopted. The acceleration of the 4th industrial revolution with the development of 5G, robotics, 3-D printing, enhanced digital communication and e-commerce radically change the economic system. There will be no need for off-shore manufacturing hubs and centralized/ distant supply chains. Domestic manufacturing for local markets and consumption will flourish. Decentralized, small-scale, community-based industries will be promoted. Universal health-care system will be instituted. The economy will be geared towards preparation for the next pandemic crisis as well as the ecological crisis. Instead of a centralized, globalized economic system, it will be an interconnected, net-worked based system using latest digital information and communication technology brought about by the 4th industrial revolution. 

The oil industry which has collapsed during the pandemic fails to recover fully with the lessened demand for fossil-fuels and rapid development of renewable sources of energy and new methods of manufacturing. This means that large scale distribution of energy is replaced by new community-based power grid.

An economy of communion will be promoted concerned not only with growth and profits but also sharing with one another and with the poor and the needy.

As physical distancing and avoidance of large gathering become the new norm, new patterns of social interaction develop (local/small communities, online/virtual communities).

What I have attempted to do in this paper is to provide an initial assessment of the global situation and prospects for the future based on my research, monitoring the news and scouring YouTube Webinars and interviews by experts during the lock-down. This is by no means exhaustive and will continue to be developed and deepened. Making an ongoing assessment of the global and local situation is the task of every institution including the Church and religious institutes at various levels. This as the basis for setting strategic directions and plans.

Background Readings:

Frank Snowden, Epidemics and Society, Yale University Press: London, 2019

Joshua Loomis, Epidemics: Impact of Germs & Their Power over Humanity, ABC-CLIO: CA, 2018

Joshua Gans, Economics in the Age of Covid-19, MIT Press: London, 2020

George Friedman, Flashpoints: The Emerging Crisis in Europe, Anchor: New York, 206

George Friedman, The Next 100 Years: A Forecast for the 21st Century, Doubleday: NY, 

Ian Bremmer, Every Nation for Itself: Winners and Losers in a G-Zero World, Penguin: Y 2012

Peter Zeihan, DisUnited Nations:The Scramble for Power in an Ungoverned World

George Magnus, Red Flags: Why Xi's China is in Jeopardy

Klaus Schwab, The Fourth Industrial Revolution, World Economic Forum: Geneva, 2016

Christiana Figueres et al., The Future We Choose: Surviving the Climate Crisis, Knopf: NY, 2020

Luigino Bruni (ed). The Economy of Communion, New City Press: NY, 2002