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What World Post-COVID-19? Three Scenarios Mathew J. Burrows and Peter Engelke The Scowcroft Center for Strategy and Security works to develop sustainable, nonpartisan strategies to address the most important security challenges facing the United States and the world. The Center honors General Brent Scowcroft’s legacy of service and embodies his ethos of nonpartisan commitment to the cause of security, support for US leadership in cooperation with allies and partners, and dedication to the mentorship of the next generation of leaders. This report is written and published in accordance with the Atlantic Council Policy on Intellectual Independence. The authors are solely responsible for its analysis and recommendations. The Atlantic Council and its donors do not determine, nor do they necessarily endorse or advocate for, any of this report’s conclusions. © 2020 The Atlantic Council of the United States. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without permission in writing from the Atlantic Council, except in the case of brief quotations in news articles, critical articles, or reviews. Please direct inquiries to: Atlantic Council 1030 15th Street NW, 12th Floor Washington, DC 20005 For more information, please visit www.AtlanticCouncil.org. What World Post-COVID-19? Joseph Mallord William Turner, Rockets and Blue Lights (Close at Hand) to Warn Steamboats Of Shoal Water. 1840, Oil on Canvas. Image courtesy Clark Art Institute. clarkart.edu. In many of his late paintings, Turner used vigorous brushstrokes and loosely defined forms to explore dramatic struggles between human beings and the elements. This work shows a storm raging in an English harbor town. Flares explode in the sky to alert ships to the location of shallow (shoal) water. On the shore huddled spectators stare out to sea, perhaps anxiously hoping their loved ones will survive the storm and return safely home. Three Scenarios ATLANTIC COUNCIL STRATEGY PAPERS EDITORIAL BOARD Executive Editors Mr. Frederick Kempe Dr. Alexander V. Mirtchev Editor-in-Chief Mr. Barry Pavel Managing Editor Dr. Matthew Kroenig TABLE OF CONTENTS INTRODUCTION 7 PROSPECTS FOR THE COVID-19 PANDEMIC 8 Systemic Shock 9 The Homeland Under Threat 11 Slow Recovery 11 US GLOBAL LEADERSHIP AT RISK 14 A Step Change In Sino-American Relations? 15 Another Test For Europe 16 East Asian Allies Dismayed By America First Approach 17 Middle East In Turmoil Even Before Pandemic Hit 18 Africa Left To Deal Alone With Pandemic? 20 An Economic Test For Putin And Russia 21 Latin America Vulnerable To Commodity Cycle 21 India And South Asia: Potential Humanitarian Disaster 23 THREE SCENARIOS 24 Great Accelerator Downwards 24 China First 26 New Renaissance 27 6 WHAT WORLD POST-COVID-19? THREE SCENARIOS 7 INTRODUCTION The COVID-19 pandemic presents a substantial shock to the post-war order, established by the United States and its allies. For the past 75 years, the United States and its partners have led a rules-based system predicated on liberal democratic values, an open and thriving global economy, and formal institutional bodies backed by power- ful democratic states. But this order has not gone unchallenged, and the current pandemic threatens the future of the system at large. A downturn in Western economies could boost a rising China, while a global depression could breed support for protectionism. International bodies designed to safeguard public health appear weak and unable to contain the crisis, and alliances with transatlantic partners are fraying as nations turn inward and close borders. Sustaining and revitalizing the rules-based order that has guaranteed freedom, prosperity, and peace for decades requires a decisive global and US-led response to the pandemic. This paper is a preliminary look at the geopolitical implications of a cri- sis that is still unfolding. Three scenarios are sketched out for the possi- ble direction of the global system post-COVID-19. The Scowcroft Center’s Foresight, Strategy, and Risks Initiative will continue to follow the course of the coronavirus, paying close attention to its geopolitical, economic, and social implications. In a situation of intense crisis, scenarios help to reduce the scope of possibilities, decrease uncertainty, and make the different options more visible. In using scenarios as a tool to manage deep uncer- tainty in a complex, volatile environment, the United States and its allies and partners can be more strategically agile and make better long-term decisions that protect and advance common interests. 8 WHAT WORLD POST-COVID-19? THREE SCENARIOS PROSPECTS FOR THE COVID-19 PANDEMIC As of mid-May, there were 4.62 million confirmed cases of COVID-19 with more than 300,000 known deaths from the disease worldwide. The United States accounted for 30 percent of the average global daily deaths. In recent weeks, Latin America and the Caribbean accounted for 25 percent of all global daily deaths, fueled by the growing outbreak in Brazil.1 Russia and India had also become COVID-19 hot spots in April and May, respectively. The number of global deaths from the coronavirus is almost certainly higher. In some countries, mortality has been as much as 50 percent higher than the historical average. If the coronavirus infected half the world’s current population over the course of a year with a 1 percent fatality rate, the death toll would be 35 mil- lion. By comparison, the Spanish flu infected an estimated 500 million peo- ple and killed 50 million worldwide in 1918-19. CHAPTER 1 s o u r c e : n e x t s t r a in .o r g , m a y 2 6 , 2 0 2 0 This phylogeny map shows evolutionary relationships of SARS-CoV-2 viruses from the ongoing novel coronavirus COVID-19 pandemic. This phylogeny shows an initial emergence in Wuhan, China, in Nov-Dec 2019, followed by sustained human-to- human transmission at a global level. The map shows clear genetic relationships, though the transmission patterns are inferred and specific transmission dates are still uncertain. FIGURE 1. Main Known Genetic Variants of the SARS-Cov-2 Virus Causing COVID-19 9 As the coronavirus spreads to the developing world, there is increased worry about higher death tolls because of the more fragile health systems in many of these countries. Hugo López-Gatell, Mexico’s coronavirus tsar, “has admitted [in late April] that the true infection level is at least eight times higher.”2 As of mid-May, there were almost 50,000 confirmed COVID- 19 cases in Mexico. India was leading Asia with almost 100,000 cases. There are confirmed reports of the virus spreading to a refugee camp in Bangladesh that houses nearly one million Rohingya.3 Refugees in the camp do not have access to enough soap and clean water to protect themselves against the contagion.4 In Pakistan, the public health system is ill-equipped to handle any crisis. In Karachi, for example, there are only 600 intensive care unit (ICU) beds for the city’s population of 20 million. As the coronavirus leaves a mounting death toll in its wake, we may not be in the clear until a vaccine is created and widely distributed. To avoid a reoccurrence, countries will need to keep their social distancing mea- sures in place and lockdowns enforced where hot spots reappear. It will be important not to ease up too soon on all restrictions, given the still lingering strains of the virus. Testing will need to continue in order to discover who might be a carrier despite showing no symptoms. Based on the Vò Euganeo experiment—the small village in Veneto, Italy, where all 3,000 inhabitants were tested twice—up to 50 percent of those infected could be asymptom- atic, which explains the larger spread than we would have seen from just the confirmed cases. Only when the public has been properly vaccinated will the virus be completely conquered. We must expect that the coronavirus will continue to mutate, poten- tially making it harder to develop a vaccine. RNA-based viruses like the coronavirus tend to mutate about 100 times faster than DNA-based ones, although the coronavirus will not mutate as quickly as influenza viruses.5 Nevertheless, the general notion prevails: the more people are infected, the more of a chance for a mutation. In late April, a Los Alamos National Laboratory study found there were 14 strains of the coronavirus with some proving to be more infectious than others.6 We must be prepared for the coronavirus to become a “recurring fact of life,” like the ordinary flu, but much deadlier. Systemic Shock The pandemic is not just a global health crisis. In its wake, the global economy lies in tatters, leaving open the question of how and when countries and regions will be able to start a real recovery if govern- ments must maintain social distancing and other restrictions for some time. We all hope for a quick V-shaped return to the status quo ante, but here are disturbing signs that the recovery will be difficult and extended, caus- ing substantial damage to the social and political fabric in many regions. The United Nations’ World Food Program has warned that “the number 10 WHAT WORLD POST-COVID-19? THREE SCENARIOS of people facing acute food insecurity could double in 2020 from the year before, to 265 million. The pandemic and lockdown measures combined with rising unemployment and limited access to food could lead to violence and conflict.”7 Even in advanced economies, there are growing fears of mal- nutrition. In the United Kingdom, three million people have had someone in their household going without food, according to a Food Foundation sur- vey.8 In the United States, food banks have seen long lines of people relying on free food to survive. Without a swift global economic recovery, the gains we have seen in the expansion of a global middle class and poverty reduction could be sacri- ficed. In rich countries, where the middle class has already been under pres- sure, a return of high unemployment and income stagnation could bolster populism and widespread discontent. The Spanish flu, which hugely added to the death toll from World War I, was a factor in ending the second phase of globalization and sparking conflict in the interwar period. From a dream of making the world safe for democracy, the post-World War I era ended up leading to the rise of fas- cism and communism in Europe. The United States turned its back on the world, electing not to join the League of Nations and passing draconian A shift in demand, disruptions in supply chains, and consumer panic have led to empty shelves in stores worldwide. jo