Ian Bremmer: Health, Financial, Political Response to COVID-19

Governments of the developed world are finally responding with due sense of urgency, individually in 3 different ways.

1st, stand health care systems up so they won't get overwhelmed (late responses). The private & public sector together, building additional ICU beds, supply capacity and production of medical equipment and surge medical personnel in the US, Canada, across Europe & the UK. Unclear if we avoid a Northern Italy scenario. A couple days ago, Dr. Fauci from the NIH said he was hopeful. Epidemiologists and critical care doctors don't feel comfortable. Not in New York, Chicago, LA, Boston, Philadelphia, New Orleans. In Europe, particularly London, Madrid, Catalonia, Barcelona, might be significantly short.


We'll see in 2-4 weeks. If responses are adequate, caseload will still explode, but mortality will be dramatically lower by 80 or 90%. The US caseload now is highest in the world. China lies about cases, but the US dramatically under-tests. On balance, the US has a larger outbreak than China at the peak. But the likelihood of a lot of American deaths looks lower. The key variable is, do we get the health care system surged adequately in the next few weeks? It's a race against time.

Dramatic response from the developed world on the monetary & fiscal side. On the monetary side, central bankers are reading from the 2008-2009 playbook. We had a financial crisis. Regulations ensured that the banks became more robust. On fiscal policy: US $2 trillion stimulus is 10% of American GDP. The Fed is able to leverage that with additional loans; a functional equivalent of $4 trillion, 20% of GDP - should be enough relief to get through 1/5 of the year, 2 months. No one thinks supply and demand is coming back in the next 6, 8 weeks.

The fiscal stimulus appears sufficient; market response has been positive so far. Congress members believe we will need more stimulus in 2 months. What kind? How big? Another $2-4 trillion, or more? The closer to elections, the more challenging.

Emerging markets need the same scale of stimulus, but don't have the cash. India on lockdown, done state by state. A few states, Punjab, Kerala, Maharashtra, look like they're doing a decent job. Other states, not. Net 80 to 90% of the Indian economy is informal - the way you get money to people has to be direct. Source of money has to be external. IMF, international financial institutions, US, Europe, others have to step up. I'm skeptical.

Emerging markets are going to experience bigger crises and crash- don't have governance resilience or coordination, need money. Turkey has a steep curve of cases, problem with social distancing. Different from the Nordics or Japan. Cultural features play in why cases explode in Italy and Spain - large numbers of people spend more time in close proximity, lead to many more cases. That's a problem for Turkey.

The Brazilian president refuses to shut down or call for social distancing. He's going after the governors that are shutting down the economy. If an explosion doesn't happen in Brazil and the economy's in decent order, he'll look like a hero. I think Bolsonaro is going to be in trouble.

Better story on US-China. After Trump has been saying the China virus, & the G-7 couldn't come up with a joint statement because Secretary of State Pompeo was saying it's got to be the Wuhan virus and no American allies agreed. Trump yesterday has a conference call with Xi Jinping. Tweets about it. Calls it the coronavirus. Is that because Trump doesn't have a willingness to talk honestly to Xi Jinping's face? Is he scared or is he actually backing away from a cold war? I think it's more the latter than the former. Trump doesn't want the economy to take a bigger dive from starting a fight with the Chinese. He's backing away. Good news.

Will it stick? Depends on how Trump's numbers do, as the election gets closer and it's harder to give a good story. This story is going to shift from numbers to people. A couple weeks ago, none of us knew people that died of coronavirus. Few knew people that had it. Now, a lot of us know people that have it. Some know people that died. Trump's lack of human empathy is going to be more challenging. I worry that we end up in a much more confrontational stance of the Americans vis-a-vis the Chinese.

Demography is destiny. That ominous-sounding pronouncement, credited to French philosopher Auguste Comte, is today taken to mean that a nation's fate depends on the youthfulness of its population. For a poor country to become rich, it needs lots of young people ready to work, to support those too old or too young to work, and to pay taxes. This is called the "demographic dividend."

That's an important part of China's success story. Over the past 40 years, more than one billion people have emerged from poverty in China. Waves of young people surged from the countryside into cities to work in factories. The state invested in education, and wages helped young workers, and then their children, go to school. The state also began a drive to develop the technologies of the future, by any means necessary. In China, once dirt-poor, hundreds of millions have created a middle class.

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Not everyone thinks that President Biden's decision to pull all US troops out of Afghanistan by 9/11/21 is a good idea. Conservative Congressman Mike Waltz (R-FL), a combat-decorated Green Beret with multiple tours in Afghanistan, thinks that the US still needs to maintain a small presence in the country to avoid incurring "massive risks." In a spirited discussion with Ian Bremmer on GZERO World, Waltz, who served as counterterrorism advisor in the George W. Bush administration, argues, "The next 9/11, the next Pulse Night Club, which is right on the edge of my congressional district, the next San Bernardino, that's now on Biden's watch. He owns it with this decision." Their conversation is featured in the upcoming episode of GZERO World, which airs on US public television starting Friday, April 23. Check local listings.

Vaccines are the best hope to end the COVID-19 pandemic. But rich countries are hogging most of the doses, with more than 83 percent of shots administered to date having gone to residents in high- and upper-middle-income countries. Most poor countries will have to wait years to achieve widespread vaccination, according to one study.

To address this inequity some stakeholders are pushing hard for waivers to intellectual-property (IP) rights through World Trade Organization trade rules so that manufacturers in poorer countries can make their own vaccines locally. India and South Africa have been leading the charge, which would essentially mean that deep-pocketed pharma companies like New York-based Pfizer, for instance, would have to hand over the keys to the kingdom, allowing local companies in New Delhi and Johannesberg to make generic versions of their vaccines.

Unsurprisingly, the debate has gotten fiery, with passionate arguments emerging both for and against.

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Carl Bildt, former Prime Minister and Foreign Minister of Sweden, shares his perspective on Europe In 60 Seconds:

What are the Russians up to against Ukraine?

We simply don't know, except the fact that they're concentrating a huge amount of military forces. And you don't do that for nothing or for fun. They are there for a purpose, to have pressure or to undertake limited to larger operations. We simply don't know. And when Putin delivered his State of the Union speech the other day, he didn't say a thing about this. They are now talking about withdrawing the forces. But let's wait and see. They have talked about withdrawing forces from Syria for a long time, but we haven't seen that as of yet.

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Australia rips up Belt & Road deal: Australia cancelled two 2018 deals signed between Victoria, Australia's wealthiest state, and the Chinese government, that committed the two sides to working together on initiatives under China's Belt and Road infrastructure development program. Foreign Minister Marise Payne said that the agreements "were adverse to our foreign relations." Similar deals between Victoria and institutions in Iran and Syria were also abandoned by the Australian government this week, under a 2020 law that allows Canberra to nullify international agreements struck at local and state level. (Australian universities say the "foreign veto bill" amounts to "significant overreach.") Meanwhile, Beijing hit back, calling the move "unreasonable and provocative," and accusing Canberra of further stoking divisions after a series of escalatory moves by both sides that have seen China-Australia relations deteriorate to their worst point in decades. Chinese investment in Australia dropped by 62 percent last year, a massive blow for Australia's export-reliant economy.

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50: The US will aim to cut its greenhouse gas emissions by 50 percent from 2005 levels by the end of the decade. The Biden administration's commitment, double the goal set by Barack Obama almost six years ago, was announced to coincide with a virtual Earth Day climate summit attended by dozens of world leaders.

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Russian president Vladimir Putin on Wednesday threatened an "asymmetrical, rapid, and harsh" response for anyone that dares to cross a "red line" with Russia.

What's the red line? Putin says he'll decide on a case-by-case basis. And the cases at the moment are growing: the US has sanctioned Russia over cyber crimes; Putin critic Alexei Navalny is near death in a Russian prison; the Czechs say Russia blew up a Czech munitions depot; and as many as 120,000 Russian troops are reported to be massing along Russia's border with Eastern Ukraine.

Which is to say: there's potentially a Sol Lewitt's-worth of red lines to ponder now.

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