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The economic impact of coronavirus

Differences in strong unified national response, vs not: In Japan, everyone listened to the government. If they say wear a mask, everyone wears a mask. If they say engage in social distancing, everyone engages in social distancing. In South Korea, too - enables effective response.

In the US or Italy, there's much more individualism, irrespective of liking government. In Italy, mayors are pleading and shouting obscenities at citizens because they're not listening. Authority doesn't matter. In France, too. Contrast in Germany, strong support for the German government; in Western countries, one of the best response functions we've seen.


A reason you need consistent shutdown early: avoid overwhelming the health care system. If people can't get needed intensive care, fatality rates around coronavirus go up 5 - 10 times. There are knock on implications of a health care system not functioning: cross infection. People with chronic and severe conditions unrelated to coronavirus unable access critical medical care. That has knock on effects on the economy. You need to surge on available tests and ability to test, before discussing when to open up the economy.

Good news, this is a top priority in the developed world; surging on test capabilities, masks, ventilators is moving fast. US companies like Roche making hundreds of thousands of test kits per week, will get us to a place that medical systems will not. We'll be in a position not to be overwhelmed, probably within a month in many localities. There's danger that systems get overwhelmed before then - possibility in New York and other municipalities in the next 2 - 4 weeks. That's the biggest danger zone for the US. Parts of Europe, e.g., Spain. Possibly Paris.

In emerging markets, bigger problems: bad, late governance. In Mexico, in Brazil, leaders refuse to accept reality, providing fake news to their people. Not like Trump exaggerating when a cure might come or suggesting medicines could help to respond, that lead to a run on those medicines. Even with Trump's press conferences, which have replaced his rallies, you're getting real news from Pence, the surgeon general, the NIH, Tony Fauci. In the US, general information around the crisis is not great, but it's not godawful. In Mexico, in Brazil, in certain emerging markets, people are getting fake news. That it's not really a danger. It's not really a crisis. You can't get it. Don't worry. Act normally. Disaster for countries that can least afford a failed response.

Lack of coordination globally makes it harder to address crisis. If you can shut down borders effectively, doesn't matter as much. The economic hit is much greater. Restarting supply chain in China. In Malaysia, supply chain is shut down for a minimum of two weeks - going to be longer. Malaysia has a lot of components of electronic goods. Supply chain across Asia, rolling hits. True in Latin America. No global response, nor an equal global rollout of this crisis.

It takes time to restart the economy. Laid off workers won't be immediately available. Restaurants needs to hire, integrate. That's the case with many different components of our interconnected economy. Supply chain & labor disruptions, people that are ill, all make it harder to get the economy going.

Second quarter will be the worst quarter we will have experienced in our lifetimes. Third quarter will be bad. That implies that we're in a heavy recession right now. Potential for further outbreaks forcing a 2nd round of economic closures is significant. That would be the worst economic and market outcome for this crisis. Despite the political pressure to get markets open and get the economy open again - if you have to shut down the economy again and reestablish quarantine, confidence will be shot.

People aren't suddenly going to feel comfortable going to restaurants, malls. It's going to take time to get back up to speed. Even with strong stimulus, 2 trillion dollars in the US (could be bigger than that). Congress goes away, a lot of them already have tested positive for coronavirus or are under self-quarantine. Getting them back together to negotiate a new bill is probably a minimum of 4 weeks away. If we get major market crashes in the interim, don't look to Congress for help. That is an issue.

Khant Thaw Htoo is a young engineer who works in Eni's Sakura Tower office in the heart of Yangon. As an HSE engineer, he monitors the safety and environmental impact of onshore and offshore operations. He also looks out for his parents' well-being, in keeping with Myanmar's traditions.

Learn more about Khant in the final episode of the Faces of Eni series, which focuses on Eni's employees around the world.

On his first day as president, Joe Biden signed a remarkable series of executive orders. Boom! The US rejoins the Paris Climate Accord. Bang! The United States rejoins the World Health Organization. Pow! No more ban on immigration from many Muslim-majority countries. Biden's press secretary reminded reporters later in the day that all these orders merely begin complex processes that take time, but the impact is still dramatic.

If you lead a country allied with the US, or you're simply hoping for some specific commitment or clear and credible statement of purpose from the US government, you might feel a little dizzy today. The sight of an American president (Barack Obama) signing his name, of the next president (Donald Trump) erasing that name from the same legislation/bill, and then the following president (Biden) signing it back into law again will raise deep concerns over the long-term reliability of the world's still-most-powerful nation.

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"There needs to be a dramatic and deep reduction in the amount of debt on the poorest countries. That's clear." As the world's poorest nations struggle to recover from a devastating pandemic, World Bank President David Malpass argues that freeing them of much of their debt will be key. His conversation with Ian Bremmer is part of the latest episode of GZERO World.

Listen: Renowned tech journalist Kara Swisher has no qualms about saying that social media companies bear responsibility for the January 6th pro-Trump riots at the Capitol and will likely be complicit in the civil unrest that may continue well into Biden's presidency. It's no surprise, she argues, that the online rage that platforms like Facebook and Twitter intentionally foment translated into real-life violence. But if Silicon Valley's current role in our national discourse is untenable, how can the US government rein it in? That, it turns out, is a bit more complicated. Swisher joins Ian Bremmer on our podcast.

Ian Bremmer discusses the World In (more than) 60 Seconds:

Biden's first scheduled call with a world leader will be with Canada's Justin Trudeau. What's going on with the Keystone Pipeline?

Well, Biden said that that's it. Executive order, one of the first is that he will stop any construction or development of the Keystone Pipeline. This is of course an oil pipeline that would allow further oil sands oil to come to the United States. The infrastructure is significantly overstretched, it's led to backlogs, inefficiency, accidents, all the rest, but it also facilitates more energy development and keeps prices comparatively down if you get it done. So, there are lots of reasons why the energy sector in Canada wants it. Having said all of that, Trudeau, even though he's been a supporter of Keystone XL, let's keep in mind that he did not win support in Alberta, which is where the big energy patch in Canada is located. This is a real problem for the government of Alberta, Canada is a very decentralized federal government, even more so than the United States. The premier of Alberta is immensely unhappy with Biden right now, they've taken a $1.5 billion equity stake in the project. I expect there will actually be litigation against the United States by the government of Alberta. But Trudeau is quite happy with Biden, his relationship was Trump was always walking on eggshells. The USMCA in negotiations ultimately successful but were very challenging for the Canadians, so too with the way Trump engaged in relations on China. All of this, the fact that Trump left the nuclear agreement with Iran, the Paris Climate Accords, WHO, all of that is stuff that Trudeau strongly opposed. He's going to be much more comfortable with this relationship. He's delighted that the first call from Biden is to him. And it certainly creates a level of normalcy in the US-Canada relationship that is very much appreciated by our neighbors to the North.

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The GZERO World Podcast with Ian Bremmer. Listen now.

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