Download This PaperCOVID-19 and the Contours of the Impending Global Crisis: Western Meltdown, European Fallout?
178 Pages Posted: 2 Nov 2020
Date Written: October 14, 2020
Abstract
The geo-strategic consequences of what the medical profession nowadays calls “a pneumonia outbreak associated with a new coronavirus of probable bat origin” are nearly beyond our imaginations. In this article we show that the world faces the stark perspective of a global pandemic, which, if it takes the path of the Influenza pandemic of 1918, will cost the lives of around 150 million global citizens (Barro, Ursúa and Weng, 2020). In addition, the current shutdowns will result in a global economic depression which could reach the proportions of the transformation crisis in Russia, which - projected at a global level – would imply around 546 million excess mortalities (Cornia, 2019; Cornia and Paniccià, 2000). The world is confronted with both of these frightening scenarios. The rise of China to a global position of dominance is now irreversible, and seems to revert the world to the geographical and economic order which existed before the age of industrialization.
• The 27 countries which now remain in the European Union after Brexit, in between them they share 34,45% of all global COVID-19 infections and a staggering 48,64% of all global COVID-19 deaths.
• The other stable Western democracies since the post-WW-2 era, which form part and parcel of the community of Western and democratic values, Australia, Canada, Iceland, New Zealand, Norway, Switzerland, United States, Japan, Israel, and United Kingdom, account for none the less than 41,36% of all global COVID-19 infection cases and 38,42% of all global COVID-19 deaths.
• The rest of the world accounts for only 24,19% of all global COVID-19 infection cases and 12,94% of all global COVID-19 deaths.
• The Free West thus is at the worst receiving end of this global crisis.
Finally, we risk a prognosis on the overall societal effects of the pandemic. A lesson of the 1918-1920 pandemic is that pandemic severity contributes to rising income inequality over time. We also attempted to estimate the probable effects of a pandemic on international income convergence/divergence over time. In the UK, it took practically a decade to recover the pre-1918-pandemic income levels, and in Italy, the crisis was even more severe, and Italian democracy collapsed and Benito Mussolini rose to power.
Based on the relative income and impact severity figures of 1918-1920 and today’s relative income levels, the predicted number of victims of three waves of COVID-19, just as they happened in 1918-20, in the poor countries of the world could be horrific and could reach well over 145 million people, with India, China, Ethiopia, Bangladesh and Pakistan each affected by more than 5 million victims.
In our analysis, we also attempt to estimate the predicted global excess mortality from the economic crisis which now sets in. The economic and social Tsunami that swept across Eastern Europe and the former USSR could become a realistic image of what we can expect in the Western countries after Corvid-19. Already the 2008 crisis and the subsequent crises in the Eurozone led to the premature death of 1.76 million people in Europe.
What, then, will be the answer of the European Union to this economic and social Hurricane, which now gathers over the European Mediterranean? We are afraid, that the European Union did not learn the lessons of the crisis in 2008. European elites, especially, are currently already hurrying to reactivate the neo-liberal “rescue umbrella” (in Chancellor Angela Merkel’s language “Rettungsschirm”, i.e. the European Stability Mechanism, ESM) that will drive Italy and Spain even more deeply into economic stagnation and into even deeper austerity. With Germany already quenching the Latin and Mediterranean European partner countries to the wall since the 2008 crisis, European austerity measures and the economic crisis of 2008 also led to a significant weakening of national security on the European continent.
We finally think that the repetition of the Willhelminian, pre-WWI German path of a global Chinese challenge to United States global leadership is inevitable. According to World Bank data, the all decisive point of no return of the Chinese global challenge against the United States of America and also against the European Union was reached in 2012, when Chinese GDP, measured in purchasing power, already surpassed that of its rivals.
Keywords: COVID-19, coronavirus, coronanomics, pandemic, economic impacts
JEL Classification: F40, I15, E1, E6
Suggested Citation: Suggested Citation