The Pandemic Depression
The Global Economy Will Never Be the Same
The chaotic global response to the coronavirus pandemic has tested the faith of even the most ardent internationalists. Most nations, including the world’s most powerful, have turned inward, adopting travel bans, implementing export controls, hoarding or obscuring information, and marginalizing the World Health Organization (WHO) and other multilateral institutions. The pandemic seems to have exposed the liberal order and the international community as mirages, even as it demonstrates the terrible consequences of faltering global cooperation.
A century ago, when pandemic influenza struck a war-torn world, few multilateral institutions existed. Countries fought their common microbial enemy alone. Today, an array of multilateral mechanisms exists to confront global public health emergencies and address their associated economic, social, and political effects. But the existence of such mechanisms has not stopped most states from taking a unilateral approach.
It is tempting to conclude that multilateral institutions—ostensibly foundational to the rules-based international system—are, at best, less effective than advertised and, at worst, doomed to fail when they are needed most. But that conclusion goes too far. Weak international cooperation is a choice, not an inevitability.
The dismal multilateral response to the pandemic reflects, in part, the decisions of specific leaders, especially Chinese President Xi Jinping and U.S. President Donald Trump. Their behavior helps explain why the WHO struggled in the initial stages of the outbreak and why forums for multilateral coordination, such as the G-7, the G-20, and the UN Security Council, failed to rise to the occasion.
Just as important is the unique cooperation challenge that the novel coronavirus represents—and the distinctive weakness of the particular institution most central to addressing it. The WHO has a mandate that exceeds its capabilities. Member states have assigned it more and more tasks while limiting its independence and resources, setting the organization up for failure. To the extent that global health governance has failed, it has failed by design, reflecting the ambivalence of states torn between their desire for effective international institutions and their insistence on independent action.
The pandemic has revealed both the limits of the existing multilateral system and the horrific costs of the system’s failure. If the current crisis causes policymakers to conclude that multilateralism is doomed and convinces them to provoke its unraveling, they will be setting humanity up for even more costly calamities. If the crisis instead serves as a wake-up call—a spur to invest in a more effective multilateral system—the world will be far better prepared when the next global pandemic strikes, increasing the likelihood that the imperatives of cooperation will win out over the pressures of competition.
When the so-called Spanish flu ravaged the world in 1918, global health governance was still in its infancy. Public health had been a national or local matter until the mid-nineteenth century, when revolutions in transport deepened global integration to an unprecedented degree. In 1851, European countries hosted the first International Sanitary Conference, devoted to managing cholera. Over the next six decades, governments would hold 11 more such conferences, negotiate multilateral treaties on infectious disease, and establish new international organizations, including the Pan American Sanitary Bureau and the Office International d’Hygiène Publique.
Yet these arrangements, focused as they were on sanitation, were no match for the Spanish flu. The lack of meaningful international coordination to combat the pandemic left each government to fend for itself. The outbreak quickly became the deadliest public health emergency in modern times, killing an estimated 50 million people worldwide.
It was not until the decades after World War II that countries created a robust infrastructure to manage international public health emergencies. They established hundreds of multilateral organizations and signed thousands of treaties to manage the shared dilemmas of rising interdependence. Among the most prominent of the new instruments was the WHO, which was created as a specialized UN agency in 1948.
Since 2000, the organization has risen markedly in importance, as various new and reemerging infectious diseases have threatened global health and security. The agency managed the global responses to the SARS epidemic in 2003, the H1N1 flu pandemic in 2009, the Ebola epidemic in 2014–16, and the Zika epidemic in 2015–16. In the wake of SARS, the World Health Assembly, the WHO’s governing body, strengthened the International Health Regulations, the core legal prescriptions governing state conduct with respect to infectious disease. The new IHR gave the WHO’s director general the authority to declare a “public health emergency of international concern” and required member states to increase their pandemic-response capacities.
Meanwhile, an entire multilateral ecosystem of global public health arrangements blossomed alongside the WHO and its IHR, including the Global Alliance for Vaccines and Immunization (now called GAVI, the Vaccine Alliance), the Global Health Security Agenda, the World Bank’s Pandemic Emergency Financing Facility, and the Africa Centers for Disease Control and Prevention. The result is a global health infrastructure beyond the wildest dreams of the national leaders who confronted the 1918 influenza pandemic alone.
Amid the current pandemic, however, governments have repeatedly forsaken opportunities for consultation, joint planning, and collaboration, opting instead to adopt nationalist stances that have put them at odds with one another and with the WHO. The result has been a near-total lack of global policy coherence.
Governments have repeatedly forsaken opportunities for consultation, joint planning, and collaboration.
In China, the initial epicenter of the coronavirus pandemic, Xi’s government was slow to report the outbreak to the WHO, and it resisted full transparency thereafter. What’s more, Beijing initially rebuffed offers from the WHO and the U.S. Centers for Disease Control and Prevention to provide desperately needed scientific expertise in epidemiology and molecular virology. China was also slow to share transmission data and biological samples with the WHO.
Outside China, many countries responded to the novel coronavirus by implementing international travel restrictions. On January 31, Trump ordered the United States closed to foreigners who had recently traveled to China. On March 11, without consulting U.S. allies, he abruptly suspended air travel from Europe to the United States. Brazil, India, Israel, and Russia also implemented pandemic-related border restrictions that month. Other countries, such as France and Germany, either banned or imposed limits on the export of protective medical equipment.
Particularly disappointing on the global stage was the lack of concerted action by the G-7, the G-20, and the UN Security Council. The leaders of the G-7, representing the world’s biggest advanced market democracies, failed to meet until early March. Even then, they did little more than highlight their respective border closures. Later that month, a meeting of G-7 foreign ministers dissolved into acrimony when U.S. partners rejected Washington’s demand that the final communiqué refer to the virus as “the Wuhan coronavirus,” after the Chinese city where it was first discovered.
The G-20, which comprises the world’s most important established and emerging economies, operated on a similar timeline, convening to discuss the pandemic for the first time in late March, nearly three months into the outbreak. At their virtual summit, the parties rejected requests from the International Monetary Fund to double its resources and suspend the debt obligations of poor nations. (They have since suspended low-income countries’ debt service payments.)
Finally, the Security Council remained missing in action. China, which held the rotating presidency of the Security Council in March, blocked it from considering any resolution about the pandemic, arguing that public health matters fell outside the council’s “geopolitical” ambit. (This is plainly untrue: in 2014, for instance, the body passed Resolution 2177, designating the West African Ebola epidemic a “threat to international peace and security.”)
The most promising multilateral initiative was the most underresourced. On March 25, UN Secretary-General António Guterres launched a humanitarian response plan to mitigate the effects of the coronavirus on fragile and war-torn states, which are home to approximately a billion people and a majority of the world’s poor, as well as most of its 70 million refugees and internally displaced people. Yet with a budget of just $2 billion in UN funds, this plan had funding that was less than one-1,000th of what the United States had dedicated to its domestic response by early May.
Such shortcomings have prompted observers to conclude that failure is inevitable—that in times of crisis, citizens will look to their own leaders, and governments will care for their own citizens at the expense of global concerns. But the record of other crises in recent years, especially the last global financial crisis, suggests that sovereign states are quite capable of coordinated responses to shared global challenges, provided that their leaders take an enlightened view of their countries’ long-term national interests.
In 2008–9, first U.S. President George W. Bush and then President Barack Obama spearheaded a cooperative international response to the global credit crunch, helping prevent the world’s descent into another Great Depression. Bush convened the first-ever meeting of the leaders of the G-20 in November 2008. The group met twice more in 2009, Obama’s first year in office, coordinating massive stimulus packages to restore global liquidity, expanding the resources and mandates of the International Monetary Fund and the World Bank, and avoiding the type of discriminatory trade and monetary policies that had fragmented and weakened the world economy in the early 1930s. The lesson is clear: multilateral institutions are what states and their leaders make of them.
The late Richard Holbrooke, during his tenure as U.S. ambassador to the UN, made a similar point in criticizing the lazy habit of chastising the UN for failures of multilateralism. Such criticism, Holbrooke said, was akin to “blaming Madison Square Garden when the Knicks lose.” Even during crises, international institutions do not spring autonomously into action. They need to be spurred by their member states, who invariably hold the whip hand. The secretariats of multilateral organizations can take some initiative, but they always do so within constraints, as agents of their sovereign principals. To the degree that global governance exists, states—especially major powers—remain the true governors.
Unfortunately, powerful countries such as the United States and China have failed to play that vital leadership role during the coronavirus crisis. In keeping with his past rhetoric and actions, Trump has followed his “America first” instincts and adopted a nationalist response to the pandemic, framing COVID-19, the disease caused by the new coronavirus, not as a threat to global public health but as an assault on the sovereignty of the United States and the safety of its citizens. As when he addresses the issue of immigrants and refugees, his first impulse was to harden U.S. borders against what he insisted on calling a “foreign” or “Chinese” virus. There was no sense in Trump’s reaction that the United States had any responsibility to launch or even participate in a collective global response.
Chinese leaders, meanwhile, have refused to cooperate with their counterparts at the G-20 and the UN because they fear exposure and embarrassment. Deliberations in the UN Security Council, in particular, would have uncovered China’s lack of transparency in handling the initial outbreak, as well as its campaign of misinformation regarding the virus’s origins, sharpening international criticism and frustrating the Chinese Communist Party’s geopolitical designs. China’s desire to avoid those outcomes and the United States’ preoccupation with exposing Chinese mendacity prevented the Security Council from passing a powerful resolution on the coronavirus, one that would have had the binding force of international law, allowing it to cut through political obstacles to cooperation.
In a more cosmopolitan world, other leaders might have filled the vacuum left by Washington’s delinquence and Beijing’s obfuscation. But that is not the world in which the crisis took shape. Over the past dozen years, great-power competition has waxed, and democracy’s fortunes have waned. Ascendant populism and nationalism have weakened the domestic foundations for multilateral cooperation by empowering authoritarian despots and weakening public support for liberal internationalism. Global public health, long insulated from geopolitical rivalry and nationalist demagoguery, has suddenly become a terrain of political combat, crippling the world’s response to the pandemic.
Epidemiological dynamics have also stymied cooperation. Unlike the global financial crisis, which struck most countries at about the same time, the virus has spread gradually and unevenly. The WHO declared the coronavirus a pandemic on March 11, but even today, the contagion’s spread and effects vary widely from country to country. This has frustrated policy coordination, as national and subnational authorities have responded to the outbreak’s ever-shifting epicenter by adopting policies reflecting very different short-term threat assessments.
Infectious diseases evoke far more fear than most other international threats, reinforcing primal instincts to impose barriers and withdraw into smaller groups, thus militating against multilateral responses. Pandemics may be transnational, but they are fought in the first instance within national jurisdictions, by local communities seeking to protect themselves.
The persistent weakness of the WHO has been a particular impediment to effective multilateral mobilization against the coronavirus. The WHO is an invaluable repository of scientific expertise, a focal point for global disease surveillance, and a champion of the human right to health. It has helped eradicate several diseases—most notably smallpox—and has put others, such as polio, on the ropes. It has also highlighted the growing threat from noncommunicable diseases of relative affluence, such as obesity and diabetes.
Yet the WHO remains deeply flawed, beset by multiple institutional shortcomings that hamstring its ability to coordinate a pandemic response. Blame rests partly with the WHO’s largest funders, including the United States, the United Kingdom, Germany, and Japan, as well as large charities, such as the Bill & Melinda Gates Foundation, which have pressed the organization to expand its agenda without providing commensurate resources, all the while earmarking a growing share of its budget to address select diseases rather than to support robust public health capacities in member states. Bureaucratic impediments—such as a weak chain of command, an indecisive senior leadership, and a lack of accountability—have also undercut the organization’s performance.
The WHO’s weakness has been a particular impediment to effective multilateral mobilization against the coronavirus.
The WHO’s bungled response to the Ebola outbreak in West Africa in 2014 revealed many of these shortcomings. An independent review panel attributed the WHO’s poor performance to crippling budget cuts, a paucity of deployable personnel and logistical capacity, and a failure to cultivate relationships with other UN agencies, the private sector, and nongovernmental organizations. Hoping to correct some of those flaws, the World Health Assembly authorized the creation of a new global health emergency workforce and a small contingency fund for rapid response. Neither reform resolved the WHO’s deeper structural problems, which the coronavirus has again laid bare.
The biggest impediment to the WHO’s success is the failure of its member states to comply fully with the IHR. Following the SARS crisis, in which China and other countries either refused or neglected to report epidemic data in a timely and transparent manner, the World Health Assembly revised the IHR. The new regulations bolstered the WHO’s surveillance capacities, empowered its director general to declare an emergency, and required all member states to develop and maintain minimum core capabilities to prevent, detect, and respond to disease outbreaks.
The coronavirus pandemic has revealed how resistant member states remain to implementing their commitments and how little leverage the WHO has to ensure that they do so. Fifteen years after the IHR were revised, fewer than half of all countries are in compliance, and many nations still lack even rudimentary surveillance and laboratory capacities to detect outbreaks. Since national governments are permitted to self-assess and self-report their progress in implementing the regulations, accountability is minimal.
Even more troubling, the revised IHR include a huge loophole that allows states to defect during emergencies. Countries can impose emergency measures that diverge from WHO guidelines if they believe these will produce superior results, provided they report their plans within 48 hours of implementation. In their early responses to the coronavirus, governments repeatedly used this clause to impose border closures, travel bans, visa restrictions, and quarantines on healthy visitors, regardless of whether these measures had WHO endorsement or any basis in science. Many did not even bother to inform the WHO, forcing it to glean information from media sources and obligating its director general, Tedros Adhanom Ghebreyesus, to dispatch letters reminding member states of their obligations.
The pandemic has also underscored flaws in the WHO’s process for declaring an emergency. It was not until January 30 that the WHO finally designated the spread of the new coronavirus as a global emergency, after many countries had shut their borders and grounded commercial aircraft. On top of criticizing the agency’s delay, commentators disparaged the WHO’s binary, all-or-nothing approach to warnings, calling for a more nuanced spectrum of alerts.
More important, the coronavirus crisis has exposed the lack of protocols to ensure that all nations have access to vaccines. In past outbreaks, such wealthy countries as Australia, Canada, and the United States have hoarded vaccines for domestic use. This continues today. In March, Trump attempted and failed to obtain exclusive U.S. access to a potential coronavirus vaccine that is under development in Germany. Even if governments do not hoard vaccines, there will be widespread disparities in access and distributional capacity.
Finally, the pandemic has raised the specter that some nations may decline to share virus samples, using the Nagoya Protocol on Access and Benefit-Sharing as their justification. The protocol, an international agreement that was adopted in 2010 and that has been ratified by more than 120 countries, serves a worthwhile function: granting nations sovereignty over their biological resources. But its application to human pathogens is an obvious perversion of that objective. During the 2005–7 avian influenza pandemic, Indonesia resisted sharing virus samples, citing the misguided concept of “viral sovereignty.” The Nagoya Protocol increases the likelihood that countries will act similarly today, risking unacceptable delays in scientific analysis of novel viruses and in the development of lifesaving vaccines to stop pandemics.
In the wake of this pandemic, one anticipates growing calls to renegotiate the IHR, to strengthen the authority of the WHO, and to increase the obligations of the organization’s member states. Doing so in the current populist climate would be risky, however. Governments might seize the opportunity to claw back even more sovereign prerogatives, weakening the legal foundations for a coordinated global response to a public health emergency.
Throughout the pandemic, the WHO has bent over backward to curry favor with important but difficult partners—no surprise given the power asymmetry between the agency and major donor states. Reliant on Chinese data and cooperation to stem the pandemic, Tedros went to extraordinary lengths early this year to ingratiate himself with Xi and to assuage Chinese sensibilities.
“Let me be clear: this declaration [of an emergency] is not a vote of no confidence in China,” the director general insisted on January 30. “In many ways, China is actually setting a new standard for outbreak response,” he said, gushing. “It’s not an exaggeration.” It was in fact a gross exaggeration, given how China mismanaged the early stages of the epidemic. Multiple critics have taken Tedros to task, labeling him Beijing’s “enabler.”
The WHO’s servility has not been limited to its approach to China, however. The agency has also largely avoided direct criticism of the United States, its largest donor. The reverse, needless to say, has not been true. At an April 7 news conference, Trump took aim at the WHO to deflect attention from his administration’s own poor response to the outbreak. He falsely accused the agency of stating in January that the coronavirus was “no big deal,” and he promised to “put a hold” on U.S. financial support for the international organization. Tedros pushed back, but ever so gently and obliquely, urging all WHO member states to avoid “politicizing” the coronavirus response. He did not directly refer to either Trump or the United States. For international institutions, it seems, kowtowing is just another way of bowing to reality.
In the ensuing months, the WHO and other multilateral institutions have taken some meaningful steps to contain the pandemic and cushion its economic blows. The WHO has served as a leading source of expertise on the virus, sent teams to affected countries, helped poor nations build up their health capacities, advanced worldwide scientific collaboration, combated misinformation, and continued to promote the IHR. Simultaneously, it has shaped the responses of dozens of other UN agencies and affiliated organizations, including the International Civil Aviation Organization, the World Tourism Organization, the UN Refugee Agency, the UN Development Program, the International Monetary Fund, the World Bank, and many, many more.
But a truly empowered WHO could have done more. With enhanced political powers and a more flexible budget, the agency might have spearheaded a coherent multilateral response to the pandemic, persuaded nations to harmonize their border closures and travel restrictions, shamed laggards into fulfilling their binding treaty commitments under the IHR, and deployed significant resources and personnel to the shifting epicenter of the pandemic. The main obstacle to this outcome, and the reason for the haphazard global response, was the persistent ambivalence that all countries, particularly great powers, feel toward global health governance. All governments share a fundamental interest in a multilateral system that can respond quickly and effectively to stop potential pandemics in their tracks. They are less enthusiastic about delegating any of their sovereignty to the WHO, allowing it to circumscribe their freedom of action, or granting it the authorities and capabilities it needs to coordinate a pandemic response.
One lesson that will emerge from the COVID-19 pandemic is that multilateral cooperation can seem awfully abstract, until you actually need it—whether you rely on it to flatten the curve of an epidemic, ensure the safety of airline travel, protect displaced people, or prevent another global economic meltdown. Another, harder lesson is that the multilateral system is not a self-regulating, autonomous machine that springs into action whenever needed. No amount of technocratic expertise or institutional reform can compensate for the current lack of political direction and sustained leadership in that system. Prominent member states must be wise benefactors to the multilateral system if they want to be its beneficiaries.
The Pandemic Bodes Ill for Both American and Chinese Power—and for the Global Order