The Black Swan Called the Coronavirus

Medical staff with bunny suit containing 2019 Coronavirus outbreak.
Medical staff with bunny suit containing 2019 Coronavirus outbreak. Image: GangstonTech / CC BY-SA

The novel Coronavirus has shown that it has the potential to affect the geopolitics of the world. It not only resulted in loss of life but also disrupted politics, trade, and supply chain production and to the extent of shaping ongoing conflicts. 

In Asia, the rate of urbanization and population density is on a much larger scale and is growing strong where more people are travelling further, more rapidly, more often than ever before. At the same time degradation of soil and contamination of the environment, which reigns in Asia sanctions infectious disease of the tropical region to spread far and wide beyond borders and geography. Asia also possesses the largest and fastest ageing population in the world who possess a compromised immune system making them more susceptible to disease. 

The damage caused by Covid-19 depended on a host of other factors such as trade, migration, transportation, communication etc. These shaped and influenced how quickly the pathogens spread beyond the borders of the countries of their origin.

The Covid-19 hit China at a time when Hong Kong is in turmoil, Uighurs are in detention camps, economy is slowing down, and trade war is going on with the US – the outbreak of the virus was the last thing Beijing would have imagined. It was also a time when millions of people wanted to travel across the country to celebrate the lunar new year festival, welcoming the Year of the rat.

There are reasons to believe that the Covid-19 will be economically more disruptive than its predecessors. The Wuhan Virus is of a different strain from SARS and MER, the damage is set to stay longer than expected. Also setting this Covid-19 different from other epidemics is its ease in human to human transmission and its protracted incubation period. This makes preparing contingency plans, monitoring of the epidemic, tracking of the virus and strong effective long term containment strategy usually more challenging. As the new coronavirus spreads as widely as SARS, its damage will be more profound. 

The knockdown effects on China’s already slowing economy could trim around 1% of its GDP as various researches indicate. Much of East and South-East Asia rely on China like its tourists to stabilize its economy and bring economic growth. Thailand will be badly hit for instance, since 5% of its GDP growth comes from Chinese tourists. Japan could lose an estimated 25 billion dollars as the Wuhan virus overshadows the upcoming summer Olympics 2020 to be held in Tokyo. For China the losses are set to be pegged higher as the authorities have suspended roadways, airways, waterways and railway transit in and around Wuhan including 20 other cities, this will have profound consequences.

Geographically the city of Wuhan is strategically placed at the crossroads of China’s coastal areas, thus the government’s decision to lock down the city resulted in economic disruptions. Wuhan is also a major domestic transport and transit hub and nerve center of manufacturing industry including conducting scientific research. The shutting down of the city means disruption of traffic, trade, supply chain logistics and maritime shipment through the Yangtze River in turn affecting the economic wellbeing of port cities such as Shanghai. Like MERS and SARS, it is expected that infections for the Wuhan Virus will decrease by spring and eventually fade away in the summer. If this happens as expected the Chinese government will consequently lift its restrictions by the end of March. 

However, the devil lies in the details as roughly 6 million people have already left Wuhan city before the quarantine began, which means tens of thousands of people could already be spreading the disease around the globe, adding to it is the long incubation period of the virus and uncertainty about the nature of the virus which add more fuel to the fire. It can lead to a rise in the number of global infections. The geriatric and people with health problems will be most vulnerable and exposed, especially those from nearby developing nations such as India, Nepal, Bangladesh, Myanmar, Thailand, Cambodia, Vietnam etc. 

Beyond the economics of epidemics, the outbreak has a political undercurrent, paternalistic governments like the PRC has a social contract with the community from which the government derives its legitimacy. It derives legitimacy from strong economic growth, quality public services, and improved standards of living rather than deriving legitimacy from elections. Perhaps more than any other governments the Communist Party of China under Xi Jinping has granted to itself the power to micro-manage the lives of its citizens to shut down the cities, silence unsanctioned media outlets, thereby putting everything at the hands of policymakers but such power is valuable in an emergency as in the case of Wuhan Virus outbreak. However, such authority of the communist party has also increased public expectation in terms of better services, defence preparedness, superiority in governance and overall quality of life. Hence, when the government falters in the mismanagement of such an outbreak of epidemics the CCP is deemed to be seen as incompetent and illegitimate, even dissemination of information can be perceived as a political weakness. It was widely evident when China took more than 30 days to report the first case of coronavirus-related pneumonia to the WHO and another few more days for the Chinese government to make an emergency intervention and announce to the global audience. The legitimacy of the CCP is now at stake including its logistics, economy and politics.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of The Geopolitics.