A clear perspective is critical amid a worsening pandemic situation. As countries post daily records, the total number of coronavirus cases, now at around 9.7 million, will hit 10 million in a matter of days. The United States saw cases rise by more than 41,000 on Thursday, marking its biggest daily increase and prompting some states to call a halt on reopening. As many as 20 million Americans are estimated to have contracted the virus - nearly 10 times the number of confirmed cases. India is nearing half a million cases after reporting its biggest 24-hour spike of over 17,000 new infections. Europe, as it exits lockdowns, has also seen an increase in weekly cases for the first time in months, contributing to a total of 2.6 million.
The uncertainty in the duration and severity of the crisis and the ability to deal with it has shaken economies. Over 95 per cent of countries are projected to have negative per capita income growth this year. Trade is projected to collapse by around 12 per cent and the global economy to shrink by 4.9 per cent. The US, Europe and other advanced economies will bear the brunt, with a slump of 8 per cent. Singapore is likely to experience its worst recession, with growth projections for this year trimmed to between -4 and -7 per cent. Global fiscal support of over US$10 trillion (S$13.9 trillion), rate cuts and liquidity injections should help protect livelihoods. These actions will, however, send global public debt to record levels.
What also marks the coronavirus crisis is its coincidence with striking acrimony in the world's most important bilateral relationship. Two years of heightened tensions between the US and China will likely worsen in the run-up to a contentious US presidential election in November. The phase one of their trade deal is not enough to stop the slide into decoupling and deglobalisation that will erase decades of progress and send millions into poverty. The bloody clashes at the Sino-Indian border and the stresses building up in the South China and East China seas only underline the extraordinary geopolitical fragility at this time.
As nations opt to act alone rather than in concert, the United Nations, the World Health Organisation, the G-7 and G-20 are handicapped. Unlike the 9/11 terror attacks and the 2008-2009 global recession, this crisis has been accompanied by a surge in populism, nationalism and protectionism. These are dangerous trends when the post-pandemic scenario is unclear. How individuals, firms and governments behave while the search continues for effective vaccines and treatments will prove critical. Social contracts have weathered well thus far and the IMF expects a sharp recovery next year, although most economies may not regain their pre-crisis output levels. With good leadership, this can be an opportunity to redress income inequalities, build sustainability into economies and resilience into global institutions.
