[MUSIC PLAYING]
PAUL POAST: The international system is surprisingly fragile
that a disease that could spark up in one area of one country
could suddenly spread globally and literally shut down
the international system.
PRESENTER: The coronavirus is changing life
as we know it on a daily basis.
In COVID 2025, we'll explore how the pandemic
is rewriting our future.
PAUL POAST: The hops for the future
coming out of this crisis is that we really
recognize how interconnected the world is.
This is something that we give lip service to.
We talk about how oh, the world is connected,
and we can go on the internet and talk to someone
who's in China right now.
And you don't have to wait on them.
We talk a lot about this.
We're very much aware of the global economy,
of the interconnected nature.
But I don't think we recognize how intimately salient
that is to us until we suddenly see something like this.
We're seeing states kind of retrench
to themselves, protect themselves, raise barriers,
and, in a way, avoid kind of the cooperation that might actually
be, in some ways, a better solution to this problem.
This is just emphasizing or heightening
trends that we observed happening prior to COVID-19.
But one of those ways is we're starting
to see a fracturing, if you will,
of what many people, many scholars, pundits,
folks in the media, et cetera have
referred to as the liberal international order.
One of the key features of it are
all the various international organizations,
international institutions that had been formed largely
since World War II, things like the United Nations,
the WTO, prior to that, the General Agreement on Trade
and Tariffs, the International Monetary Fund, the World Bank.
And most notably, the World Health Organization
became an institution that came into existence after World War
II, with the purpose of helping to address these very pandemics
that we're seeing.
The Chinese government has used COVID-19
as an opportunity to try to begin positioning itself
as an alternative to US leadership,
if not trying to directly replace US leadership.
And these two countries were already viewing each other
as competitors.
We're witnessing them competing with each other
during this crisis.
And I think that, following the crisis,
we're going to continue to see them competing with each other,
whether that is trying to create alternative international
institutions.
But the US said, you know what?
We're not going to worry about focusing on creating
global institutions.
We're going to focus on supporting
more regional institutions or institutions
that are more specially tailored to US interests.
And could China do the same thing?
Could China create, say, a Chinese Health Organization
and encourage countries to join that?
The COVID-19 crisis has highlighted
the centrality of the Fed and the US dollar
to the international system, and in particular,
the global economy.
What happened back in 2008, during the international global
financial crisis, was the Federal Reserve took
a leading role as serving as a lender of last resort,
not just for US funds, but globally.
Well, we're seeing this being heightened further
in this crisis, where a host of central banks
are essentially being lent to by the Federal Reserve.
In fact, some observers of this have even
said the Federal Reserve has now become
the world's central bank, not just the US's central bank.
That's not something that's going to suddenly change
once this crisis is over.
And so in many ways, this is only further
entrenching centrality of the Federal Reserve
and the US dollar in the global economy.
That's going to have a profound long-term impact.
We're talking a lot about the United States.
We're talking quite a bit about, if you will,
problems facing the developed world.
But a big point of concern is what's
going to happen in the developing world.
COVID-19 hasn't yet hit the developing world
at the same rate, scale that it's hit the developed world.
There's real concern that this is
going to do long-term damage to, say, various nations in Africa.
This could become a humongous humanitarian crisis in India.
So this is a huge concern.
And given that one expects these to be the major growth
markets of the global economy going forward,
if they're devastated by COVID-19,
that, again, could have profound impacts going forward.
An outcome that should be encouraged
as a result of COVID-19 is this realization
of the fragility of the international system.
The problem is, when the pandemic has gone,
the pandemic will be gone.
And it may be gone for five years.
And during that time, people have a tendency
to revert back to a very myopic view, very short-sightedness
of saying, well, what's my current problem?
And I'm going to spend money and budget for the current problem.
And I share this phrase with my students,
which is that for many, the biggest problems in the world,
you can't tech your way out of it.
At the end of the day, you need to have a political solution
to many of the problems that we face in the world today.