Epilogue: COVID-19

Summary

COVID-19 has exacerbated and accelerated some trends:

• •In geopolitics—the decline of US leadership, rising US-China tensions and the “demise” of multilateralism and rules-based order.

• •On economic globalization—the trend towards regionalization2 and economic nationalism.

More specifically, it has, for both the short and long term, added implications for:

• •Economic recovery—whether it will be V-shaped, U-shaped or L-shaped.

• •Societal structure

• •Technology and data

The health aspects have attracted a lot of interest. The most important one may be: Are we prepared for another pandemic?

Geopolitics

American global leadership has been declining for some years. The US share of global GDP fell from 31.2 per cent in 2000 to 23.8 per cent in 2018. The same trend is visible for manufacturing, with the United States accounting for 16.6 per cent in 2018 compared to not many decades ago when it was the leading manufacturing country in the world. Debt is rising fast. It may still be the leading country for innovation and higher education, but the gap to challengers such as China is narrowing. There have been signs of an American strategic withdrawal for a decade or two in view of a mismatch between its capabilities and commitments. While the United States is unquestionably still the most powerful nation, its global outreach, capability and willingness to continue as global leader are not at the same level they were at the turn of the century. A cornerstone of President Trump's foreign and security policies has been to realign the costs and benefits of the US global role by cutting commitments. In some cases this has been manifested in the withdrawal of troops, as was the case in June 2020 with the announcement of a cut by a third of US troops in Germany Such reductions, often made without any warning to allies, raises doubts about US credibility, and they may give rise to suspicions that US guarantees may be subordinated to presidential whims.

For several years many observers have seen China as the next global leader. This conclusion may be too hasty. China's share of global GDP has risen from 7.2 per cent in 2000 to 15.8 per cent in 2018. This is remarkable, but it still leaves China far behind the United States.