Three scenarios for life after Covid

By BLAKE HOUNSHELL and RENUKA RAYASAM

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ENDGAME — So what happens after we kick the virus?

Nobody really knows, but companies and governments are placing giant bets on what our post-Covid future will look like. It could look like anything from a fascism-friendly world dominated by China to a glorious resurgence led by America and Europe, according to a new report due out Thursday and previewed by POLITICO. The authors, former intelligence official Mat Burrows and Peter Engelke of the Atlantic Council, lay out three scenarios — from worst to best. And they are some doozies:

SCENARIO 1: THE GREAT DECELERATION — Everyone loses. “The United States, Europe and China all struggle to recover despite major fiscal and monetary efforts. The recovery stretches well into the 2020s, aggravated by the fact that it takes much longer for a vaccine to be developed than hoped for.” The West flails as President Donald Trump wins reelection and the EU becomes paralyzed. Inside China, discontent grows as Communist Party leaders struggle to revive the economy. Yikes: “By the mid-2020s, deglobalization is speeding up, yielding slow economic growth everywhere. Poverty levels are rising in the developing world and there is the potential for open conflict between the United States and a China-Russia alliance.”

SCENARIO 2: CHINA FIRST — Beijing wins. China capitalizes on the crisis to build ties across Asia, undermine democracy worldwide and ruthlessly suppress dissent at home. In the U.S., the country lurches leftward even as Trump wins reelection — leading him to enact Sen. Elizabeth Warren’s wealth tax during his second term. Food riots break out across the Middle East and North Africa, while collapsing oil prices force Saudi Arabia into the Chinese orbit.

SCENARIO 3: NEW RENAISSANCE — The rosiest option imagines a “V-shaped recovery” and a reinvigoration of U.S. global leadership. Wealthy countries band together to vaccinate everyone around the world, free of charge. Under pressure, China closes its wild animal markets, and Western countries propose a “superagency” to prevent the next worldwide crisis. China and the U.S. set aside many of their differences and get to work on a “Marshall Plan” for developing countries ravaged by the disease.

In any scenario, things could go badly wrong. The virus could wallop poor countries that have yet to be hit hard, like Pakistan. Social distancing measures could remain in place longer than anyone expects, meaning “the recovery will be difficult and extended, causing substantial damage to the social and political fabric in many regions.” In the U.S., “there is a growing risk that the middle class will suffer another drop in its standard of living.”

The health and economic catastrophe could morph into a crisis for America’s claim to global leadership if the U.S. recovers slowly and “if authoritarian powers, particularly China, more effectively weather the storm.” And there’s a baleful feedback loop at work here, the authors warn: “The coronavirus pandemic may end up reinforcing Chinese President Xi Jinping and the Communist Party of China’s authoritarian tendencies on the one hand, and an ‘America First’ reaction on the other.”

Their most depressing warning? This thing might NEVER go away. “We must be prepared for the coronavirus to become a ‘recurring fact of life,’ like the ordinary flu,” they write. “But much deadlier.”




Originally Published: https://www.politico.com/newsletters/politico-nightly-coronavirus-special-edition/2020/04/22/three-scenarios-for-life-after-covid-488997