Asia & the Pacific

1. We must learn from and remember the lessons of the past—while recognizing that Fukushima is not going to “happen again” as future accidents will have their own characteristics; while remembering the past, we must also avail ourselves of advances in seismology, climatology, engineering, etc.

The geopolitical and geo-economic forces wrought by the coronavirus pandemic, as examined previously in this series, are likely to slow the transition to a more sustainable global energy mix. Fortunately, the pandemic has also resulted in governments gaining vastly greater influence over whether this shift stalls or accelerates.

For most people, there was nothing to celebrate when the International Monetary Fund downgraded its outlook for global economic growth in June, anticipating a contraction of 4.9% for 2020. Yet for others, such as the small but persistent group of economists and others known as the “degrowth movement,” the Covid-induced economic slowdown has a silver lining.

The search for silver linings to the coronavirus pandemic has come up woefully short. But one hopeful — and much talked of — prospect is that the disruption will accelerate the global shift to a more sustainable energy future.

As economies begin to orient themselves towards recovery and growth in a post-COVID-19 era, they will first need to disentangle themselves from their prior bedfellows, the state, whose courtship was necessary for survival during the pandemic.  Such bedfellow relationships have become increasingly common as government intervention is urgently needed for economic stabilization. Governments have also embraced their new role with vigor. According to the IMF, as of April 2020, countries have committed around $8 trillion to combat the pandemic and to remedy its ill effects on economies and societies. Decisions about how this money will be spent will undoubtedly recalibrate the logic of capitalism for years to come. 

I do not think it’s likely that Kim Jong-un will conduct another test of ICBMs—since Trump had repeatedly drawn a bright red line there. Kim Jong-un and his experts would rightly be worried that were they to cross this line, especially in an election season, Trump would respond by attacking North Korean ICBM launch sites—as he’s signaled he would do. 

While much of the world is consumed by the COVID-19 crisis, the Chinese government is quietly unleashing a financial innovation that will reshape its economy and improve its strategic standing for decades to come. In April, China’s central bank introduced the “digital yuan” in a pilot program across four cities, becoming the world’s first major economy to issue a national digital currency.

All national leaders must put their countr's interests first, but the important question is how broadly or narrowly they define those interests. Both China and the US are responding to COVID-19 with an inclination toward short-term, zero-sum approaches, and too little attention to international institutions and cooperation.

Today’s economic crisis leaves us with an unsettling and perplexing regret. Why weren’t financial portfolios already adjusted for risks that stem from health events such as pandemics? After all, financial portfolios are adjusted for liquidity risks, market risks, credit risks, and even operational and political risks.