The pandemic presents “a substantial shock to the post-WWII order, and the worst may be yet to come until a vaccine is widely distributed. The recovery will likely be difficult and extended, and US global leadership is at risk. The three scenarios: downward deglobalization, China as a global leader, and optimistic multilateralism.
- Great Accelerator Downwards. The US, Europe, and China all struggle. The recovery stretches well into the 2020s, aggravated by a longer period for a vaccine to be developed than hoped for. Trump is re-elected and hopes to exploit the crisis. Northern EU members are pitted against the others, and Italy is the new Greece. By the mid-2020s, deglobalization is speeding up, and poverty levels rise in the developing world. There is potential for open conflict between the US and a China-Russia alliance.
- China First. China is not fully recovered but sees an opportunity to undermine Western democracy’s credibility with increased soft loans and “Belt and Road” deals with states in Asia, Africa, and Latin America. Trump whips up anti-Chinese fervor to cover the slow US recovery, and Asian-Americans are attacked. A large proportion of US workers let go by large firms are not rehired. A re-elected Trump agrees to a temporary wealth tax and higher income taxes on the rich. A climate-related drought in the US and Canada raises food prices. For many countries outside Europe, the US appears in sharp decline. Despite COVID originating in China, “the pandemic has tilted the geopolitical balance in its favor.”
- New Renaissance. G-7 and G-20 leaders with a new US president at the helm rise above nationalism and agree on a coordinated recovery plan that relaxes tariffs and lifts border closures. After several quarters, a V-shaped recovery finally happens, helped by the discovery and rapid dissemination worldwide of a vaccine. Calls for all governments to reform are widespread.
Dealing with global challenges “brings the US, the EU, China, and other states together” to address their common interest in combatting climate change and future health crises.
With the lowering of interstate tensions and economic growth resumed, “for the majority of the world’s population, the Sustainable Development Goals of eliminating poverty and spreading education are once again within reach.”
Note: The lead author of this report, Matthew Burrows, is the Director of the Scowcroft Center’s Foresight, Strategy, and Risks Initiative.