«We’re going to see more absolute poverty, a smaller global middle class, and more suffering.»
The American political scientist Ian Bremmer presents a bleak outlook. The current crisis not only reveals the weakness of the geopolitical system – the lack of leadership – but this lack also increases the damage of the crisis. According to Bremmer, poverty will increase, the global middle class will shrink, and some countries that had problems before the crisis will implode. While some nations will do better than others, there are no winners.
Mr. Bremmer, the pandemic is a truly global crisis. But there is hardly any global leadership or coordination.
The absence of global leadership is nothing new. I’ve been writing about the G-Zero for almost ten years. This is our first G-Zero crisis. It’s a bad time for a crisis, and it’s an especially bad time for a big one, and this is the biggest one in our lifetime.
How does the current crisis compare to prior crises?
After 9/11 or during the financial crisis in 2008 and 2009, we saw the strength of the transatlantic relationship. There was American leadership globally, the willingness of the Russians to provide support during the war in Afghanistan, China coordinated with the US and the G20 after the financial crisis.
We don’t see any of that today.
It’s even worse. There’s recrimination. Over 80 countries are putting export controls on various types of medical equipment and pharmaceuticals. It’s not just that they’re not coordinating. They are actively hurting others. America is cutting off travel from Europe, not telling Europe in advance. China is spreading fake news about the origins and blaming the US for the pandemic. America is holding hearings about China and refusing cooperation with the WHO. Geopolitical tensions are growing.
About Ian Bremmer
Ian Bremmer has been studying geopolitics for decades. In 1998 he founded Eurasia Group – a global political risk research and consulting firm. Headquartered in New York, the company now has offices in Washington, London, Tokyo, São Paulo, San Francisco, and Singapore. Bremmer, grew up in Massachusetts, received his PhD from Stanford University and has written several books. His most recent work, «Us vs. Them: The Failure of Globalism», shows that broad sections of the population in the industrialized nations have not profited from globalization and feel neglected.
Why is there no coordination?
There are many structural reasons. Some of it has to do with the fact that America doesn’t want to play the international role it used to. The increasing inequality, the growing migration without taking care of people in the US, and the failed wars make Americans uninterested in supporting allies and in being the global sheriff and promoting free trade or even in leading by example and promoting common values.
What are other reasons?
The European Union is much weaker without the UK. And much of the leadership inside the EU is Euro-skeptic. Germany is a strong counter-example, but Germany benefits so much more from Europe than other countries do. In those countries on the periphery, we see a lot more anti-European sentiment than in the core. The Russians are in serious decline and are very angry about it. They’re blaming America and the west. They’re working to undermine the transatlantic relationship and further delegitimize institutions across the west. China is much stronger than it was ten years ago, but China is not aligning with Western values and institutions. China is building a competitive architecture.
The US-president doesn’t help either.
Donald Trump is a manifestation of unilateralism and indifference to the importance of alliances other than short-term transactional utility. It was evident that we were in a G-Zero before this crisis, but when times are good, people ignore that you’re not paying attention to the foundation of the house. But now a big storm comes in, and suddenly we’re looking around us and say wow, the world doesn’t work. The crisis is going to be a lot worse as a consequence of that.
How bad will it get?
We’re going to see more absolute poverty, a smaller global middle class, and more suffering. For some time, the quality of life is going to be significantly to demonstrably worse for everyone.
That doesn’t mean that there aren’t good things to take away. You learn lessons from bad times in your life. If you’re fundamentally optimistic, you come out stronger and better as a consequence of that. Philosophically I can imagine that we pay more attention to things that matter. That gives us a chance to redress some of the inequities in capitalism.
What will the world look like after the crisis?
Inequality will increase dramatically. Growing inequality inside countries will lead to more populism, more anti-establishment sentiments, and more delegitimization of institutions.
Will inequality worldwide increase as well?
There will be more inequality between the developing world and the developed world. The developed world has a lot of money to be able to ensure that it can continue to work. The developing world doesn’t. And the money that comes from the IMF, the west, and China will not be adequate.
Who will profit from the crisis?
Some countries will do better than others, but no nation will come out of this better off than going in. None. We have to understand this as a planet and a population that is used to things getting better. Globalization has driven that. But this is a move away from globalization.
What will this deglobalization look like?
We’ll see more fragmentation. We will see the unwinding of a lot of just-in-time supply chains. American companies that are bailed out will face a lot of conditionality and will need to put capital and jobs in the US. We’re looking at a 15 to 20% unemployment rate, and the US doesn’t want to depend on China. This doesn’t only affect the medical supply side, but more broadly, also manufacturing and services.
Will there be a cold war between the US and China?
I wouldn’t make that call yet, but we are heading in that direction. The US and China are ending up in a more contentious fight, you’re already seeing that in the South China Sea, in Hong Kong, and with technology.
How will the next months play out?
Chinese president Xi Jinping and Trump feel the need to play the patriotism card. Domestic politics is leading to more confrontation. That’s always a bad thing. On top of that, you don’t have the same level of interdependence between the two countries. Even though there was never any trust between the US and China under Barack Obama, there was an awful lot of interdependence. There was a lot of vested interest. That is eroding significantly. There’s less of a buffer that prevents you from getting into a crisis and preventing a crisis from escalating when you have one.
What about the trade deal?
With the economy going badly in the US, Trump continues to want at least the phase one trade deal to stay in place. Because if it goes away, the most natural outcome would be for Trump to go back and to put the tariffs back. Those are tariffs on consumer goods and directly hurt the people he most wants to protect in the US. It’s unclear that Trump wants to move in that direction.
How will the US come out of this crisis?
The US will be stronger than its allies, more so than before the crisis. Part of it is that American banks are stronger, and the banks are going to be threatened through the financial impact over the next few years. Part of it is that tech companies are by far the most important piece of the economy, in going in, while it’s shut down but also to get out of this. The US has tech companies, Europe, Canada, and Japan don’t.
Will the European Union survive the crisis?
I hope so, but it’s going to be stressed. Southern European countries are going to have enough money to get through this crisis. Further debt will be provided. But the question is, how are they going to grow on the back of this.
Are we going to see the mutualization of debt across the EU?
That’s what we need if we want sustainability of the Union. But I don’t think it’s going to happen. Northern European countries don’t want to risk their credit ratings, and there isn’t widespread support. This is going to be a much much much bigger stress than the Greek crisis was, with weaker leadership on the part of the Europeans. During the Greek crisis, you had the UK, you had Merkel at the peak of her powers, and you had much more coordination. That’s not true today.
Do you expect more social unrest?
Some countries will implode. I think about middle-income countries that were badly run, to begin with. Countries that had a lot of social discontent already. Now they have to face two or three years of being cut off from global supply chains, having their economies not run properly, and some level of social distancing.
What countries are you thinking about?
Countries like Algeria, Iraq, Venezuela, and even Iran. I expect more social instability in those countries. Some countries look like they’re not going to have the ability to avoid a financial crisis in the next couple of years. Countries like Turkey.
What about the west, do you expect social instability as well?
I don’t think there’s going to be necessarily a lot of social instability in wealthier countries. Certainly not in Japan, in Canada, or even in the US. The media has made a big deal over these demonstrations in Ohio and Wisconsin. These have been a very small number of people, and they have not been violent. Social unrest is possible, certainly around the elections, especially if they’re seen to be rigged and stolen. But it’s not going to be a systemic threat.
Why should the elections be viewed as rigged and stolen?
This election has the potential to be very deeply delegitimized in the eyes of the voters. We might see the outcomes being determined as much by the justices as we do by the voters. Trump and the Republicans have a very strong interest in keeping turnout low and maybe even in manipulating the way the vote occurs. I am talking about fewer voting places, challenging hurdles for voter registration.
Why is that?
Trump’s base is much smaller than Biden’s, but it’s also considerably more enthusiastic. There’s an enormous amount of antipathy about Trump in the country. He’s an incompetent and unfit leader, but Biden is not a great campaigner, and he’s not looking great. The events he’s done recently he mentally looks less than fully there, and that has to be a worry for Democrats as we get closer to November, and he starts campaigning again in earnest.
Who will win?
A major recession hurts the incumbent, but social distancing and low turnout help the incumbent. I think it’s close to fifty-fifty. You keep seeing the media talking about these national polls. I don’t understand it. Biden is indeed going to win by millions of votes in the national polls, but that’s not the way we have an election. It’s about swing states. According to our proprietary polls that look at swing states it’s a lot closer in those swing states than it is on the nationwide stage. It’s very early to make a call.
Do you expect interference like in 2016?
The funny thing is the Russians didn’t do very much. It’s just that the Americans were so divided and so ready to believe fake news, that a little bit of fake news from the Russians, a little bit of money, a little bit of interference had a multiplying effect. They tried the same thing in Germany; it didn’t affect much because people didn’t buy it. The country wasn’t as divided. I expect at least the same level of interference on the part of the Russians this time around.
The handling of the current crisis doesn’t bode well for the climate crisis.
It also doesn’t bode well for other global challenges like the post-industrial revolution, the next pandemic, and all the automation and what happens with jobs. Does capitalism as a system work when labor no longer matters as much? These are all global challenges. But we don’t have a global order. It’s an interregnum. We’ll get out of it, but we’re not getting out of it any time soon. That’s probably the thing geopolitically we should be worried most about.
How does this crisis influence automation?
We’re moving much more quickly towards the digital economy. That’s going to displace enormous numbers of people. The knowledge economy will do well. But most people don’t work in the knowledge economy. What are we going to with all these people, how are we going to tolerate that level of structural inequality? That’s a huge challenge. For the future of our planet, it’s about climate. But frankly, people pay less attention to climate when they’re worried about their health, and they don’t know how they’re going to take care of their kids. Climate is a second-order problem in that environment, and we are not showing ourselves capable of dealing with even the first-order problem right now.
Any chance that we’ll see a strengthening of international institutions after this crisis like we saw after WWII?
No. America was very reluctant to join WWII and we almost had a very different world order as a consequence of that. After Pearl Harbor the Americans did come to the rescue of the Europeans, did create an alliance, and rebuilt the world order. There’s nowhere close to the level of interest and willingness to do that today and the capacity is also much lower. I hate to say it. but this crisis isn’t big enough. WWII did feel existential for a lot of countries. That’s not true today.