Signs of great change are emerging in managing the crises of the globalization era

Day after day, the Corona virus crisis and its repercussions take the features of the global crisis, not only because the disease is spread geographically to all continents of the world, but also because the measures taken by governments to try to contain this crisis have become affecting the daily life of humans on a large scale, and their economic repercussions, according to institutions International, will overshadow the efficiency of the global economy as a whole.

While the economic repercussions necessitated a comparison between the Corona virus crisis and the global financial crisis of 2009, this comparison is also useful in clarifying basic features of what we might call “crises of the era of globalization”, and in exploring the changes that the global system has witnessed since the 2009 crisis, which casts a shadow on addressing The current crisis.

The need for new approaches

A comparison of the two crises shows one of the most important features of crises in the era of globalization, which is that decision-makers have to develop approaches to tackle these crises with high degrees of uncertainty. In the global financial crisis of 2009, there was insufficient information about the size of bad debts that represented the spark of the outbreak of the crisis, nor about the extent of exposure of banks to it, nor about the repercussions of the inability to pay on the banking system as a whole, as there was an absence of transparency in the transactions of the banking system itself In addition to an unprecedented entanglement between the various "units" of this system, from banks and financial companies ... etc, through the electronic network, which created an atmosphere in which the collapse of a bank was expected to have a direct and rapid impact, but it does not allow at the time He himself expected the form or intensity of this effect.

The uncertainty surrounding the Corona Virus crisis appears to be more severe, and its implications are more serious, given its direct contact with the health and safety of large numbers of people, which requires decision makers to take measures to confront a virus that has not yet had basic information on its spread, its ability to mutate, and the time range Expected to spread. It was also not known in the first weeks of the incubation period of the virus, that is, the period that passes from the time a person becomes infected with the virus until symptoms appear on it, and all this information is necessary in order to determine the mechanisms to prevent its spread.

On the other hand, the laboratory tests necessary to detect HIV infection were not widely available early in the outbreak of the crisis, which hindered the ability to determine the extent of its spread, and prevented those infected from moving and spreading it more widely.

Until now, information about the best methods of treatment, which have basically developed on the first lines to confront the virus, and under extremely difficult conditions, are not spread quickly enough to the medical community on an international scale, so that different countries can prepare the necessary health equipment to treat their patients.

The importance of the community dimension

The comparison between the Corona virus crisis and the global financial crisis of 2009 shows a new feature of the global crises, which is the escalation of the importance of the societal dimension and its impact on crisis management, especially through electronic social media platforms. In 2009, decision-makers dealt with the banking system crisis from behind closed doors, and details were not widely shared during the crisis, as "society" was not an effective party in setting priorities or making decisions. The decisions were biased to save the banks at the expense of the indebted individuals, and then the governments resorted to implementing austerity policies to address the huge financial deficit that was exacerbated by the banks ’exit from its crisis. Popular reactions to these measures did not appear until after a period, when societies expressed the collapse of their confidence in the ruling institutions and elites, through the decline in support for the prevailing political current, the rise of the currents and left-wing and right-wing political parties most extreme in multiple countries, and the rise of leaders such as the US President, Donald Trump And, the favorite to win the party card in the presidential elections, scheduled for November, Bernie Sanders.

As for the Corona virus crisis, "society" has been a main player in the crisis since its inception, as a result of the widespread spread of information on the Internet. The Chinese government was not the first source of information about the crisis, but rather began to leak information through what was published by some doctors in Wuhan (source of the virus) on electronic platforms. Although the authorities tried to control the rhetoric related to the crisis, and to suppress and threaten those who published information about the spread of the virus, the leaks continued, and the information also reached the international community outside China, and the Chinese government found itself under internal and external pressure to disclose information about the crisis.

Despite the efforts of the Chinese government to control the discourse related to the crisis, and to draw a positive "image" of its management of it, leaks about developments and conditions within the areas of the epidemic, and the negatives that marred some of the measures taken by the authorities did not stop, and its spread led to a state of public anger, it is difficult Expecting its extent and repercussions on the political system.

Severe anxiety

Uncertainty, in addition to the widespread mistrust of governments ’handling of the crisis, has combined to create a state of great concern, or even dismay, at the level of public opinion globally. A large amount of misinformation, false news, conspiracy theories, and racist tendencies circulated on social media platforms contributed to its spread.

Communities expressed their dismay by calling for the purchase of some basic commodities, and canned food, for fear of a lack of supplies, or having to stay at home for a long time. The demands on the medical masks, despite the frequent statements of doctors that they are necessary only for those dealing directly with patients, led to high prices and their disappearance from the market. Indeed, the Amazon website removed companies that took advantage of the crisis to raise prices of masks and antiseptics significantly.

The major declines in global stock exchanges in late February and early March were only an expression of the shift in the state of concern from public opinion to investors, and their lack of confidence in the measures that governments will take to reduce the repercussions of this crisis at the economic level.

Unprecedented measures

The Corona virus crisis was differentiated from other crises by governments resorting to unprecedented measures to limit the spread of the virus, which included the closure of schools and universities for varying periods of time, placing entire regions - as in Wuhan in China, and in northern Italy - under quarantine, and prevented entry or exit from them.

It also prevented many countries from entering travelers from regions or countries where the virus is spreading, and others resorted to quarantining their citizens returning from countries suffering from HIV infections. Some countries have also canceled international and local conferences and events that lead to large numbers gathering in one place. There was talk about the possibility of delaying the Tokyo Olympics, which is scheduled to be held in the summer of this year, until a later date of the same year, while Italy prevented the public from attending football matches, while taking place on time.

The impact of these measures has been unprecedented, as the extent of their lives has confused the functioning of life at the individual and societal levels. The decisions to close schools have affected nearly 300 million students worldwide, and their parents faced the dilemma of their caregivers while they were at work. The producers of the last James Bond film decided to postpone the date of its showing in cinemas from March to November, in order to avoid the losses that would result from the low demand for cinemas in light of preventing the gathering and fear of the spread of the virus. Many major international companies, such as Twitter, have encouraged their employees to work from home whenever possible.

In light of the declining demand for flights, many international airlines encouraged their crews to take leave without pay, and prominent tourist attractions, such as the Italian city of Venice, seemed deserted and almost empty of visitors.

Economic implications

The aforementioned measures are expected to have negative economic ramifications for families and companies. Fathers will bear the cost of caring for the children at home, either by appointing a person to perform that task, or one of the parents is forced to take leave without pay. The category of unspecified employment, a pattern that has become widespread in the global economy, whether in the transportation sector, such as Uber service, or in the tourism sector, with all related services, and in other sectors, will be affected negatively throughout the duration of the crisis.

At the corporate level, the expected losses may not be compensated. Small Chinese companies that are unable to fulfill their obligations, due to the movement and assembly bans in certain areas of the country, may have to declare bankruptcy. The aviation sector will be greatly affected, and depending on the duration of the crisis, companies may resort to layoffs, or to cancel the new aircraft they have requested. Those already in a precarious situation may go bankrupt, which has already happened to a relatively small British company operating on airlines between the UK and Europe. Experts estimate that the losses that may be caused to this sector alone due to this crisis could reach more than 100 billion dollars.

The vulnerability of the economy appears to have become a feature of the crises of the globalization era, as both the 2009 and 2020 crises had a negative impact on growth rates. While the 2009 crisis slowed growth in the economies of Europe and the United States in particular, emerging economies - such as China and India - The role of the “growth engine” and contributed to containing the repercussions of this slowdown, but it is expected that the Corona virus crisis - according to international institutions - will slow down the global economy as a whole, especially since the "emerging" economies in China and India are currently experiencing, for various reasons, a decline in rates Growth, before the outbreak of the crisis.

In addition, there is a clear decline during the past few years in the rates of trade exchange and the volume of international trade, in which a climate of escalating hostility between the major powers, especially the United States and China, contributes to the decline in demand for raw materials and the decline in oil prices.

In this context, governments seem less able to absorb the economic consequences of this crisis, and their tools have less impact. The US central bank tried to reassure the markets by lowering the interest rate, but the effect of that measure was doubtful, as central banks in major countries have applied quantitative easing policies since the 2009 crisis, in order to stimulate growth, making loans available at a low cost, and therefore reducing them once Others are not expected to have any tangible effect in stimulating the economy, according to many analysts.

Collapsed cooperation

Today the world is witnessing a noticeable decline in international multilateral cooperation, unlike international cooperation in 2009, when major economies met with emerging economies, within the framework of the Group of 20, to take the necessary measures to face the crisis. The impact of the decline in the intermediate stream that adopts globalization and multilateral cooperation on the international scene, and the rise of nationalist and isolationist currents, cannot be overlooked in shaping the tense and polarizing climate that currently dominates global interactions, and hinders cooperation in the current crisis. But with the increase in the number of people infected with Coronavirus around the world, which, according to the World Health Organization, exceeded 100,000 on March 6, 2020, and with the expansion of the virus, the need has become more urgent for countries to coordinate efforts among them to face the cost of this crisis on the most important level The most expensive, the human level.

The category of unspecified employment, whether in the transportation sector, such as Uber service, or in the tourism sector, with all related services, and in other sectors, will be affected negatively throughout the duration of the crisis.

Despite the efforts of the Chinese government to control the discourse related to the crisis, and to draw a positive "image" of its management of it, leaks about developments and conditions within the areas of the epidemic, and the negatives that marred some of the measures taken by the authorities did not stop, and its spread led to a state of public anger, it is difficult Expecting its extent and repercussions on the political system.

The uncertainty surrounding the Corona Virus crisis appears to be more severe than the 2009 global financial crisis, and its implications are more serious, given its direct contact with the health and safety of large numbers of people, which forces decision-makers to take measures to confront a virus that has not yet had basic information on how it is spreading, Its ability to mutate, and the expected time span for its spread.