Asia has earned leadership — now it must show it
The way Asian states including China have dealt with the coronavirus has put Europe and the US in the shade — now they should lead the international financial fightback.
The coronavirus, more than any episode before, is challenging the supremacy of Europe and north America in world affairs, which has prevailed since globalisation began 500 years ago.
The outbreak began in China, like several epidemics of the recent past including Sars in the early 2000s. For two months it looked to many like an Asian problem. People arriving from Asia were the first to be subjected to quarantine in Western countries. At the end of February, 93% of all cases had been in China. But already, the disease was spreading faster elsewhere.
Now, the virus's Chinese origins are but a memory. Ninety-two percent of all reported cases have occurred outside east Asia.
This is not an accident, but the result of human achievement. Most remarkable in this crisis has been how effectively several Asian countries — China above all, but also Japan, South Korea and Singapore — have, so far, controlled the spread of the contagion.
China had to do this with no warning — indeed, the government famously refused to listen to the earliest alerts it received from doctors in Wuhan. But once it grasped the seriousness of the problem, the country acted with a breathtaking decisiveness.
Many in the West are shocked by some of the Chinese measures — harsh and sometimes arbitrary discipline, using intrusive social tracking through smartphones. Rightly so. An epidemic should not be used as an excuse to justify curtailing personal rights or political freedom for any other purpose.
But democracies in Asia have also fought the virus well. South Korea has been particularly impressive, testing citizens so extensively that only about 1 in 40 tests has been positive.
Asian political cultures and traditions are different from those in the West, where few would want them to be imported wholesale.
But the fact is inescapable: when it came to dealing with a global pandemic, leading Asian states have shown themselves to be better governed than Western nations. One of the primary duties of the state is to protect its citizens, and Asian countries have done a much better job.
Even with the far greater lead time they had to prepare for the outbreak during January and February, and with the advantages of their wealth, scientific prowess and many powerful, innovative companies, most European and north American countries' responses have been shambolic by comparison.
In China, only 2.4 people in every million have died. In the US, already, it is over 25 in every million. In the UK, 86.
This could have far-reaching political effects. It is too early to forecast these precisely, but it has been clear for several years that more authoritarian leaders have been rising to the top in countries of all kinds. The Orwellian potential of social media and artificial intelligence are also likely to empower autocrats.
What we can foresee with some clarity is immediate developments in 2020. North Asia is already beginning to emerge from the coronavirus crisis in decent shape, though not of course without economic harm.
China and the other Asian states are still finding dozens of new coronavirus infections every day, which means strict infection control measures will have to remain in place to stop it getting out of hand again, even if the most severe lockdowns can be relaxed.
But already, Asian capital markets are showing much of their usual vigour. This is a second way in which Asian societies are proving themselves to be well run and able to handle a crisis skilfully.
Looking at the riskiest end of the spectrum, Chinese equity capital markets issuance in the first quarter, according to Dealogic figures, was only 17% below the average of the first quarters of the past five years.
Even though the virus crisis only really hit Western markets some days into March, US ECM issuance for the quarter was 23% below average, while in Europe it was 43% down.
The West's agony
Europe and north America are now in the throes of a terrible fight against the disease. Over 3,000 are dying every day in Europe and more than 1,000 in the US, while the number of cases rises by 70,000 a day.
This is already putting a heavy load on Western societies, and especially straining international co-operation mechanisms such as the European Union.
There are modestly encouraging signs from the data: Italy in particular has managed to sustain a slowing of the rate of new infections for nearly two weeks, and has just had its first day for over three weeks with fewer than 4,000 new cases. But getting down to a manageable rate of spread is a long way off and will require many weeks more of strict quarantining.
The big crisis coming
Just while this is going on, the virus is about to enter its third phase, which may well be its deadliest: rapid spread in developing countries, where health systems are far less able to cope, governments have weaker power to enforce isolation and economies are fragile.
At a time like this, a concerted global effort is needed by wealthier countries to help the poor. This will require unprecedented action through bodies such as the International Monetary Fund, World Bank and United Nations.
The crucial question is: will north American and European countries be able — and willing — in the thick of their own traumas, to muster both the political leadership and the money to make this life-saving effort happen?
Perhaps, and it is to be hoped so. For one thing, trying to reach a global consensus on stepping up the ambition of the world's fight against climate change — a far greater threat, ultimately, than the coronavirus — will be incomparably harder if developing nations feel abandoned by the rich.
But it has to be in doubt. The EU is even finding it hard to muster an adequate system of financial solidarity among its own members, as the wrangles over corona bonds make clear.
Over to Asia
The clear implication is that Asia has to take the initiative. Even if Western countries can be persuaded to join in providing money, their leaders may not have the mental space to make the first moves.
This is a historic opportunity for north Asian countries to show the quality of their governance in a third, and higher respect. They can, if they choose, take their place at the front rank of global leadership, by showing an enlightened concern for the wellbeing of their immediate south and southeast Asian neighbours, as well as for Africa and Latin America.
The role played by the US and Europe in international aid and development since 1945 has been a vital fruit of, and in turn a support to, their global economic leadership. A similar space now lies open to Asia.
In capital markets this will mean Asia contributing finance in many ways, from grants and direct bilateral lending on easy conditions to combined efforts through global institutions such as the IMF and World Bank, which may well need more resources. It will also mean contributing ideas for new forms of co-operation.
This is not just an opportunity for Asia, however. The seriousness of the emergency means it is also a historic duty.