SLOW RECOVERY IN GLOBAL TRADE
After the credit crunch and swine flu, finally a new beginning
The Swine Flu pandemic has been contained – thanks largely to the efforts of futurists and scenario planners, and the leaders who believed in them. Governments and business were well prepared for the eventual, inevitable, spread of this killer virus to the global human population.
Borders and airports were monitored at the first sign of an outbreak, and an unprecedented collaboration by authorities on a global scale brought research and manufacture together to deliver the vaccines.
Coming as it did barely a year after the Credit Crunch, global trade and investment took a double whammy. Already depressed first-world economies became even more insular and paranoid, and emerging countries found their primary markets viewing them with even greater suspicion of risk.
“It couldn’t have come at a worse time,” said Doug Vining of FutureWorld, a think tank that was one of the first to highlight the Global Flu scenario. “Even though policy makers were well prepared, the financial crisis had sapped their attention and stretched their resources.”
Some countries were hard hit, mainly as a result of trade bans, and the global economy suffered a further setback.
“Now, it seems, we are seeing the first signs of recovery, as trade is picking up from the East, and Obama has re-opened his borders.” But it’s too late for General Motors – they were counting on continued demand from Central and South America to see them through Chapter 11.
The collapse of the Mexican market put paid to that hope.
ANALYSIS >> SYNTHESIS: How this scenario came to be
FOUR ALTERNATIVE SCENARIOS FOR THE GLOBAL ECONOMIC SLUMP
Bird Flu has been on the radar for several years, but almost all human deaths have been from infected poultry. The potential for the virus to mutate in pigs, which are closer to humans in their DNA makeup, has also not been ignored. If this Swine Flu strain mutates to a form which is virulently contagious among humans, then we face a global threat of a rampant pandemic which could kill tens of millions of people and reduce the global economy to tatters.
Coming as it has, hot on the heels of the financial crisis, the Global Flu attack could delay recovery of the economy even further, especially if the response is tepid, as a result of overdrawn budgets.
Four likely scenarios are examined in this analysis.
In this scenario, Swine Flu never mutates to a form which causes any greater risk than normal seasonal influenza. Outbreaks spread to several continents, but counter-measures are swift and effective. The primary global concern – in the short run – remains the economic crisis, and here too, efforts at restructuring and restarting the economic engine are successful.
In the second scenario, human contagion remains normal, but the pandemic is not as easily contained. Mortality rates are high, and although infection rates are relatively low, traditional therapy is not as effective, especially in less prepared and affluent communities. Travel warnings are issued, and border health checks become more frequent. Countries where infections occur suffer from reduced tourism and trade activity. Health issues take some resources away from stimulus packages, and the slump is extended by several months.
Depression and Plague
In the worst-case scenario, the ‘Mexican Flu’ becomes rampantly transmissible between humans, with catastrophic results. Millions, possibly tens of millions die and panic is widespread. In a repeat of the Spanish Flu epidemic of 1918, countries become increasingly protective and inwardly focused. The already stressed global economy enters a recessionary spiral which takes decades to reverse. Rich countries ignore the plight of the Third World as they struggle to protect their own populations and industries. Mortality rates increase due to a shortage of vaccines. No countries escape the effect of the ‘plague’ and realize – too late – that collaboration and co-operation with the global community could have averted the disaster. There’s just not enough money to support bail outs and curtail the ‘Mexican Flu’ at the same time.
Quarantine and Slow Recovery
In the most likely scenario, the virus mutates into several strains which are easily transmitted between people. However, government and business preparedness for this event spurs the efficient use of policy, technology and medical resources to quickly contain and manage the epidemic and its resulting disruptions. Technology helps in detecting infections and developing counter measures, as well as providing contingency plans such as tele-commuting to mitigate the effects of travel bans. Trade disruptions are inevitable, and this does impact on stimulus attempts, but the global economy starts to recover in due course. Key to this scenario is the ability to make innovative use of new technology, and the entrepreneurial spirit that spurs people on to claim and inhabit the ‘white spaces’ left by extinct corporations.
Warning: Hazardous thinking at work
Despite appearances to the contrary, Futureworld cannot and does not predict the future. Our Mindbullets scenarios are fictitious and designed purely to explore possible futures, challenge and stimulate strategic thinking. Use these at your own risk. Any reference to actual people, entities or events is entirely allegorical. Copyright Futureworld International Limited. Reproduction or distribution permitted only with recognition of Copyright and the inclusion of this disclaimer.