By Calissa Man and Louise Cheng
As the COVID-19 crisis continues, we have looked to past security, health and environmental shocks for ideas about how societies, economies, and governance may change as a result. While the past does not wholly determine our present, the study of other major shocks offers key insights on how human behaviour may change (or not) over time. Here, we offer four lessons from the past.
Lesson 1: Old Divides, New Vulnerables
Past crises deepened or accentuated existing divides around race, age, and class. For instance, the nomenclature for new infectious diseases (for instance the Spanish flu, the Asian flu, Hong Kong flu, and COVID-19 (“the Wuhan virus”) can normalise racial prejudice. [i] Reforms mandated by the International Monetary Fund (IMF) in response to the 1997 Asian Financial Crisis cut public spending on health and education, increasing the rich-poor divide in affected countries. [ii] In Cape Town, the 1918 influenza pandemic justified the enforcement of racial segregation under the pretence of public health concerns. The forcible displacement of black communities later served as the urban planning blueprint for 20th century apartheid in South Africa. [iii]
Past shocks also created new vulnerable groups. As with the current pandemic, workers in the travel, tourism and retail industries experienced heightened unemployment and job disruption during past pandemics and 9/11. [iv] In the long term, survivors, first responders and frontline medical staff faced devastating psychological aftereffects, suffering from depression, post-traumatic stress disorder (PTSD), substance abuse, and suicide ideation 5–10 years after the 9/11 attacks, SARS outbreak and 3/11 Fukushima Daiichi nuclear disaster. [v] [vi] [vii] [viii]
Lesson 2: Political Upheaval
Past shocks created openings for new political leaders and movements. The 1918 influenza pandemic catalysed India’s independence movement, as high death tolls and inadequate healthcare fuelled widespread anger against the colonial administration. Grassroots activists won locals over by filling the public health vacuum, gaining hitherto-lacking support for the independence movement. [ix] Following the 1997 Asian Financial Crisis, political leaders used the economic crisis to appeal to urban and rural poor with more inward-oriented development regimes. [x]
Past shocks also caused shifts in international politics, by fomenting mistrust in global superpowers and Western international institutions. During the 2009 H1N1 pandemic, the United States outbid developing countries for vaccine doses and delayed its promise to provide vaccines for developing countries, tarnishing its international image. [xi] Moreover, the World Health Organisation (WHO) declared the H1N1 a pandemic based only on the new virus’ transmissibility without considering the severity of the strain. Governments later blamed the WHO for creating an unnecessary surplus of vaccines that strained national coffers. [xii] The IMF’s role in responding to the 1997 Asian Financial crisis generated distrust in Asian economies towards the Bretton Woods institutions, initiating their move to seek alternatives to the IMF and World Bank. [xiii]
Past shocks have also revealed signs of “medical nationalism”. During the 2009 swine flu pandemic, wealthy countries dominated the procurement of the swine flu vaccine. As a result, developing countries had delayed access to the swine flu vaccine, in much smaller doses. [xiv] This shares parallels with the COVID-19 pandemic, as the world’s biggest economies pursue nationalistic “sweetheart deals” for preferential access to COVID-19 vaccines. [xv]
Lesson 3: Bigger Government, Bigger Business
Government interventions have played a large part in any crisis management scenario. Privacy protections were often the first to be eroded. Following 9/11, the “War on Terror” led to a state of permanent war which gave way to a new normal of increased surveillance. [xvi] In the wake of SARS, new national public health agencies were created and disease surveillance programs were strengthened, often with easy access to citizen data. [xvii] The expansion of government oversight at the expense of privacy became accepted as the price of continued vigilance.
The scale of past natural disasters also expanded government responsibilities. Hurricane Katrina set a precedent that the federal government would fund disaster recovery efforts. [xviii] Similarly, the 3/11 Fukushima Daiichi nuclear disaster drove the launch of Japan’s Reconstruction Agency as citizens called for greater prioritisation of disaster preparedness and recovery. [xix] Economic downturns exposed weaknesses in welfare systems, forcing governments to rethink their policy measures. The Asian Financial Crisis exposed the inadequacies of relying solely on economic growth for social protection, justifying the implementation and expansion of previously unpopular unemployment insurance and social safety nets. Post-crisis, many of these measures proved difficult to roll back. [xx] However, support for welfare conflicted with fiscal constraints during recessions. As government deficits and debt increased after the 2008 Global Financial Crisis, cuts on social welfare became commonplace. This sparked social unrest and a political vacuum exploited by movements such as the Tea Party and Occupy Wall Street. [xxi]
Past shocks also enabled the consolidation of economic power by large businesses. The 2008 Financial Crisis led to an unprecedented wave of consolidation, as floundering institutions such as Bear Stearns and Merrill Lynch were bought by giants such as Bank of America and JPMorgan Chase. Similarly, SARS created new e-commerce hegemons, Alibaba and JD.com as more consumers stayed home. [xxii] Surging stock prices, healthcare expenditure and panic-buying for health-related products during health shocks led to the further consolidation of Big Pharma. [xxiii]
Lesson 4: Greater Fragility
While big businesses benefited, past crises exacerbated issues faced by vulnerable groups. There was a disproportionate rise in youth unemployment following the Asian Financial Crisis and Global Financial Crisis, causing a higher likelihood of long-term ‘scarring’. [xxiv] Austerity measures during past recessions also cut public spending on education and healthcare. This disproportionately lowered school enrolment rates among the poor, exacerbating societal inequality and dampening future productivity. [xxv]
While every shock has its unique tail risks, there are some common effects that we can watch for in future shocks. We should consider how past shifts in society, governance and the economy as a result of previous crises can inform our understanding of COVID-19 and future shocks.. . . . .
Calissa Man and Louise Cheng are Research Assistants at the Centre for Strategic Futures.
The views expressed in this blog are those of the authors and do not reflect the official position of the Centre for Strategic Futures or any agency of the Government of Singapore.
[i] Rick Gladstone, “Coronavirus Outbreak Risks Reviving Stigma for China”, The New York Times, 10 February 2020. https://www.nytimes.com/2020/02/10/world/asia/china-epidemics-coronavirus.html
[ii] Oxfam, “A Cautionary Tale: The true cost of austerity and inequality in Europe”, 174 Oxfam Briefing Paper. https://www-cdn.oxfam.org/s3fs-public/file_attachments/bp174-cautionary-tale-aus terity-inequ ality-europe-120913-en_1_1.pdf
[iii] Howard Phillips, “In a Time of Plague: Memories of the ‘Spanish’ Flu Epidemic of 1918 in South Africa”, 2018. Cape Town: Van Riebeeck Society.
[iv] Marion Joppe, “Trapped tourists: how is the coronavirus affecting travel?”, World Economic Forum, 5 February 2020. https://www.weforum.org/agenda/2020/02/the-coronavirus-will-hit-the -tourism-and -travel-sector-hard
[v] Wu, Ping, Yunyun Fang, Zhiqiang Guan, Bin Fan, Junhui Kong, Zhongling Yao, Xinhua Liu et al. “The psychological impact of the SARS epidemic on hospital employees in China: exposure, risk perception, and altruistic acceptance of risk.” The Canadian Journal of Psychiatry 54, no. 5 (2009): 302–311.doi:10.1177/070674370905400504
[vi] Mak, Ivan Wing Chit, Chung Ming Chu, Pey Chyou Pan, Michael Gar Chung Yiu, and Veronica Lee Chan. “Long-term psychiatric morbidities among SARS survivors.” General Hospital Psychiatry 31, no. 4 (2009): 318–326. doi: 10.1016/j.genhosppsych.2009.03.001
[vii] Cone, James E., Jiehui Li, Erica Kornblith, Vihra Gocheva, Steven D. Stellman, Annum Shaikh, Ralf Schwarzer, and Rosemarie M. Bowler. “Chronic probable PTSD in police responders in the world trade center health registry ten to eleven years after 9/11.” American Journal of Industrial Medicine 58, no. 5 (2015): 483–493. doi: 10.1002/ajim.22446
[viii] Yabe, Hirooki, Yuriko Suzuki, Hirobumi Mashiko, Yoko Nakayama, Mitsuru Hisata, Shin-Ichi Niwa, Seiji Yasumura, Shunichi Yamashita, Kenji Kamiya, and Masafumi Abe. “Psychological distress after the Great East Japan Earthquake and Fukushima Daiichi Nuclear Power Plant accident: results of a mental health and lifestyle survey through the Fukushima Health Management Survey in FY2011 and FY2012.” Fukushima Journal of Medical Science (2014): 57–67. doi: 10.5387/fms.2014–1
[ix] Shyam A. Krishna, “How the Spanish flu changed the course of Indian history”, Gulf News, 15 March 2020. https://gulfnews.com/opinion/op-eds/how-the-spanish-flu-changed-the-course-of-indian-history-1.1584285312898
[x] Julio C. Teehankee, “The Political Aftermath of the 1997 Crisis: From Asian Values to Asian Governance?”, Dialogue and Cooperation. http://library.fes.de/pdf-files/bueros/singapur/04 601/2007–2/teehankee.pdf
[xi] Richard Milne and David Crow, “Why vaccine ‘nationalism’ could slow coronavirus fight”, Financial Times, 14 May 2020. https://www.ft.com/content/6d542894-6483-446c-87b0 -96c65e89bb2c
[xii] Stephen Grenville, “The Asian Infrastructure Investment Bank and the rise of regionalism”, The Lowy Institute, 16 March 2015. https://www.lowyinstitute.org/the-interpreter/asian-infrastructure-investment-bank-and-rise-regionalism
[xiii] Eben Harrell, “Was the Threat of H1N1 Flu Exaggerated?”, Time Magazine, 26 January 2010. http://content.time.com/time/health/article/0,8599,1956608,00.html
[xiv] Turner, Mark. “Vaccine procurement during an influenza pandemic and the role of Advance Purchase Agreements: Lessons from 2009-H1N1.” Global Public Health 11, no. 3 (2016): 322–335. https://www.tandfonline.com/doi/abs/10.1080/17441692.2015.1043743
[xv] Brook Baker, “U.S.-, China- and EU-First Nationalism and COVID-19 Technology Hoarding Push the Rest of the World to the End of the Line”, Health Gap Global Access Project, 5 June 2020. https://healthgap.org/u-s-china-and-eu-first-nationalism-and-covid-19-technology-hoarding-push-the-rest-of-the-world-to-the-end-of-the-line/
[xvi] Johannes Thimm, “From Exception to Normalcy”, SWP Research Paper, 7 October 2018. https://www.swp-berlin.org/en/publication/the-united-states-and-the-war-on-terrorism/
[xvii] Braden CR, Dowell SF, Jernigan DB, et al. “Progress in Global Surveillance and Response Capacity 10 Years after Severe Acute Respiratory Syndrome”, Emerging Infectious Diseases, June 2013. https://wwwnc.cdc.gov/eid/article/19/6/13-0192_article
[xviii] Donald Ketti, “How Hurricane Katrina made the Feds more powerful”, Governing, 1 August 2015. https://www.governing.com/columns/washington-watch/gov-hurricane-katrina-disaster-spen ding.html
[xix] “Beefing up the government’s disaster response”, The Japan Times, 1 September 2019. https://www.japantimes.co.jp/opinion/2019/09/01/editorials/beefing-governments-disaster-response/
[xxi] Kriesi, Hanspeter. “Mobilization of protest in the age of austerity.” Street Politics in the Age of Austerity: From the Indignados to Occupy, edited by M. Ancelovici, P. Dufour, & H. Nez (2016): 67–90. https://library.oapen.org/bitstream/id/e33d2c02-28cc-4733-93fc-8cd45ff19e55/634179.pdf
[xxii] Ker Zheng, “How SARS contributed to the birth of China ecommerce”, Digital Commerce 360, 5 February 2020. https://www.digitalcommerce360.com/2020/02/05/how-sars-contributed-to-the-birth-of-china-ecommerce/
[xxiii] Randeep Ramesh, “Report condemns swine flu experts’ ties to big pharma”, The Guardian, 4 June 2010. https://www.theguardian.com/business/2010/jun/04/swine-flu-experts-big-pharmaceutical
[xxiv] Ronald McQuaid, “Youth unemployment produces multiple scarring effects”, London School of Economics British Politics and Policy blog, 28 July 2014, https://blogs.lse.ac.uk/politicsandp olicy/multiple-scarring-effects-of-youth-unemployment/
[xxv] James C. Knowles, Ernesto M. Pernia, and Mary Racelis. “Social consequences of the Financial Crisis in Asia”, Asian Development Bank Economic Staff Paper Number 60, November 1999. https://www.adb.org/sites/default/files/publication/28156/esp060.pdf