Authoritarian Spin Could Derail the Global Economy

Authoritarian Spin Could Derail the Global EconomyAuthoritarian Spin Could Derail the Global Economy.

A truth, rarely discussed, about the geopolitical risks posed by authoritarian leaders is that they are especially bad at managing crises. The U.S., Brazil, Russia, and India have the largest coronavirus outbreaks in the world. It is no coincidence that they are led each by populists who practice or at least admire authoritarianism. These leaders’ nativist political instincts have led to disastrous results as the Covid-19 pandemic intensifies and the global economy spirals deeper into recession. Without a scientific breakthrough, this populist wave may intensify as leaders exploit virus-driven outrage and inequity, people struggle to recover, and experts are pushed further to the periphery of policy.

The disparity between authoritarian hubris and expert advice shows up in the data. Taken together, these four countries are home to one-quarter of the world’s population, but nearly 50% of the global coronavirus cases. That shouldn’t be a surprise since coronavirus denial has been front and center of their policies. They have downplayed or outright ignored the dangers of its spread and extolled their own knowledge over the advice of experts—a classic authoritarian move according to researchers who study this phenomenon.

Early on U.S. President Donald Trump said the virus would simply disappear. He refuses to wear a mask despite his own staff and Secret Service becoming ill and has held rallies in Oklahoma and Arizona, where cases are spiking. Brazilian President Jair Bolsonaro has also politicized wearing a mask and held rallies with little regard for the chaos it would cause. Asked about rising infections and deaths, he said, “So what?” And he fired two health ministers who had warned of the crisis.

Indian Prime Minister Narendra Modi instituted a lock-down that stranded millions of migrant workers in urban hotspots. It only worsened the outbreak. When they finally got home home, the virus went with them, spreading it with a vengeance to rural areas with sparse health care. In Russia, President Vladimir Putin claimed in March that everything was “under control” as case numbers and deaths appeared exceptionally low. He even sent medical supplies to the U.S., which Washington paid for despite much of it being unusable.

All four leaders are aggressively pushing reopening well before cases peak. The U.S. recorded nearly 46,000 new cases in a single day last week, more than double Japan’s entire six-month total. Russia’s cases have doubled in roughly five weeks; Brazil’s in three weeks; and India’s in only 20 days. These get-the- economy-going moves stand in stark contrast to countries Germany, Spain, France, and Italy that are re-opening after significantly bending their curves.

The authoritarian impulse to ignore experts has drastic economic consequences that extend beyond national boundaries. They could derail, if not entirely eliminate, the structures of global trade and development that have generated growth for decades. While the “liberal” world order has its rightful discontents, the world created in the image of neo-authoritarians will be much worse for business.

Populists’ economic policies are built on a country-first platform that eschews cooperation in global institutions. That means not cooperating with the World Trade Organization, World Health Organization, NATO, and other global and regional bodies. Cooperation would entail compromise. Instead these leaders choose to go it alone, and the result is bad economic policy. The continued surge in coronavirus infections is likely to slow a weakened global economy even further. World Bank growth projections for June 2020 have been revised down from January by 10 percentage points for Brazil and 9.1 points for India. The U.S. and Russia don’t fare much better, each swinging negative by nearly 8 percentage points.

Will these leaders be held responsible? It’s hard to say. Each was propelled to power in part by income inequality, which will worsen under these conditions. Populist political movements thrive during economic stress. In Russia, an expected change to the constitution could enable Putin to hold the presidency until 2036. Trump has months to catch up with Democratic candidate Joe Biden’s swing-states lead. Brazil’s Bolsonaro faces dropping approval ratings and many impeachment requests, but there’s no direct threat to his presidency at the moment. He has even flirted with right-wing supporters who want the military to back him. An attempt by the opposition Congress party to oust Modi in 2018 failed, and short of a no-confidence vote, he’ll stay through 2024.

Across all these countries individual freedoms are under assault, from increased surveillance to curfews and censorship. The dramatic rupture with democratic norms prompted 60 former heads of state and government to sign a letter warning that democracy is under threat. The virus itself also puts a brake on how fast authoritarian leadership can rise. No matter how authoritative the voice or how commanding the orders, health threats will affect individuals’ behavior. They are not likely to go shopping, eat out at restaurants, or even show up to work if conditions worsen. For political risk analysts, volatility is the near-term base case.

A return to normal economics hinges not on these leaders continuing to downplay the severity of the virus, but on the discovery and production of a safe and effective vaccine. One way forward is to follow the science, control the virus’ spread, and give households the financial support they need to weather the storm. Then, despite the authoritarian political spin and willful neglect, perhaps 2021 will beat all expectations for recovery.