Luohan Academy holds online discussion on Novel Coronavirus (COVID-19), its economic fallout, and our shared digital future with Nobel Laureate Michael Spence
Shanghai, Milan, and Beijing, Sunday, March 22, 2020. Luohan Academy's Managing Director, connected with Nobel Laurate Michael Spence in Milan, one of the hardest-hit regions of the epidemic. Hosting the discussion was television anchor and finance reporter Cheng Lei. The conversation focused on three main topics first, containment controls and government action, second the economic impact, and third technology as a prescription to combat the virus' spread.
Containment Controls and Government Action
With a death toll above 10,000, COVID-19 presents an unprecedented crisis that the world has not seen in over 100 years. Michael Spence points out that "some western governments…were late to start." However, Spence goes on to say that in Italy, "the government and other institutions are doing everything they can now. Not just restrictions, but the medical system here in the north is really quite good, but it's simply overwhelmed. That's again, a function of the late start." His observations, emphasized by Chen, paraphrasing Winston Churchill, "you never want to waste a good crisis, but I feel like China's lesson was somehow wasted." Both emphasized that early, preventative, and cooperative actions by governments are a necessity for containing a virus that is borderless.
Virus Containment and the Economic Slump
The virus has quickly spiraled into a global economic recession. In the war against the virus, the world is fighting two different battles. The first battle is against the spread of the virus; however, at the same time, we are fighting a second battle; the struggle against economic downturn remarked Chen. He goes on to describe an "economic domino effect," as the virus spreads each economy will be affected in a rolling rhythm "because we're so interconnected, each country will feel the economic impact of the next as they fight the spread of the virus." Spence added, In the short run, nothing will get the job done," including monetary policy. However, in the long term, coordination is essential, much like the scientific and medical community are coordinated, the global financial levers around the world need to work together. "Stability, sustainability, and pandemics have a global character to them, …so my hope is that this will be a stimulus to move in the direction of increased cooperation at least in areas where it really matters."
Technology Is a Game Changer
Emerging technology has impacted nearly every sector of business and society, and that includes how we combat the virus. As Spence explains, digital technology played a large roll in how China battled the virus "because the digital infrastructure, mobile payment, Fintech, and all of that is more highly developed there than anywhere. The knowledge and sophistication and penetration. Data is crucial, and society has to make choices on how they're going to use it. To that point, Chen points out that "technology is giving us a lot of opportunities and also disruptions, so there's a lot of different factors, elements that are driving us in different directions. It causes a more proactive government, doing something to fix the problems. It also calls for more coordination."
A common theme throughout the discussion was coordination, coordination in combating the virus, coordination in restarting the economy, and coordination on how best to leverage technology towards those goals. The Zoom hosted discussion exemplified this point, as it allowed viewers from around the world to partake in, comment and watch Chen and Spence along with anchor Cheng discuss these critical questions just as the globe copes with the virus.