Coronavirus has changed everything. We just haven’t noticed it yet. But those changes will become more apparent by the day.
Where COVID19 is taking us is uncertain. It appears contained in China. South Korea seems to be on top of its rate of spread. But Italy, the US and Europe may soon be overwhelmed by the contagion.
But Flinders University change ecologist Professor Corey Bradshaw says that, ultimately, its impact will not be counted in human fatalities. Nor in the cost of treating the sick.
It will be in our minds. It’s in our economic system.
We’ve built ourselves a civilisation where those costs are excessively high, he says.
Expectations. Politics. Trade. Manufacturing. Agriculture.
COVID19 is set to shake up them all.
And it’s just a start.
Professor Bradshaw warns this virus is just one of an emerging pattern of regular outbreaks. It’s all linked to the overwhelming extent of globalisation, urbanisation and ecosystem collapse.
And our way of life isn’t built to cope with it.
“COVID19 emphasises our system is set up ideally to transmit such a disease and is extremely susceptible to even small interruptions,” Bradshaw says.
There’s no slack to absorb a hit. There’s no capacity to catch a surge. There’s no flexibility to dodge a problem. Our interconnected world – and its ultra-efficient flow of trade, investment, knowledge and people – has been revealed to have feet of clay.
The coronavirus has set in motion a chain of events that will bring consequences with which few Australians are familiar:
DAY THE UNIVERSE CHANGED
It was an Autumn November day, somewhere in Wuhan, China, when a virus made the jump out of the animal world into humans. Best guess, it came from a bat. But it wasn’t the bat’s fault. It probably got it from some other wild animal. The bat was likely eaten. Or someone touched its poo (and then their own face).
This virus was a doozy.
It came from a family humans have had only minimal contact with before.
So, we have very little protection against it.
It jumped into a world humans have moulded to their own purposes. But that world is also nirvana to a virus.
“I’m surprised it doesn’t happen more often,” Bradshaw says – despite the recent arrival of Ebola, Swine Flu, SARS, Lymes disease – and now COVID19. “We’ve actually put ourselves in an ideal position from the perspective of a virus, which is why we see estimates of anywhere between 30 and 60 per cent of the population likely to get it.”
It has burst on an unready world.
Suddenly, we may have to think about things we’ve never needed to consider before.
Can we make a medical mask? A COVID19 test kid? A car? From scratch?
The raw materials for much of what we use come from all over the world. Most are manufactured in China.
Does Australia have the resources, the manufacturing equipment, the expertise to go it alone?
Professor Bradshaw was part of a World Health Organisation (WHO) research group examining the infectious diseases of poverty.
“We were looking at the interface between human society and environmental change,” he said. “And the basic take-home message was that, as society is pushing into wilderness areas, there’s a higher and higher possibility of novel pathogens jumping the species barrier”.
It’s not new. It’s just happening on an unprecedented scale.
Populations are exploding. Forests are being chopped or burnt down. Poverty-stricken people must live on the fringes with equally desperate wild animals.
Behind this epidemiological front-line is a densely populated, urbanised planet.
“As coronavirus spreads, so does the sobering reality that epidemics will become more common with our increasingly connected age,” a World Economic Forum (WEF) assessment reads. “In our global society, outbreaks of infectious disease can move from a remote village to a major city on the other side of the world in under 36 hours.”
Which is why another COVID19 is almost certainly headed our way.
“These diseases will reshape economies. Economists estimate that, in the coming decades, flu pandemics will cause average annual losses of 0.7 per cent of global GDP – or $ US570 billion,” the World Economic Forum warns.
Ultimately, Professor Bradshaw feels those most affected by the COVID19 shock will be the most affluent. But affluent may not mean what you think it does.
It means us.
We fly to Shanghai to watch a game of Australian Rules. We go to Italy for Formula One. The Tour-de-France.
“If someone wants their French wine or an exotic spice from India, they tend to want it now,” Bradshaw says. “Usually, supply chains can deliver. But, in this case, they can’t anymore.”
Worse, we’ve lost touch with where our food and products come from, and how we get it.
“People don’t understand about their basic needs versus luxury goods. Or even what is a seasonal food, and what’s not,” Bradshaw says. “It’s a particular problem in Australia. We have a highly urbanised population, disassociated from even basic agriculture.”
Furniture from Sweden. Vegetables from Vietnam. Cereal from Peru. Medicines from China. Cars from South Korea and Taiwan.
They’re cheap and readily available.
Or were a few weeks ago.
Problem is, Australia no longer grows or manufactures many of these things onshore. New cars, for example, could quickly become scarce if ‘just-in-time’ deliveries from Asia and Europe stop flowing. Not to mention vital medicines – and even the basic chemicals needed to make COVID19 tests.
And once they stop arriving, it could be a while before we see more.
“There’s nothing wrong with overseas trade. That’s not my point,” Bradshaw says. “My point is that we have skewed supply chains so far to the extremes that when they are perturbed, people get into a lot of strife.”
Australia has a vibrant seafood industry, though you wouldn’t notice it from the small quantities and high prices in our stores. It’s just that it was most profitable to send almost all of it overseas immediately.
Now, Bradshaw says, the industry is languishing as there is no local distribution network – or domestic demand – to offset the collapse of its Asian markets.
“Our wine industry is another example where most of it is sent overseas,” he says. “If that suddenly stopped, there would be a massive glut of wine that couldn’t be consumed because there’s just far too much.”
Australia used to be more than just a breadbasket. It also produced a diverse variety of fruits and vegetables. “But we’ve lost the majority of the different fruits and vegetables we used to grow, and even different varieties of wheat and barley,” Bradshaw says. “Agriculture has been vastly simplified to suit an international industrial scale. Sure, it’s commercially easier to do these kinds of large scale operations. But such low diversity operations – while they make more money – are more susceptible to problems.”
This highlights the logic of the ‘localvore’ food movement, he says: “This is all those people saying we should be eating seasonally, and food produced within a short radius of where we live,” Bradshaw says. “It not only supports and establishes local economies, but it also limits the susceptibility of the supply chain to abrupt stoppages from a crisis. Not to mention fresher and better-tasting food …”
Pandemics have the power to change the world. The Black Death of the 14th Century killed up to a third of Europe’s population. This produced a labour shortage, increased wages and improved civil rights to an extent which eventually toppled the feudal system and set the scene for the rise of democracy.
COVID19 doesn’t have the Black Death’s fatality rate. But containing it is lethal to the supply chains that feed our economies.
Now, international stock markets are in a frenzy.
In just one week, we’ve seen the most significant collapse since 1987.
But among the desperate trades, some patterns are emerging.
Efficiency. Streamlined. Just-in-time. These corporate war cries are suddenly dirty words.
A few short weeks ago, these words maximised profits.
Now we’re discovering they minimise resilience.
“Companies are desperately reconsidering supply chains. Diversification is now a necessity, not just strategic aspiration. Suddenly the logic of many belts and many roads is plain,” ASPI Medcalf says.
Everybody is suddenly very aware of just how reliant they are on China for everything from medicines and machinery to electronic components and rare earths.
But it’s not just China. It’s the whole globally specialised network of supply.
“Does COVID-19 herald the moment of peak economic interdependence globally?” asks Jennings. “That’s a big judgement call to make. But such are the levels of interdependency built by reliance on global just-in-time supply chains that the developed economies will largely sink or swim together.”
A WORLD OF DIFFERENCE
“COVID-19 will eventually pass and become more controllable with vaccines and developed natural immunity, but not yet and not before it could wreak profound change on those who currently hold political, economic and military power around the globe.,” Jennings says. “There has never been a more important time for Australians to think about how we protect our strategic interests in this dangerous world.”
Businesses are already scrambling to diversify supply chains. China won’t likely remain the manufacturing hub it was just three months ago. But it’s not only China. It’s the whole concept of narrow-focused, extremely efficient suppliers that has been called into question.
In the medium term, more production may need to be brought back to Australia.
“We shouldn’t be surprised if the lesson some countries take from this experience is that more sovereign self-reliance in critical areas like vaccine production and access to medical supplies, food and key areas of defence technology is worth paying a premium for,” Jennings writes.
Ultimately, Professor Bradshaw says, globalisation will have to be rethought.
How many shocks can an international economy sustain?
How many shocks are likely on their way?
Forests are burning. Glaciers are melting. Ecological systems are collapsing. Resources are running out.
Professor Bradshaw says this has to change. And we have to change with it.
“This time, it looks like a lot of rich people will end up not being quite as rich,” he says. “Globalisation is based on large multinational corporations that are dependent on fragile, distributed networks. This has made a few people very, very wealthy. Yes, it does create jobs. But at the same time, why don’t we have manufacturing anymore? It’s because the highest economic returns in manufacturing aren’t in Australia. Now, that may not be as important as it seemed.”