Biden’s world in 2021

Following on from yesterday’s discussion of what a Biden foreign policy might mean for Canada, I see, in The Economist, a very useful forecast signed* by Zanny Minton Beddoes, the Editor-in-chief of that journal that looks at the forces that might shape the post-COVID-19 and post-Trump world.

She says that “Some years loom large in history. Usually it is the end of a war or the onset of a revolution that punctuates the shift from one chapter to another. 2020 will be an exception. The defeat of Donald Trump marked the end of one of the most divisive and damaging presidencies in American history … [and] … A once-in-a-century pandemic has created the opportunity for an economic and social reset as dramatic as that of the Progressive era. The big question for 2021 is whether politicians are bold enough to grasp it.

That “reset” word should resonate with Canadians because Prime Minister Justin Trudeau has fired a shot across our bows, saying that ““This pandemic has provided an opportunity for a reset … [and] “This is our chance to accelerate our pre-pandemic efforts to reimagine economic systems that actually address global challenges like extreme poverty, inequality and climate change.” That suggests that he wants to change Canada in ways that will satisfy the Laurentian Elites and those they idolize …

… but which should frighten most working-class and middle-class Canadian taxpayers because he plans to “reset” into something like Russia in the 1930s.

Covid-19,” Zanny Minton Beddoes writes, “has not just pummelled the global economy. It has changed the trajectory of the three big forces that are shaping the modern world. Globalisation has been truncated. The digital revolution has been radically accelerated. And the geopolitical rivalry between America and China has intensified. At the same time, the pandemic has worsened one of today’s great scourges: inequality. And by showing the toll of being unprepared for a low-probability, high-impact disaster, it has focused more minds on the coming century’s inevitable and even higher-impact disaster, that of climate change. All this means there is no going back to the pre-covid world.

All that, she says, “will not be obvious at the start of the year. Amidst the misery of a resurgent second wave, attention in many countries will still be focused on controlling the virus. As the New Year begins a vaccine will be on the horizon, though not yet widely available. Only as 2021 progresses, and vaccines are rolled out, will it become clear how much has permanently changed.

She says that the pandemic has compressed years worth on ongoing changes into months and that the digital economy ~ think about working from home and shopping online ~ have changed a lot of our habits. The big winners, Ms Minton Beddoes says, are the tech giants and large companies that have large troves of data and deep pockets. The losers will be the very heart and backbone of our economy: the small, independent businesses, the ones that Justin Trudeau claims are owned by wealthy tax cheats, that have, traditionally, grown into giants.

Although globalisation will still be about goods and capital crossing borders, people will travel less,” she says, and this will have impacts on the entire tourism sector and on migration and that will have an impact on poorer countries, like the Philippines, for example, that rely heavily upon remittances from their people who work around the world.

Zanny Minton Beddoes says that “Global commerce will be conducted against an inauspicious geopolitical backdrop. Mr Trump’s mercurial mercantilism will be gone, but America’s suspicion of China will not end with the departure of “Tariff Man”, as the president was proud to be known. Tariffs, now levied on two-thirds of imports from China, will remain, as will restrictions on its technology companies. The splintering of the digital world and its supply chain into two parts, one Chinese-dominated and the other American-led, will continue. Sino-American rivalry will not be the only fissiparous influence on globalisation. Chastened by their reliance on imported medical supplies and other critical goods (often from China), governments from Europe to India will redefine the scope of “strategic industries” that must be protected. State aid to support this new industrial policy has become and will remain ubiquitous.I believe that Canada will, finally, have to get off the fence and stand with America and Europe and India and most of the Asia-Pacific region against China, no matter what the spokesmen for the Laurentian Elites …

… and the rich and powerful in the boardrooms, like the Desmarais family, and the backroom power brokers, like Eddie Goldenberg, who have been driving Canadian foreign policy might say.

All this,” she writes, “will leave the world economy divided and diminished. The gap between strength in China (and other post-covid Asian economies) and weakness elsewhere will remain glaring. China’s was the only big economy to grow in 2020; in 2021 its growth rate will exceed 7%, substantially faster than the pace of recovery in Europe and America. And unlike Western economies, its recovery will not be underpinned by gaping budget deficits or extraordinary monetary stimulus. China’s economic success and quick vanquishing of covid-19 will be the backdrop for a year of triumphal celebration in Beijing, as the Communist Party marks its centenary.” As Pierre Poilievre has pointed out Canada is, currently, at the bottom of the US-led West by almost every economic indicator: debt, unemployment, deficits and so on:

While Canada may be one of the worst performing economies in the developed world, Ms Minton Beddoes predicts that America and Europe will be sluggish throughout 20121 and pundits cheerfully will predict the final decline and fall of the liberal, capitalist West. That looks good for China, right? No, she says, because “For all its “vaccine diplomacy”, China inspires fear and suspicion more than admiration. And for all his determination to bring China centre-stage, its president, Xi Jinping, shows little appetite for genuine global leadership. Although Mr Trump’s contempt for allies and forays into transactional diplomacy have shaken trust in the American-led global order, they have not destroyed it.

Which brings us back to Joe Biden, because, Ms Minton Beddoes predicts, “That means America, once again, will have disproportionate ability to shape the post-pandemic world – and the man most able to set the tone is a 78-year old, whose political career began closer to the presidency of Calvin Coolidge than today. Joe Biden, a consensus-building moderate whose own political positions have always tacked close to his party’s centre of gravity, is an improbable architect of a bold new era.” And that brings me back to another point: when Joe Biden looks North he is going to see a leader who is NOT like him. He’s going to see a leader who resembles the loony-left wing of his party. He will, I suspect, hope that we, Canadians, will elect someone more like him ~ a social and fiscal moderate with whom he can find common ground on a wide range of issues:

She says that Mr Biden may be just the right person for this coming (hopefully brief) era: mature but moderate and only cautiously bold.

In foreign policy,” Zanny Minton Beddoes says, “Mr Biden will repair relations and reaffirm America’s values and global role. A veteran of diplomacy and instinctive multilateralist and institution-builder, Mr Biden will send strong signals quickly: America will re-enter the Paris climate agreement, stay in the World Health Organisation and join COVAX, the global coalition to distribute a covid-19 vaccine. He will head quickly to Europe to reaffirm America’s commitment to NATO and the transatlantic alliance—though his first stop will be Berlin or Paris, rather than Boris Johnson’s Brexit Britain. Mr Biden will reassert the importance of human rights and democracy to American foreign policy. Expect tougher criticism of China for its treatment of Uyghurs in Xinjiang and its oppression in Hong Kong; there will be no more palling with dictators … [but, she adds, on key issues] … Mr Biden’s presidency will offer more a change of approach than of direction. America will remain concerned about the threat posed by a rising China: the Trump administration deserves credit for focusing attention on it. But rather than attack with unilateral tariffs, Mr Biden’s team will focus on building a multilateral coalition to counter China. Expect talk of a transatlantic grand bargain, where America assuages European concerns about its tech giants, particularly the personal data they gather and the tax they don’t pay, in return for a joint approach towards Chinese tech companies. Expect talk of a new global alliance, binding Asian democracies into the Western coalition to counter China—the basis, conceivably, of a new kind of American-led world order.

Ms Minton Beddoes concludes by saying that if President-elect Biden is willing to grasp the opportunities that are there then he can restore America to its world-leading position. The same thing, I would argue, applies to Canada: IF we have mature, moderate, fiscally responsible leadership then we, too, can be “great again.” But, it’s a big IF and it means, just for a start, dumping Justin Trudeau’s Liberals on to the political dung heap where they belong and electing Erin O’Toole’s Conservatives to, at least, back-to-back majorities AND then holding them accountable for what they promise.

—–

* Articles in The Economist are rarely signed. Some bureau and department chiefs like Lexington (USA) and Schumpeter (Finance and Economics) are used as noms de plume, but, generally, article are the result of a team effort and thus bylines are rare.)

Published by Ted Campbell

Old, retired Canadian soldier, Conservative ~ socially moderate, but a fiscal hawk. A husband, father and grandfather. Published material is posted under the "Fair Dealing" provisions (§29) of the Copyright Act for the purposes of research, private study and education.

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