foreignpolicy--2020-03-31--The Coronavirus Could Topple Governments Around the World

The Coronavirus Could Topple Governments Around the World On March 27 , Britain ’ s bombastic prime minister , Boris Johnson , announced on Twitter that he had tested positive for the coronavirus .
Two other high-ranking British officials—the country ’ s health secretary , Matt Hancock , and Johnson ’ s main advisor , Dominic Cummings—soon followed him into self-isolation .
The news was widely reported and sent shock waves through the political establishment .
Political leaders are usually insulated from major health scares by their wealth and access to private health care .
But the coronavirus has already @ @ @ @ @ @ @ the United States and Australia , as well as Sophie Trudeau , the wife of the Canadian prime minister .
In Italy , Nicola Zingaretti , the head of the Democratic Party—a partner in the coalition government—has been infected , and Roberto Stella , the president of the medical guild in Varese province , has died .
In France , Culture Minister Franck Riester is sick , along with five members of parliament .
In the United States , rumors regarding the health of President Donald Trump have been dampened after it was @ @ @ @ @ @ @ virus , but other U.S. politicians have not been so lucky .
Sen. Rand Paul of Kentucky has the virus ; in New York , two members of the State Assembly have been infected , as has Francis Suarez , the mayor of Miami .
Many other prominent figures have also gone into self-isolation , including Sens .
Rick Scott and Ted Cruz.In countries where politics are more personalized , the death of a leader can trigger damaging succession battles .
Despite these high-profile cases , democratic institutions in all of these countries @ @ @ @ @ @ @ cope with the short-term incapacity or isolation of their leaders .
If worse comes to worst , they also have tried and tested succession mechanisms to select new cabinet members , prime ministers , and presidents .
The consequences will be very different in countries where political institutions are weaker and where the illness or death of a leader has been known to generate the kind of power vacuum that might inspire rival leaders , opposition parties , or the military to launch a power grab .
This is a particular problem in @ @ @ @ @ @ @ and political parties don ’ t have strong decision-making mechanisms , which is true in parts of Africa , Asia , Latin America , and post-communist Europe .
According to the researchers Rodger Govea and John Holm , 61 percent of leadership transitions in Africa are “ unregulated , ” and many of these episodes have resulted in a political crisis .
In countries where politics are more personalized , the death of a leader can trigger damaging succession battles that can split the ruling party and , in the worst cases , @ @ @ @ @ @ @ therefore extremely worrying that senior political officials and leaders have also contracted COVID-19 , the disease caused by the new coronavirus , in countries such as Burkina Faso , Iran , and Nigeria—countries that are already unstable gerontocracies .
Indeed , it is particularly worrying how far the coronavirus is spreading within the political elite in countries where many senior politicians are over 60 , making them especially at risk .
In Burkina Faso , a country that has experienced more than its fair share of instability in recent years—and which is currently @ @ @ @ @ @ @ affairs , education , the interior , and mines have all tested positive .
In Nigeria , one of the most economically and politically important countries on the continent , Abba Kyari , the chief of staff to 77-year-old President Muhammadu Buhari , has come down with the disease .
Although media outlets have reported that Buhari tested negative , this has not stopped damaging rumors that the often ill president has been incapacitated from circulating in Twitter .
The world should also be paying close attention to Iran , where media censorship @ @ @ @ @ @ @ .
So far , two vice presidents and three cabinet officials are known to have gotten the virus .
It is also estimated that 10 percent of parliament and many prominent figures within the Islamic Revolutionary Guard Corps are sick—including a senior advisor to the 80-year-old supreme leader , Ayatollah Ali Khamenei , raising questions about his health.Any prolonged vacuum at the heart of government increases the risk of political crisis .
In all of these countries , any prolonged vacuum at the heart of government increases the risk of political crisis .
@ @ @ @ @ @ @ the potential sources of political instability the coronavirus could spark .
Others include the risk of popular unrest and the debt crises that will soon engulf many countries around the world .
Along with the fact that some of the main providers of foreign aid are now preoccupied with their own financial crises , there is a serious risk that politically and economically weak states will face a perfect storm of elite deaths , debt , mass unemployment , and social unrest .
Political unrest will often be driven from below .
In @ @ @ @ @ @ @ systems are weak , and the cost of food is high , citizens are already under intense financial pressure .
Despite earning the least , those who live in slum areas around capital cities often have to pay more for access to water and food than those who have valuable properties in the city centers .
While the cramped conditions of slum living make it implausible to self-isolate , limited and inconsistent income make it impossible to buy in bulk—or to stay home for weeks on end without working and risk starvation .
@ @ @ @ @ @ @ the world , hunger is just a few days away .
The measures taken by many governments to deal with the coronavirus are only likely to increase these pressures , not least because they undermine many of the coping mechanisms that individual societies have innovated to manage financial insecurity .
In India , Prime Minister Narendra Modi has banned people from leaving their homes for three weeks .
This triggered a mass exodus from cities and considerable panic as migrant workers attempted to return home without transport ; one person reportedly died of @ @ @ @ @ @ @ to his village .
Modi later asked for “ forgiveness ” for the impact of the lockdown on the poor but said the measures had to remain in place .
The impact of isolation and quarantine is having a similar impact elsewhere .
In Zimbabwe , where the cost of food was already prohibitive due to rampant inflation , hungry citizens have argued against a lockdown on the basis that they ’ ll “ die of hunger first.
” Already , the Nigerian and Rwandan governments have initiated programs designed to feed vulnerable @ @ @ @ @ @ @ that when governments can not afford to do this , people will feel forced to breach lockdown , resulting in clashes with the security forces .
Already , there have been sporadic incidents of unrest in a number of countries , including prison protests in Italy .
Meanwhile , heavy-handed efforts to enforce the curfew threaten to further erode public confidence in the government and the security forces .
There are reports of widespread human rights abuses being committed in Kenya and South Africa , where the police have been using water cannons @ @ @ @ @ @ @ .
Growing tensions between hungry communities and the security forces are only likely to undermine efforts to contain the spread of the virus and increase the prospect of more protests and riots .
In the longer term , the coronavirus crisis is placing some of the world ’ s most fragile economies under the most intense strain .
This year , the poorest countries on Earth—which make up around 25 percent of the world ’ s population—are due to make more than $ 40 billion in payments to private and public creditors .
@ @ @ @ @ @ @ and Zambia , governments can not afford to provide basic public services for their citizens because so much of the budget goes to servicing debt.The end of the coronavirus crisis could be followed by a series of economic collapses across the developing world .
Recognizing that this situation is a direct threat to international efforts to eradicate COVID-19 , the International Monetary Fund has floated proposals to make more credit available and to defer debt payments for affected countries .
But this will only delay the coming debt crunch , not prevent it @ @ @ @ @ @ @ governments rack up even more debt , especially as key income streams such as tourism and the service sector have dried up .
Unless the deferral of debt goes hand in hand with debt cancellation and long-term rescheduling , the end of the coronavirus crisis could be followed by a series of economic collapses across the developing world .
In turn , this will undermine the ability of governments to provide affordable fuel and food , further increasing the risk of public unrest .
While leadership vacuums , popular resistance , and debt @ @ @ @ @ @ @ , all of them bring it closer—especially if there is a leadership struggle in the midst of economic collapse and high food prices .
It is only natural that countries around the world have focused on fighting the coronavirus .
But as soon as its impact on public health is brought under control , it is essential that the international community urgently addresses the broader political and economic costs of COVID-19 .
This will take great generosity at a time of immense domestic hardship for the world ’ s wealthy nations , and @ @ @ @ @ @ @ become isolationist , which is a strong impulse at times of national crisis .
Civil wars , political instability , and poverty kill millions of people every year .
These deaths rarely elicit the kind of comprehensive media coverage that COVID-19 has received , but they are no less important .
It is possible to prevent the worst political consequences of the coronavirus but only if governments and institutions act now .
Wealthy nations must increase their aid budgets rather than cut them , and international organizations must anticipate and work to avoid @ @ @ @ @ @ @ .
That is the only way to collectively survive the present in a way that does not undermine the future .

On March 27, Britain’s bombastic prime minister, Boris Johnson, announced on Twitter that he had tested positive for the coronavirus. Two other high-ranking British officials—the country’s health secretary, Matt Hancock, and Johnson’s main advisor, Dominic Cummings—soon followed him into self-isolation. The news was widely reported and sent shock waves through the political establishment.
On March 27, Britain’s bombastic prime minister, Boris Johnson, announced on Twitter that he had tested positive for the coronavirus. Two other high-ranking British officials—the country’s health secretary, Matt Hancock, and Johnson’s main advisor, Dominic Cummings—soon followed him into self-isolation. The news was widely reported and sent shock waves through the political establishment.
Political leaders are usually insulated from major health scares by their wealth and access to private health care. But the coronavirus has already impacted leaders across the world—afflicting officials in the United States and Australia, as well as Sophie Trudeau, the wife of the Canadian prime minister.
In Italy, Nicola Zingaretti, the head of the Democratic Party—a partner in the coalition government—has been infected, and Roberto Stella, the president of the medical guild in Varese province, has died. In France, Culture Minister Franck Riester is sick, along with five members of parliament.
[Mapping the Coronavirus Outbreak: Get daily updates on the pandemic and learn how it’s affecting countries around the world.]
In the United States, rumors regarding the health of President Donald Trump have been dampened after it was revealed that he tested negative for the virus, but other U.S. politicians have not been so lucky. Sen. Rand Paul of Kentucky has the virus; in New York, two members of the State Assembly have been infected, as has Francis Suarez, the mayor of Miami. Many other prominent figures have also gone into self-isolation, including Sens. Rick Scott and Ted Cruz.In countries where politics are more personalized, the death of a leader can trigger damaging succession battles.
Despite these high-profile cases, democratic institutions in all of these countries are likely to be robust enough to cope with the short-term incapacity or isolation of their leaders. If worse comes to worst, they also have tried and tested succession mechanisms to select new cabinet members, prime ministers, and presidents.
The consequences will be very different in countries where political institutions are weaker and where the illness or death of a leader has been known to generate the kind of power vacuum that might inspire rival leaders, opposition parties, or the military to launch a power grab. This is a particular problem in countries where checks and balances are weak and political parties don’t have strong decision-making mechanisms, which is true in parts of Africa, Asia, Latin America, and post-communist Europe. According to the researchers Rodger Govea and John Holm, 61 percent of leadership transitions in Africa are “unregulated,” and many of these episodes have resulted in a political crisis.
In countries where politics are more personalized, the death of a leader can trigger damaging succession battles that can split the ruling party and, in the worst cases, encourage a military coup. It is therefore extremely worrying that senior political officials and leaders have also contracted COVID-19, the disease caused by the new coronavirus, in countries such as Burkina Faso, Iran, and Nigeria—countries that are already unstable gerontocracies.
Indeed, it is particularly worrying how far the coronavirus is spreading within the political elite in countries where many senior politicians are over 60, making them especially at risk. In Burkina Faso, a country that has experienced more than its fair share of instability in recent years—and which is currently struggling against an insurgency—the ministers of foreign affairs, education, the interior, and mines have all tested positive.
In Nigeria, one of the most economically and politically important countries on the continent, Abba Kyari, the chief of staff to 77-year-old President Muhammadu Buhari, has come down with the disease. Although media outlets have reported that Buhari tested negative, this has not stopped damaging rumors that the often ill president has been incapacitated from circulating in Twitter.
The world should also be paying close attention to Iran, where media censorship has obscured the extent of the crisis. So far, two vice presidents and three cabinet officials are known to have gotten the virus. It is also estimated that 10 percent of parliament and many prominent figures within the Islamic Revolutionary Guard Corps are sick—including a senior advisor to the 80-year-old supreme leader, Ayatollah Ali Khamenei, raising questions about his health.Any prolonged vacuum at the heart of government increases the risk of political crisis.
In all of these countries, any prolonged vacuum at the heart of government increases the risk of political crisis.
A leadership crisis is just one of the potential sources of political instability the coronavirus could spark. Others include the risk of popular unrest and the debt crises that will soon engulf many countries around the world. Along with the fact that some of the main providers of foreign aid are now preoccupied with their own financial crises, there is a serious risk that politically and economically weak states will face a perfect storm of elite deaths, debt, mass unemployment, and social unrest.
Political unrest will often be driven from below. In countries where poverty is widespread, health systems are weak, and the cost of food is high, citizens are already under intense financial pressure. Despite earning the least, those who live in slum areas around capital cities often have to pay more for access to water and food than those who have valuable properties in the city centers. While the cramped conditions of slum living make it implausible to self-isolate, limited and inconsistent income make it impossible to buy in bulk—or to stay home for weeks on end without working and risk starvation. For many of the poorest people in the world, hunger is just a few days away.
The measures taken by many governments to deal with the coronavirus are only likely to increase these pressures, not least because they undermine many of the coping mechanisms that individual societies have innovated to manage financial insecurity. In India, Prime Minister Narendra Modi has banned people from leaving their homes for three weeks. This triggered a mass exodus from cities and considerable panic as migrant workers attempted to return home without transport; one person reportedly died of exhaustion after attempting to walk 168 miles to his village. Modi later asked for “forgiveness” for the impact of the lockdown on the poor but said the measures had to remain in place.
Isolation and quarantine orders are having a similar impact elsewhere. In Zimbabwe, where the cost of food was already prohibitive due to rampant inflation, hungry citizens have argued against a lockdown on the basis that they’ll “die of hunger first.” Already, the Nigerian and Rwandan governments have initiated programs designed to feed vulnerable families. There is a serious risk that when governments cannot afford to do this, people will feel forced to breach lockdown, resulting in clashes with the security forces.
Already, there have been sporadic incidents of unrest in a number of countries, including prison protests in Italy. Meanwhile, heavy-handed efforts to enforce the curfew threaten to further erode public confidence in the government and the security forces. There are reports of widespread human rights abuses being committed in Kenya and South Africa, where the police have been using water cannons and rubber bullets to enforce the lockdown.
Growing tensions between hungry communities and the security forces are only likely to undermine efforts to contain the spread of the virus and increase the prospect of more protests and riots.
In the longer term, the coronavirus crisis is placing some of the world’s most fragile economies under the most intense strain. This year, the poorest countries on Earth—which make up around 25 percent of the world’s population—are due to make more than $40 billion in payments to private and public creditors. In some cases, such as Lebanon and Zambia, governments cannot afford to provide basic public services for their citizens because so much of the budget goes to servicing debt.The end of the coronavirus crisis could be followed by a series of economic collapses across the developing world.
Recognizing that this situation is a direct threat to international efforts to eradicate COVID-19, the International Monetary Fund has floated proposals to make more credit available and to defer debt payments for affected countries. But this will only delay the coming debt crunch, not prevent it. Greater access to credit will see governments rack up even more debt, especially as key income streams such as tourism and the service sector have dried up.
Unless the deferral of debt goes hand in hand with debt cancellation and long-term rescheduling, the end of the coronavirus crisis could be followed by a series of economic collapses across the developing world. In turn, this will undermine the ability of governments to provide affordable fuel and food, further increasing the risk of public unrest.
While leadership vacuums, popular resistance, and debt crises do not make political instability inevitable, all of them bring it closer—especially if there is a leadership struggle in the midst of economic collapse and high food prices.
It is only natural that countries around the world have focused on fighting the coronavirus. But as soon as its impact on public health is brought under control, it is essential that the international community urgently addresses the broader political and economic costs of COVID-19. This will take great generosity at a time of immense domestic hardship for the world’s wealthy nations, and it will mean resisting the urge to become isolationist, which is a strong impulse at times of national crisis.
Civil wars, political instability, and poverty kill millions of people every year. These deaths rarely elicit the kind of comprehensive media coverage that COVID-19 has received, but they are no less important. It is possible to prevent the worst political consequences of the coronavirus but only if governments and institutions act now. Wealthy nations must increase their aid budgets rather than cut them, and international organizations must anticipate and work to avoid political crises more proactively than ever before. That is the only way to collectively survive the present in a way that does not undermine the future.


foreignpolicy--2020-03-31--The Coronavirus Is Absolutely No Excuse to Lift Sanctions on Iran

The Coronavirus Is Absolutely No Excuse to Lift Sanctions on Iran Iran ’ s clerical dictatorship cares more about its own survival than it cares about the welfare of the Iranian people .
But you wouldn ’ t know it from the chorus of Americans and Europeans exploiting the coronavirus crisis in Iran to push the Trump administration to lift sanctions against Iran .
This is fundamentally dishonest—the sanctions do not restrict medical supplies and other forms of humanitarian aid—and plays into the hands of a brutal regime .
Iran ’ s human rights record is one of the worst @ @ @ @ @ @ @ the regime killed 1,500 people who peacefully protested the dictatorship ’ s mishandling of the economy .
Soon after , it blew a passenger airliner out of the sky , killing everyone on board .
A few weeks ago , Iranian-backed militias killed two U.S. and one British soldier in Iraq .
Last week , we learned that Robert Levinson , a former FBI agent held by Iran , died in captivity .
His captors refused to provide information on his whereabouts to his long-suffering family for 13 years .
More Americans and @ @ @ @ @ @ @ accused of being spies , remain hostage in Iranian jails today .
Are we to believe the same Iranian leaders committing these human rights crimes when they say they need wholesale relief from U.S. sanctions to combat the coronavirus ?
To an unwitting American audience , such Iranian propaganda can be quite persuasive , particularly when the request for sanctions relief is endorsed by the United Nations secretary general , the Chinese foreign minister , European politicians , and even former officials from Barack Obama ’ s administration .
U.S. sanctions on Iran @ @ @ @ @ @ @ aid .
A recent analysis of pharmaceutical trade between Europe and Iran shows little change between 2011 and 2019 despite periods of imposition , suspension , and return of sanctions .
If Iran is experiencing challenges in convincing banks to process transactions with its trade partners , perhaps it ’ s because Tehran is determined to use its financial sector for money laundering and terrorism finance—concerns that led the Financial Action Task Force , a 39-country anti-money laundering organization , to recommend last month that the global financial community take stringent measures to @ @ @ @ @ @ @ practices .
Tehran ’ s record of diverting humanitarian goods to fund its terrorist operations is also well documented .
The State Department last week reported that in July 2019 , “ one billion euros intended for medical supplies ‘ disappeared ’ and another $ 170 million dollars allocated for medical goods were instead spent on tobacco.
” In 2018 , the Treasury Department revealed that an Iranian medical and pharmaceutical company was being used to facilitate illicit payments to Russia in a scheme to help Syria finance purchases of oil .
In @ @ @ @ @ @ @ nuclear deal with Iran , Turkey ’ s Halkbank infamously helped facilitate billions of dollars of illicit transactions on behalf of Tehran using fake invoices for fictitious humanitarian goods .
While Iran ’ s leaders disregard the welfare of their people , the United States is committed to enabling the flow of humanitarian goods .
Even as it exerts maximum pressure on Iran , Washington has permitted several Iranian banks to remain on the SWIFT financial messaging system to facilitate humanitarian trade .
The U.S. Treasury and the Swiss government established a humanitarian @ @ @ @ @ @ @ prevent the regime from diverting money and goods away from the Iranian people .
Tens of billions of dollars of Iranian oil revenue sitting in foreign escrow accounts are available to fund the import of humanitarian goods .
Indeed , that ’ s how Iran imported $ 15 billion in essential goods and medicine in the past year , according to the governor of the Central Bank of Iran .
Iran ’ s supreme leader , Ayatollah Ali Khamenei , controls more than $ 200 billion in off-the-books assets in holding companies and @ @ @ @ @ @ @ Iran ’ s sovereign wealth fund , of which $ 20 billion is in cash or cash equivalents .
He could easily use $ 40 billion from this corporate empire to support Iran ’ s $ 400 billion economy .
Instead , he uses this money , much of which was illegally confiscated from Iranians , to fund his revolutionary agenda of domestic repression and regional destruction .
The pattern of abuse applies to Iran ’ s sovereign wealth fund , too .
The supreme leader has approved diverting billions of dollars from @ @ @ @ @ @ @ to finance terrorism , human rights abuses , and expanded nuclear activities .
Yet when it comes to fighting a pandemic to save lives , there ’ s allegedly no money to be found .
Khamenei ’ s nuclear program continues without delay even during the pandemic .
Iran ’ s centrifuges keep spinning , producing more enriched uranium for potential use in a future nuclear weapon .
The regime is also denying nuclear inspectors access to certain suspicious sites related to the Iranian nuclear program .
Sanctions relief would only make these @ @ @ @ @ @ @ 5 billion International Monetary Fund bailout requested by Iran .
Money is fungible .
The regime hasn ’ t stopped supporting terrorism or killing Americans .
Concerns regarding money laundering , corruption , and diversion of humanitarian goods remain unresolved .
With clerics encouraging Iranians to engage in risky public activities despite public health guidance to maintain social distancing , putting money into the hands of this government will neither solve the pandemic in Iran nor improve global security .
The regime has repeatedly rejected offers from the United States to provide direct @ @ @ @ @ @ @ and Israel ) for creating the virus .
Iranian President Hassan Rouhani , meanwhile , admitted the regime was waging a global public relations campaign to use the pandemic as a pretext for wholesale sanctions relief while his own health officials say there are no shortages .
The regime in Iran is a terrorism addict asking the world for money to fight a pandemic .
To make sure funds are used for the Iranian people , not the supreme leader ’ s malign activities , world leaders should ask for a supply list @ @ @ @ @ @ @ distribution , and insist on the implementation of public health measures to save the Iranian people .
Sanctions relief for the regime should be a non-starter .
The Iranian people are suffering at the hands of their own leaders on top of a pandemic .
They know all too well that their own government is the problem , not U.S. sanctions .

Iran’s clerical dictatorship cares more about its own survival than it cares about the welfare of the Iranian people. But you wouldn’t know it from the chorus of Americans and Europeans exploiting the coronavirus crisis in Iran to push the Trump administration to lift sanctions against Iran. This is fundamentally dishonest—the sanctions do not restrict medical supplies and other forms of humanitarian aid—and plays into the hands of a brutal regime.
Iran’s clerical dictatorship cares more about its own survival than it cares about the welfare of the Iranian people. But you wouldn’t know it from the chorus of Americans and Europeans exploiting the coronavirus crisis in Iran to push the Trump administration to lift sanctions against Iran. This is fundamentally dishonest—the sanctions do not restrict medical supplies and other forms of humanitarian aid—and plays into the hands of a brutal regime.
Iran’s human rights record is one of the worst in the world. Last fall, the regime killed 1,500 people who peacefully protested the dictatorship’s mishandling of the economy. Soon after, it blew a passenger airliner out of the sky, killing everyone on board. A few weeks ago, Iranian-backed militias killed two U.S. and one British soldier in Iraq.
Last week, we learned that Robert Levinson, a former FBI agent held by Iran, died in captivity. His captors refused to provide information on his whereabouts to his long-suffering family for 13 years. More Americans and other foreigners, arbitrarily detained and falsely accused of being spies, remain hostage in Iranian jails today.
Are we to believe the same Iranian leaders committing these human rights crimes when they say they need wholesale relief from U.S. sanctions to combat the coronavirus? To an unwitting American audience, such Iranian propaganda can be quite persuasive, particularly when the request for sanctions relief is endorsed by the United Nations secretary general, the Chinese foreign minister, European politicians, and even former officials from Barack Obama’s administration.
[Mapping the Coronavirus Outbreak: Get daily updates on the pandemic and learn how it’s affecting countries around the world.]
Let’s separate fact from fiction.
U.S. sanctions on Iran have always provided an exception for humanitarian aid. A recent analysis of pharmaceutical trade between Europe and Iran shows little change between 2011 and 2019 despite periods of imposition, suspension, and return of sanctions.
U.S. sanctions on Iran have always provided an exception for humanitarian aid.
If Iran is experiencing challenges in convincing banks to process transactions with its trade partners, perhaps it’s because Tehran is determined to use its financial sector for money laundering and terrorism finance—concerns that led the Financial Action Task Force, a 39-country anti-money laundering organization, to recommend last month that the global financial community take stringent measures to defend itself against Iran’s illicit practices.
Tehran’s record of diverting humanitarian goods to fund its terrorist operations is also well documented. The State Department last week reported that in July 2019, “one billion euros intended for medical supplies ‘disappeared’ and another $170 million dollars allocated for medical goods were instead spent on tobacco.” In 2018, the Treasury Department revealed that an Iranian medical and pharmaceutical company was being used to facilitate illicit payments to Russia in a scheme to help Syria finance purchases of oil. In the years leading up to the 2015 nuclear deal with Iran, Turkey’s Halkbank infamously helped facilitate billions of dollars of illicit transactions on behalf of Tehran using fake invoices for fictitious humanitarian goods.
While Iran’s leaders disregard the welfare of their people, the United States is committed to enabling the flow of humanitarian goods. Even as it exerts maximum pressure on Iran, Washington has permitted several Iranian banks to remain on the SWIFT financial messaging system to facilitate humanitarian trade. The U.S. Treasury and the Swiss government established a humanitarian banking channel backed by rigorous oversight to prevent the regime from diverting money and goods away from the Iranian people. Tens of billions of dollars of Iranian oil revenue sitting in foreign escrow accounts are available to fund the import of humanitarian goods. Indeed, that’s how Iran imported $15 billion in essential goods and medicine in the past year, according to the governor of the Central Bank of Iran.
Iran’s supreme leader, Ayatollah Ali Khamenei, controls more than $200 billion in off-the-books assets in holding companies and foundations and another $91 billion in Iran’s sovereign wealth fund, of which $20 billion is in cash or cash equivalents. He could easily use $40 billion from this corporate empire to support Iran’s $400 billion economy. Instead, he uses this money, much of which was illegally confiscated from Iranians, to fund his revolutionary agenda of domestic repression and regional destruction.
The pattern of abuse applies to Iran’s sovereign wealth fund, too. The supreme leader has approved diverting billions of dollars from this fund over the last two years to finance terrorism, human rights abuses, and expanded nuclear activities. Yet when it comes to fighting a pandemic to save lives, there’s allegedly no money to be found.
Khamenei’s nuclear program continues without delay even during the pandemic. Iran’s centrifuges keep spinning, producing more enriched uranium for potential use in a future nuclear weapon. The regime is also denying nuclear inspectors access to certain suspicious sites related to the Iranian nuclear program.
Sanctions relief would only make these challenges worse. So would a $5 billion International Monetary Fund bailout requested by Iran. Money is fungible. The regime hasn’t stopped supporting terrorism or killing Americans. Concerns regarding money laundering, corruption, and diversion of humanitarian goods remain unresolved. With clerics encouraging Iranians to engage in risky public activities despite public health guidance to maintain social distancing, putting money into the hands of this government will neither solve the pandemic in Iran nor improve global security.
The regime has repeatedly rejected offers from the United States to provide direct assistance and has instead blamed America (and Israel) for creating the virus. Iranian President Hassan Rouhani, meanwhile, admitted the regime was waging a global public relations campaign to use the pandemic as a pretext for wholesale sanctions relief while his own health officials say there are no shortages.
The regime in Iran is a terrorism addict asking the world for money to fight a pandemic. To make sure funds are used for the Iranian people, not the supreme leader’s malign activities, world leaders should ask for a supply list, buy the goods, monitor their distribution, and insist on the implementation of public health measures to save the Iranian people.
Sanctions relief for the regime should be a non-starter. The Iranian people are suffering at the hands of their own leaders on top of a pandemic. They know all too well that their own government is the problem, not U.S. sanctions.


foreignpolicy--2020-03-31--India’s Lockdown Helps Its Rich but Ignores Its Poor

India ’ s Lockdown Helps Its Rich but Ignores Its Poor Welcome to Foreign Policy ’ s weekly South Asia Brief .
This week , we focus on the coronavirus crisis once again , exploring how various countries are imposing lockdowns .
If you would like to receive South Asia Brief in your inbox every Tuesday , please sign up here .
Look closely at the picture above .
Migrant workers in Ghaziabad , part of Delhi ’ s National Capital Region , pack into ( and on top of ) buses to get back home as hundreds more look @ @ @ @ @ @ @ For these men and women , social distancing is an unimaginable privilege .
The photograph was taken on Sunday , five days after Indian Prime Minister Narendra Modi announced a nationwide lockdown .
It ’ s just one of many such images emerging from across the world ’ s second-most populous country .
Last Tuesday , Modi gave Indians four hours ’ notice before imposing the lockdown .
The televised announcement recalled a similar speech in November 2016 , when India suddenly discontinued around 80 percent of its paper currency and promised to @ @ @ @ @ @ @ The replacement notes took several weeks to fully circulate , leading to a cash crunch that disproportionately harmed daily wage laborers , migrant workers , farmers , and small businesses .
The current nationwide lockdown is once again going to disproportionately hurt the country ’ s underclasses .
There are around 45 million migrant workers now trying to head home from their jobs in the cities , millions of homeless people left stranded , and hundreds of millions of daily wage laborers who will now struggle to put food on the table .
@ @ @ @ @ @ @ , hundreds of millions of Indians are living in small apartments , often with several people to a single room .
When so many people are living cheek by jowl , it takes only one person to spread the coronavirus .
The lockdown is only a week in , but many families are already struggling with basic necessities and storage .
( Only one-third of Indian households have refrigerators . )
As Rana Ayyub reports in Foreign Policy , there are already cases of people dying of hunger .
Soon , entertainment , @ @ @ @ @ @ @ a worry .
Only 66 percent of households have TVs , and more than half of the population still doesn ’ t have access to the internet .
The next few weeks will exacerbate familiar socioeconomic divides in the country .
Different models .
Not all South Asian countries have taken the same approach as India .
In Bangladesh , which has a population of around 164 million , the government warned about shutting down public transport a week before it actually did so , giving many migrant workers a chance to get @ @ @ @ @ @ @ days of national holiday—a euphemism if there ever was one—until April 4 .
Meanwhile in Pakistan , which has a population of close to 200 million , Prime Minister Imran Khan has argued against a countrywide lockdown .
“ If I impose a total lockdown , what will happen to our country ’ s poor ?
” he said on March 22 , speaking directly to Pakistanis and urging them to stay home only if they can afford to .
“ Panic can cause more damage than the coronavirus , ” Khan said @ @ @ @ @ @ @ and schools , letting individual states and provinces manage other aspects of supply chains and public movement .
Which South Asian response model will work best ?
Only time will tell , but for now the rates of coronavirus testing remain very low compared with those of most developed economies—which likely means there will be a lag between real and reported cases .
Global cooperation ?
The coronavirus crisis is a moment for leaders to appear strong .
As Michael Kugelman writes in Foreign Policy this week , India ’ s Modi has @ @ @ @ @ @ @ a leader in crafting a global response .
New Delhi has kick-started a regional emergency fund and proposed a G-20 videoconference .
But not only are countries too focused on their domestic crises to consider collaboration , as Kugelman points out , but Modi may also find that he has his hands full with India ’ s worsening situation .
As shown below , the number of confirmed cases of the coronavirus continues to rise across the region , especially in India and Pakistan .
FP Conference Call—For more on how the coronavirus @ @ @ @ @ @ @ how governments can respond , join me on Friday at 11 a.m. EDT for an FP Insider conference call with Raghuram Rajan , a former chief economist at the International Monetary Fund and former governor of India ’ s central bank , and Adam Posen , the president of the Peterson Institute for International Economics .
Reserve your spot now .
The tiny island nation of the Maldives has just 17 confirmed cases of the coronavirus—enough to drive most tourists away .
What percentage of the country ’ s GDP comes from tourism @ @ @ @ @ @ @ Rajapaksa releases war criminal .
The United Nations says a presidential pardon in Sri Lanka for convicted war criminal and former army sergeant Sunil Ratnayake is “ an affront to victims ” of the country ’ s civil war .
Last week , President Gotabaya Rajapaksa , who is himself accused of overseeing war crimes , ordered the release of Ratnayake , who was sentenced in 2015 for slitting the throats of eight Tamil civilians and dumping their bodies into a sewer .
Taliban strikes amid peace efforts .
Afghan officials reported that @ @ @ @ @ @ @ Afghan security forces over the weekend in separate attacks across the country .
Political disagreements and the continued fighting are holding back efforts to conduct the intra-Afghan talks between the elected government in Kabul and the Taliban .
India ’ s historic rate cut .
India ’ s central bank slashed its interest rates to the lowest level on record last week while also promising to inject nearly $ 50 billion of cash into the financial system .
The Sensex , India ’ s main stock index , is trading at its lowest @ @ @ @ @ @ @ the country most reliant on tourism , followed by the British Virgin Islands , Macao , Aruba , and Seychelles .
Fingers crossed these countries can bounce back soon .
That ’ s it for this week .
We welcome your feedback at newsletters @ foreignpolicy.com .
You can find older editions of South Asia Brief here .
For more from FP , subscribe here or sign up for our other newsletters .

Welcome to Foreign Policy’s weekly South Asia Brief. This week, we focus on the coronavirus crisis once again, exploring how various countries are imposing lockdowns.
Welcome to Foreign Policy’s weekly South Asia Brief. This week, we focus on the coronavirus crisis once again, exploring how various countries are imposing lockdowns.
If you would like to receive South Asia Brief in your inbox every Tuesday, please sign up here.
Social Distancing Is a Privilege
Look closely at the picture above. Migrant workers in Ghaziabad, part of Delhi’s National Capital Region, pack into (and on top of) buses to get back home as hundreds more look on, waiting for a ride. For these men and women, social distancing is an unimaginable privilege. The photograph was taken on Sunday, five days after Indian Prime Minister Narendra Modi announced a nationwide lockdown. It’s just one of many such images emerging from across the world’s second-most populous country.
Last Tuesday, Modi gave Indians four hours’ notice before imposing the lockdown. The televised announcement recalled a similar speech in November 2016, when India suddenly discontinued around 80 percent of its paper currency and promised to replace it with new rupee notes. The replacement notes took several weeks to fully circulate, leading to a cash crunch that disproportionately harmed daily wage laborers, migrant workers, farmers, and small businesses.
The current nationwide lockdown is once again going to disproportionately hurt the country’s underclasses. There are around 45 million migrant workers now trying to head home from their jobs in the cities, millions of homeless people left stranded, and hundreds of millions of daily wage laborers who will now struggle to put food on the table. One layer up in the social strata, hundreds of millions of Indians are living in small apartments, often with several people to a single room.
When so many people are living cheek by jowl, it takes only one person to spread the coronavirus. The lockdown is only a week in, but many families are already struggling with basic necessities and storage. (Only one-third of Indian households have refrigerators.) As Rana Ayyub reports in Foreign Policy, there are already cases of people dying of hunger. Soon, entertainment, education, and mental health will become a worry. Only 66 percent of households have TVs, and more than half of the population still doesn’t have access to the internet. The next few weeks will exacerbate familiar socioeconomic divides in the country.
Different models. Not all South Asian countries have taken the same approach as India. In Bangladesh, which has a population of around 164 million, the government warned about shutting down public transport a week before it actually did so, giving many migrant workers a chance to get home. The country has declared 10 days of national holiday—a euphemism if there ever was one—until April 4.
Meanwhile in Pakistan, which has a population of close to 200 million, Prime Minister Imran Khan has argued against a countrywide lockdown. “If I impose a total lockdown, what will happen to our country’s poor?” he said on March 22, speaking directly to Pakistanis and urging them to stay home only if they can afford to. “Panic can cause more damage than the coronavirus,” Khan said. Pakistan has shut down large malls and schools, letting individual states and provinces manage other aspects of supply chains and public movement.
Which South Asian response model will work best? Only time will tell, but for now the rates of coronavirus testing remain very low compared with those of most developed economies—which likely means there will be a lag between real and reported cases.
Global cooperation? The coronavirus crisis is a moment for leaders to appear strong. As Michael Kugelman writes in Foreign Policy this week, India’s Modi has been trying to position his country as a leader in crafting a global response. New Delhi has kick-started a regional emergency fund and proposed a G-20 videoconference. But not only are countries too focused on their domestic crises to consider collaboration, as Kugelman points out, but Modi may also find that he has his hands full with India’s worsening situation.
As shown below, the number of confirmed cases of the coronavirus continues to rise across the region, especially in India and Pakistan.
FP Conference Call—For more on how the coronavirus pandemic is impacting the global economy and how governments can respond, join me on Friday at 11 a.m. EDT for an FP Insider conference call with Raghuram Rajan, a former chief economist at the International Monetary Fund and former governor of India’s central bank, and Adam Posen, the president of the Peterson Institute for International Economics. Reserve your spot now.
Question of the Week
The tiny island nation of the Maldives has just 17 confirmed cases of the coronavirus—enough to drive most tourists away. What percentage of the country’s GDP comes from tourism?
A) 3.9 percent
B) 19 percent
C) 39 percent
D) 69 percent
Scroll down for the answer.
In Other News
Rajapaksa releases war criminal. The United Nations says a presidential pardon in Sri Lanka for convicted war criminal and former army sergeant Sunil Ratnayake is “an affront to victims” of the country’s civil war. Last week, President Gotabaya Rajapaksa, who is himself accused of overseeing war crimes, ordered the release of Ratnayake, who was sentenced in 2015 for slitting the throats of eight Tamil civilians and dumping their bodies into a sewer.
Taliban strikes amid peace efforts. Afghan officials reported that Taliban insurgents killed 27 members of the Afghan security forces over the weekend in separate attacks across the country. Political disagreements and the continued fighting are holding back efforts to conduct the intra-Afghan talks between the elected government in Kabul and the Taliban.
India’s historic rate cut. India’s central bank slashed its interest rates to the lowest level on record last week while also promising to inject nearly $50 billion of cash into the financial system. The Sensex, India’s main stock index, is trading at its lowest level since 2017.
And the Answer Is …
C) 39 percent.
The Maldives is the country most reliant on tourism, followed by the British Virgin Islands, Macao, Aruba, and Seychelles. Fingers crossed these countries can bounce back soon.
That’s it for this week.
We welcome your feedback at newsletters@foreignpolicy.com. You can find older editions of South Asia Brief here. For more from FP, subscribe here or sign up for our other newsletters.


foreignpolicy--2020-03-31--Coronavirus and the End of Economics

Coronavirus and the End of Economics

Coronavirus and the End of Economics The coronavirus pandemic has dramatically disrupted the everyday social and economic patterns of societies around the world .
Economists have focused on its economic impact and on what central banks and governments should do in response to an unusual simultaneous disruption of both supply and demand .
There is consensus that governments will have to support businesses and workers who are losing income—or risk dangerous knock-on effects on banks and the real economy—and find a way to finance these expenditures .
There is also an urgent need to ramp up the production of essential @ @ @ @ @ @ @ and masks ; to provide hospital beds ; and to ensure that required personnel can themselves turn up for work .
Despite disruption to supply chains and restrictions on the population , essential goods and basic services must be provided , firms must be kept from going bankrupt , and employment and incomes must be maintained .
These circumstances raise fundamental questions about the role of the market and the public sector in doing what is needed on the required scale and with sufficient speed .
Some economic thinkers are rightly attacking these @ @ @ @ @ @ @ practical ends also calls for us to rethink more basic economic ideas .
The economics discipline has provided the most influential framework for thinking about public policies , but it has proved inadequate , both in preparing for the current emergency and for dealing with it .
The pandemic underlines the necessity for a rethinking of our received ideas about economics and points in some directions that this rethinking should take .
Let ’ s first take the view of mainstream economics of the relationship between individual and collective rationality in a situation @ @ @ @ @ @ @ that what seems rational for the individual to do can end up being irrational from a collective standpoint .
Conventional economists conceive that the actions of individuals who propagate an infectious disease generate an externality in the form of an infection risk ( not just for those whom an individual interacts with directly but those whom they interact with , in turn ) , thereby raising the disease risks in society at large .
It may be reasonable for an individual to judge that an interaction with a specific other individual is low @ @ @ @ @ @ @ many such interactions multiplied across a population would greatly increase the speed of transmission of the disease and the ultimate risk of infection , not merely for the person concerned but for others There is not much to quarrel with here .
The trouble comes later .
Externalities can be such that some are harmed by them or that everyone is harmed by them .
The current pandemic involves aspects of both of these cases , but in either instance , a rethinking is needed .
Since mortality rates from the current pandemic @ @ @ @ @ @ @ and younger people most often experience small direct harms compared with the benefits they receive from an uninterrupted life , a framework for making public health choices in the current pandemic must go beyond the question of whether all can be made better off and instead undertake interpersonal comparisons of well-being to determine whether the benefits of a specific action to some outweigh the losses to others .
Most conventional economists studiously avoid such comparisons , focusing instead on efficiency considerations that rank outcomes only according to whether all are made better off @ @ @ @ @ @ @ this situation , such an approach will get us nowhere .
The economist Lionel Robbins famously attacked interpersonal comparisons as being questions of “ Thy blood or mine.
” But in this case they may be questions of “ Thy blood or my livelihood.
” Interpersonal comparisons permit us to judge whether prospective additional losses of life of some may be viewed as outweighing the inconveniences and economic or social harms , possibly also serious , experienced by others .
A pandemic allows us to see why it is absolutely necessary , even @ @ @ @ @ @ @ different people ’ s interests .
Such comparisons can of course be fraught .
In the best case , meaningful public deliberation on them can provide some social and political legitimacy .
Drastic decisions by governments in Europe and the United States to stem the pandemic so far appear to have earned public support , even in the absence of much public discussion .
But ultimately , societal deliberation is unavoidable about the weights to be attached to different interests , not only to gain adherence to them but to ensure that justifiable @ @ @ @ @ @ @ is a case for having restrictions on day-to-day life in place for a sustained period , it must be based on a willingness to weigh the interests of different people against each other .
Similarly , the case for requisitioning private resources ( such as medical facilities , buildings , or intellectual property concerning the makeup of pharmaceuticals or the design of ventilators ) in order to serve the immediate public purpose of fighting the pandemic can be best understood in terms of exceptional but reasonable trade-offs between the vital interests of some @ @ @ @ @ @ @ .
The willingness and ability to undertake such trade-offs is inherent to the concept of the public interest .
On a more fundamental level , the pandemic also shows the inadequacy of the conventional economist ’ s understanding of individual rationality .
In some measure , the control of a pandemic aims to avoid results that are damaging to all , at least among those who are similarly positioned in terms of risks from the disease .
Achieving the collectively rational outcome does not require departing from individual rationality , as the standard @ @ @ @ @ @ @ instance , in the famous example of the prisoner ’ s dilemma ) .
Rather , it requires viewing individual rationality differently and more expansively than economists have typically preferred .
This is not a new idea .
Critics of the narrow understanding of rationality in economics have long underscored the need to understand strategic interdependencies from a broader perspective , for instance that of enlightened self-interest—a concept that was advanced by Adam Smith and recognized by Alexis de Tocqueville but has largely fallen into disuse .
Similarly , moral philosophers , in @ @ @ @ @ @ @ reasoned approach to morality required evaluating one ’ s own actions by how they would be judged if undertaken by others .
All of these thinkers believed that rationality , properly understood , must include reasons that lead away from the relentless and myopic pursuit of individual advantage .
Only with this more comprehensive approach to rationality can one meaningfully make an appeal for voluntary compliance with the requirements of the social good .
It is noteworthy that in the model most prominently used by policymakers to inform their response to the present @ @ @ @ @ @ @ restrictions has been assumed .
Although abiding by such restrictions might be motivated by fear of punishment or by respect for authority , it can also stem from a willing alignment of one ’ s own reasoned choices with a societal effort at coordination .
Either way , the current situation requires policymakers to go beyond the narrow toolbox of mainstream economic theory to justify , and to motivate compliance with , public health measures that diminish individual freedom .
A second reason that conventional economic thinking offers very limited guidance in the @ @ @ @ @ @ @ uncertainty .
Economists have long made the distinction between uncertainty and risk .
Uncertainty is typically understood as involving outcomes that can not straightforwardly be assigned a probability , unlike risk .
Economics offers limited resources to understand how to make decisions in the presence of fundamental uncertainty .
But a still deeper form of uncertainty is one in which the possible outcomes can not easily be anticipated at all .
Such a wildly unpredictable outcome has come to be popularly known in recent years as a black swan event .
The coronavirus @ @ @ @ @ @ @ been such a black swan event , but that claim does not withstand scrutiny : The possibility of such a threat was long recognized by experts .
This recognition led to scenarios being discussed at the highest levels of governments .
The possibility of a pandemic was therefore a “ known unknown ” rather than an “ unknown unknown.
” The prospect of a pandemic involving a coronavirus thus involved fundamental uncertainty of the first type : an occurrence that could be anticipated—indeed , was anticipated—even though it could not be assigned a @ @ @ @ @ @ @ whether , when , and in what form it would happen .
Given this , it now seems obvious that the relevant public health infrastructure had been severely neglected .
For instance , at the global level , the World Health Organization ( WHO ) , which plays a central role in the surveillance of and response to emerging diseases , may have been inadequately financed .
It is a different matter that WHO has also been accused by some of a poor initial response to the pandemic .
A similar claim could @ @ @ @ @ @ @ infrastructure in many countries .
The fundamentally uncertain nature of the evolution of the pandemic gives rise to continuing deep dilemmas as to the so-called rational response to the current coronavirus emergency .
Consider the metaphor of “ flattening the curve , ” which has informed governmental and societal responses to the pandemic .
The potential results of measures such as the closure of schools and universities , restaurants and bars , and social distancing have been underpinned by simulations that are , inevitably , based on specific assumptions and limited evidence and @ @ @ @ @ @ @ avoiding deaths from the disease ) .
The motivation for undertaking specific measures is based on the expected direction of their impact , but what actual effect they will have , in relation to the spread of the virus , let alone other health and non-health consequences , is unknowable from the models that have been used .
This is implicitly admitted by the model builders , who have therefore studied the impact of periodically turning restrictions on and off as information about the success or failure of policies comes in .
The @ @ @ @ @ @ @ disagreement on the right course of action .
The effects of the draconian closure of borders , and the shutting down of many aspects of day-to-day life , on other aspects of physical health , mental health and loneliness , sociability , economic prosperity and inclusion , public finances , education , and birth and death rates , among many other factors , add to the uncertainty confronting societies .
Each of these relates to the others in complex ways .
The effects of such draconian policies are difficult to know .
Some @ @ @ @ @ @ @ permanent .
Others may be temporary but highly disruptive .
The plausible chains of causation are diverse .
An effort to chart them is essential to making prudent public decisions but also necessarily encounters serious limitations .
The late sociologist Ulrich Beck , who spoke of the emergence of a “ risk society ” that generated “ bads ” as well as “ goods , ” distributed according to often unknown or unknowable chains of causation , was not far off the mark .
The need to undertake adequate measures to stanch the @ @ @ @ @ @ @ that we do not , and can not , know all that we need to know to make informed decisions .
Although a public health emergency highlights the need for executive powers , and the need for expertise , it also underlines their limits .
In a democratic context , public decisions must be underpinned by judgments that are capable , in the light of day , of being supported by reason and sustained by societal deliberation .
Judgment must therefore be combined with justification .
The fundamentally uncertain nature of the impact @ @ @ @ @ @ @ influence private sector responses , and this must in turn be taken account of by public policies .
The famous Ellsberg paradox showed that individuals have an aversion to uncertainty that goes beyond their aversion to risk .
In a situation where both the “ state space ” describing possible events and the probability to be attached to each such event are unknown , the emotional element in decision-making is prominent ; the “ animal spirits ” of investors come to the fore .
For instance , although there are rational reasons for @ @ @ @ @ @ @ result of the pandemic , the enormous day-to-day fluctuations in stock prices in its aftermath appear to be a form of excess volatility that can not be fully understood as rational .
Public policy in response to the pandemic must focus on providing an anchor and assurance to private actors .
This can create expectations of stability so that private actors continue where possible to spend and invest , plan for the end of the public health emergency , and avoid actions that could create adverse knock-on effects on public health or economic @ @ @ @ @ @ @ Panic is itself a risk factor and can be triggered by the wrong public actions or calmed by the right ones .
Governments can provide a backstop that ensures the survival of firms and the continuity of employment and incomes so as to maintain aggregate demand and broad-based solvency and liquidity .
This may require outright subsidies and transfers in order to enable economic activity to go on and to avoid irreversible damage .
But these are ways of dealing with uncertainty , not dispelling it .
Identifying the necessary interventions that take @ @ @ @ @ @ @ , economic stability , and other factors is in the nature of a “ wicked problem ” and demands extraordinary public leadership , at a time when trust in government is unprecedentedly low .
There is , moreover , no formula for it .
Although economics can provide required input , no one discipline , nor indeed all of them together , suffices to turn art into science .
Third , consider that an economy can not be separated from society : It is socially embedded .
The notion that the economy can @ @ @ @ @ @ @ , political , or social processes—often promoted by the dominant tradition in economics and reflected in general equilibrium theory—is shown by the pandemic to be not merely fragile but false .
One way to see this is that the appropriate economic policy response to the pandemic depends on what is held to be of value—and the values to be considered go beyond the narrowly economic .
Former White House chief strategist Steve Bannon reportedly said that “ a country is more than an economy.
” He was right , if for the wrong @ @ @ @ @ @ @ pandemic would have seemed impossible even yesterday : nations isolating themselves , motivated not by the desire to protect their economies but to protect the public health .
Implicit in this overriding of economic priorities is the importance of an idea of common citizenship and shared fate .
Many societies pay little heed to this idea in normal times .
But the pandemic underlines that the public health is a consequence of regulations , institutions , policies , norms , habits , and economic and social arrangements .
As a result , state @ @ @ @ @ @ @ , becomes paramount .
The impact of paid sick leave or access to health care on the spread of infectious diseases provides examples of how political and economic choices generate the transmission belt for disease .
An influential idea of economic policy was that each objective requires its own instrument , but when causal interlinkages are deep , the instruments—in this case , public health and economic policies—must be coordinated to achieve the objectives .
The pandemic also blurs the dividing line between the private and the public .
The goal of flattening @ @ @ @ @ @ @ are insufficient hospital beds , ventilators , and other facilities to look after all of the potentially sick at one time .
This capacity constraint is , however , the result of prior public and private decisions not to invest in what may then have seemed to some—but not to all—to be excess capacity .
The current severe curtailments of private freedoms , in particular of movement and assembly , and disruptions of patterns of life—with potentially damaging economic , social , and health consequences—are the result of what appear in retrospect to @ @ @ @ @ @ @ the structure of supply chains , once motivated by efficiency considerations , may also have made it more difficult to increase rapidly the output of required necessities , generating marked inefficiency as a result .
Keynesian economic thinking has long underlined the societal interest in adequate investment , whether public or private .
The pandemic brings to the fore that this interest can extend beyond how much investment there is to what investment there is .
Current efforts to raise the supply of the constraining resources rapidly may require public coordination and redirection @ @ @ @ @ @ @ like a war , makes the distinction between the private and the public spheres less meaningful .
It brings into high relief previously obscured interdependence .
This is not mere theory but thinking that makes sense of practice , especially but not only in extraordinary times .
A rational response to the pandemic requires recognizing that interdependencies between the spheres of life are central to economic phenomena just as they are to epidemiology .
The kind of knowledge that is required demands active collaboration between the various social and natural sciences .
Whether @ @ @ @ @ @ @ , making sense of the relation between what is rational when viewed individually and when viewed collectively , recognizing the role of fundamental uncertainty and the consequent need for judgment and justification in making public policies , understanding the economy in its social context , or in other ways , the discipline of economics must open itself to new insights and retrieve old ones .
The required rethinking of concepts and methods is most likely to come about due to the demands , and in the crucible , of applied problem-solving .
Difficult @ @ @ @ @ @ @ a beginning .

The coronavirus pandemic has dramatically disrupted the everyday social and economic patterns of societies around the world. Economists have focused on its economic impact and on what central banks and governments should do in response to an unusual simultaneous disruption of both supply and demand. There is consensus that governments will have to support businesses and workers who are losing income—or risk dangerous knock-on effects on banks and the real economy—and find a way to finance these expenditures. There is also an urgent need to ramp up the production of essential commodities such as ventilators, gloves, and masks; to provide hospital beds; and to ensure that required personnel can themselves turn up for work. Despite disruption to supply chains and restrictions on the population, essential goods and basic services must be provided, firms must be kept from going bankrupt, and employment and incomes must be maintained.
The coronavirus pandemic has dramatically disrupted the everyday social and economic patterns of societies around the world. Economists have focused on its economic impact and on what central banks and governments should do in response to an unusual simultaneous disruption of both supply and demand. There is consensus that governments will have to support businesses and workers who are losing income—or risk dangerous knock-on effects on banks and the real economy—and find a way to finance these expenditures. There is also an urgent need to ramp up the production of essential commodities such as ventilators, gloves, and masks; to provide hospital beds; and to ensure that required personnel can themselves turn up for work. Despite disruption to supply chains and restrictions on the population, essential goods and basic services must be provided, firms must be kept from going bankrupt, and employment and incomes must be maintained.
These circumstances raise fundamental questions about the role of the market and the public sector in doing what is needed on the required scale and with sufficient speed. Some economic thinkers are rightly attacking these problems with urgency.
But addressing such practical ends also calls for us to rethink more basic economic ideas. The economics discipline has provided the most influential framework for thinking about public policies, but it has proved inadequate, both in preparing for the current emergency and for dealing with it. The pandemic underlines the necessity for a rethinking of our received ideas about economics and points in some directions that this rethinking should take.
The public interest and rational choice
Let’s first take the view of mainstream economics of the relationship between individual and collective rationality in a situation like the current pandemic. It conceives that what seems rational for the individual to do can end up being irrational from a collective standpoint. Conventional economists conceive that the actions of individuals who propagate an infectious disease generate an externality in the form of an infection risk (not just for those whom an individual interacts with directly but those whom they interact with, in turn), thereby raising the disease risks in society at large. It may be reasonable for an individual to judge that an interaction with a specific other individual is low risk for both of them, but many such interactions multiplied across a population would greatly increase the speed of transmission of the disease and the ultimate risk of infection, not merely for the person concerned but for others
There is not much to quarrel with here. The trouble comes later. Externalities can be such that some are harmed by them or that everyone is harmed by them. The current pandemic involves aspects of both of these cases, but in either instance, a rethinking is needed.
Since mortality rates from the current pandemic are overwhelmingly greater for the old, and younger people most often experience small direct harms compared with the benefits they receive from an uninterrupted life, a framework for making public health choices in the current pandemic must go beyond the question of whether all can be made better off and instead undertake interpersonal comparisons of well-being to determine whether the benefits of a specific action to some outweigh the losses to others. Most conventional economists studiously avoid such comparisons, focusing instead on efficiency considerations that rank outcomes only according to whether all are made better off by a course of action. In this situation, such an approach will get us nowhere. The economist Lionel Robbins famously attacked interpersonal comparisons as being questions of “Thy blood or mine.” But in this case they may be questions of “Thy blood or my livelihood.” Interpersonal comparisons permit us to judge whether prospective additional losses of life of some may be viewed as outweighing the inconveniences and economic or social harms, possibly also serious, experienced by others.
A pandemic allows us to see why it is absolutely necessary, even if far from straightforward, to weigh different people’s interests. Such comparisons can of course be fraught. In the best case, meaningful public deliberation on them can provide some social and political legitimacy. Drastic decisions by governments in Europe and the United States to stem the pandemic so far appear to have earned public support, even in the absence of much public discussion. But ultimately, societal deliberation is unavoidable about the weights to be attached to different interests, not only to gain adherence to them but to ensure that justifiable trade-offs are being made.
If there is a case for having restrictions on day-to-day life in place for a sustained period, it must be based on a willingness to weigh the interests of different people against each other. Similarly, the case for requisitioning private resources (such as medical facilities, buildings, or intellectual property concerning the makeup of pharmaceuticals or the design of ventilators) in order to serve the immediate public purpose of fighting the pandemic can be best understood in terms of exceptional but reasonable trade-offs between the vital interests of some and the less vital interests of others. The willingness and ability to undertake such trade-offs is inherent to the concept of the public interest.
On a more fundamental level, the pandemic also shows the inadequacy of the conventional economist’s understanding of individual rationality. In some measure, the control of a pandemic aims to avoid results that are damaging to all, at least among those who are similarly positioned in terms of risks from the disease. Achieving the collectively rational outcome does not require departing from individual rationality, as the standard framework would suggest (as, for instance, in the famous example of the prisoner’s dilemma). Rather, it requires viewing individual rationality differently and more expansively than economists have typically preferred. This is not a new idea. Critics of the narrow understanding of rationality in economics have long underscored the need to understand strategic interdependence from a broader perspective, for instance that of enlightened self-interest—a concept that was advanced by Adam Smith and recognized by Alexis de Tocqueville but has largely fallen into disuse. Similarly, moral philosophers, in particular Immanuel Kant, underlined that a reasoned approach to morality required evaluating one’s own actions by how they would be judged if undertaken by others. All of these thinkers believed that rationality, properly understood, must include reasons that lead away from the relentless and myopic pursuit of individual advantage.
Only with this more comprehensive approach to rationality can one meaningfully make an appeal for voluntary compliance with the requirements of the social good. It is noteworthy that in the model most prominently used by policymakers to inform their response to the present crisis, only partial compliance with social restrictions has been assumed. Although abiding by such restrictions might be motivated by fear of punishment or by respect for authority, it can also stem from a willing alignment of one’s own reasoned choices with a societal effort at coordination. Either way, the current situation requires policymakers to go beyond the narrow toolbox of mainstream economic theory to justify, and to motivate compliance with, public health measures that diminish individual freedom.
Uncertainty, judgment, and justification
A second reason that conventional economic thinking offers very limited guidance in the present circumstance is the presence of fundamental uncertainty. Economists have long made the distinction between uncertainty and risk. Uncertainty is typically understood as involving outcomes that cannot straightforwardly be assigned a probability, unlike risk. Economics offers limited resources to understand how to make decisions in the presence of fundamental uncertainty. But a still deeper form of uncertainty is one in which the possible outcomes cannot easily be anticipated at all. Such a wildly unpredictable outcome has come to be popularly known in recent years as a black swan event.
The coronavirus pandemic might at first appear to have been such a black swan event, but that claim does not withstand scrutiny: The possibility of such a threat was long recognized by experts. This recognition led to scenarios being discussed at the highest levels of governments. The possibility of a pandemic was therefore a “known unknown” rather than an “unknown unknown.”
The prospect of a pandemic involving a coronavirus thus involved fundamental uncertainty of the first type: an occurrence that could be anticipated—indeed, was anticipated—even though it could not be assigned a probability, nor could it be known whether, when, and in what form it would happen. Given this, it now seems obvious that the relevant public health infrastructure had been severely neglected. For instance, at the global level, the World Health Organization (WHO), which plays a central role in the surveillance of and response to emerging diseases, may have been inadequately financed. It is a different matter that WHO has also been accused by some of a poor initial response to the pandemic. A similar claim could be made about the national public health infrastructure in many countries.
The fundamentally uncertain nature of the evolution of the pandemic gives rise to continuing deep dilemmas as to the so-called rational response to the current coronavirus emergency. Consider the metaphor of “flattening the curve,” which has informed governmental and societal responses to the pandemic. The potential results of measures such as the closure of schools and universities, restaurants and bars, and social distancing have been underpinned by simulations that are, inevitably, based on specific assumptions and limited evidence and that focus mainly on one goal (avoiding deaths from the disease). The motivation for undertaking specific measures is based on the expected direction of their impact, but what actual effect they will have, in relation to the spread of the virus, let alone other health and non-health consequences, is unknowable from the models that have been used. This is implicitly admitted by the model builders, who have therefore studied the impact of periodically turning restrictions on and off as information about the success or failure of policies comes in.
The inadequacy of existing models leads to reasonable disagreement on the right course of action. The effects of the draconian closure of borders, and the shutting down of many aspects of day-to-day life, on other aspects of physical health, mental health and loneliness, sociability, economic prosperity and inclusion, public finances, education, and birth and death rates, among many other factors, add to the uncertainty confronting societies. Each of these relates to the others in complex ways. The effects of such draconian policies are difficult to know. Some effects of policies may be persistent or permanent. Others may be temporary but highly disruptive. The plausible chains of causation are diverse. An effort to chart them is essential to making prudent public decisions but also necessarily encounters serious limitations.
The late sociologist Ulrich Beck, who spoke of the emergence of a “risk society” that generated “bads” as well as “goods,” distributed according to often unknown or unknowable chains of causation, was not far off the mark. The need to undertake adequate measures to stanch the disease must be balanced against our knowledge that we do not, and cannot, know all that we need to know to make informed decisions. Although a public health emergency highlights the need for executive powers, and the need for expertise, it also underlines their limits. In a democratic context, public decisions must be underpinned by judgments that are capable, in the light of day, of being supported by reason and sustained by societal deliberation. Judgment must therefore be combined with justification.
The fundamentally uncertain nature of the impact of the pandemic and its evolution will influence private sector responses, and this must in turn be taken account of by public policies. The famous Ellsberg paradox showed that individuals have an aversion to uncertainty that goes beyond their aversion to risk. In a situation where both the “state space” describing possible events and the probability to be attached to each such event are unknown, the emotional element in decision-making is prominent; the “animal spirits” of investors come to the fore. For instance, although there are rational reasons for the collapse of market sentiment as a result of the pandemic, the enormous day-to-day fluctuations in stock prices in its aftermath appear to be a form of excess volatility that cannot be fully understood as rational.
Public policy in response to the pandemic must focus on providing an anchor and assurance to private actors. This can create expectations of stability so that private actors continue where possible to spend and invest, plan for the end of the public health emergency, and avoid actions that could create adverse knock-on effects on public health or economic outcomes, such as firing workers. Panic is itself a risk factor and can be triggered by the wrong public actions or calmed by the right ones. Governments can provide a backstop that ensures the survival of firms and the continuity of employment and incomes so as to maintain aggregate demand and broad-based solvency and liquidity. This may require outright subsidies and transfers in order to enable economic activity to go on and to avoid irreversible damage. But these are ways of dealing with uncertainty, not dispelling it. Identifying the necessary interventions that take note of the interdependence between public health, economic stability, and other factors is in the nature of a “wicked problem” and demands extraordinary public leadership, at a time when trust in government is unprecedentedly low. There is, moreover, no formula for it. Although economics can provide required input, no one discipline, nor indeed all of them together, suffices to turn art into science.
What is an economy?
Third, consider that an economy cannot be separated from society: It is socially embedded. The notion that the economy can be analyzed independently of the public health, political, or social processes—often promoted by the dominant tradition in economics and reflected in general equilibrium theory—is shown by the pandemic to be not merely fragile but false.
One way to see this is that the appropriate economic policy response to the pandemic depends on what is held to be of value—and the values to be considered go beyond the narrowly economic. Former White House chief strategist Steve Bannon reportedly said that “a country is more than an economy.” He was right, if for the wrong reasons. The global response to the pandemic would have seemed impossible even yesterday: nations isolating themselves, motivated not by the desire to protect their economies but to protect the public health. Implicit in this overriding of economic priorities is the importance of an idea of common citizenship and shared fate. Many societies pay little heed to this idea in normal times. But the pandemic underlines that the public health is a consequence of regulations, institutions, policies, norms, habits, and economic and social arrangements. As a result, state and societal action, or lack thereof, becomes paramount. The impact of paid sick leave or access to health care on the spread of infectious diseases provides examples of how political and economic choices generate the transmission belt for disease. An influential idea of economic policy was that each objective requires its own instrument, but when causal interlinkages are deep, the instruments—in this case, public health and economic policies—must be coordinated to achieve the objectives.
The pandemic also blurs the dividing line between the private and the public. The goal of flattening the curve has been embraced because there are insufficient hospital beds, ventilators, and other facilities to look after all of the potentially sick at one time. This capacity constraint is, however, the result of prior public and private decisions not to invest in what may then have seemed to some—but not to all—to be excess capacity. The current severe curtailments of private freedoms, in particular of movement and assembly, and disruptions of patterns of life—with potentially damaging economic, social, and health consequences—are the result of what appear in retrospect to have been prior underinvestments. Changes in the structure of supply chains, once motivated by efficiency considerations, may also have made it more difficult to increase rapidly the output of required necessities, generating marked inefficiency as a result. Keynesian economic thinking has long underlined the societal interest in adequate investment, whether public or private. The pandemic brings to the fore that this interest can extend beyond how much investment there is to what investment there is. Current efforts to raise the supply of the constraining resources rapidly may require public coordination and redirection of private resources. A pandemic, like a war, makes the distinction between the private and the public spheres less meaningful. It brings into high relief previously obscured interdependence. This is not mere theory but thinking that makes sense of practice, especially but not only in extraordinary times.
A rational response to the pandemic requires recognizing that interdependencies between the spheres of life are central to economic phenomena just as they are to epidemiology. The kind of knowledge that is required demands active collaboration between the various social and natural sciences. Whether it is in conceptualizing the public interest, making sense of the relation between what is rational when viewed individually and when viewed collectively, recognizing the role of fundamental uncertainty and the consequent need for judgment and justification in making public policies, understanding the economy in its social context, or in other ways, the discipline of economics must open itself to new insights and retrieve old ones. The required rethinking of concepts and methods is most likely to come about due to the demands, and in the crucible, of applied problem-solving. Difficult moments such as the present one make a beginning.