History shows that the deepest economic and social changes occur in the aftermath of major crises, catastrophes or conflicts. They have catalytic, disruptive effects on existing orders, creating new realities and different ways of thinking about the future. East Asia is now in an important phase of its history.
There is currently an understandable preoccupation with how quickly the East Asian economy can recover from the COVID-19 crisis. At the same time, it is crucial to keep in mind how future generations will look back at this period and judge our actions — and inactions.
This moment in history will ultimately be framed both by what preceded it and what came after. Was the chance taken in the 2020s to put the region’s economy on a more sustainable path? This could prove to be the most defining decade of the 21st century.
The COVID-19 crisis is occurring at a time of fervent populist nationalism when the prospects of reliving a late-19th century-style era of ratcheting up geopolitical tension, trade protectionism and superpower rivalry are very real.
Lack of international leadership and cooperation in addressing the pandemic
The lack of international leadership and cooperation in addressing the pandemic is all too evident. The institutions underpinning the post-1945 international economic order are under severe pressure in the current era of Trump, Putin, Xi, Bolsonaro and Duterte.
Crises expose the flaws and limitations of poor leadership, but also the qualities of good leaders such as New Zealand’s much-lauded Jacinda Ardern. Crises can bring out the worst in humanity but also its positive attributes of compassion, creativity and adaptation.
Writing recently in the Financial Times, Nobel economics laureate Amartya Sen argued that a better society can emerge from the lockdowns and that ‘the need to act together can certainly generate an appreciation of the constructive role of public action’.
East Asia has demonstrated success at transformative public action. Over recent decades, the region has raised more people out of poverty than any other period of human history. In the years to come, East Asian countries have the opportunity to realise new transformative goals and take a lead on developing new public actions, policy ideas and innovations to improve people’s lives.
Fiscal stimulus measures
For now, governments in East Asia and elsewhere are focused on fiscal stimulus measures to shore up national economies as private sector business activity collapses.
While these interventions are rightly addressing economic emergency issues such as mass unemployment, business bankruptcies, credit flows and funding frontline health and other essential…