Tag Archive for: COVID

The Coming Collapse of the Developing World

/in , , ,

In Europe, North America, Oceania and East Asia, the COVID-19 pandemic has been a tragic, wrenching experience, creating more depressed and divided societies. Yet, as we have been gazing obsessively at our own problems, a spectre infinitely worse is emerging in the most populous, fastest growing and least resilient parts of the world.

COVID has caused a deep crisis in the already suffering developing world, which contains nearly half of all humanity. And this will have serious implications for the future of the world economy and political order.

Initially, COVID was something of a rich country’s disease. It started in industrial China and spread to places like the United States, Italy and the United Kingdom. But now none of the wealthiest countries falls within the top 10 worst-hit countries in terms of Covid deaths per capita. In the US, COVID has gone from the leading cause of death to seventh place in just over a year.

According to Bloomberg, the countries now most resilient to COVID and its variants are all among the richest – the United States, New Zealand, Israel, France, the UK and Spain, along with some wealthier East Asian countries, including China. In contrast, the pandemic rages on in Latin America and the backwaters of Eastern Europe. Impoverished Peru has been particularly hard hit, recording a COVID fatality rate twice that of any other country.

At the bottom of the list, according to Bloomberg, lies Argentina, the Philippines, India, Malaysia, Indonesia, Colombia and Pakistan, where on average just five per cent of the population have been vaccinated. We may be seeing the fruits of what the Nation describes as ‘a gargantuan north-south vaccination gap’.

A vaccine apartheid

By June this year, the US and Britain had jabbed half of their populations, and the rest of the EU had jabbed a third. In contrast, the Democratic Republic of Congo, Ethiopia, Nigeria, South Sudan, North Sudan, Vietnam and Zambia had vaccinated between 0.1 per cent and 0.9 per cent of their populations. This is a world lurching towards vaccine apartheid.

Indeed, given the fear COVID-19 instills in people, developing countries in which infections are rife could become like no-go areas for Westerners – places that Western businesses avoid, except to acquire raw materials, such as the minerals that are critical to meeting the climate goals of Western countries.

Even before the pandemic, many economies in the developing world were experiencing difficulty accessing world credit markets, and that access will likely now worsen. Vaccination apartheid will exacerbate pre-existing problems. For example, according to 2019 data from the World Bank, youth unemployment was approaching 25 per cent in Turkey, India and Iran. In South Africa, it was over 55 per cent. Already high levels of youth unemployment will become much higher.

Read the rest of this piece at Spiked.

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Hügo Krüger is a Structural Engineer with working experience in the Nuclear, Concrete and Oil and Gas Industry. He was born in Pretoria South Africa and moved to France in 2015. He holds a Bachelors Degree in Civil Engineering from the University of Pretoria and a Masters degree in Nuclear Structures from the École spéciale des travaux publics, du bâtiment et de l’industrie (ESTP Paris). He frequently contributes to the South African English blog Rational Standard and the Afrikaans Newspaper Rapport. He fluently speaks French, Germany, English and Afrikaans. His interests include politics, economics, public policy, history, languages, Krav Maga and Structural Engineering.

Photo: Dennis Jarvis, via Flickr under CC 2.0 License.

Winners and Losers: The Global Economy After COVID

/in ,

The COVID-19 pandemic has transformed the world economy in ways that will be debated by pundits and future historians for decades to come. Yet, as hard as it is to predict a disrupted future accurately, the pandemic (not to mention its probable successors) looks likely to produce clear economic winners and losers. The top digital companies—Amazon, Apple, Tencent, Microsoft, Google, Facebook, Ant, Netflix, and Hulu—have thrived during quarantines and the ongoing dispersion of work. These are the most obvious winners in what leftist author Naomi Klein has called a “Screen New Deal” that seeks to create a “permanent and profitable no-touch future.” Since 2019, Facebook, Apple, Amazon, Microsoft, and Google have added over two-and-a-half trillion dollars to their combined valuation, and all enjoyed record breaking profits in 2020.

But it’s not just the tech oligarchs who have benefited from the pandemic disruption. Companies that keep the basic economy functioning—firms dealing in logistics, for example, or critical metals or food processing—have become, if anything, even more important. With the shipping supply chain disrupted due to the pandemic, logistics giant Maersk is set to increase its inland-based operation with the acquisition of the Swiss-based broker KGH Customs Services. The company reported its best quarter ever in the first quarter of 2021, launching a $5 billion share buyback scheme. And although the developing world has been hit hard by declines in tourism and investment, mining giants such as Glencore are investing billions to challenge China’s market dominance in rare earth minerals. The global market for cobalt is expected to double by 2025 and has launched a new “scramble for Africa,” which is also raising moral questions about whether or not the green oligarch’s love of the planet outweighs human rights abuses such as the practice of child labor in the Democratic Republic of Congo.

Even some high street businesses which have taken major hits are finding new niches. Many small businesses may never return to pre-COVID levels, as people have become used to the convenience of online purchases. Nevertheless, some are finding new uses for redundant malls, and have discovered new ways to reach more customers using social media and technology. Lower property prices are also opening up potential opportunities for entrepreneurs in pricey places such as Manhattan, San Francisco, or London. Pestilence re-shapes economies.

In his 2017 book The Fate of Rome: Climate, Disease, and the End of an Empire, historian Kyle Harper argues that plague, as well as climate change, undermined the Roman empire, creating conditions that boosted the barbarian warlords who would later become the Medieval aristocracy. The lethal plagues of the Middle Ages likewise disrupted the great Mongol empire, at the time the largest in history, and in conjunction with cooling temperatures, undermined the stability of the great Silk Road and ended the Pax Mongolica. This opened the door to the Age of Exploration and Europe’s maritime conquest of the world. Within Medieval Europe, the Black Death killed as much as 40 percent of the population, but also precipitated the rise of the Third Estate, and in some places raised wages for scarce labor. “People were fewer,” noted historian Barbara Tuchman, “but they ate better. The pandemic also led to greater emphasis on long-distance navigation.”

During the current crisis, disintermediation has been the primary driver of the post-pandemic economy. The novel coronavirus forced businesses to adapt quickly to new circumstances, and as with all economic crises, created winners and losers. The lockdowns accelerated the use of digital technology for work, retail, and entertainment. This has not only helped the big firms but also produced a whole crop of new startups, many of which address the shift to online work. The tech oligarchies now face competition from decentralized networks based on blockchain technology which is less vulnerable to domination by giant firms with algorithms that are designed to eliminate the incentive structures that lead to central node control and promote monopolistic behavior. Domains such as Lokinet, Ethereum, Odysee, and Urbit seek to give users ownership of their own data. Even Google’s near-monopoly of web browser supremacy is set to be challenged by data-privacy-conscious alternatives such as DuckDuckGo, which has seen a 62 percent growth in search results in 2020. Users are clearly becoming more conscious of privacy and data ownership.

Read the rest of this piece at Quillette.

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Hügo Krüger is a Structural Engineer with working experience in the Nuclear, Concrete and Oil and Gas Industry. He was born in Pretoria South Africa and moved to France in 2015. He holds a Bachelors Degree in Civil Engineering from the University of Pretoria and a Masters degree in Nuclear Structures from the École spéciale des travaux publics, du bâtiment et de l’industrie (ESTP Paris). He frequently contributes to the South African English blog Rational Standard and the Afrikaans Newspaper Rapport. He fluently speaks French, Germany, English and Afrikaans. His interests include politics, economics, public policy, history, languages, Krav Maga and Structural Engineering.

Homepage photo: Steve Jurvetson, via Flickr under CC 2.0 License.

Could COVID Exodus Speed the Heartland Revival?

/in , , ,

Over the past two decades America’s largest urban areas enjoyed a heady renaissance, driven in large part by the in-migration of immigrants, minorities and young people. But even as a big-city dominated press corps continued to report on gentrification and displacement, those trends began to reverse themselves in recent years as all three of those populations started heading in ever larger numbers to suburbs, sprawling sunbelt boomtowns and smaller cities and out of the biggest ones.

That shift preceded the COVID pandemic, but has rapidly accelerated with the expansion of remote work, which has undermined the economic basis for high-end urban and post-industrial economies. Meanwhile, the severe lockdowns Democratic governors and mayors favored devastated the service and small business economies that had provided sustenance to immigrant and minority entrepreneurs and workers.

The same “canaries in the coal mine” that spurred America’s urban renaissance have been leaving its big cities in growing numbers since 2014, notes demographer Wendell Cox. New York, Los Angeles and Chicago have all begun to lose population while people have flocked to new employment hubs like Austin, Dallas, Phoenix, Columbus and Nashville that have led the way in terms of both overall new jobs and high-end business and professional service jobs.

Nowhere is this shift more evident than with immigrants. The share of the foreign born settling in big coastal “gateways” has plunged from 44 percent in 2010 to barely 35 percent in 2019. Foreign-born populations, notes Cox in research for the think tank Heartland Forward, stagnated or even declined in New York, Los Angeles and Chicago as they surged in Houston (over 25 percent growth), Dallas-Ft Worth (30 percent) Charlotte (nearly 40 percent) and Nashville (a remarkable 44 percent).

Houston, in fact, is now the most diverse major metropolitan area in the country. In 1960, Harris County, which includes Houston and many of its suburbs, was 70 percent white, non-Hispanic and 20 percent African American. Today, the county’s total population is 31 percent white and non-Hispanic, 42 percent Hispanic, 19 percent Black and 8 percent Asian. The share of foreign-born Houstonians now approaches one-fourth of the population—almost twice the average for the nation’s 50 most populous metros.

More surprising still has been the equally rapid move of immigrants to smaller cities such as Fayetteville, Ark., Knoxville, Tenn,; Cedar Rapids, Iowa, Springfield, Mo., and Fargo, N.D. The fastest growth in foreign-born populations has been in areas with traditionally low immigrant concentrations. Where the foreign-born population grew by 10 percent nationally in the last decades, in states like Georgia, Kentucky, South Carolina and the Dakotas it has expanded by 30 percent.

Racial minorities, too, are heading increasingly to the sunbelt boom towns, the south and to smaller cities. The surges in Latino, Asian and African American growth are not in Los Angeles, New York, Chicago, or the Bay Area, according to an analysis by Wendell Cox for the Urban Reform Institute, but in Atlanta, Boise, Salt Lake City, Phoenix and Las Vegas.

Again, economics is a key factor. Middle-class job creation has been generally stronger in these communities and, due to less regulation and lower taxes, costs are lower. African-American real incomes in Atlanta are more than $60,000, compared to $36,000 in San Francisco and $37,000 in Los Angeles. The median income for Latinos in Virginia Beach-Norfolk is $69,000, compared to $43,000 in Los Angeles, $47,000 in San Francisco and $40,000 in New York City. The highest Asian median household incomes are in Raleigh, Jackson, Fayetteville (AR-MO) and Austin.

Read the rest of this piece at Daily Beast.

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo: Brian Stansberry via Wikimedia under CC 3.0 License.

America After COVID: What Demographics Tell Us

/in ,

“When there is a general change in conditions, it is as if the entire creation had changed, and the whole world altered.”  —Ibn Khaldun, 14th century Arab historian

The Covid-19 pandemic, it’s clear, will help reshape America’s economic and demographic future. Yet, many of the trends that we may associate with this reshaping—the rise of online work, a growing interest in suburbia and smaller cities—were already in place before the pandemic. The pandemic did not originate these trends, but it will likely accelerate them.

For years, the conventional wisdom from economic observers like Neil Irwin of The New York Times and echoed by public relations aces and property speculators has been that “superstar cities” like New York, San Francisco and Seattle have “the best chance of recruiting superstar employees. In contrast, rural and interior regions would become home to “behind.” And experts like urbanist Christopher Leinberger predict suburban tracts would become “the next slums.”

Yet, in reality, jobs and young people have been increasingly heading toward both the suburban periphery and smaller cities. In fact, a snapshot of America before the appearance of Covid-19 was of a country migrating more to suburbs, exurbs and smaller cities, with the U.S. Census Bureau reporting the fastest growth in domestic migration between 2010 and 2019 taking place in cities with less than a million people—a dramatic change from just a decade earlier.

In contrast, our largest metropolitan areas—New York, Chicago and Los Angeles—lost nearly as many net domestic migrants as the population of Arkansas from 2010 to 2019 (2.8 million compared to 3.0 million). New York’s population growth peaked at 130,000 in 2011 but fell to a 60,000 loss by 2019, according to Census Bureau estimates.

The Geography of Pandemics

The pandemic has been toughest on areas suffering from what we call “exposure density.” Nationwide, the highest fatality rates are in the two highest urban density categories, which are comprised of three New York City counties. Manhattan’s fatality rate, with 2.4 percent of the nation’s deaths, is 4.8 times its proportional share of deaths; Brooklyn and Bronx counties, which have the higher poverty rates associated with higher death rates, do even worse, with a fatality rate 7.5 times the national average.

In contrast, less dense counties—those with urban densities between 2,500 and 5,000—have less than their proportional share of deaths (0.8 percent), with 22.4 percent of deaths and 28.1 percent of the population. Lower density areas have even lower fatality rates, despite the occasional spikes in food-processing plants, Native American reservations and extremely poor areas like those close to the Mexican border. Even with the recent surge, fatality rates in states like Texas, Arkansas, Kansas and the Dakotas remain between one-third to one-eighth of those in New York and New Jersey.

Pandemics, like changes in climate, often alter how and where people live. In the 14th century, plagues wiped out as much as one-third of Europe’s population, but the wreckage also brought opportunities for those left standing. Large tracts of land, left abandoned, could be consolidated by rich nobles or, in some cases, enterprising peasants, who looked to lower rents and higher pay. “In an age where social conditions were considered fixed,” suggested historian Barbara Tuchman, the new adjustments seemed “revolutionary.”

Read the rest of this piece at Chief Executive.

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He is a founding senior fellow at the Urban Reform Institute, Houston and a member of the Advisory Board of the Center for Demographics and Policy at Chapman University in Orange, California. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is co-author of the annual Demographia International Housing Affordability Survey and author of Demographia World Urban Areas.

Photo credit: Mike Dunn via Flickr under CC 2.0 License.