‘Verge of catastrophe’

In last week's edition of Turning Points, we noted that in a hyper-connected world, there can be no global health security—or climate security, or economic security, or financial security—without the world's two largest economies working closely together. This week, the U.S. and Chinese leaders publicly acknowledged that reality as Covid-19 rampages across the planet. "China has been through much & has developed a strong understanding of the Virus. We are working closely together. Much respect!" President Donald Trump tweeted after a call with President Xi Jinping on Friday. Xi said that, "Both sides will benefit if we cooperate, both will lose if we fight each other," according to Xinhua News Agency. "Cooperation is the only correct choice." This week in the New Economy Wheat heads for weekly gains as Russia considers export limits. South Africa's Covid-19 shutdown begins as virus claims first victim. A Zimbabwe billionaire offers fresh support to health-care workers. Guinea approves law that may allow its president to seek third term. Lebanon vows recovery plan for "broken" economy by year-end. Donald Trump and Xi Jinping. The potentially lethal consequences of a U.S.-China rift became apparent this week when a Group of Seven meeting to coordinate a global response ended without a joint statement. This was because U.S. Secretary of State Mike Pompeo insisted on using the term "Wuhan virus" to describe the pandemic—in contravention of World Health Organization naming guidelines aimed at avoiding stigma. (His boss had been condemned for repeatedly using the racially charged term "Chinese virus.") This is arguably a moment for concerted global action, rather than political posturing, as Covid-19 heads toward the new economy's most vulnerable populations. China mobilized its massive state resources to contain the outbreak; rich countries have advanced healthcare systems and extensive social welfare nets to cushion the pain. But struggling economies in Africa, Latin America and the Middle East have neither institutional strength nor medical capacity—and they're next. Iran is already a disaster, and travelers will likely spread the pathogen from there to Syria, Iraq and Lebanon, all teeming with refugees.  Abiy Ahmed "Egypt may be on the verge of a catastrophe," writes Jon B. Alterman at the Center for Strategic and International Studies, although the country doesn't seem to know it. Egyptians are still congregating in coffee shops and mosques.  Ethiopian Prime Minister Abiy Ahmed writes that "African economies are staring at an abyss," starting with his own country. Without the hard currency generated by Ethiopian Airlines, the country can't import essential medical supplies. And how are Ethiopians supposed to wash their hands when many don't have access to clean water? Meanwhile, infections are about to explode in the slums of Brazil, where President Jair Bolsonaro dismisses the new coronavirus as the "sniffles." Brazil's favelas are a "ticking time-bomb," says Robert Muggah, research director at the Igarapé Institute, a think-tank in Rio de Janeiro.  Marc Lipsitch, a Harvard epidemiologist, explains the global nature of the threat: "Like a forest fire, intense control in one place fails if there are sparks from other places," he writes on social media. A shower of sparks is now descending. "We are all in this together," writes Ahmed. "Only global victory can bring this pandemic to an end." Turning Points live There's a live version of Turning Points coming. In this biweekly Bloomberg New Economy conversation series, I will focus on the long-term economic impact of the coronavirus. From geopolitics to public health to the future of work, our post-pandemic world will look and behave differently. What will emerge? We will explore the ideas, dynamics, and challenges that will shape a fundamentally new economy—featuring the leaders who are charting the course. On the Front Lines of Business We also plan a companion conversation series, On the Front Lines of Business, featuring corporate and government leaders across the new economy. Companies are being forced to improvise by overhauling work practices, operations, and supply chains. Which of these on-the-fly innovations will endure? What might change for the better?  I'll be engaging leading executives on the key decisions they're making; the trade-offs as they weigh their responsibilities to employees, investors, shareholders and customers; and the human stories that will define this unprecedented moment. Stand by for more details on both. Follow @neweconforum on Twitter for updates. _________________________________________________________   Like Turning Points? Subscribe to Bloomberg All Access and get much, much more. You'll receive our unmatched global news coverage and two in-depth daily newsletters, The Bloomberg Open and The Bloomberg Close. Sign up for the Bloomberg Recession Tracker:   Bloomberg Economics crunches the numbers every month using our proprietary model to reveal  the probability of a downturn over the next year.  We'll deliver an updated assessment of all relevant indicators, directly to your inbox. This free newsletter includes analysis showing whether recession risk is increasing or decreasing, with comparisons to the past month's performance as well as previous recessions. Sign up here . Download the Bloomberg app: It's available for iOS and Android. Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. Learn more. Follow Us Get the newsletter You received this message because you are subscribed to Bloomberg's Turning Points newsletter. Unsubscribe | Bloomberg.com | Contact Us Bloomberg L.P. 731 Lexington, New York, NY, 10022