- Political and legal advisory firm warns "competence of leaders about to be tested"
LONDON – Avonhurst’s Head of Global Political Strategy, Tina Fordham said the coronavirus will test the competence of global leaders. She was Citi bank’s Chief Global Political Analyst and has over 20 years’ experience advising institutional investors, corporate boards and international organisations about global political developments and their implications for markets and the investment environment.
Fordham said: “Beyond the human cost, the coronavirus is the most significant Black Swan for politics, markets and the economy since the Global Financial Crisis. The competence of leaders is about to be tested, with much higher stakes — public health and safety — than during the debt crisis.
“A recession isn’t a natural disaster, though some leaders will try to spin it as such. One source of comfort to investors may be that the risk to public health probably means a recession triggered by a pandemic would see more political support for fiscal stimulus than the 2008 crisis, for example, though it also poses a demand shock that could hurt the economy if policy makers are seen to overreact.
“Political incumbents of every stripe face heightened scrutiny and government reaction function will be tested, with under-investment in public health infrastructure and crisis prevention capacity exposed. The anti-expertise and anti-globalist bias of populists is unlikely to provide answers to a concerned public in crisis mode. International coordination, out of fashion since the G8 finance ministers came together, will be needed to stem the crisis, bearing in mind that the current presidency of the G-20 is Saudi Arabia.
“Meanwhile, geopolitical tensions will inflame, as some actors take advantage of the crisis to gain advantage. The spat between Russia and Saudi Arabia at last weekend’s OPEC meeting reflects how geopolitical tensions can spill over, causing an economic shock. Likewise North Korea’s missile test over the weekend.
“Closer to home, countries like the US with its historic tendency toward suspicion of government and libertarian tradition will likely see push back against measures such as self-isolation and curtailing economic activity.
“Even if contained soon, in terms of political risks and the medium-term outlook, the coronavirus will materially change the outlook for 2020, and possibly beyond given the potential for relapse risk.”
Tina has been named in the Top 100 Geopolitical Experts (alongside Condoleezza Rice) and the FN’s Top 100 Most Influential Women in European Finance. Tina was also appointed to the UN’s High- Level Panel on Women’s Economic Empowerment and a #1 ESG ranking from Institutional Investor.
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