Black Swan and the 5 pirouettes the world is doing for Covid-19

By Maria V. Sokolova, consultant at the International Trade Centre. (All views in this post are personal.)

What do COVID-19 and ballet share? Turns out, a lot.

The ballet “Swan Lake,” composed by Pyotr Tchaikovsky, has symbolized major political shifts in the Russian Federation since it was broadcasted for three days on Russian television during an attempted coup d’état in 1991. This ballet, and its famous black swan, has come to signify an emerging major change in history. The current COVID-19 pandemic has been referred to as  a “black swan” event due to its initially perceived high level of impossibility – before the event happens. Leaving aside prognostications about the world after the coronavirus, the world is now a stage for the most complex performance ever. And every pas of this performance counts. 

Step 1: Tour en l’air

Throwing yourself into the air, making a turn and trying to land on your feet (one or both) straight.

With half of the world’s population in containment mitigation, governments are scrambling to find a way out of the worldwide catastrophe.  Measures vary from surveillance of phones to facial recognition, from banning gatherings of more than two people, to simply maintaining social distance. Unprecedented financial bailouts are happening everywhere— from international organizations to countries, from countries to companies, from countries to certain groups of populations. Everyone (who can) is catching a temporary lifeline, observing what’s happening and what to do next. 

 Admitting that this time is different took some countries longer than others. Other countries, taking note of the pandemic’s progression elsewhere, are still waiting to see what the human impact of the pandemic will be. This unprecedented event, with its unimaginable scale, hitting the entire globe, has left countries at the mercy of trial and error in how to balance saving human lives and their economies. 

 Containing this shock and avoiding a collapse becomes a big challenge for a rules-based international system, and global governance more generally speaking. To complete the tour en l’air, it must then adapt to the new reality on one or two feet – and, quite possibly, start dancing in a new way.

Step 2: Pas de bourrée

Fast-paced many small steps.

The sheer number of health researchers, working in hospitals, universities, think tanks and even a multinational companies, that are racing to find cheaper, faster, and more accurate tests for the virus, or to develop a treatment or a vaccine to  fight the pandemic  is overwhelming. In a way, such granular yet common sentiment and cooperation all over the world is unprecedented. Despite some questions on cooperation by governments, the benefits of cooperation between scientists and researchers are beyond question. By providing what a researcher in South Korea learns today to another in Canada enables the global research community to pursue a 24/7 search to “flatten the curve” or “stop the spread.” 

Step 3: Fouetté

Standing centerstage on one leg and do multiple rotations, while using their other leg as a leverage.

The proliferation of global value chains not only brought fresh blueberries, strawberries and mangoes year-round to your table, but has improved the quality of life in many countries overall. The sudden massive consumption pattern changes (e.g. toilet paper hoarding in certain countries) and physical disruptions (e.g. banned  port operations not deemed “essential”), came as a test for even the traditional behemoths of international trade – multinational corporations. The companies that deal with “essential” products (e.g. food, medical supplies) are struggling to physically deliver their valuable products to consumers. 

The global economy is now being sent directly to the ICU by the physical disruption: if production can still be maintained, consumption may not be possible – as in the case of the global oil market. Physical supply and logistical disruptions due to confinement measures and travel bans, coupled with sudden changes in consumption patterns, limit the backbone of operations of international supply chains. Keeping ports open to transfer goods, sending furloughed workers to collect harvest, redirecting production towards protective equipment  the global private sector is providing new and more creative solutions and adjustments every day to keep not only the economy, but the world’s populations, alive. The ability of global value chains to adjust to the current crisis is a test for globalization, for example, whether global trade liberalization is justified, or whether countries do not need to revert to nationalism and/or near-shoring in reaction to the pandemic.

Step 4: Plié

Bending of the knees, no matter in which position you are.  

Half of the world’s population had to rapidly adjust to enforced changes to their lifestyles – moving to #wfh, homeschooling, staying inside and staying sane – and for some, all at once. 

For those of us who have the privilege of social distancing at home (ie. having a home, still having a job), we have learned that many more tasks can be done by email or on Zoom, that society may push unrealistic expectations on working parents, that making it through the day is sometimes just enough, and maybe you don’t need another pair of shoes or another gadget. 

Apart from a remarkable shift in composition of goods consumption, supply of online services has sky-rocketed, making this situation a fast-forward process for digitalization. A sudden influx of online courses, classes and training sessions calling for you to rise after the quarantine as a better person – a hard task, especially if you don’t know if you will even have a job afterwards and how society will change. There has also been an unequal effect of the pandemic on gender. This impact is twofold – while industries like textiles that employ  more women are temporarily stalled, women in the medical industry – most nurses and pharmacists are female – are on the “frontline” of the pandemic.  

We must have to bend into the changes, being limited in our choices, our movement, our view of our society and the world. How we will change our views depends on how much bending different aspects of our lives in different countries can handle or are willing to tolerate – including our mental health and economic habits.  

Step 5: Cabriole

Making a high jump, while making the impression that you are pushing yourself through the air with another leg. 

All players on the globe are just trying to keep face while solving a problem we have never really encountered before. In fact, all these steps undertaken are efforts to buy time. Buy time to get more data – and hence get more predictability on what is happening. No matter who we are, we are just pretending that we know what we are doing. In reality, we are just buying time before we get enough data to learn what we are facing, where we are facing it, and, given the number of asymptomatic cases, when the next outbreak will happen.

Simply producing COVID-19 tests and ventilators is not enough – they need to be transported to where they are needed, and with the global logistics system almost down, it is almost impossible. The lockdown and confinement mitigation measures seem to be working  in “flattening the curve,” but they cannot last forever and will not be effective with current economic inequities, such as where  10 people live in the same room. Promoting hygiene is an effective technique assuming that you have access to clean water.  

It’s a far stretch to assume that unfreezing the “non-essential” businesses will revive the economy to the state it was before as it assumes that people will still have jobs to return to.

Putting half of the globe’s population on lockdown for a global pandemic was deemed by many as impossible, just like the existence of black swans until Australia was discovered. Many people were ruling it out as an impossibility – because all swans ever seen until the 16th century were white, and many illnesses were much slower and containable before COVID-19. 

From a standpoint of the world until 2020, we are now definitely facing a “black swan” event – but whether we have discovered an unknown population of black swans that will change our world view forever is yet unknown. Will the global, liberalized economy survive as we know it? Will we see de-globalization of production networks and localization of critical manufacturing? Will we recover to a world where black and white swans are a new normal?

Watching the trickery of the black swan and its overwhelming beauty, the complexity of the dance steps always makes me hold my breath a little bit – in part because of the feeling of inevitable change coming. The black swan in “Swan Lake” does not get its plan fulfilled, but, in a very classical Russian fashion, the happy ending also comes in tears. We need to get through to the next act to see this ballet progress. It is somehow slightly comforting to know, that if we manage this one right, then we are prepared for the big premier: in front of our planet called “The Climate Change.”

Maria V. Sokolova is currently a consultant at The International Trade Centre, working on implementation of trade agreements and trade information transparency. She has previously worked for the UN and the IMF, and holds a PhD in International Economics with minor in International Law from The Graduate Institute Geneva. Her economic research is focused on interdisciplinary topics of macroeconomic aspects of trade, regionalism and development, and political effects of trade agreements.