In this week’s episode we speak with Brian Bremner, Executive Editor, Global Business at Bloomberg, where we talk about the global aspects of the Covid-19 pandemic and the politics behind finding a cure, creating a vaccine and ultimately could government policy effect the global distribution of that vaccine.

TRANSCRIPT

Jeffrey Friedman: Hello and welcome to the RP Health Cast by Rooney Partners. I am your host Jeffrey Friedman. Despite its worldwide spread, the global pandemic is not being met with global cooperation. At a time of trade wars between the US and China, and at a moment in time when the US has dramatically scaled back its commitment to the European Alliance and scaled back its commitment to the World Health Organization, and at a juncture in history when nationalistic forces have been on the rise, the environment conducive to a coordinated global effort to defeat the coronavirus is simply absent. To help us understand how we got to this place in world history and what we should expect the geopolitical state of play to be in in the age of the coronavirus, we are very fortunate to have with us today, Brian Bremner. Brian, good afternoon and thank you for joining us today. 

Brian Bremner: It is terrific to be here.

Jeffrey: Brian, your role for Bloomberg News includes overseeing the global coverage of the coronavirus. You are based in London, now. You were a journalist in the US for many years. Right before coming to London, you were the executive editor for Bloomberg in Asia. It would seem your career and background were tailor-made for this assignment now.

Brian: Yeah, in some ways it is. I spent about 20 years in Asia for Business Week Magazine and then Bloomberg. I lived through the SARS epidemic which you might recall happened in the early 2000s, which in many ways kind of foreshadowed what is going on right now, although the current pandemic is bigger in scale. It is wreaking more economic damage. But in a weird way, this is kind of closing a circle for me at that journalistically. 

Jeffrey: Yeah, I bet. What comes around goes around. It is a circle. Now, at Bloomberg, you and your colleagues have done extraordinary reporting on the coronavirus. Before we turn to geopolitics, I want to start with the beginning, with Wuhan, China, which is generally viewed as the source of the SARS-CoV-2 virus. Suspicions about the coronavirus leaked from a bioresearch lab. What is your take on that Brian?

Brian: Well, you know from the very beginning, I think a number of people in the intelligence world, particularly in the US did notice that there was a biosecurity lab in Wuhan which turned out to be the first epicenter of the coronavirus epidemic. A lot has happened in the intervening months since this broke in late December. In the last several weeks, particularly as the epidemic is deepened in the United States, there have been some theories about the origin of the virus being tied to the biosecurity lab. There are basically two competing theories. One, that the virus was man-made, in other words, it was designed in the lab intentionally. The other theory is that the virus may have started in the wilds of Central China. But a sample was taken into the lab and then was accidentally released and set off this chain reaction that we are all living with today. I think the scientific consensus is that the first theory is pretty much unfounded. If you look at the genetic sequencing of the virus, there are telltale signs that one would find that it was kind of splice together. There seems to be no evidence that took the case. Even I think the China Hawks, the most intense critics do not give terribly much credence to that theory. Whether it was accidentally released is plausible. However, there is no hard evidence that actually occurred, so that is a bit of a mystery still. I do think the US is kind of backed off some of the rhetoric that you heard a few weeks ago with Secretary of State Pompeo basically saying that there was overwhelming evidence that this had taken place. I think he is backed off of that. If you talk to professional virologists and people who do this for a living, the reputation of the Wuhan facilities is pretty good. They have done some landmark work in coronavirus research. Yeah, there have been accidents that have happened over the decades all over the world with virus samples. But I think the reputation is pretty good and it is far from proven or even a strong case has been pulled together that that is what happened, that there was an accidental release.

Jeffrey: There is still a sense of mystery around this. China said international experts are not going to be allowed into China to investigate the origins until the world secures an unspecified final victory against the virus. Those are their words, final victory. What is that about? Is final victory even possible with something like this?

Brian: Well, let us put that apart. I mean, the first issue is the access on the ground to finding out the virus origins. So there was a World Health Organization scientific mission that went in in February. Now, this was in the darkest moments of China’s own experience with the epidemic. The hospitals were flat out, people were getting sick at massive levels. So they were not able to do a tremendous amount of forensic work, I mean the kind of disease analysis to go back to the origins of it and therefore protect us, you know, going forward. They were not able to do that at that time. They want to go back to what the World Health Organization does and just this week, China seemed to indicate that they were open to that. Now, what the ground rules are going to be and how deeply they can go into China and re-interview patients, look at virus samples, really do a lot of fieldwork, that remains to be seen. The question of what will the end looks like, it is really hard to say. This coronavirus which had its origin in the bat populations of China, the genetic sequencing seems to show that it kind of started in that population. It is somehow, and you know, the world does not know the answer to this, made that leap from rural China into a megacity like Wuhan, and then took off around the world from there. So the big unknown is whether there was a secondary animal host. If you look at previous outbreaks in this family of viruses, the SARS virus and its cousin, the MERS virus which is the Middle East Respiratory Syndrome. They both had kind of intermediary animal hosts. MERS had camels and the SARS epidemic back in the early 2000ss. Although they do not know this conclusively, they are pretty sure that there was an animal called a civet cat, which is this mammal that is used in wild exotic dishes in China was the carrier into the human population. There is also a big concern about wet markets in China but also in other parts of the world where you have wildlife trade, kind of co-mingling meats. Depending on the quality of the wet market, these scenes can become very unsanitary and breeding grounds for pathogens. So yeah, these are all unanswered questions that another scientific mission, another group of experts from all around the world are going to have to piece together. It may be quite sometime before we know the exact origin of the story. So the other question that you ask is what does success looks like? So we do not know whether we have an effective vaccine yet. There are a lot of very interesting crash programs in the United States, in Europe, in China, in the UK, the Oxford Group. These vaccines are in various stages of development and have to go through human trials. If we get really lucky and there is an effective vaccine that can be ramped up commercially, I mean in terms of production and distributed to big chunks of the human population, that could be one path to protection. Then the question is, is this going to be one of those viruses that linger from year to year and that we need some kind of additional protection from in vaccine form. The other path to the end of this is what is sometimes called herd immunity. This is the idea that sometimes viruses are pathogens. If they reach enough of the population, it is usually around 60%, then you have got enough people who have survived it and have natural immunity and the viral dynamics change. It becomes less, you know, something that will race through the population and it can be more isolated and dealt with. So that is another scenario that we may be living with for a while. So those are the broad diameters of where this might go. 

Jeffrey: So I guess the bottom line is we do not know enough and it is way too early at this point. 

Brian: That is right. There is a lot of really important infectious disease detective work that needs to be done. It probably has to be done in China. That is why you are seeing this kind of international pressure on China and on the World Health Organization to get in there. Because if we do not know which animal species is that secondary carrier, then we are vulnerable to second and third waves. You are already seeing kind of a mini outbreak in northeastern China which is worrisome. Even though Wuhan and the central part of the country have calmed down and are opening up, the Chinese authorities are already having to deal with the secondary outbreak. That is obviously a big issue in the West, in Europe and in the United States which start to open up again.

Jeffrey: So Brian, Europe has been the site of some very terrible hot spots with where you are in the UK and Italy having the most fatalities in Europe. What is your assessment? Why? Why those two countries?

Brian: Well, I think in the case of Italy, unfortunately, the Chinese experience with the epidemic coincided with their lunar holidays, the Chinese New Year holidays which were in late January, early February. China, because of the size of its population has an enormous impact on global tourism and that series of holidays is actually the biggest human annual migration every year. Unfortunately for Italy, a lot of Chinese tourists, probably infected, may be asymptomatic, gather in a place, they went to Venice and they went to Milan during their holidays and completely blindsided the Italian health care system. People just were not aware at that point in time, late January, early February just how stealthy this virus is. What is unique about this coronavirus as supposed to SARS is that when you get SARS or MERS, you get sick right away. There is just nothing nuanced about it. In a weird way, although the fatality rates are higher for these other diseases, they are actually easier to manage because it is obvious to everyone that someone is sick. Then you are more likely to quarantine them, more likely to get medical help. This virus, you can walk around for weeks and not really feel it all differently but be very contagious. So it hit Italy really, really hard and then kind of took off from there. The British experience is interesting because there might have been compounded by a policy error. I think early on, the scientific consensus was very much in that herd immunity mentality that I talked about a few minutes ago. Maybe the best way to handle this since it is not terribly lethal is to keep things going as normal and then we will deal with the older patients who get sick. But a lot of people are going to experience this as a flu or something, slightly worse than that. They will be fine, they will get immune, and then gradually, the society will build up as collective immunity and it did not work out that way. It got really bad, really fast. Because again, we started to learn that this virus, although it is not as lethal as Ebola or SARS, it is pretty lethal. If you infect enough people, the vulnerable parts of the population are going to get seriously ill. The big irony is that Prime Minister Boris Johnson became seriously ill and had to be put in intensive care because of this. So then, that experience led to a rethinking that you had a more proper lockdown in the UK and you are starting to that the curve bend. Now things are starting to slowly reopen.

Jeffrey: So Brian the economic pain caused by this virus has been staggering. So in the US for instance, over 30 million workers have filed unemployment claims in the past six weeks. I think that represents about 15% of the workforce. So developed countries like the US and those in the EU are using fiscal stimulus plans to provide a measure of relief for its citizens. If this is the case in developed countries, can you talk about what is happening in emerging market countries? It must be unbearable. 

Brian: Well, this is going to be a kind of global experience, unfortunately. I mean, no one doubts that we are heading into a pretty meaningful global recession. When you have that kind of set up, the emerging markets in Asia, Latin America, Eastern Europe are going to feel the full brunt of it and you are right. They do not necessarily have the fiscal and monetary cushion to unload big stimulus packages to hold things together. So it is probably going to be a very, very difficult economic experience for emerging markets. It is not going to be much fun for developing markets. Basically, people have made the analogy to medically-induced coma, as we have kind of put the global economy into because of the public health concerns. It is going to take a while for the patient to get back up to fighting speed. There are all sorts of negative feedback loops that can become embedded and prevent you from that sharp recovery. I mean, one hopes that that happens but I think most economists view that this is going to be a very, very long kind of convalescence. Certainly well into 2021, the unemployment rate really starts to come back down meaningfully and the economy really starts to rub up again.

Jeffrey: Okay. So before I ask why we do not have a global response to support each other, I would like you to compare the macro-political climate today with that of the last crisis, the Great Recession of 2008 and 2009. I mean, the world was a different place then. Can you please remind us how the world’s leaders responded to that financial threat?

Brian: Well, I think what is interesting about the financial crisis is that it did not take long to understand exactly the source of it and then the dimension of it. It was pretty obvious that there was a structural imbalance in the housing market in the US, and to a lesser degree Europe and that you know, through a number of events, some of the biggest banks in the world had made very highly risky bets on mortgage-back securities when the housing market went down. Those went down and then you had this cascading effect around the financial world that was very scary. It was very economically destructive. But at least you could kind of get your mind around the nature of the problem. So I think the policy response, although even to this day, there is a debate about whether enough was done to this sting, it was pretty clear what needed to be done by the major central banks and the US, UK, EU governments, and China as well. So even though that was a long recovery back, this different because first of all, this fully global in scope. The virus raced around all around the world to every economy and the requirement is like a full-blown stoppage of economic activity. So that is different. The nature of the problem and then the time it took to fully get your mind around the problem. Early on, when it looked like it was just China and maybe possibly other parts of Asia, the US Stock Market was bounding from strength to strength because it did not seem like it was a systemic risk around the world. Then when this thing went into Europe and then started to flare up in the US in a serious way, all the financial markets reacted. I think what else is different is the intensity of the US-China rivalry. I mean it certainly existed back in 2008. But I think it has been heightened and it has intensified and the economic and geopolitical rivalry is so much more intense these days. So that is complicating the international policy response to the virus because everything, well, the science is getting politicized. There is a lot of you blaming each other. It is a kind of a toxic political environment and that makes smart decisive policy action a lot more difficult. 

Jeffrey: Do you think that this economic crisis similar to back in 2008, is a bump in the road? Do you think that this is going to be business, as usual, back when we come out of this in 2021? Or do you think the world is going to learn a little bit, there is going to be massive changes because of this?

Brian: Well, I think a couple of things are pretty clear and some of these trends pre-existed the virus, the pandemic and it just been intensified by other trends seem newer and are unexpected. But once they getting grained or going to be hard to reverse, I mean an obvious one is just the state intervention in economic life. If you look at the scale of the Central Bank interventions and lending, and then also the fiscal side of it where you are seeing governments lend big amounts of money and maybe even taking equity stakes in the airline industry, in the small business sector, in hospitality and leisure, anything with a strategic national interest like a Boeing or an Airbus. There is just going to be far more government interaction in our economic life than anyone probably would have predicted a year ago. Other trends about telemedicine, telecommuting, these things were kind of out there but I think a lot of companies are waking up to the idea that this does not happen in every instance. But some companies have been able to function at a pretty high level with most of their workforce at home. What is that going to mean for the way we organize ourselves in our corporate working lives but also the commercial real estate markets. If companies start to rethink their commitments to long-term expensive leases in the major business centers of the world what is that going to look like? Who is going to win? Who is going to lose? There are going to be big changes I think in consumer behavior. Are we going to bu much more mindful of the microbe world? Are we going to you know change the way we consume and entertain ourselves as a result of this experience of the lockdown? The very real possibility that in a highly globalized world where human populations are growing and encroaching on wildlife, we could be facing more of these kinds of breakouts in the future. How we are going to prepare ourselves for that? Then finally, I have to think that this epidemic has been so destructive to people’s lives certainly. The economic toll has been so high that there will be a very serious rethink about how can we organize ourselves internationally so if there is an outbreak, we are much faster on the scene and getting the right resources in place to manage these crises and maybe even avoid them. One area that is really interesting is vaccine development. That was a very sleepy part of the big pharma world until this crisis. Now, you have got all these crash programs and of course, a lot of money flowing in. But that is because you a gun is on our head. Should we rethink that after this crisis is past, do we have to think about vaccine development like we do weapons programs? In other words, they are heavily subsidized. You do not use them right away but can we start to think about full-spectrum vaccine development that would get us close to the mark if a new virus came on the scene. At least we would be better prepared to speed up that vaccine, turn around time, and put us in a much better place than we are right now.

Jeffrey: Brian, Bloomberg took about vaccines. Bloomberg reported a couple of days ago that the US moderne side, US was likely to obtain the vaccine from the French company Sanofi. So in a world of rising nationalism, one would have thought that France would have had the first rights to this vaccine. So we talk about global coordination, can you explain what is going on and why would the US State claim there?

Brian: Well, right now you have got this outbreak of vaccine nationalism, right? I mean all the countries, they want to protect their own people. Some of them have major global pharmaceutical companies operating within their borders, some do not. A lot of money is, you know, emergency funding is being spent to place bets on various crash programs around the world. In the case of Sanofi, they are getting a fair amount of US funding and the CEO of the company said that means that the US will get some preferential treatment which upset the French very much. The question also becomes, what if the Chinese, what if their crash program finds the price first, how would that work. Xi Jinping this week at the World Health Organization governing assembly said that if the Chinese do find a vaccine that works, it will be a public utility. In other words, it would be available to the rest of the world. So it is a bit of a mess, but it kind of speaks to a point I just made is that you know, this is a very chaotic way to approach a pandemic. In theory, you would have fought through these things, you know, war game, get out. So these viruses come along and they come along pretty regularly particularly in this century. It is not a secret that this could happen. We have agreements, we have understandings about how we would finance a pandemic shot and distribute it around the world. How you scale it up. It is clear that we are not there and that is why there are all these friction points and name-calling that is going on in the political world. Instead of pointing fingers, we need to work on that global coordination.

Jeffrey: Brian, thank you so much for your insights today. Your thoughts and experience on the global stage are certainly fascinating and thought-provoking. I would love to have you back on our podcast in the near future to discuss this global coordination, and hopefully, that will happen, the global coordination very soon. Thank you again and stay safe. 

Brian: Thank you.

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