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Following the end of the "traffic light" coalition, Federal Chancellor Olaf Scholz has submitted a request to the president of the Bundestag for a vote of confidence in the Bundestag.
Viewpoint: Germany seeks new political leadership to address economic crisis
Faced with a political impasse preventing action on acute economic and geopolitical challenges, the German parliament will hold a vote of confidence in Chancellor Olaf Scholz’s government on Dec. 16. Based on an agreement among the main parties in the Bundestag, lawmakers will deliver a vote of “no confidence,” paving the way for snap elections on Feb. 23.
We asked Eurasia Group expert Jan Techau to explain what set off this chain of events and where it is likely to lead.
What has prompted this vote of confidence?
The chancellor called the vote after long-simmering tensions finally brought down the ruling coalition of Scholz’s Social Democrats, the pro-business Free Democrats, and the Greens. There are big ideological divides among these three parties, and it was never an easy marriage. Initially, they could paper over these divides with money for each party’s pet projects. But a little over a year ago, the Constitutional Court struck down large parts of the 2024 budget, saying they were financed with an illegal repurposing of unused pandemic-relief funds. That set up endless negotiations and finally a showdown over the 2025 budget, which ended with Scholz firing the finance minister, the Free Democrats’ Christian Lindner, and the subsequent collapse of the coalition agreement.
So, it sounds like fights over spending priorities are the main issue shaping German politics?
They are a symptom of a broader economic crisis that has undermined competitiveness, growth, and tax revenue. The country has high labor and energy costs and a high reliance on exports, especially to China. For a long time, China bought nearly everything that Germany produced, from machinery to cars and chemicals. But China has developed its own industries and is no longer just a customer but increasingly an aggressive competitor making many of the same goods. To put it simply: Germany is a high-cost country reliant on exports whose main customer no longer wants to buy all its stuff.
How are geopolitical issues shaping the domestic debate?
All these economic problems come at a time of mounting geopolitical challenges. Donald Trump’s election victory in the US is expected to bring increased pressure on Germany and other European countries to harden their stances against China. Trump could force Germany to choose between its economic reliance on China and its security reliance on the US. At the same time, you have the war in Ukraine and Russia’s hostility to Germany and the rest of the West that has prompted significant – and very costly – efforts to rebuild Europe’s defense capabilities.
What seems like the most likely outcome of the February elections?
The conservative Christian Democrats, led by Friedrich Merz, have a substantial lead in the polls. It seems unlikely that any other party will be able to close the gap by Feb. 23. They will need to form a coalition government (one-party parliamentary majorities and minority governments are very uncommon in the German system), probably with the Social Democrats and maybe a third party as well. One key watchpoint will be the performance of the two extremist parties, the far-right Alternative for Germany and the far-left Sahra Wagenknecht Alliance. They have no prospect of entering government this time around, but if they obtain a combined one-third of the seats in the Bundestag, they could block legislation requiring changes to the constitution, which needs a two-thirds majority. Such a blocking minority could hamper the next government’s ability to implement a forceful reform agenda.
What is the reason for the conservatives’ strength?
There are two factors. The first is that voters’ number one concern at the moment is the state of the economy. This issue has traditionally favored conservatives, who are seen as more competent in this realm. The second is the collapse in the popularity of the three parties of the ruling coalition amid a widespread sense of crisis and malaise. They have recovered a bit recently, but at one point the approval ratings of the three parties combined were at about the same level as those of the conservatives.
Assuming a conservative-led government emerges, what does that mean for domestic policy?
If the Christian Democrats form a coalition with the Social Democrats, they will have to jettison many conservative ideas. The German system is geared toward stability and continuity, an approach that has worked extremely well, though the downside is that it’s hard to make big changes when needed. The question is whether the current crisis is big enough to force change. I expect an overhaul of the so-called debt brake, a strict limitation on government borrowing that has restrained policymaking. But beyond that, a raft of politically difficult measures are needed to deregulate industries and lower labor costs to restore German competitiveness. We’ll see if the next government can deliver.
How about foreign policy?
There would certainly be more engagement with the EU. The Christian Democrats pride themselves on being the pro-EU party of Germany in the tradition of Konrad Adenauer and Helmut Kohl. My guess is that the next government will remain reluctant to embrace the proposals for common borrowing backed by some other EU countries. Still, it could be more supportive of other joint initiatives. Merz had been more hawkish in his rhetoric toward Russia but has recently toned it down because he knows there are a limited number of votes he can win with this approach. Regardless, foreign policy will be a somewhat lower priority for the next government than getting the economy going again.
Edited by Jonathan House, Senior Editor at Eurasia Group.
FILE PHOTO: An image of Cuba's former President Raul Castro and Cuba's President and First Secretary of the Communist Party Miguel Diaz-Canel is seen beside a Turkish powership, in Havana, Cuba, April 17, 2023.
Cubans cry for electricity and food in rare protests
Extended blackouts and food scarcity drove Cubans into the streets of Santiago, the Caribbean country’s second-largest city, on Monday, in rare and risky protests. President Miguel Díaz-Canel blamed the US trade embargo for shortages and warned that American “terrorists” were fomenting dissent.
Cuba depends heavily on its allies, Russia and Venezuela, for food and fuel, but the island’s rumbling economic crisis means each peso fails to go as far as it once did. The government raised prices on fuel by over 400% at the start of March as part of an effort to stabilize the economy and control spiraling inflation, which officially topped 30% (though the real rate is likely higher).
Havana is now receiving aid from the World Food Programme for the first time, after requesting help in a rare acknowledgment that the country can’t feed itself. Now, blackouts of up to 18 hours a day mean that ordinary folks can’t refrigerate what food they do have, and instead watch it spoil in tropical weather. Over 400,000 people have fled to the US in the two and a half years since the last major economic protests.
We’re watching for signs of unrest spreading to other cities, and for how hard Havana cracks down on dissent.
What's next for Lebanon?
Some of the worst sectarian clashes since Lebanon's 15-year civil war (1975-1990) broke out in Beirut this week between supporters of Hezbollah and Amal, both Shiite political parties, and Christian, far-right Lebanese Forces. Shiite protesters were rallying against the state probe into the Beirut port blast, which occurred last year. They say authorities were singling out Shiite politicians for questioning and blame. Below is our original piece on the Beirut port explosions published on August 5, 2020.
The twin explosions at Beirut's port on Tuesday were so powerful that the aftershocks reverberated as far as the Eastern Mediterranean island of Cyprus, 150 miles away. The specter of fire and smoke was such that many suggested on social media that Beirut had experienced a nuclear blast.
In the days ahead, more details will come to light about why a deadly cache of materials was haphazardly stashed at a port warehouse, and why Lebanon's government failed to secure the site. So, what comes next for crisis-ridden Lebanon?
The timing could not be worse. In recent weeks, Lebanon, one of the world's most indebted countries, has spiraled into chaos after decades of economic mismanagement.
Crime is spiking as desperate Lebanese seek scarce basics like food and medicine, while others are turning to a swarming online barter economy to survive — clothes for baby formula? The deepening economic crisis recently pushed at least 500,000 children in Beirut into poverty, an aid group warned in July.
International observers, meanwhile, have questioned whether Lebanon has already breached the "failed state" threshold.
International support. So far, countries including Australia, Canada, France, Israel, Norway, Turkey and the Netherlands have offered Beirut urgent humanitarian aid in the form of generators, medical equipment and personnel, and even some cash. The EU, for its part, is sending search and rescue teams to search for survivors, while French President Emmanuel Macron will touch down in Beirut on Thursday to offer support to his country's former colony.
While immediate humanitarian support has been forthcoming — and encouraging — the aid itself is unlikely to pull Lebanon back from the brink. There are several reasons for this.
First, humanitarian aid is one thing, but financial lifelines are another. Even before the pandemic crippled the global economy, the World Bank predicted that 50 percent of Lebanese could be living below the poverty line if current trends continued. Hoping to stave off its worst economic crisis since the 15-year civil war ended in 1990, Beirut has since appealed to international creditors like the International Monetary Fund (IMF) for a whopping $10 billion in financial assistance, but the IMF has refused to play ball unless the Lebanese government reforms its bloated, inefficient, and corrupt public sector. So far, Beirut's power brokers have resisted.
Reformist will is key. Even if the IMF acquiesces and doles out funds to cash-strapped Lebanon, what happens when the money gets there? Lebanon's patronage-ridden public sector and corrupted politicians, many of them former warlords of sectarian groups, have mismanaged the country's economy for decades, lining their own pockets while the middle class has plunged into poverty. IMF support does not solve long-term problems such as government paralysis, poverty and social instability that, experts warn, can only be mitigated through structural reform.
The Hezbollah equation. The political clout of Hezbollah, the Iran-backed Shiite group, further complicates Lebanon's efforts to secure external funding. In 2018, the IMF pledged $11 billion to Lebanon on the condition that the government institute significant anti-corruption and economic reforms. Washington, which, along with its Gulf Arab allies, deems the group a terrorist organization, recently accused Hezbollah of obstructing reform efforts, a view tacitly supported by other international donors.
This week's tumult also comes as the country braces for a UN court's verdict on the 2005 slaying of Lebanon's former Sunni Prime Minister Rafik al-Hariri, set to be handed down on August 18. The outcome in the Hariri case, which inflamed sectarian tensions across Lebanon and the region, will likely implicate Hezbollah officials. This risks further complicating efforts to secure external aid, and threatens to ignite sectarian discord amongst already-despondent Lebanese.
As negotiations with the IMF stalled in recent months, a desperate Beirut turned to Beijing for economic support, but it's walking a fine line, wary of irking Washington, a longtime ally, as US-China tensions surge.
The ball is largely in Beirut's court. The government can start working towards comprehensive reform in the hopes of lifting its floundering population out of poverty. Alternatively, it can fall back on the excuse of international donors not coming through and continue with business as usual. Which will it choose?
- The Graphic Truth: Salad crisis — Lebanon's food prices soar - GZERO Media ›
- Belarus human rights abuses stacking up; Beirut blast one year later - GZERO Media ›
- Belarus human rights abuses stacking up; Beirut blast one year later - GZERO Media ›
- Belarus human rights abuses stacking up; Beirut blast one year later - GZERO Media ›
Quick Take: Latest vaccine news may be a light at the end of the tunnel
Ian Bremmer's Quick Take:
Hey, everybody. Ian Bremmer here, happy Monday, Thanksgiving week. Things starting to look increasingly normal in terms of outlook, in terms of having all of these vaccines. I understand that the next few months in the United States are going to be incredibly challenging, but so much easier when you see that there's light at the end of the tunnel and you know where that's coming. Most recently, the AstraZeneca announcement, which for me, in some ways is a bigger deal globally, even than what we've seen from Moderna and Pfizer, because it doesn't require freezing, it's just refrigeration, which means that countries around the world that don't have the infrastructure to deal with this cold chain requirements of these vaccines will be able to use another set of vaccines with different technology. That's not just AstraZeneca, it will be Johnson and Johnson. It's the Russians. It's the Chinese.
As you start rolling those out, that allows the world to actually get back to normal. It's going to take longer than the United States and Europe and Japan. The advanced industrial economies are going to get these vaccines first, they've put the money in, they've done the development, they have the infrastructure, but we're not talking about years, we're talking about months. By the time we get to first quarter next year, large numbers of people are actually going to be vaccinated. I also think it's really important that this is an issue that is not getting politicized. I mean, yes, there's the potential for fights among states, especially states that have difficulties in terms of how much money they have and can allocate to getting this infrastructure up and running. It's expensive, it'll take billions of dollars, and a lot of states are already got big budget deficit crunches, and you're going to have Democrats versus Republicans fighting over where money is and isn't going and difficulties and stimulus, all of that.
But the fact that these vaccines have been developed by or supported by Operation Warp Speed in the US, means that both the outgoing Trump administration and the incoming Biden administration are all going to be saying, "Get these vaccines." I mean, there will be anti-vaxxer sentiment in the world, and there will be anti-vaxxer sentiment in the United States. But when your top vaccines are at 95% effectiveness, and when the side effects are largely limited to a fever for a few days, but not more significant than that, more people are going to take it. When both Republicans and Democrats, when political leaders around the world are all saying, "Take it." This isn't like, is a mask useful or not? Should have never been politicized in the US. What about hydroxychloroquine? That works, or no, it really doesn't. Remdesivir it works, no it really doesn't.
These things have gotten politicized and they make people not believe it. I don't think people will feel that way about the vaccines. I'm worried that in some countries, Israel and France, the level of anti-vax sentiment and the disinformation around vaccines is very high. Russia, believe it or not, highest level of disinformation and anti-vax sentiment in the world, even though the Russians themselves are one of the producers that are pushing to get these vaccines out as fast as possible, a lot of Russians will refuse to take it, but I think the numbers will be lower than you expect. So if you add to the fact that you're going to have lots of vaccines available soon at very high efficacy, not getting politicized, more people believing in it, and a lot of people that will have already gotten the disease. I mean, in the United States right now, we know that a large percentage of the population has already gotten the disease.
Let's say 5%, but in reality, that's tested, given limitations of tests and level of asymptomatic spread. In reality, it's probably more like 15% of Americans have already gotten coronavirus. Once we start talking about end of winter and what this present second wave looks like, you're probably talking about closer to 25 or 30%. So you have 25 or 30% of the population has already gotten coronavirus, whether they know it or not, and have some level of immunity. Then you're able to get a meaningful piece of the population taking this vaccine, especially those that are most vulnerable to dying. Your mortality rate from coronavirus by spring is going way down. That's on top of all of the improvements with treatments that we've gotten with better ability to recognize quickly symptoms, both in-home treatments and in-hospital treatments and these antigen cocktails also getting approved. We see from Eli Lilly, we see others, the Regeneron, those are also making a significant difference in terms of improved treatment and lowering mortality rates.
You put that all together by middle of next year, we're starting to look at coronavirus in the rear view mirror. It's still an issue, it's still with us, and it's still a global problem, but it's no longer stopping us from engaging in big pieces of our daily lives. My God, that's great news. It's bigger news then the election in the United States, I've said it before, I'll say it again. Coronavirus is absolutely the most important issue in the United States and globally. It was true before the election. It's true after the election, a lot of people going insane because Trump refuses to concede. He may never concede. He's still leaving. Yes, it's a problem that we've got all this disinformation in the media, but that's very different from being able to respond in short order, in a year, to a disease that did not exist in the human population just over a year ago, has infected, we know of, some 50 plus million people around the world. Again, reality much greater than... suddenly we can address it. That's the news! That's the news!
Lots of other things going on, obviously, and I'll be spending more time on them. It'll be good to get back to daily, international affairs. The fighting that we see in Ethiopia, which is getting worse and a lot of hard liners in the Ethiopian government that the Abiy administration needs to stay in power, but pushing towards efforts against the Tigray region that could amount to war crimes. I hope they don't start shelling the general population. We've already seen lots and lots, I mean, 5,000 a day refugees, those numbers could pick up, it's a big new war and it's in a country that has over 100 million people, that's a pretty big deal. So got to watch out for that.
Certainly worried about the potential for US, China relations to continue to deteriorate. Trump is still President for a couple of months and there will be further measures taken against the Chinese government. There are plenty of things the Chinese government's doing that are antagonizing, not just the US, but other countries around the world, that has the potential to get worse. Also, of course, the fact that there's just been a meeting between the Saudi Crown Prince and the Prime Minister of Israel, both have their domestic challenges. Netanyahu may not be very long for power in Israel, MBS has had his internal fights and trying to consolidate power inside Saudi Arabia, and clearly worries that a Biden administration will not be as interested in working with him as the Trump administration has. But we're talking about a completely new geopolitics in the Middle East that allows America's allies in the region to work more closely with each other, puts more pressure on Iran at the margins, makes it easier to get back to a new tweaked Iranian nuclear deal.
By the way, my friend, Tony Blinken who's about to be appointed Secretary of State, he is someone who clearly understands that if you're going to get back to the Iranian deal, you're not doing the status quo ante, it's going to be more challenging. So the Saudi Israel alignment, which Secretary of State Pompeo was involved in, frankly, I mean, I'm sure that Pompeo and Blinken are not talking to each other right now, but I'd like to hope in the coming weeks, maybe they will, because they're both rowing in the same direction. This is an area where the American national security interest is the same, whether you're talking about Trump or whether you're talking about Biden, there's more of that than people generally think or appreciate it. So that's a little bit from me. Thanks everyone, be good.
Episode 8: What to expect from Joe Biden’s Presidency
Listen: It was an election for the history books in many ways, with record voter turnout during an unprecedented global health crisis. And while President-elect Joe Biden emerged as the winner after securing close-margin victories in some key states, he will undoubtedly face a deeply divided nation when he takes the oath of office in January 2021.
In our latest episode of Living Beyond Borders, we're examining what the election results mean to the US, the world, and your wallet. From taxes to trade and climate change, our experts offer the facts and figures you need to know as America prepares for the Inauguration of the 46th President.
Moderated by Caitlin Dean, this conversation features Jon Lieber, Eurasia Group's Managing Director for the US; and Candi Wolff, Head of Global Governmental Affairs at Citi.
Candi Wolff
Managing Director and Citi's Head of Global Government Affairs
Jon Lieber
Managing Director for the United States, Eurasia Group
Caitlin Dean
Head of Financial & Professional Services, Eurasia Group
Why big business should help small business - and how
Should big business care about small business in these times?
The answer is yes and for many reasons. First, small business is the lifeblood of our economies. 45% of employment in emerging countries and 70% in the OECD comes from small and medium enterprises. Moreover, these enterprises have been badly hit by the crisis. Surveys indicate as many as 50% of European small to medium enterprises feel they may not survive over 12 months. While SMEs are relying on government support, larger companies do have a role to play. After all, this includes prioritizing small business and procurement by locking in demand for multiple years, thus facilitating access to good credit, paying receivables to small business in time and where possible, ahead of schedule. Cash flow matters most when you're small. Looking out for small businesses that have lower resilience. For example, financial institutions can lend more and in doing so, ensure deeper customer relationships in the future.
Episode 6: Big cities after COVID: boom or bust?
Listen: What will the cities of the future look like? Before the COVID-19 pandemic, the answer to that question was clearer: Urban areas around the world were on a trajectory of exponential growth, with 68% of the world's population expected to live in cities by 2050.
It's unlikely the pandemic can dramatically alter that unstoppable trend, particularly in developing nations. But it will no doubt be impacted by the economic and lifestyle changes this global crisis has brought, from New York to London to Tokyo and beyond.
In this episode we examine the short and longer-term implications of a shift toward urbanization, how the pandemic will alter city life, and what it all means for the global economy, geopolitics, and your wallet.
Moderated by Caitlin Dean, Head of the Financial and Professional Services Practice at Eurasia Group, the conversation pairs Citi Private Bank's Head of North America, Ida Liu, with Senior Editor Alexander Kliment of GZERO Media's Signal newsletter.
Ida Liu
Citi Private Bank's Head of North America
Alexander Kliment
Senior Editor, GZERO Media's Signal newsletter
Caitlin Dean
Head of Financial & Professional Services, Eurasia Group
Quick Take: Pandemic and the presidential election
Ian Bremmer's Quick Take:
Hi, everybody. Ian Bremmer here. Yet another exciting week in the run-up to the US elections. Not the only thing going on, though, not at all. I mean, first of all, coronavirus continues to be by far the biggest story in the US, in Europe, as we have a major second wave, and indeed in many countries around the world. Also, we're seeing a lot more instability pop up. I mean, we've had every Sunday now for about three months massive unprecedented protests in Belarus. They're not slowing down at all. We see major demonstrations, including anti-royal demonstrations in Thailand, Pakistan. You've got significant instability right now, of course, we'd seen in Lebanon over the past months. Why is this all going on? Is this a GZERO phenomenon?
I would say not quite, but it is related in the sense that the reason you have a leaderless world today, the reason you have a GZERO world is because increasingly, political architecture and institutions have been weakening and they aren't aligned with the geopolitical order. Similarly, the reason why you're seeing so much more instability these days is because a lot of people feel like their own domestic governance has not been fit for purpose, certainly in the United States and the big social movements and the growing divide between red and blue on the back of an unprecedented economic crisis and pandemic in modern times that is hitting not just everyone together, but really those economics are on the back of the working class and the middle-class, what people are increasingly calling a K-shaped recovery, where Bezos is now worth almost $200 billion, anyone in the knowledge economy is doing pretty well.
You can socially distance. You can work at home. Your jobs are doing fine. Your 401ks are fine. The markets are popping. But what if you don't have any of that access? What if you're not in a job like that? What if you don't have stocks in a portfolio? Well, then your life has gotten a lot harder and you're feeling that support for those that say they're going to do better for you doesn't really make your life any better. I thought it was really interesting that we had these big rallies in the last couple of days from President Trump and we'll see them again every day for the next couple of weeks where he's saying, if you elect Biden, he's going to listen to the scientists.
If you're a PhD, you say, "Well, okay, that's a good thing, right? We want the experts being listened to." But if you're someone for whom life has been getting worse for them decades now, not just in the last four years, but for a long time, you feel like you've been lied to. That's not just political leaders from one party or another. That's the media, that's the scientists, that's everyone out there with their so-called facts and great education who may be really smart and they may be really smug, but they're not helping you, and in that regard, the fact that President Trump can still have a 40% approval rating and say the sorts of things he's saying and respond the way he is responding to this coronavirus shows you how deeply the system has eroded.
Whether Trump wins or whether Biden wins coming up, these problems are not going away. They're much more structural, and I do get the sense that a lot of people in the foreign policy establishment in the United States and the foreign policy establishment in the US, both left and right, is largely anti-Trump and they see how much Trump is disliked outside the United States in many, most countries around the world, America first as an overt strategy and tagline doesn't surprise you that it's not going to work very well if you don't happen to be American.
But I think there is a broad belief that if we just get rid of Trump, if Biden comes in, then everyone's going to flop to the United States as a leader again. Number one, that's just not the case. I mean, the erosion of American leadership was happening well before Trump. The feeling that the United States was increasingly hypocritical in the way that it led, I mean, you think about the war in Afghanistan, the war in Iraq, you think about Guantanamo, you think about failed promotion of democracy internationally at the same time that America's own democratic capabilities at home are increasingly seen by its own people as not fit for purpose, nevermind the way that the Canadians or the Germans or the Scandinavians or others who might look at the United States would increasingly see the United States is not such an effective model.
Well, you need to realize that it's not like everyone is just sort of gagging at the bit for anyone but Trump and now we're going to love the United States again. It's going to be much more fragmented. This GZERO world is not a product of Trump and it's going to persist beyond whether it's one or two Trump administrations. I guess, I've always thought that's more important. I mean, I do worry about the further acceleration of the erosion of American institutions happening under a president that doesn't care particularly for rule of law and doesn't really believe that in the strength of representative democracy or human rights, he's much more transactional his orientation. So certainly, I've seen that whether it's the executive or corruption in the civil service, or whether it's the effective functioning of the legislature in the US, all of those things have been eroding for some time, but they're eroding more quickly under the Trump administration.
But I mean, so too, is the media having its legitimacy erode in the last four years, and I would argue that's largely self-inflicted how they've chosen to respond to a very divided and commercially very enriching political landscape for them. How social media has chosen to ignore the importance of coexisting well with a civil society and fabric that supports it because they'd rather ensure that they can maximize eyeballs, advertising and revenue, and the business models are not particularly aligned.
So I think it's important for us to understand that these issues are much more structural than the election that we're going to have in the next couple of weeks. Also, because lots of other countries continue to experience these things challenges, and the next two years are still, irrespective of who's leading the United States, largely going to be defined by how humanity both collectively and the deeply fragmented are responding to this continued coronavirus. We now have caseload in many countries across Europe that is higher than it was during their first wave. Deaths are certainly going down. In the United States, deaths are going up from a month ago, but they're down from where they were in the early wave.
Science is responding more effectively to the crisis, but we are nowhere close to out of this and we won't be until we have a vastly more effective and broader testing regime, until we have much better political leadership and until we have vaccines that are distributed and across the world in sufficient amounts with education that people are going to take them. we're talking about still another couple of years where that's defining the way that the global political environment and economic environment actually works, and in that regard, I think irrespective of how this us election turns out, you're still going to be in this period of extraordinary crisis of headlines on a daily basis, whip-sawing you from issue to issue.
Yes, if Trump is gone, Twitter will drive you a little less crazy and there won't be as many headlines driven by it. But the country I think is going to be every bit as divided, in fact, in many ways more so in part because the election will be seen as illegitimate by many, and in part more importantly, because the economic impact of this crisis is going to be so much harder for people.
Final thing I would say is that in 2020, the healthcare response to coronavirus has been radically mixed and differentiated around the world. Some have done very well in response on the healthcare side. We know who those countries are. It's Japan, it's South Korea, it's Germany, it's Canada, it's others. Some have done a poor job on the healthcare side, frankly, including our own United States, the United Kingdom and many others, Brazil. But economically, almost every major economy in the world has done a really good job in the first year of this crisis, responding to it. All the central bank governors, almost all the ministers of finance, the US Secretary of Treasury, almost all the major legislatures in the world have responded adequately or more than adequately to the nature of the economic crisis.
In 2021, the primary issue is not going to be the healthcare fallout. That will be better, in part because we've learned a lot. The death rate is going to go down, in part because the effectiveness is going to be better. You'll have more treatments, you'll start to have vaccine, all those things, but the economic impact is going to be much worse and I fear the economic response is going to be much more differentiated and haphazard, and that is one of the reasons why we need to pay a lot more attention to coronavirus in 2021, even as there's going to be such fatigue from talking about and dealing with the pandemic, but most human beings around the world are still going to be experiencing it and that's that bottom of the K.
Keep in mind that the one thing the K-shape recovery really doesn't teach you is that when you hear about a K, you think, "Well, both legs of the K are actually equivalent." Not true. That top of the K only reflects about 10% of the population in the advanced industrial economies. The bottom of the K is pretty much everybody else. Going to have to address that in a serious way in the next year. Thanks everyone. Be safe. Avoid people. Talk to you soon.