The first crisis of the Anthropocene: The ecological origins (AFD - Part 1/3)

The COVID crisis is a triple crisis. Aside from the international health crisis, which has a strong ecological connection and which has so far specifically affected so-called developed economies, the moment has become a global financial crisis and an oil and commodities crisis of acute intensity in the developing world. This course will highlight the interconnectedness of these three dimensions. The first lecture will concentrate on the immediate impacts of the crisis. The health crisis is itself the combination of accelerated ecological degradations due to deeply unbalanced modes of development, and the starving of public health systems. The disinvestment in public goods by national and international public bodies observed in the last decades strikes back. This socio-ecological crisis has generated a full-blown pandemic with financial and economic impacts at a scale not seen in at least a century. Its uncertain timing, completely dependent on the virus dynamics, enters in deep contradiction with the current governance system, making any assumptions about a recovery dynamics highly speculative. This global shock of biological and economic notions of time certainly makes it a systemic crisis of the Anthropocene. In the developing world, the crisis triggered massive international capital flows movement away from emerging markets and toward developed countries. Moreover, the sudden decrease in oil and commodities demand exacerbated tensions notably among oil market actors driving the price for short-term WTI futures in negative territories. Consequently, many emerging markets and developing economies are now facing potential disruptive impacts such as exchange rate tensions, speculative attacks, and possible debt restructuring. The macrofinancial mechanisms at hand will be highlighted.