VIEW: Pent up tensions lead to rise in civil disorder

After the start of lockdowns, the attention of the corporate intelligence and risk analysis community naturally turned to ask what would come next.

The principal fear has been a rise in civil disorder, driven by the release of pent-up tensions over society and the environment, and the fading euphoria of initial 'freedom' from stringent measures.

Events in the UK, US, France, Italy, and Germany in the past few days have served to reinforce this predicted trend.

As I write, reports of an attack in Glasgow city centre are unfolding. Although it is not yet known whether it is terror-related, it is still shockingly violent. There are many signs that these will not be isolated cases – but rather just the beginning, with the real hardship yet to come.

It is no secret that working-class communities, including a higher proportion of minorities, have suffered more greatly from the virus so far. There are multiple factors at play, and we do not understand all of them yet, but it is the impact that is of prevailing importance.

These communities have experienced more hardship than the middle classes, who are more likely to have saved money throughout lockdown, benefiting from mortgage holidays and reduced luxury spend. By comparison, those who were struggling to get by are much worse off.

Compounding this are trends such as AI and automation accelerated by the virus and likely to further hit this community in the form of large-scale redundancies. The gig economy, linked strongly to hospitality and travel, will also disproportionately suffer.

The sense of inequality will therefore markedly increased, with economic effects likely to become more apparent from September, and right through 2021.

Localised closures and lockdowns are already a feature of life but will become more prevalent as governments attempt to restrict local hot spots; as shown around migrant workers in southern Italy, as well as in Germany, impositions on a small area are likely to be met with either active or passive resistance. Similarly, in the UK, self-imposed isolation is being rejected by one in four people contacted through the test and trace system.

Current general rates of infection are low in Europe, but are nonetheless rising again, while the situation in the US is particularly alarming. This shows the potential for further hardship, likely to come in the autumn as other factors contribute towards a return of pressure on health services.

This is also the time that redundancies are more likely and in Q1 2021 many businesses that may have struggled through the last year on a combination of borrowing and deferment will find very large debts being called in. Cuts will start well before then, once the initial ‘bounce back’ optimism fades. No amount of haircuts or dinners now will make up for a quarter of lost revenue, and retail remains at 45% of the levels seen a year ago, despite re-opening.

Amongst other trends, environmental activism is also set to make a large return, with a feeling that this is the moment to build support for lasting change. A runway incursion at Orly, Paris, shows the future trend and 'polluting' companies that have taken taxpayer-funded bailouts are very likely to come under sustained pressure. A return to the policies of the past will be viewed with increasing anger, requiring yet more potentially costly change.

This cycle of protests over injustice will in-turn fuel counter-protests and reactions from the far right, which will feed yet more unpleasant fringe activities – a growing threat which we have already covered this week.

This also ignores more widespread anger at governments that have mishandled the crisis, and the ongoing effect of increasing rivalry between great and regional powers, adversely affecting trade and business sentiment.

We are in a period of euphoria, but events of recent days are showing that the clouds are already growing - and the real, absolute hardships are yet to come. This will be a challenging period and so it is incumbent now to take stock and consider how best to navigate affairs in a more volatile, uncertain, complex and ambiguous world.

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