I think most of us are happy to see 2020 come to an end. This has proven to be one of the most challenging years in recent history. The pandemic generated an unprecedented disruption in economic conditions across the world. The financial, political and social consequences of COVID-19 will reverberate for many years to come. We can even say that 2020 will most likely be a pivotal year for our generation, a critical juncture that will change the course of history. As we come to the end of this year, our team of consultants share their views about 2020 and the issues that could shape our world next year.


Hopefully 2021 will be a year of transition towards a scenario of greater control over the pandemic and vaccines will definitely play a fundamental role in that regard. There are currently almost 400 vaccines in the research and development stage, of which dozens are already in Phase II or Phase III of clinical development. By the time we write this, several vaccines have been granted Emergency Approval in different countries, and the U.S. alone has already vaccinated its first million people. However, there is still much left to comprehend in order to be firmly convinced that vaccines will be the definitive solution. We do not know for how long will immunity last. If the immunity duration is very short, then the positive impact of vaccines will be very limited because it will be impossible to vaccinate the entire world’s population every year. And we do not know the extent of possible mutations that the virus could present in the coming months, which could also impact the effectiveness of current vaccines. Variants of the coronavirus have already been identified in the UK and Denmark. The use of face masks and healthy distance seems to be fading in several countries due to the fact that important sectors of the population are resuming normal activities regardless of the risks of contagion (lockdown fatigue or simple irresponsibility). This will lead to major spikes in the number of infections in the first months of 2021, which could generate the feared collapse of health systems in some countries, including Mexico. It is likely that we will see dramatic increases in the number of hospitalizations and deaths in the first half of 2021, with a more optimistic scenario towards the second half of the year, given the success of vaccines and with some countries reaching some level of herd immunity. We consider we still have at least twelve months to go in this pandemic, with the worst part of it in the first half of 2021, but we also think by this time next year the outlook could be much more optimistic.


Joe Biden became the 46th president of the United States with 306 electoral college votes to 232 electoral votes for his rival Donald Trump. As for the popular vote, Biden received 80 million votes while Trump reached 74 million. The United States remains the single largest economic and military power on the planet, thus its internal political process remains relevant for the whole world. One of the first tasks of the Biden administration will be to try to find ways to reunite the American population. Despite all the controversial issues that plagued the Trump administration, 74 million citizens decided to give him their vote. This does not speak so much about the qualities of President Trump, but of the dissatisfaction of the American citizen with the current status-quo. With 74 million votes Trumpism, and everything it represents, is alive and well in the United States. And it is a reality that, in the richest country on earth, there are millions of people who feel that the system has left them behind. The most important country of the free world is also a fractured country and this creates a strong geopolitical risk, since the multiple enemies of the United States may perceive this as a situation of weakness and could try to take advantage of it. Establishing reliable avenues of cooperation with the Republican Party will be very important, and in that Biden may have an advantage, since he is a Washington insider known for successfully negotiating with the opposition in the past. In summary, Biden is a welcome change both at the national and international levels, and will have a great opportunity to promote some changes in the first year of his presidency, but he will not enjoy a long honeymoon and will face the almost-impossible task of re-uniting the country behind a common vision.  


The complex US-China relationship will continue to define the international agenda. It is very likely that the Biden administration will seek to “reset” the relationship to move beyond the aggressive tone set by Trump. However, the conflict with China will continue to escalate simply because conflict is the natural state of interaction between established and rising powers. China is more than ever convinced about its historic opportunity to become an international leader and is increasingly assertive in this regard. This conflict will generate an important opportunity for North America: the relocation of production processes to closer and safer locations, or Nearshoring. As long as China is perceived as a geopolitical opponent with real national security risks, there will be more pressure to return processes and jobs to the North American region. Mexico and Canada are ideal places to capture these operations, given their proximity to the United States and because we do not represent a strategic threat to our main commercial partner.

On the other hand, China will have a very difficult task after the pandemic. When all the dust settles, important questions will start to arise: Could China have taken more decisive action to prevent the spread of the virus? What did they know and when did they know it? Can the world be safe with a China that is not transparent and fully cooperative with the rest of the world?Should the Chinese political establishment be trusted? Can the Chinese political establishment manage or prevent another crisis like this? Should the world do business with a China that plunged our economies to the current economic chaos? The post-pandemic environment could create serious political instability within China and could also have long-lasting impact on the China brand and its positioning in the world.


The other complex relationship of the United States is with Russia. However, unlike China, this relationship comes from a historical context of open confrontation and does not have as many interdependent areas that could incite more cooperation. A telling symbol is the time Vladimir Putin took to recognize Joe Biden as President-Elect. Three presidents, Putin (Russia), Bolsonaro (Brazil) and López (México) were the last to congratulate Biden. Although in military and economic terms Russia is far inferior than the United States, it is also true that Putin is a solid strategist who fully understands how to play an asymmetric war. In that sense, Putin will likely move the conflict with the United States to fields where he perceives to have an advantage, such as cyberspace, espionage, disinformation and election interference. Unlike Trump, Biden will try to maintain the world order based on a strong international presence of the United States, and will not tolerate too much Russian influence in Western countries. It is likely that Biden will be much more effective in enlisting the cooperation of other US allies in establishing joint sanctions against Moscow. This will be a relationship that will only become more conflictive in 2021.


Next year we will see a renaissance in international cooperation as the United States regains its leadership role in some key international organizations. Biden has stated that he will immediately re-integrate the United States into the Paris Accord, which is essential to making substantial progress in the fight against climate change. The United States is the second largest emitter of greenhouse gases, after China, so the solution to this serious problem is impossible without coordination between these two countries. In the case of the CPTPP (Comprehensive and Progressive Trans-Pacific Partnership), both China and the United States have expressed interest in reviving it, indicating a will to return to the globalization and trade liberalization agenda. Just in November, China announced the creation of the largest trade integration agreement in history. The RCEP (Regional Comprehensive Economic Partnership) includes the ten members of ASEAN (Association of Southeast Asian Countries) plus China, Japan, South Korea, Australia and New Zealand. It will be interesting to observe the dynamics among international forces advocating for greater isolationism, populism and authoritarianism (of which Donald Trump was the strongest representative) and the traditional forces of liberalism, represented by Joe Biden and his international allies. The fight between what we in this firm call “nostalgic populism” and the forces of liberalism is becoming the ideological battle of this century.


The economic recovery towards 2021 will be marked by processes that will be very unequal among countries and economic sectors. Asian countries have been very effective in controlling the pandemic through strong disciplinary actions such as the application of massive tests to their population, personalized monitoring of COVID cases, very strict border controls, and immediate isolation of groups at risk. As a result of those actions, for example, Taiwan had a period of more than 200 days without new cases of coronavirus, and as of December 2020, Japan had kept its number of COVID-19 deaths around three thousand, the lowest in the G-7. At the other extreme are countries like the United States, Mexico, or Brazil, where the principles of freedom of movement and assembly have been privileged, and therefore infections have continued to rise. The countries that best control the pandemic will most likely have the best economic recoveries. From a geopolitical point of view, this pandemic has the potential to plunge the United States and the West into a serious economic crisis, and could give China and the East a competitive boost during the recovery process. It could contribute to the consolidation of Asia as the global business engine of the world. 

In terms of economic sectors, hotels, airlines, restaurants, entertainment venues, cruise ships, conventions and tourism will continue to be depressed and we are likely to see the bankruptcy of national and international companies in these sectors. On the contrary, other sectors such as pharmaceuticals, hospital services, logistic services, e-commerce, home-office, and even the trading of some commodities could benefit from an environment of gradual recovery towards a new normality, where much of our personal and work life will be done from our homes. The bad news is that the recovery will not be universal but, on the contrary, it will deepen the divisions and inequalities in our societies, separating even more those who can work from home from those who cannot, those who have access to technology from those who do not, or those who are covered by quality health services from those who are not. The pandemic is making us a more divided society, with the negative consequences that this entails from political, economic and social points of view.


The following is a list of other possibilities to keep in mind as we do our planning for next year:

  • Health habits become a part of the new normal, leading to higher level of awareness about infectious diseases and the best ways to fight them. 
  • The use of remote work becomes normalized, with a large number of employees now connecting from home at least half of the time, reducing traffic, noise and pollution in big cities, and generating permanent disruption in the commercial real estate industry.
  • Global pandemic becomes significantly worse, either due to mutation of the virus, vaccines proving less effective that originally anticipated, negative side effects, or the emergence of another bacteria or virus that puts additional pressure on the world’s health systems.
  • Emergence of “zombie companies” in many countries as an unintended consequence of the low interest rates environment.
  • Burst of a bubble in financial or non-financial assets as an unintended consequence of the low interest rates environment.
  • A large country falls into default after being unable to refinance its external debt.
  • Political instability in the United States due to racial conflicts or the activation of paramilitary groups that openly challenge the status quo and the federal government.
  • The problem of insecurity continues to grow in Mexico, with criminal groups openly challenging the rule of law at the highest levels.
  • Political instability in the USA and Mexico lead to incidents of domestic terrorism.
  • The United States and China escalate their tensions and go from trade conflict to isolated military events, mainly in Southeast Asia, derived from political or economic events in Hong Kong, Taiwan or the China Sea.
  • Unanticipated consequences derived from the Brexit process, which could include disruption in financial markets, impact on supply chains, or renewed political division in places such as Scotland.
  • Post-Trump nostalgic populism translates into something worse in the United States: A new political organization with a more aggressive and nationalistic agenda that cannot be kept in check by the traditional political institutions, and which starts to gain ground towards the 2024 elections.

Our entire team at Nuricumbo + Partners would like to wish you a healthy and successful 2021!

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