Illustration: Sarah Grillo/Axios

The fate of countries around the world lies in a very few individual politicians' hands — more so than at any other time in half a century or more.

Why it matters: Two politicians in particular, Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin, wiped about $20 trillion off the value of the world's oil reserves this week when they failed to come to an agreement on cutting oil production. That's more than $2,500 per human being on the planet.

The spread of the novel coronavirus is similarly a function of decisive action by heads of state, or the lack thereof. Governments alone determine whether the number of new cases increases exponentially, or whether it is brought under control within days.

Of note: The Chinese government, through inaction, allowed COVID-19 to grow to the degree that global infections were inevitable. Subsequent Chinese actions, however, were decisive and effective.

  • South Korea has also been effective in combating the coronavirus and has managed to do so through "openness and transparency" rather than lockdowns.
  • Italian Prime Minister Giuseppe Conte has locked down the entire country, imposing severe restrictions on travel and shuttering all stores except groceries and pharmacies.
  • President Trump, by contrast, sent markets into a series of tailspins by talking about the virus as a political attack rather than as an epidemiological emergency. His plan for minimizing the domestic spread of COVID-19 is notable mainly for its nonexistence.

The big picture: It's generally very difficult to determine the amount of credit or blame for economic conditions that can be laid at the feet of any individual politician. Heads of state tend to inherit an economic system and stick with that system. But a global pandemic is exactly the kind of shock that only government action can address.

  • Russia and Saudi Arabia have already failed the test. Faced with a significant decline in demand from the coronavirus, they failed to agree to cut supply by a similar amount. Instead, they both decided to increase production, sending oil (and stock market) prices plunging.
  • The United States is also failing. Its official count of 1,281 coronavirus cases is much lower than the reality, given that testing kits have been extremely scarce and that the country had tested fewer than 5,000 people as of Monday. (South Korea, by contrast, with only 15% of the U.S. population, has tested almost 200,000 people.)

The bottom line: In normal day-to-day life, someone with the novel coronavirus will infect more than 3 other individuals. That's a simple recipe for exponential growth. Effective heads of state have shown that they have the ability to change individual behavior across their country so that the number gets reduced to less than 1.

  • Normally, the health of a country is a function of the strength of its economy. That correlation has now temporarily been upended. Politicians need to slow down economic activity to save their countries.

Go deeper: Brace for coronavirus supply shocks

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