In every era, there comes a time when readjustments in the fundamentals of the global order have to be reckoned with. If the fall of the Berlin Wall and the collapse of the Soviet Union were two such broadly identifiable events of the last century, the 9/11 attacks in the US, the fall of Lehman Brothers and the ongoing coronavirus outbreak are certainly their parallels in the current century. The COVID-19 epidemic poses an unprecedented challenge to the world by, among other things, pushing the world into an economic recession and disrupting global relationships and cooperation as we have known it. None of this was inevitable, but the differences in the handling of the crisis by different countries will make some of these effects come to pass. The most important among them being how the US is seen to have responded to the pandemic domestically and globally.
Among the foremost impacts that the pandemic is widely expected to have is to fundamentally alter the nature of economic globalisation as we know it. If this indeed happens, there could be various possibilities, but every one of them will mean that there will be adjustments, if not an upheaval, to the current economic and international order, mainly fostered and substantially underwritten by the US.
First it could push countries, led by the US, to adopt a collectively apprehensive stand against China. The impact of the epidemic on the West has simply left the US, UK and the EU wondering how ‘exposed’ they have become to China. As such, the West, led by the US under Trump, could see the beginning of a united effort to limit this trade and connectivity exposure, if not substantially decouple from it. Even in the absence of the EU’s support in this endeavour, the Trump administration is likely to take steps that strategically decouples the US from its dependence on China in specific domains.
Secondly, and partly as a result of US actions, the crisis could help China position itself as the new champion of globalization, given how it is seen to have emerged out of the pandemic crisis and responding to global calls for aid and assistance. China’s assistance to various countries – including massive deployment of medical assistance, ranging from medics to medical gear in EU area from Italy and Spain to Greece and Estonia -- is being seen as Beijing’s effort to further a ‘Health Silk Road’, building on its Belt and Road Initiative to build trade and infrastructure connectivity. And given most EU countries’ dependence on Chinese trade and supplies, it is currently unimaginable for these countries to lessen their dependence on their new “savior”.
Third, the world that emerges on the other side of this pandemic will perhaps see functional alterations in how democracies work. Greater government control over populations and institutions, mass surveillance and curtailed freedoms, state-directed economies, intensive border controls – China’s influence could be more acceptable and pervasive than before, undermining key aspects of the Western liberal order.
At the same time, reinforced nationalisms, directed against China, could arise as America and the West develop a sense of schadenfreude on the part of Beijing as the world watches China recover from the pandemic’s effects while the world reels under it.
Fourth, and as a result of the above, the post-pandemic world is likely to see the intensification of great power competition between China and the US. Already, the trade war between the two countries has marred bilateral ties, even as the US has moved to take steps to curb Chinese influence in the country. America’s inability to play a significant role in the latest scramble for Europe, to lift the continent back on its legs during the pandemic, could trigger a frustrated Washington to adopt more retaliatory steps against China. This could further hasten a US grand strategy focused against China, although not necessarily pivoted around the Pacific theatre this time around. For most countries that bank on strategic hedging between the US and China, these developments do not augur well.
Fifth, the pandemic will likely leave the global community more divided. Italy is a clear example of how European and Western solidarity has been broken by the pandemic, upending traditional assumptions of State behaviour in alliances, groups and regional partnerships. In most crises, States turn to allies, partners and friends for help, and most often receive such help. However, during its hour of need, Italy found itself abandoned by its EU partners even after its appeal for essential medical supplies, while China came to its rescue.
In so far as the role of multilateral institutions is concerned, the WHO is facing tremendous criticism over its early misinformation on human-to-human transmission of the COVID-19 virus and most of all because of its perceived support to China. As such, regionalism and multilateralism, among the two strongest pillars of the Western liberal international order, have been shaken.
Other pillars of that global order continue to be tested. With the IMF predicting that the world is set to slip into a deep recession, capital outflows from emerging economies and smaller nations are likely to hit most countries very hard. For the first time, the IMF has deployed its total lending capacity of $1 trillion to assist smaller economies in need and has asked the advanced economies to come forward and help them. It remains to be seen which nations step up.
(The writer is Deputy Director, Kalinga Institute of Indo-Pacific Studies, Bhubaneswar)