History is unfortunately written by the victor and Coronavirus is no exception. The world is at a turning point and nothing will ever be the same again; it is destined to change beyond recognition. The major transformation will generate more striking changes than those brought about either by the World Wars or by the end of Cold War in the 1990s.
Pandemics have always caused massive economic, social, political and military impacts on human activity. The pandemic is not just a global health crisis. In its wake, the global economy lies in tatters. Economic recovery will be staggered. The scenario of developed countries having a dominant position in the international political and economic order has begun to change. Economic development has become the core issue in today’s world. Globalization has brought about more and more global issues.
The liberal economic order is taking a bow as protectionism will now flourish. There is no global agreement on a response to the pandemic; only the virus is globalized. UN Secretary-General Antonio Guterres has called the pandemic “a global health crisis, unlike any in the seventy-five years history of the United Nations, but its most powerful body, the Security Council, has been eerily silent on it”.
But considering its makeup, its silence may be a blessing in disguise. Chinese veto in the Security Council makes the UN irrelevant. Expecting the present Council to root for a united, healthier, more peaceful world is like expecting Pakistan to root for human rights and against terrorism. Americans have become increasingly isolationist. In his 2018 UN Speech, President Donald Trump, the leader of the “free world”, warned member states against the threat of global governance to their national sovereignty and suggested they emulate his “America First” approach and embrace his “narcissistic, hell-with the rest of the world, nationalism”, according to Marwan Bishara, ex Professor of International Relations of American University in Paris.
USA has since abandoned many of its international responsibilities, erecting walls and closing borders. It took France and not USA to summon a G-7 meeting to discuss the pandemic and it took Riyadh not Washington, to summon a G-20 meeting. Predictably both led to nothing. The pandemic has put US global leadership at stake. The global order could be fundamentally reshaped by the virus as the US and the EU may suffer an extended economic slowdown and if China more effectively weathers the storm. The US also risks a severe decline in its soft power. Will Washington turn back to “America First” or position itself to help those in the developing world who will be hard hit? In case it is the former, America could lose the global leadership contest with China.
The chances of saving multilateral frameworks for international relations are weak unless the US and Europe join hands, with acquiescence from China. USA and China may need each other to ensure chances of global recovery. Leaderships in USA and China are likely to face real tests if global recovery is long and does not deliver on jobs. We all hope for a quick return to the status quo ante, but there are disturbing signs. The post-Covid economic world order will require refurbished and reformed international institutions such as WTO, WHO, Bretton Woods institutions and others. The realists ponder over and the liberals bemoan the “comeback” of the strong state, rise of nationalism, the ascendance of China at the expense of America, as well as the failure of global governance, the retreat of globalization and increasing divisions within a United Europe.
People are rallying around their governments as they expand their authority in every sphere of life, with little or no legislative cover in sight or prospects for giving up this authority once the outbreak is over. In realistic terms, it means less open, less free, less prosperous state systems. Movements of nationalism, populism, xenophobia, racial and religious discrimination and extremism will probably be the winners. Nations will turn inwards and close borders. Even before the pandemic started there were ample signs of de-globalization, rising anti-immigration sentiment and great power competition. Will Covid-19, therefore tip the balance against global cooperation and multilateralism? There is a need to avert East-West competition in which the developing world would not necessarily be a winner.
Both USA and Europe will need to take more responsibility for the developing world’s predicament, not leaving it only in the hands of China’s Belt and Road Initiative. A post-American, post-liberal world order awaits us. But what shape will it take? Globalized international order is under challenge. There is world-wide rage against China since it camouflaged the true impact of coronavirus from the world and also hid the all-important fact of human to human transmission for a long time, leaving the world completely unprepared and leading to the death of lakhs of people and unprecedented shutdown of the world economy.
Americans are incensed about their dependence on China for pharmaceuticals and medical supplies. Compounding the anger is the realisation that China is pulling out of coronavirus ahead of the US and is already starting its economic recovery to the point of having 2-3 per cent GDP growth. The Chinese hid coronavirus facts from the US and the world till the US-China trade deal was signed. Nobody outside China will ever forget that Covid-19 started in Wuhan. China’s critics have blamed the authoritarian leadership for exacerbating the outbreak by initially trying to conceal it.
Chinese officials have suggested that the US was casting doubts on China to distract the world from their mismanagement of the virus. It is true that Beijing’s strict response helped stop the outbreak. When the Wuhan lockdown was first imposed, overseas public health experts and policy-makers called it “draconian and doomed to fail”. But many have since concluded that in the absence of widespread testing, a cure or a vaccine, harsh restrictions on people’s movement is the key to slowing transmission. Later, India also implemented it successfully.
China is trying hard to repair the reputational damage caused by the earlier SARS epidemic emanating from bats in China. The world is responding to China in various ways – from suggesting freezing and taking over world-wide Chinese assets. The US’s insistence on describing the health crisis as distinctly Chinese has thwarted global cooperation and it would lead to increased US hostility towards China in the postpandemic world.
According to Lei Shaohua of School of International Studies, Peking University, “the USChina relationship has been hijacked by the health crisis”. Professor Wang Yong of the same university says, “the strategic and geographical rivalry, as well as competition over ideologies and development model will intensify US-China tension following pandemic.”
The more the US suffers during the Covid-19 outbreak, the more difficult the US-China relationship will become. But not everybody is so pessimistic. Bill Gates calling for a global approach has said, “Humanity after all, is not just bound together by common values and social ties. We are also connected biologically. In the pandemic we are all connected. Our response must be too.” Cui Tiankai, Chinese Ambassador to the US commented in The New York Times “At a time when solidarity is essential, we need to keep cool heads and clearly say ‘no’ to the folly of fanning racism and xenophobia and to scapegoating other countries or races.”
There is no denying that Sino-US cooperation can go a long way not only in controlling the pandemic but also lead to early discovery of a vaccine. The fight over spheres of influence and models of development can wait in the interest of humanity. It is true that the planet is looking for a new world order after this pandemic. The world is looking at India to restore the balance of power in close association with others and this cannot be done without India’s assistance, whether geo-politically, financially, politically, economically or militarily. Recent developments, particularly signals from USA and China, indicate a bigger role for India in international affairs. In the geo-political order, India will be the middle power between USA and China. It will have substantial bargaining power in a deepening US-China confrontation. Yet there are other powers like Russia, Japan and the EU which may join either camp. Along with unprecedented human toll, Covid-19 has triggered a deep economic crisis. India is no exception. There is a prediction of zero percentage GDP growth for India.
Forty crore jobs are at risk, as per an ILO report. Millions will become poorer. The cost of stabilizing and protecting households, companies and lenders could exceed Rs 10 lakh crore or more than 5 per cent of India’s GDP. There could be solvency risk within the Indian financial system as almost 25 per cent of MSME loans could slip into default, compared to 6 per cent in the corporate sector and 3 per cent in Retail segments. It is imperative that society preserves both lives and livelihoods. President Trump has launched a trade war announcing tariffs on thousands of products manufactured in China and ratcheted up the rhetoric by ordering US companies to start pulling out of China. Though he backed off two days later, many companies have started looking for viable and reliable alternative locations. India is a viable alternative, with labour costs half those of China, a vast pool of workers including talented engineers and a government eager to help with a staunch partner in Prime Minister Narendra Modi.
His government’s Make in India policy seeks to turn India into a manufacturing hub by offering incentives to MNCs to open factories. Until now India has made for India, soon India will make for the world, says the head of Indian Cellular & Electronic Association. The plan is to expand India’s $25 billion phone manufacturing to $400 billion by 2024. India must seize the opportunity and ensure that American, Japanese, South Korean and other corporations trying to move out of China establish their manufacturing bases in India. In crisis lies the opportunity. The writer is former Chairman of the Maulana Abul Kalam Azad Institute of Asian Studies, an autonomous body under Ministry of Culture, Government of India.