The COVID-19 “shock therapy”
shall herald a paradigm shift, in international relations, & the world as
we know today shall transform considerably forcing policy makers &
diplomats to weave a new strategic narrative. Power shifts are inevitable but
the course & timeline uncertainty shall imperil the best laid plans.
The most likely structural
changes are as follows
(1)Welcome to a Bi-polar
world: The opprobrium faced by the Chief of World Health Organization’s
(WHO) Chief, Tedros Adhanom, for apparent delay in gauging the extent of the
virus spread, in China, & warning
the world, of pandemic, only on Mar 11th
tempted POTUS Trump to suspend funding for the WHO – when it needs it most – accusing
it of “mismanaging & covering up the spread of corona virus” & insisting
on “full accountability”.
The conspiracy theory of China using corruption to wield power disproportionate to its contributions to international bodies does invite traction. The verbal sparring - with Trump calling corona virus the ‘Chinese virus” raised the dragon’s hackles while the Chinese Spokesperson, Zhao Lijian, claiming that the virus might have been spread by the US army while participating in the Military world games held, at Wuhan, in Oct 2019 – ended perhaps, after both countries agreed to a truce – the longevity of which is uncertain. The anti China chorus is reaching a crescendo; even while the on-going Sino-US trade war muddies the water further, the unprecedented initiation of class action suits in the US, against China, Australian demand, pinning down China, by asking for an independent investigation into the origins & spread of COVID-19, demand by the German tabloid, Bild, for Euro 149 billion as pandemic reparation to Germany etc. aided by the increased bellicose tone adopted by Chinese diplomats shall force many nations to choose sides.
The conspiracy theory of China using corruption to wield power disproportionate to its contributions to international bodies does invite traction. The verbal sparring - with Trump calling corona virus the ‘Chinese virus” raised the dragon’s hackles while the Chinese Spokesperson, Zhao Lijian, claiming that the virus might have been spread by the US army while participating in the Military world games held, at Wuhan, in Oct 2019 – ended perhaps, after both countries agreed to a truce – the longevity of which is uncertain. The anti China chorus is reaching a crescendo; even while the on-going Sino-US trade war muddies the water further, the unprecedented initiation of class action suits in the US, against China, Australian demand, pinning down China, by asking for an independent investigation into the origins & spread of COVID-19, demand by the German tabloid, Bild, for Euro 149 billion as pandemic reparation to Germany etc. aided by the increased bellicose tone adopted by Chinese diplomats shall force many nations to choose sides.
Former US National Security Adviser (NSA) HR McMaster writing in “The Atlantic” refers to China’s leaders belief that
their revisionist agenda has a narrow
window of opportunity :”before its population grows old”; before other nations
realize its true intentions -“national rejuvenation
at their expense”; & “before China’s economy sours”. The Goldilocks moment
is in!!
The world in COVID 19 turmoil
offers, China, a unique opportunity to emerge as a saviour offering Personal
Protection Equipment (PPE), masks, pharmaceuticals etc. & the debt trap
inlaid through the Belt & Road initiative (BRI) grants them “client states” – 23 countries,
as of 2018, in “debt distress’ of which 8 – Montenegro, Tajikistan, Kyrgyzstan,
Mongolia, Maldives, Pakistan Djibouti, Laos “already have unsustainable levels
of debt” as per McMaster. With Russia firmly in a Chinese embrace & an
ambitious Xi Jinping keen to leave his mark on history a shift to a bipolar
world order getting accelerated is inevitable.
(2)The Post World war II architecture under stress:US provides $ 400-500 million, annually, to WHO versus China’s $40 million. While the US action of suspending funding looks inhumane, it is in line with the precedent set by Trump, in 2017, of withdrawing from the United Nations Educational, Scientific & Cultural Organization (UNESCO), in 2017; this action, ironically, helps too, in conveniently distracting voters from his own mismanagement of the outbreak.
The post World War II architecture erected by the US consisted on the United Nations (UN) to handle politics & the Bretton Woods Sisters - World bank & International Monetary Fund - to handle economics. US could impose its world view either by offering access to its huge market - about a quarter of the World's GDP now - or threaten regime changes through a military intervention or make sanctions effective by having dollar as the world's reserve currency & controlling international trade payments through the SWIFT. Edward Snowden's revelations on snooping vide cyber dominance & control on data are other vectors that helped sustain global dominance.
The unilateral US pull-out of the Iran nuclear deal brought the EU, China & Russia together with a desire to move past the US dollar system of SWIFT payments. China - the world's 2nd largest economy & among the top 3 in military might, now has the New Development Bank (NDB) & Asian Infrastructure Investment bank (AIIB) was an alternative to the Bretton Wood sisters apart from State owned banks & hence is prepared to challenge the US. By denying entry to Google, Facebook et al, into China, the dragon created its own global data factories vide Baidu, Tencent & Alibaba & in Huawei has the Telecom resource to enlarge its snooping universe.
An isolationist US, withdrawing from UN institutions & making World Trade Organization (WTO) toothless signals a crumbing edifice on which China would be keen to erect its own.
(2)The Post World war II architecture under stress:US provides $ 400-500 million, annually, to WHO versus China’s $40 million. While the US action of suspending funding looks inhumane, it is in line with the precedent set by Trump, in 2017, of withdrawing from the United Nations Educational, Scientific & Cultural Organization (UNESCO), in 2017; this action, ironically, helps too, in conveniently distracting voters from his own mismanagement of the outbreak.
The post World War II architecture erected by the US consisted on the United Nations (UN) to handle politics & the Bretton Woods Sisters - World bank & International Monetary Fund - to handle economics. US could impose its world view either by offering access to its huge market - about a quarter of the World's GDP now - or threaten regime changes through a military intervention or make sanctions effective by having dollar as the world's reserve currency & controlling international trade payments through the SWIFT. Edward Snowden's revelations on snooping vide cyber dominance & control on data are other vectors that helped sustain global dominance.
The unilateral US pull-out of the Iran nuclear deal brought the EU, China & Russia together with a desire to move past the US dollar system of SWIFT payments. China - the world's 2nd largest economy & among the top 3 in military might, now has the New Development Bank (NDB) & Asian Infrastructure Investment bank (AIIB) was an alternative to the Bretton Wood sisters apart from State owned banks & hence is prepared to challenge the US. By denying entry to Google, Facebook et al, into China, the dragon created its own global data factories vide Baidu, Tencent & Alibaba & in Huawei has the Telecom resource to enlarge its snooping universe.
An isolationist US, withdrawing from UN institutions & making World Trade Organization (WTO) toothless signals a crumbing edifice on which China would be keen to erect its own.
(3)The European Union (EU) project weakens: Brexit was only a
teaser for many of the 27 EU member nations’ quest to reclaim sovereign control
on policy issues. Germany being viewed as a hegemon, for its tight fistedness, after
the Global Financial Crisis, in 2008, by nations such as Greece, Portugal etc. & Berlin’s reluctance, now, to the issue of joint debt
under “Corona Bonds” faces opposition from countries like Italy.
Unless Germany & France take
the lead & offer solutions, the internal dissonance could derail the EU project. Meanwhile, China &
Russia are relentlessly pursuing an agenda to extend influence westward; China
quickly responded to Serbia’s plea for medical supplies just as Russia sent
doctors to Italy to help them address the COVID 19 challenges; this soft power play
runs parallel to Putin’s cyber power intrusion to influence elections in
western democracies & helping support the fringe parties emerge into the mainstream
in an attempt to gain influence.
(4)Deglobalization: Governments shall now use the crisis to advocate import substitution, & re-shoring of manufacturing. Japan has already announced a $2.2 billion fund to wean back Japanese supply chains operating in the Chinese mainland. COVID crisis has exposed the chinks in the national security, of relying on China, for manufacturing or pharmaceuticals, on India. Trump’s “America first” entails winning back manufacturing from China & Mexico & services from India & there is a broad agreement across the aisle, in the US Congress, on the same: regime change - i.e even if Democrats come to power later this year - hence shall not make a difference. India has already been at the receiving end of H1B visa issues, in the US, & the latest immigration restrictions, for a temporary 60 days, imposed by Trump, is a predictor of things to come. The instinct to protect the supremacy of the White Anglo-Saxon Protestants (WASP) shall likely play out.
With a competitive advantage in services, India has been trying to push for “labour mobility” in trade negotiations & has been suffering a pushback including in the recently concluded RCEP (Regional Comprehensive Economic Partnership) negotiations. Deglobalization is in.
(4)Deglobalization: Governments shall now use the crisis to advocate import substitution, & re-shoring of manufacturing. Japan has already announced a $2.2 billion fund to wean back Japanese supply chains operating in the Chinese mainland. COVID crisis has exposed the chinks in the national security, of relying on China, for manufacturing or pharmaceuticals, on India. Trump’s “America first” entails winning back manufacturing from China & Mexico & services from India & there is a broad agreement across the aisle, in the US Congress, on the same: regime change - i.e even if Democrats come to power later this year - hence shall not make a difference. India has already been at the receiving end of H1B visa issues, in the US, & the latest immigration restrictions, for a temporary 60 days, imposed by Trump, is a predictor of things to come. The instinct to protect the supremacy of the White Anglo-Saxon Protestants (WASP) shall likely play out.
With a competitive advantage in services, India has been trying to push for “labour mobility” in trade negotiations & has been suffering a pushback including in the recently concluded RCEP (Regional Comprehensive Economic Partnership) negotiations. Deglobalization is in.
(5)Governments swing “Left” of centre: The communist revolution in 1917
nudged Western Europe towards creating a “welfare state” architecture; “big
governments’ to deliver services & arrangement of a social security net
followed. A weakening USSR prompted a Republican POTUS, Reagan, in the US & Conservative
Party’s Thatcher, in the UK, in the 1980’s, to push for a leaner govt. vide
privatization. The breakup of the USSR & the rise of prosperity in China
after it introduced “socialism with Chinese characteristics”- a euphemism for
Quasi capitalism under a single party rule- prompted other nations to tread the same path;
reluctant ones were nudged by the World Bank & IMF whose undeclared
objective was to prise open virgin markets for western capital. Both the Democratic
Party in the US & the Labour Party, in the UK, abandoned their “working class”
origins & re-crafted their Party’s under Bill Clinton & Tony Blair, in
the 1990’s, by moving right of center.
World trade & commerce were
encouraged as long as the Western world gained but things have started to
change during the last decade. The fear of the world economic epicenter shifting towards the East prompted, surprisingly, another Republican – Trump to
champion the working class angst, in the rust belt, to win elections.
Likewise, a Tory, Boris Johnson, rides on Xenophobia & job loss fears to
break the Labour strongholds in the north. People like Bernie Sanders are now forcing the Democratic Party to rediscover their working class roots. In short, western
democracies are turning “left of center”.
(6)Power Grab by aspiring autocrats: Viktor Orban of Hungary has used
the crisis to make Parliament grant him sweeping powers – to rule by decree
with no expiry date. Having packed the courts with allies, initiating attacks
to silence civil society & armed with a law to punish “fake news” he has
all the weapons to perpetuate his reign uninterrupted. Democracy & rule of
law thus faces its most intense challenge in many countries.
(7)”Privacy”- the collateral damage to save lives : While China is
a known surveillance state, many Governments, across the world, have used this crisis to nudge citizens to download
apps to help them dole out health tips, identify COVID -19 infected patients
nearby etc. Without safeguards & a data protection law, it could regress
into mass surveillance going forward. While this is a “health emergency”, a national
security bogey, can be invented later, to push for continued additional surveillance
impeding privacy. The EU model of clearly defining the scope of data collected
& debarring collectors for using data for any other purpose is the model
worth replicating.
Conclusion: Corona virus Crisis
is an opportunity for aspiring autocrats – like Hungary’s Viktor Orban - to
grab unbridled power & countries
like China to nudge the world towards a bipolar world architecture. As recession
looms, job losses shall accentuate xenophobia impacting global labour mobility;
populist leaders shall resort to protectionism & “big governments” running
a welfare state. Some governments could emerge into a “big brother” avatar,
enhancing surveillance under the guise of saving lives but with “privacy” the
collateral damage.
National security concerns shall
prompt reshoring of manufacturing & services & import substitution leading
to consumer price rises & perhaps a reduction in consumer choices. Deglobalization
is ushered in. As international institutions like the WHO suffer a trust deficit,
weakening - if not outright disintegration
of the post-World War II architecture - gets accelerated risking the world getting segregated into disjointed islands. We move from the Before Corona (BC)
world, of global connectivity, to After death of Corona (AD) world of relative isolationism.
