- Ascending Asia
- Waning U.S.
- Intra-European fission
- Rising China
- Fading organisations
- The energy factor
The trends shaping the post COVID-19 world
For IASToppers’ Editorial Simplified Archive, click here
The COVID-19 pandemic began as a global health crisis. As it spread rapidly across nations, country after country responded with a lockdown, triggering a global economic crisis. Certain geopolitical trendlines were already visible but the COVID-19 shock therapy has brought these into sharper focus, defining the contours of the emerging global (dis)order.
- The first trend which became clear in the aftermath of the 2008 global financial crisis is the rise of Asia.
- Economic historians pointed to its inevitability, recalling that till the 18th century, .
- The Industrial Revolution accompanied by European naval expansion and colonialism contributed to the rise of the West, and now the balance is being restored.
- The 2008 financial crisis showed the resilience of the Asian economies, and even today, economic forecasts indicate that out of the G-20 countries, only China and India are likely to register economic growth during 2020.
- Asian countries have also demonstrated greater agility in tackling the pandemic compared to the United States and Europe.
- This is not limited to China but a number of other Asian states have shown greater responsiveness and more effective state capacity.
- Consequently, Asian economies will recover faster than those in the West.
- The second trend is the retreat of the U.S. after a century of being in the forefront of shaping the global order.
- U.S. Interventions in Afghanistan and Iraq have become quagmires that have sapped domestic political will and resources.
- This is the fatigue that (former) U.S. President Barack Obama sensed when he talked of “leading from behind”.
- President Donald Trump changed it to “America first” and during the current crisis, the U.S.’s efforts at cornering supplies of scarce medical equipment and medicines and acquiring biotech companies engaged in research and development in allied states, show that this may mean “America alone”.
- Moreover, even as countries were losing trust in the U.S.’s leadership, its bungled response at home to the pandemic indicates that countries are also losing trust in the U.S.’s competence.
- The U.S. still remains the largest economy and the largest military power but has lost the will and ability to lead.
- A third trend is the European Union’s continuing preoccupation with internal challenges.
- The challenges are generated by its expansion of membership to include East European states, impact of the financial crisis among the Eurozone members, and ongoing Brexit negotiations.
- The trans-Atlantic divide is aggravating an intra-European rift.
- Rising populism has given a greater voice to Euro-sceptics and permitted some EU members to espouse the virtues of “illiberal democracy”.
- Adding to this is the North-South divide within the Eurozone.
- Further damage was done when Italy was denied medical equipment by its EU neighbours who introduced export controls, which led to China airlifting medical teams and critical supplies.
- The Schengen visa or free-border movement has already become a victim of the pandemic.
- The EU will need considerable soul searching to rediscover the limits of free movement of goods, services, capital and people, the underlying theme of the European experiment of shared sovereignty.
- A fourth trend is the emergence of a stronger and more assertive China.
- While China’s growing economic role has been visible since it joined the World Trade Organization at the turn of the century.
- Its more assertive posture has taken shape under President Xi Jinping’s leadership with the call that China is now ready to assume global responsibilities.
- Chinese assertiveness has raised concerns, first in its neighbourhood, and now in the U.S. that feels betrayed because it assisted China’s rise in the hope that an economically integrated China would become politically more open.
- In recent years, the U.S.-China relationship moved from cooperation to competition; and now with trade and technology wars.
- The pandemic has seen increasing rhetoric on both sides and with the election season in the U.S., confrontation will only increase.
- A partial economic decoupling has begun and will gather greater momentum.
- Global problems demand global responses.
- With COVID-19, international and multilateral bodies are nowhere on the scene.
- The World Health Organisation (WHO) was the natural candidate to lead global efforts against the health crisis but it has become a victim of politics.
- Its early endorsement of the Chinese efforts has put it on the defensive as the U.S. blames the outbreak on a Chinese biotech lab and accuses Beijing of suppressing vital information that contributed to the spread.
- The UN Security Council (UNSC), the G-7 and the G-20 are paralysed when the world faces the worst recession since 1929.
- The reality is that these institutions were always subjected to big power politics.
- Agencies such as WHO have lost autonomy over decades as their regular budgets shrank, forcing them to increasingly rely on voluntary contributions sourced largely from western countries and foundations.
- U.S. leadership strengthened the Bretton Woods institutions in recent decades because the U.S.’s voting power gives it a blocking veto.
- The absence of a multilateral response today highlights the long-felt need for reform of these bodies but this cannot happen without collective global leadership.
The energy factor:
- The final trend relates to energy politics.
- Growing interest in renewables and green technologies on account of climate change concerns, and the U.S. emerging as a major energy producer were fundamentally altering the energy markets.
- Now, a looming economic recession and depressed oil prices will exacerbate internal tensions in West Asian countries which are solely dependent on oil revenues.
- Long-standing rivalries in the region have often led to local conflicts but can now create political instability in countries where regime structures are fragile.
These unfolding trends were quite perceptible earlier too but have been aggravated by the pandemic. The world today faces the burden of pandemic as well as schism in the world order. Rising nationalism and protectionist responses will prolong the economic recession into a depression, sharpening inequalities and polarisations.