With half the world population now isolating themselves around the world, the novel coronavirus pandemic has become a truly global event. As on date, more than 65000 people have died, and over 12 lacs are suspected to be suffering from the virus. The scale of impact on the health of the people across the world is unprecedented, and we are still not sure what lies ahead of us in weeks and months to come. Scientists are working overtime to develop a vaccine, but it is still many months away before we can see a cure for this deadly virus. The prolonged lock down is being considered as unavoidable to check the rate of infection (flattening of the curve) even though it has unimaginable adverse impact on the lives of the people. Most notably on the economies of the nations, rich and poor alike, and on the livelihood of the population of the planet, mainly the poor.

Is it the End of Economic Globalisation?  The new unemployment numbers released in US at the beginning of Apr, show an uptick to 4.4 percent, up from 3.5 percent in Feb with more than 7 lacs new job losses[i]. In India the government has not released the figures, but it is widely accepted that both the formal and the informal sectors have been hit as never before. The coronavirus pandemic will therefore not only have long-lasting economic effects but lead to a more fundamental change.

To begin with, the fundamental shock to the world’s financial and economic system is the recognition that global supply chains and distribution networks are deeply vulnerable to disruptions due to a black swan event such as COVID 19. Globalization allowed companies to farm out manufacturing all over the world and deliver their products to markets on a just-in-time basis, bypassing the costs of warehousing. Inventories that sat on shelves for more than a few days were considered market failures. Supply had to be sourced and shipped on a carefully orchestrated, global level. COVID-19 has proven that pathogens can not only infect people but poison the entire just-in-time system.

Given the scale of financial market losses the world has experienced since February, companies are likely to come out of this pandemic decidedly wary about the just-in-time model and about globally dispersed production. The result could be a dramatic new stage in global capitalism, in which supply chains are brought closer to home and filled with redundancies to protect against future disruption. That may cut into companies’ near-term profits but render the entire system more resilient.

Even before this crisis, the multinational companies had started shifting the manufacturing away from China due to various reasons including rising wages, the trend will only accelerate now. The coronavirus pandemic could be the straw that breaks the camel’s back of economic globalization. Companies will now rethink and shrink the multistep, multi country supply chains that dominate production today However, this will not happen in a hurry, and India has an opportunity, if it plans well, to grab the opportunities that will come its way. Former Chief Economic Advisor Arvind Subramanian said this in an interview to NDTV on 3 Apr.

Will the Pandemic lead to more cooperation amongst the nations?  Previous plagues—including the influenza epidemic of 1918-1919—did not end great-power rivalry nor usher in a new era of global cooperation. Neither will COVID-19. We will see a further retreat from hyper globalization, as citizens look to national governments to protect them and as states and firms seek to reduce future vulnerabilities.

We are already witnessing that the pandemic is strengthening the state and reinforcing nationalism. Though it depends upon how the economies and the societies come out of the crisis, it is more likely that COVID-19 will further accelerate the shift in power and influence from West to East.  In short, COVID-19 will create a world that is less open, less prosperous, and less free.

Governance and delivery to the Citizens is the Key.  The decision making of leaders of the nations and how they deliver health and economic security to the citizens will define the future of the politics. Therefore, the coronavirus pandemic will change our politics, both within states and between them in times to come. It is to the power of government that societies—even libertarians—have turned. Government’s relative success in overcoming the pandemic and its economic effects will exacerbate or diminish security issues and the polarization within societies. Either way, government is back. Experience so far shows that authoritarians or populists are no better at handling the pandemic. Indeed, the countries that responded early and successfully, such as Korea and Taiwan, have been democracies—not those run by populist or authoritarian leaders. PM Modi responded decisively and timely to minimize the impact despite many problems associated with federal and democratic structure. World is already comparing the response of democratic India with that of China, which mismanaged the initial response, India has the opportunity to become the great power that the world will look up to if it comes out of the crisis with least pain possible,

US Will Need a New Strategy. In 2017, U.S. President Donald Trump announced a new national security strategy that focuses on great-power competition.

Richard Danzig summarized the problem in 2018: “Twenty-first century technologies are global not just in their distribution, but also in their consequences. Pathogens, AI systems, computer viruses, and radiation that others may accidentally release could become as much our problem as theirs. Agreed reporting systems, shared controls, common contingency plans, norms, and treaties must be pursued as means of moderating our numerous mutual risks.”[ii]

Even if the United States continues to prevail as a sole superpower, it cannot protect its security by acting alone.

On transnational threats like COVID-19 and climate change, the key to success is importance of cooperating with others. Every country puts its national interest first; the important question is how broadly or narrowly this interest is defined. COVID-19 shows we are failing to adjust our strategy to this new world. ‘Vasudhaiva Kutumbakam’ – the World is one Family, may well be the mantra for humanity to survive from non-military threats

Relevance and role of UN and other International Organisations will be questioned. UN is missing in action as the world is grappling with the biggest challenge to the security and the very survival of the human race. The council’s inaction contrasts with its previous approach to global health crises in Africa over the past two decades.

In January 2000, U.S. Vice President Al Gore presided over a U.N. Security Council meeting to discuss the threat posed by HIV to regional security in Africa. The National Security Council had declared HIV, the virus that causes AIDS, a national security threat.

In September 2014, Samantha Power, then-U.S. ambassador to the United Nations, presided over the first emergency session of the Security Council to address the Ebola epidemic in West Africa. During the meeting, the council adopted a resolution declaring Ebola a “threat to international peace and security” and urged the world to send more health care workers and supplies to the hardest-hit countries: Liberia, Sierra Leone, and Guinea.

But this time, United Nations Security Council is watching the greatest global health crisis in a century unfold from the side lines, quarrelling over the wisdom of working online, batting down proposals to help organize the response to the pandemic, and largely ignoring the U.N. secretary-general’s appeal for a global cease-fire. Role of WHO has also come under criticism and the allegations are that it was under pressure from China not to warn the world in time.[iii]

Signs of hope are still alive. Finally, there are signs of hope and good sense in the opinion of Mr Shiv Shankar Menon[iv]. India took the initiative to convene a video conference of all South Asian leaders to craft a common regional response to the threat. At India’s behest if the pandemic shocks us into recognizing our real interest in cooperating multilaterally on the big global issues facing us, it will have served a useful purpose.

End note

[i] https://www.theguardian.com/business/usemployment

[ii] https://dnyuz.com/2020/03/20/how-the-world-will-look-after-the-coronavirus-pandemic/

[iii] https://foreignpolicy.com/2020/03/27/un-security-council-unsc-coronavirus-pandemic/

[iv] https://foreignpolicy.com/wp-content/uploads/2020/03/coronavirus

Maj Gen RPS Bhadauria, VSM (Retired) is a Distinguished Fellow with the USI of India.

Disclaimer: The views expressed are those of the author and do not necessarily represent the views of the organisation that he belongs to or of the USI of India.