While a debilitating pandemic rages on and countries all over the world have just one priority- to contain the rapid spread of the virus, it is important to look at other global issues that have manifested themselves through states’ behaviour across the world. This paper seeks to take an analytic peek into some of the actions, priorities, and decisions of consequence to the existing world order by leading global powersduring the pandemic to contain it or even otherwise. This assessment is important from the point of view that this pandemic is already 'stretching the International Order to its breaking point' and the longer it stays, the more negatively impacted global order will be, with upshots likely in all major areas including public-health, economy and geopolitics.
This paper looks at some of the important trends in the areas of economy, geopolitics and socio-economic domain amidst the ongoing COVID-19 pandemic.
The United States (US)
As the number of positive coronavirus cases in the US near 7,50,000 and total deaths touch 39, 000, there are signs that point to the flattening of the ‘curve’, in at leastNew York City which has been the country’s most affected state. However, this belief is not without apprehension that if the virus reaches other parts of the country, the curve could take the shape of a ‘U’ or a ‘W’.
Among the foremost impacts of the COVID-19 outbreak on the American society in terms of severity will be the on its economy, especially the socio-economics. With more than 95 percent of Americans staying at home, joblessness and layoffs have reached an unprecedented high. More than 16 million people have filed US jobless claims over 3 weeks since March 21. By comparison, 9 million jobs were lost in the 2008 financial crisis. Restaurants, leisure and hospitality industries, travel and transportation (particularly airline), manufacturing, construction and healthcare have crumbled across the US with maximum impact in states like New York, California, Michigan and Florida.Although the US Congress passed the largest US economic stimulus measure ever in the form of the $2.3 trillion Coronavirus aid bill to help workers and businesses, benefits remain to be seen. Moreover, the Democrats and Republicans remain divided on the level of oversight that would be required to ensure that bailouts percolate down to the last labourer.
China's economy contracted for the first time in around three decades in the first quarter of 2020. In China, the greatest economic impact due to the pandemic has been on manufacturing and supply lines, and consequentially demand. Domestic restrictions have affected the supply chains of big companies such as industrial equipment manufacturer JCB and carmaker Nissan. Chinese car sales dropped by 86 percent in February 2020.The other source of major economic impact on Chinese economy will be in the form of global firms deciding to either scale down production or move out. In the economic realm, China has proved to be a component ‘choke point’ with stalled supplies to the world. Today, China accounts for close to 30 percent of global manufacturing, leading to manufacturing and supply chain clusters. The post-pandemic world will likely see attempts by countries to de-cluster by diversifying manufacturing and supply chains from China to other parts of the world. Already, Apple, Google and Microsoft have looked to move some hardware production from China to places including Vietnam and Thailand.Japan has led from the front in this regard by allocating $2.2 billion of its record economic stimulus package to help its manufacturers shift production out of China as the coronavirus disrupts supply chains between the major trading partners.
In Europe, which has been hit badly, countries are scrambling to check the level of China’s access, investments and their level of dependency on the former. Western European countries like Spain, Italy and Germany have scrambled to tighten their FDI rules in order to curb Chinese takeovers of struggling firms because of the coronavirus. The European Union (EU) has come out with a strategy to balance EU’s openness to FDIs with new ‘screening tools’. There is an increasing apprehension in the world over enhanced Chinese abilities to spend as China has announced stimulus worth billions of dollars. In Italy, Germany, Spain and Australia laws have also been passed to check participation and investment in sensitive sectors like healthcare, energy, finance and defence.
On the other end of the spectrum, a recuperating yet resurgent China has readied itself to assist Europe and create an opportunity out of the crisis. China’s post-COVID-19 turn to Europe is expected to be pivoted on three staggered priorities comprising what can be seen as China’s ‘Marshall Plan’ for Europe: an immediate medical assistance to Europe in the wake of the ongoing pandemic; a technology based deeper assistive entry and; a greater focus on Belt and Road projects in Europe, especially since most of the projects have stalled due to the raging pandemic. The success that China will achieve in realising each of these objectives is hard to predict, especially with Europe’s guarded posture, its internally divided stand on accepting Chinese assistance, and even more so because of a recent PR disaster for China as a result of its faulty supplies of medical equipment and gear to Europe recently. In the area of technological ingress, China fears that Britain might soon overturn its original decision on allowing Huawei to help operate its 5G telecommunications network in the country. Huawei's vice president, Victor Zhang, has written an open letter urging Britain to stick by its original decision. Finally, it remains to be seen how the BRI projects take off after the pandemic ends, although a resurgent focus is expected.
Beyond Europe, Australia has taken new measures to adopt an increasingly defensive posture toward Chinese investments, after years of massive capital inflows. The Australian government has now made it mandatory for all proposed foreign investments to go through scrutiny by the Foreign Investment Review Board.
The post-pandemic world is expected to see, if not fundamentally altered, a somewhat changed global order. This is likely to be driven by the business and spending priorities of countries once they recover, how major countries come to deal with China, and most of all by whether the US adopts a retaliatory strategy not just against China but against entities and institutions that it believes are ‘fronts’ for Chinese interests. The first, in what is expected to be a series of steps by the US, has already been taken. The Trump Administration has movedto halt the funding of the World Health Organization (WHO). Trump accused that the WHO had "failed in its basic duty and it must be held accountable" and held the organisation responsible for spreading "disinformation" that likely led to a wider outbreak of the virus. The US is the biggest overall donor to the Geneva-based WHO, contributing more than $400 million in 2019, roughly 15 percent of its budget.The action followed a letter directed to the WHO Director-General Dr. Tedros Adhanom Ghebreyesus by Republican members of the House Oversight Committee requesting that the WHOto provide information about its relationship with China regarding its widely criticised response to the coronavirus pandemic.
The WHO has also been at the centre of another controversy, related to Taiwan. Taiwan has accused the WHO of underplaying the severity of the spread of coronavirus to ‘pander’ to China. The twitter handle of the Ministry of Health and Welfare, Republic of China (Taiwan) shared the email contents of its early communication to the WHO about the virus, which it says was ignored by the WHO. This apparent ‘neglect’ by the WHO has had the US back Taiwan against China like never before and support its official recognition by the global body. In 2016, Taiwan’s observer status in the WHO was revoked, of which the US seeks a reinstatement, even as Taiwan has emerged as the second largest mask supplier to the world amidst the pandemic and seems to be fully in control of the pandemic situation domestically. Earlier in March, the US President signed the TAIPEI Act pledging open support for Taiwan against Beijing.
As the Trump administration has taken a tough position against China amidst the pandemic, some of its allies like Japan and Australia have also come out in criticism of China and the early suppression of information regarding the nature and lethality of the SARS-CoV-2. The Australian media has already had a run-in with the Australian Consulate General who raised questions on the Daily Telegraph’s coverage of the epidemic, followed by a point-by-point rebuttal by the Australian Daily. This incident coincides with other attempts by China to launch an aggressive and pre-emptive defence of any attribution of blame for the spread of coronavirus across the world. After the US President called it the "Chinese Virus", on March 12, China’s foreign ministry spokesman Zhao Lijian counterclaimed that ‘it might be US Army who brought the epidemic to Wuhan’. Furthermore, China sought an apology from a Danish newspaper Jyllands-Posten over a satirical cartoon that implied China as the origin of the coronavirus.
The virus has not slowed down China’s aggressive geopolitics in the Asian maritime domain, besides it has also launched a social media campaign to counter all allegations. China has put up two research stations and sank a Vietnamese fishing boat in the South China Sea amid the coronavirus pandemic.Besides these, China conducted an “unprecedented” night-time air drill off the coast of Taiwan on March 16 and sent a six-ship flotilla, led by the Liaoning aircraft carrier which sailed through the Miyako Strait, east of the northernmost tip of Taiwan. In support of Taiwan, the US is keeping a close vigil in the area with at least 11 appearances of US military aircraft in the area since March 25. This does not augur well for a world which is reeling under an unprecedented health crisis.
India has so far has been fleet-footed in handling the challenges emerging from the pandemic domestically as well as through international diplomacy. Domestically, India acted swiftly to enforce a nation-wide lockdown. Regionally, it has led from the front in reviving SAARC’s framework for creating a common fund pool specifically for the COVID-19 outbreak. Besides, it has sent medical teams, assistance and supplies to regional and extra-regional countries like Maldives, Sri Lanka, Nepal, Bangladesh, Bhutan, Kuwait, China, Brazil and the US. India’s timely medical assistance to Brazil has pushed other countries of LAC region like Argentina, Chile, Ecuador, El Salvador to reach out to India for help.
Among great powers, India has kept a fine balance between China and the US. If the Indian Foreign Minister spoke with his counterparts in the US, UK and Australia, he equally engaged Russia and China.India’s balanced approach between great powers, especially China and the US which are at loggerheads even amidst the pandemic, is further evident by its assistance to and cooperation with both China and the US. While India has provided 15 tonnes of medical supplies to China comprising masks, gloves and other emergency medical equipment, India has cleared export of hydroxychloroquine (HCQ) to the US. Both China and the US are thankful to India for timely help,and have promised to help India in return. The US has appreciated India’s decision to provide wheat to Afghanistan during the ongoing crisis.In the immediate aftermath of India's decision to supply HCQ to the US, the US Department of State cleared Indian request to supply 16 MK 54 lightweight torpedoes and ten Harpoon Block II air-launched missiles for its latest maritime patrol aircraft. From China, India will soon be receiving 15 million PPE kits.
China engaged in an early diplomacy with India after the US President Donald Trump labelled the coronavirus as “Chinese Virus”. In a call between External Affairs Minister S. Jaishankar and his Chinese counterpart Wang Yi, despite showing agreement with China that the virus should not be labelled,India has not shied away from mentioning COVID-19 in its official statement marking 45thanniversary of entry into force of the Biological and Toxin Weapons Convention (BWC). The statement calls for institutional strengthening of the Convention as well as the WHO and has asked states parties to the BWC "to recommit themselves to full and effective implementation of the Convention and full compliance with it, in letter and spirit".
However, India’s engagement of China is not without its subterranean notions of friction. Officials in the Chinese Embassy of Delhi have come out strongly in criticism of news reports in the Indian media about labelling the virus as “Chinese virus”. Besides, they have also criticised India media over media reports endorsing Taiwan’s inclusion in the WHO. Calming nerves, the Indian envoy in Beijing, Vikram Misri, has led from the front in advocating cooperation between India and China to develop a vaccine for the virus.
China is likely to closely watch what ensues after the promise of “coordinated effort” by India and the US in the Indo-Pacific domain. S Jaishankar and US Secretary of State Mike Pompeo have spoken over phone to discuss a joint strategy by India and the US to respond to the COVID-19 pandemic.This talk has been followed up by India’s participation, led by Foreign Secretary Harsh V Shringla, in a telephonic conversation initiated by the US Deputy Secretary of State Stephen Biegun to discuss a common strategy and share best practices between countries of the Indo-Pacific region. The discussion included representatives from Australia, the Republic of Korea, Vietnam, New Zealand, and Japan with a pledge to continue the discussions on a weekly basis. The framework behind this weekly meeting is being called the ‘Quad Plus” which also overlaps with the ASEAN+6 model. Although the success of this group is facilitating a regional strategy to deal with the COVID-19 outbreak remains to be seen, China will be keenly watching the developments and discussions between the Indo-Pacific countries. For India, which has been traditionally cautious about its role in the Quad, a more inclusive model like the “Quad Plus” could provide the necessary operational bandwidth in the region to move ahead with its Indo-Pacific vision. Moreover, with the US and its allies like Japan and Australiaincreasingly targeting China for the outbreak of COVID-19, there is a possibility of India being cornered in the Quad mechanism. As such, the “Quad Plus” framework is likely to suit India’s position better in the current situation.
Given China’s continued aggression in the maritime domain despite the pandemic, particularly in the South China Sea, India will be keeping a close watch on China’s activities in the maritime domain of the Indo-Pacific. Very recently, itsdeployment of a fleet of underwater drones in the Indian Ocean which collected more than 3,400 observations has made New Delhi more vigilant.
3. Social Cost
As per an International Monetary Fund (IMF)prediction, 90 percent of all countries will experience negative growth in real gross domestic product per capita this year. While the need to contain the coronavirus outbreak has generated similar priorities world over, for most countries it is a choice between public health and economy. This has created high possibilities for further increasing social and economic divisions in societies world over. Greater the existing inequalities, greater will be the risks for further growing divisions.
In terms of social cost, there is at least one starkly identifiable consequence that has unfortunately surfaced in most countries in the wake of the COVID-19 outbreak; racial and ethnic disparities. For instance, in the US the coronavirus is infecting and killing black people at disproportionately high rates highlighting disparities in access to healthcare and other resources. One set of data shows that the coronavirus is killing Black and Latino people in New York City at twice the rate that it is killing White people. Another shows that, African-Americans account for a third of all the positive tests in Michigan and in Louisiana, about 70 percent of the people who have died are black. The Chinese city of Guangzhou, which is home to Asia’s largest African migrant population, has emerged as the centre of anti-foreigner sentiment against African nationals, rising to xenophobic extent. The coronavirus outbreak has fuelled unsubstantiated claims among residents of the city that foreigners and people of colour are importing the coronavirus to the city, leading to round-ups and evictions of Africans.
In India, the migrant labourers and daily wage workers seem to be at the forefront of the socio-economic brunt as a result of the COVID-19 pandemic. However, for a large and diversified country, especially a mammoth unorganised sector and a short notice to implement with a nation-wide lockdown, the Indian state has done reasonably well.
*Dr. Vivek Mishra, Research Fellow, Indian Council of World Affairs.
Disclaimer: The views expressed are that of the Researcher and not of the Council.
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