Context: There is a need to assess the global scenario once the COVID-19 crisis is over. The crisis has threatened to throw the world into recession and is disrupting the global order.
- The Prime Minister of India declared the pandemic as a serious global crisis.
- Also, the PM announced a series of steps such as a one day ‘peoples curfew’ (on March 22) ‘social distancing’, the setting up of a COVID-19 Task Force under the Finance Minister to come up with measures to mitigate the economic hardship engendered by the pandemic, and finally a three-week-long lockdown.
- Several precautionary measures based on guidelines in vogue elsewhere in the world for preventing pandemics of this kind, have also been introduced including ‘home isolation’, ‘home quarantine’, etc.
The crisis of global governance
- The weakening legitimacy of international institutions: The WHO’s response to the outbreak, and its endorsing official Chinese line exposes the weakness of WHO.
- Many of our global institutions and their agencies suffer from politicisation, manipulation and a lack of representation, independent leadership and purpose.
- National sovereignty & exclusion: The world is slipping into spheres of influence of exclusive arrangements groups which limit a global response to global challenges.
- The US is also preventing a global consensus on the Corona response by divisively terming the disease as “Wuhan virus” at the G-7 and at the UN Security Council.
- China remains unpunished for its poor handling of the virus: China handled the virus initially in an opaque manner, and manipulated the institutional mechanism. But WHO has not faulted it.
Post COVID-19 scenario:
China’s pivotal role: The problem with the novel coronavirus is that with the exception of China, which battled another coronavirus epidemic in 2003 — the Severe Acute Respiratory Syndrome (SARS) epidemic — there is little available for most nations on which to base their assessment of what next.
- China may cease to be the world’s biggest exporter of manufactured goods. With no country in a position to replace it, this development will precipitate a further economic downturn internationally.
Global recession is inevitable
- Industries are facing new challenges such as having to adjust to a shift from cost efficiencies to innovation and breakthrough improvements.
- Uncertainty, panic and lockdown policies are expected to cause demand worldwide to decline.
- This will inevitably lead to a vicious downward cycle, where companies close down, resulting in more lay-offs and a further drop in consumption.
- A decline in GDP would follow.
Pandemic as global order disrupter: Post COVID-19, the U.S. will be among the countries badly affected by this pandemic. The U.S. can be expected to step back and practice neutrality in global affairs.
- Rise of authoritarian regimes and authoritarian trends: China and Russia have strengthened their relationship, and improved their asymmetric capabilities.
- Russia has become far more economically and politically stable and an important power broker in West Asia.
- Extended isolation (according to psychologists) can trigger a different kind of pandemic event leading to possible suicidal tendencies, fits of anger, depression, alcoholism and eccentric behavioural patterns.
- Countries lacking a comprehensive nationwide health system would find this an even more difficult situation to handle.
- Existing curbs on migrants’ movement could even lead to a major law and order situation.
Digital authoritarianism: China’s authoritarian methods seem to have helped it to contain the spread of the virus — at least for the time being.
- The rise of digital autocracies could lead to digital repression, and in the age of AI-powered surveillance, create a capacity for predictive control, or what is often referred to as ‘social management’.
Assessment for India
- An early estimate by the Asian Development Bank, soon after the epidemic was declared, was that it would cost the Indian economy $29.9 billion.
- A recent industry estimate pegs the cost of the lockdown at around $120 billion or 4% of India’s GDP.
- According to the Confederation of Indian Industry (CII), existing stress in the financial sector in India would require up to six months even after the entire course of the COVID-19 epidemic is over to restore normalcy and business continuity.
- Rebooting the ethic of global cooperation: India’s early outreach to the SAARC community and its proactive role in the G20 demonstrates its ability in navigating ideological-political diversity comfortably. It should continue to do so.
- Containing isolationism: Many nations will use this pandemic as an opportunity to close their economy to the international community. India must defy such impulses.
- To compensate for economic loss, massive inflows of government funds would be needed, but most governments, India included, might find it difficult to find adequate resources for this purpose. Global coordination was a must in the extant situation.
When the current pandemic is over, the globe must learn lessons about what happened, and how international systems and institutions can be strengthened and radically reformed in order to forestall its recurrence.
Image Source: World Economic Forum