Introduction: The Disruption
The COVID-19 pandemic is unprecedented, involving as it does far too many variables. Pandemics have often changed the world and reshaped human society. Empires have collapsed. There is already concern that a diminution in human values could occur, and with this, the concept of an international community might well cease to exist.
Institutions under fire
Existing international institutions such as the United Nations, the United Nations Security Council and the World Health Organization (WHO) are being criticized as failing to measure up to the grave challenge posed by the pandemic.
- World Bank has already predicted negative growth for most nations.
- India’s growth forecast for the current fiscal year has been put at 1.5% to 2.8%.
- Contraction of the economy and the loss of millions of jobs across all segments will further complicate this situation.
- The role of the state as an enforcer of public good will almost certainly become greatly enhanced.
- Some pieces of legislation such as the Disaster Management Act are already getting a new lease of life, previously perceived to be anachronistic in a modern democratic set-up.
- For example- Europe has shown a willingness to sacrifice personal liberties in favour of greater state control.
- Post COVID-19, the world may have to pay a heavy price in terms of loss of liberty.
China in the spotlight
- Far-reaching changes can also be anticipated in the realm of geo-economics and geopolitics.
- One nation, viz. China, is presently seeking to take advantage of and benefit from the problems faced by the rest of the world in the wake of the epidemic.
- More importantly, it is seeking to convert its ‘failure’ into a significant opportunity. This is Sino-centrism at its best, or possibly its worst.
- China now seeks to benefit from the fact of its ‘early recovery’ to take advantage of the travails of the rest of the world, by using its manufacturing capability to its geo-economic advantage.
- Simultaneously, it seeks to shift from being a Black Swan (responsible for the pandemic), to masquerade as a White one, by offering medical aid and other palliatives to several Asian and African countries to meet their current pandemic threat. It can be seen as seeking to gain a geopolitical advantage by this action.
- China seems to be ostensibly preparing the way for a China-centric multilateral globalisation framework.
Reacting to China’s actions
- There are enough reports of China’s intentions to acquire financial assets and stakes in banks and companies across the world, taking advantage of the scaled-down value of their assets to support this.
- Several countries apart from India, such as Australia and Germany, have begun to restrict Chinese foreign direct investment in companies and financial institutions in their countries, recognising the inherent danger of a possible Chinese hostile takeover of their critical assets.
- India seems to have woken up only recently to this threat, after the Peoples’ Bank of China acquired a 1% stake in India’s HDFC, taking advantage of the sharp decline in the price of HDFC stocks.
A faltering West
- Weakened economically and politically after COVID-19 has ravaged the nation, the U.S.’s capacity to play a critical role in world affairs is certain to diminish.
- The main beneficiary of this geopolitical turnaround is likely to be China, a country that does not quite believe in playing by the rules of international conduct.
- Germany, which may still retain some of its present strength, is already turning insular, while both France and a post-Brexit United Kingdom will be out of the reckoning as of now.
West Asia and India
- The oil price meltdown will aggravate an already difficult situation across the region.
- Israel may be one country that is in a position to exploit this situation to its advantage.
- The economic downturn greatly reduces India’s room for manoeuvre. In South Asia, it faces the prospect of being isolated, with the Chinese juggernaut winning Beijing new friends and contacts across a region deeply impacted by the economic consequences of the COVID-19 pandemic.
- India’s leverage in West Asia — already greatly diminished — will suffer further, with oil prices going down and the Indian expatriate community out on a limb.
- Many of the latter may seek repatriation back to the host country, substantially reducing the inflow of foreign funds to India from the region.