Asia ascending, U.S. waning
- The first trend which became clear in the aftermath of the 2008 global financial crisis is the rise of Asia.
- 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.
- 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.
- 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.
- A third trend is the European Union’s continuing preoccupation with internal challenges generated by its expansion of membership to include East European states, impact of the financial crisis among the Eurozone members, and ongoing Brexit negotiations.
- Threat perceptions vary between old Europe and new Europe making it increasingly difficult to reach agreement on political matters e:g relations with Russia and China.
- 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.
- A fourth trend, related to the first, is the emergence of a stronger and more assertive China.
- In recent years, the U.S.-China relationship moved from cooperation to competition; and now with trade and technology wars, it is moving steadily to confrontation.
- 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.
- The UN Security Council (UNSC), the G-7 and the G-20 are paralysed at when the world faces the worst recession since 1929.
- The reality is that these institutions were always subjected to big power politics.
- During the Cold War, U.S.-Soviet rivalry blocked the UNSC on many sensitive issues and now with major power rivalry returning, finds itself paralysed again.
- U.S. leadership strengthened the Bretton Woods institutions in recent decades because the U.S.’s voting power gives it a blocking veto.
The energy factor
- 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.
-Source: The Hindu