From UPSC perspective, the following things are important :
Prelims level : G-7, G-20, BRI etc.
Mains level : Paper 2- Recent changes in the global order that were hastened by the pandemic.
The article examines 7 trends that have been emerging in the global order for quite some time now. The corona crisis has only accentuated these trends. So, what are these trends? read to know more.
1. The rise of Asia
- The first trend which became clear in the aftermath of the 2008 global financial crisis is the rise of Asia.
- Economic historians pointed to its inevitability, recalling that till the 18th century, Asia accounted for half the global GDP.
- The Industrial Revolution accompanied by European naval expansion and colonialism contributed to the rise of the West, and now the balance is being restored.
- The 2008 financial crisis showed the resilience of 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.
- This is not limited to China but a number of other Asian states have shown greater responsiveness and more effective state capacity.
- Consequently, Asian economies will recover faster than those in the West.
2. Decline of the US
- The second trend is the retreat of the U.S.after a century of being in the forefront of shaping the global order.
- The U.S. played a decisive role in shaping the world, from the World Wars to the leadership of the western world during the Cold War, molding global responses to threats posed by terrorism or proliferation or climate change.
- But recent examples show that interventions in Afghanistan and Iraq have become quagmires that have sapped domestic political will and resources.
- President Donald Trump called for “America first” and during the current crisis, the U.S.’s efforts at cornering supplies of scarce medical equipment and medicines and acquiring biotech companies engaged in research and development in allied states, shows that this may mean “America alone”.
- Moreover, even as countries were losing trust in the U.S.’s leadership, its mishandling at the home of the pandemic indicates that countries are also losing trust in the U.S.’s competence.
3. Weakening unity of the EU
- A third trend is the European Union’s continuing preoccupation with internal challenges.
- This internal disruption is generated three factors: 1) EU’s expansion of membership to include East European states 2) Impact of the financial crisis among the Eurozone members 3) 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.
- Rising populism has given greater voice to Euro-sceptics and permitted some EU members to espouse the virtues of “illiberal democracy”.
- Adding to this is the North-South divide within the Eurozone.
- This divide was seen when austerity measures were imposed on Greece, Italy, Spain and Portugal a decade ago by the European Central Bank.
- These austerity measures were persuaded by the fiscally conservative Austria, Germany and the Netherlands.
- The EU lacked solidarity when Italy was battling the pandemic alone.
- Further damage was done when Italy was denied medical equipment by its EU neighbours who introduced export controls.
- Schengen visa or free-border movement has already become a victim to the pandemic.
- The EU will need considerable soul searching to rediscover the limits of free movement of goods, services, capital and people, the underlying theme of the European experiment of shared sovereignty.
4. Rise of China
- China’s growing economic role has been visible since it joined the World Trade Organization in 2001.
- Its more assertive posture has taken shape under President Xi Jinping’s leadership with the call that a rejuvenated China is now ready to assume global responsibilities.
- 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.
- A partial economic de-coupling had begun and will gather greater momentum.
- The Belt and Road Initiative involves investing trillions of dollars in infrastructure building as a kind of pre-emptive move against any U.S. attempts at containment.
- Even if Mr Xi’s leadership comes under questioning, it may soften some aggressive policy edges but the confrontational rivalry with the U.S. will remain.
5. Failure of multinational institutions
- With COVID-19, international and multilateral bodies are nowhere on the scene.
- 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 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.
- Agencies such as WHO have lost autonomy over the decades as their regular budgets shrank.
- Budget constraints forced them to increasingly rely on voluntary contributions sourced largely from western countries and foundations.
- The absence of a multilateral response today highlights the long-felt need for reform of these bodies but this cannot happen without collective global leadership.
6. The oil prices
- The two trends were changing energy markets: 1)Growing interest in renewables and green technologies on account of climate change concerns. 2) The U.S. emerging as a major energy producer.
- Now, a looming economic recession and depressed oil prices will exacerbate internal tensions in West Asian countries which are solely dependent on oil revenues.
7. Stability of West Asia
- Long-standing rivalries in the region have often led to local conflicts but can now create political instability in countries where regime structures are fragile.
Consider the question “The Corona crisis contributed to speeding the failure of a global order which had been faltering before the pandemic afflicted the world. Examine the trends that have been accentuated by the pandemic.”
The vaccine may end the corona crisis when it comes, but the unfolding trends in the geopolitics have been altering the world even before the corona crisis and continue to do so after a pandemic is over.