COVID-19 AND THE RESHAPING OF THE GLOBAL GEOPOLITICAL ORDER

Geopolitics has been historically
shaped by multiple events in history. Wars, conflicts and occasionally
haphazard events have changed how nations have achieved and lost power on the
international stage. The international system after the Cold War ended has been
characteristically driven by the United States-led global order. The Western
institutions, collectively known as the Bretton Woods system, have been major
institutions shaping the global financial order. In the dying stages of the
Cold War, China’s rise was seldom seen as that of the next big global power fit
enough to challenge the US presence in Asia. The post-Cold War era also saw the
formation and development of the European Union. The diffusion of power and
geopolitics from central power to multiple regional power centres led to the
formation of the multipolar regional order.

Frictions between countries were
commonplace in Asia; an ascendant China was not only challenged by US presence
in the region, but also by the rise of India throughout the 2000s. However,
since the mid-2000’s, the rise of China and the debate on the uneasy decline of
US power in Asia has displayed itself in multiple events and forums across the
region, often with countries such as India and groupings like ASEAN having to
pay the price for choosing sides. The recent episode involving a trade war
between the US and China over supremacy in the technological space exposed the
limits of the structure and tipping points between both the countries in the
region. Eventually, the end of this war was followed by COVID-19, a ‘Black
Swan’ event which has had a huge impact on the global economy and geopolitics.

‘Black Swan’ events are an extremely
negative event or occurrence that is impossibly difficult to predict. In other
words, such events are both unexpected and unpredictable. As the world deals
with the COVID-19 pandemic which has seen 15,361 deaths till 23^rd
March, 2020, reports have indicated faults at multiple levels in controlling
the issue at the right time. While China’s suppression of the information has
surfaced in recent understanding, the drop in its consumption levels has
severely impacted the global economy. Businesses have been clearly hit. Major
among them have been aviation and tourism. The drop in travel and bans on
flights have impacted the two industries, leading to a complete shutdown of
some sectors within these areas. Major global airlines have cut anywhere
between 80 to 90% of their capacity on the backs of travel bans and the lack of
passengers as a result thereof. Some economies reliant on tourism have been
badly hit.

Nevertheless, crisis times call for
astute diplomacy and capitalisation of the issues at hand. Several issues could
be noticed on how states handled the crisis and their response, and how global
markets and the uncertainty were taken advantage of by a few countries. While
China reached the peak of the crisis, global markets had started to respond by
closing down to the outside world systemically. Crashing markets and impacted
supply chains followed by reduced demands were indicative of the coming crisis.
One of the key impacts of the slowing economy was felt in the oil markets. The
reduced demand from China and the rest of the world has led to tumbling prices.
The OPEC, which coordinates and sets global oil prices, fell out with Russia.
This fallout between Russia and Saudi Arabia has sent oil prices crashing,
leading to historical lows, possibly benefiting bigger global consumers.

Japan, which had been continually
struggling to keep its economy afloat, reported one of the slowest growth rates
in many years due to domestic policies. Just staying above the line going into
recession, due to the slowdown caused by the virus, Japan may very well be
heading into an economic crisis. Recent discussions also highlight that Japan
would most likely be postponing the Summer Olympics which could have provided a
great boost to its economy.

Similarly, some other countries have
not failed to showcase their power through diplomacy. India, which has till now
done some of the most extensive relief operations in all affected regions by
bringing back stranded citizens, has also extended its hand to the South Asian
region which has fallen apart after the failure of the South Asian Association
for Regional Co-operation (SAARC); the joint effort call was heeded by all
(except Pakistan). Similarly, India also lifted the ban on the export of all
kinds of personal protection equipment, including masks, and cleared some
consignments of medical gear placed by China, a move seen as a goodwill
gesture; such diplomatic signalling is seen positively as an extending reach in
times of crisis. India’s ability to get back its citizens from Wuhan is also a
demonstration of this extended positive reach.

In the global sense, as the crisis’s
epicentre moves to Europe where the death toll has now overtaken that of China,
and the United States’ healthcare system has showcased its total unpreparedness
to tackle this epidemic, China’s reviving supply lines will surely find a
future market to sell its goods. India, with its developed pharmaceutical
sector, should capitalise on this situation. However, the US lobbies which are
averse to generic substitutes have always scuttled any ideas for the lucrative
markets. China’s companies, including its retail giant Alibaba, have already
started to send across protective medical supplies to all South Asian countries
(excluding India) as well as some countries in Africa. The inability to rely on
existing Western donor systems which have been increasingly challenged by China
since the last decade, may turn out to be a silver lining for China.

The
future of the global order remains uncertain; the COVID-19 crisis has struck at
a time when leaderships have been challenged domestically all over the world.
While the United States is in election season, China’s vulnerability to a
crisis has put a question mark on the strengthening of the power base of
President Xi Jinping within China and that of its ruling Communist Party.
However, India’s handling of the situation has helped quell some negativity for
now about the ongoing domestic issues in the country. Nevertheless, once the
dust settles, the gravest impact would be felt in Europe. As the region was
already battling a refugee crisis, deaths relating to Coronavirus would add a
burden on the regional economies. The inability to rebuild from the economic
impact would invariably shift the burden on the emerging powers within the
grouping, forcing an already delicate line in the grouping; the region’s
economic engine Germany has already recorded no growth in the coming year. The
negative growth rate and the developing internal political crisis within the
country do not hold a positive outlook.