A shift from a global village of relatively deeply integrated communities to a form of “gated globalisation” based on political and economic familiarity appears inevitable. The digitisation of the global economy will only accelerate this process and, perhaps, technology tools may well aid in this.
Nearly three decades ago, Francis Fukuyama argued that the imminent collapse of the Soviet Union and the universalisation of liberalism would mark an end to the historical struggle over ideology and political models. His thesis was, by his own recent admission, overly optimistic. The resurgence of strong identities and nationalist leaders has given rise to the politics of resentment and tribalism. Coupled with new shifts in the global balance of power and disruptive technological and industrial processes, it is clear that a new world is upon us. The onset of the novel coronavirus at the turn of this decade has accelerated many of the processes that were compelling change and has compressed timelines for governments, businesses, and communities to make crucial decisions about the future.
Perhaps the most significant of these shifts is the unmistakeable demise of Pax-Americana. The COVID19 outbreak is the first global challenge that has witnessed the complete absence of American leadership. It has also thrown into sharp relief the social and governance vulnerabilities of the West more broadly. Even the EU has struggled to equitably distribute resources between its member states amidst this pandemic with many now openly expressing their reliance on China—a result of expediency and naivety. The divisions—between North and South Europe over economics, and Western and Eastern Europe over values—seem likely to widen. The weakened transatlantic core of the international liberal order is likely to slip further in relevance in the post-COVID world.
Even so, it is not immediately obvious that any new leadership will take charge in the future. China, which by most estimates is a leading contender, has drawn the ire of the international community for several interrelated reasons, beginning with its missteps in containing the virus. Despite efforts to launder its own image through the WHO and the provision of public health goods to various regions, its efforts to sow discord among EU member states and its muscularity in dealing with Hong Kong, Taiwan, and the South China Sea littorals is not winning it any friends. The documented racism towards its African diaspora has added to the list of nations and communities that are re-evaluating their dependence and relationship with the middle kingdom.
Most nations are struggling to adjust to the fast changing and evolving balance of power equations between China and the western hemisphere. East Asian democracies, which have arguably responded most effectively to the outbreak, have watched these goings on with anxiety. It is clear that they will continue to play one against the other and carve for themselves room to manoeuvre. Russia, which was amongst the first to limit travel to and from China, is now being threatened by an outbreak in its own cities. It will nonetheless continue to bolster Beijing’s agenda as long as it undermines what Moscow has always believed to be a fundamentally undemocratic world order managed under US hegemony. It would be interesting to see how Russia—under its presidency—steers the BRICS countries (Brazil, Russia, India, China, and South Africa) to respond to the series of disruptions that the world is grappling with.
These interrelated disruptions in various geographies also dovetail into another broader trend: The return of the strong state and the normalisation of nationalist leadership. The coronavirus outbreak will act as a catalyst for this process. Some governments will use emergency and national security powers to consolidate power, as Hungary’s Orban already has. Others may use this as an excuse to blame and undermine international institutions—the preferred bogeyman of the Trump Administration. And many will enjoy the popular support of their citizens as they do so.
The most obvious impact of these developments will be the end of globalization as we know it. Most states will aggressively move to reduce interdependence, especially with those regions where political trust is limited. Japan’s efforts to incentivise its industry to diversify supply chains away from China through a stimulus package is indicative of this. But the ripple effect of these decisions will be felt across geographies—from the Gulf states, who are struggling to maintain supply of oil and manage flows of labour; to the ASEAN, which will see enormous disruptions to its trade flows that are deeply intertwined with both China and the US.
Indeed, a shift from a global village of relatively deeply integrated communities to a form of “gated globalisation” based on political and economic familiarity appears inevitable. The digitisation of the global economy will only accelerate this process and, perhaps, technology tools may well aid in this. As governments take advantage of digital and surveillance tools to combat the COVID19 outbreak—in societies both liberal and illiberal— a new ‘techphobia” will begin to affect foreign technology platforms and businesses. With nearly all social, economic, and strategic interactions moving to the virtual and digital realm, states will race to “encode” their political values and technology standards into the algorithms and infrastructure that will govern our societies. This will certainly be a competitive process which will give birth to a persistent “code war”.
Most worryingly, the international community’s ability and willingness to tackle collective challenges through global efforts will be irredeemably harmed. From the G20 to the UNSC, few international institutions have proved capable of responding to the pandemic with any level of speed or efficacy. Other institutions, like the WHO, have been subject to political capture and manipulation, adding to the waning global trust in these bodies. There is a dangerous fragility now to global co-operation—with uncertain implications for future challenges of this scale. What will this mean, for instance, when climate change begins to redraw coastal lines, cause food shortages, exacerbate inequality and strain national resources like never before? If the global response to the COVID19 outbreak is any indication, it will be every nation for itself, with many suffering horrible consequences as a result.
The coronavirus may have heralded the sudden onset of what Ian Bremmer calls a “G-Zero” world—one that is at once multipolar, leaderless, and likely besieged by renewed geopolitical conflict. It will be a world where the West has lost its “moral” authority and one that Beijing seeks to reshape through its muscular and expansive Belt and Road Initiative; one where the Kremlin will see an opportunity to expand its geopolitical ambitions in East Europe, West Asia and the Arctic; and one where nations without geopolitical or geoeconomics prowess will have to “pick sides”, either by constraint or compulsion.
The coronavirus has certainly shone a torch on a world disorder, one where most communities are likely to be plagued by poverty, conflict, unemployment and inequality, while great powers either look away or cast their material resources towards their own populations and self-interest. Plurilateral efforts such as at the G20, G7, the BRICS, the OSCE and the SCO, among others, may become the only viable venues where key global actors coordinate and convene with purpose, and will be the arenas where actors who are unable to engage in meaningful conversations can speak through proxies. Will these become the norm builders for “gated globalization” or can we find it within us to repurpose, resuscitate and radically reform the UN as it turns 75 to help shape a common future?
This article by Erol User has been published exclusively by the BLOCKCHANCE Media Council
Erol User is an experienced Chief Executive Officer with a demonstrated history of working in the investment banking industry. Skilled in Business Planning, Corporate Finance, Entrepreneurship, Strategic Planning, and Business Development. Strong business development professional with a MBA, MSC focused in Economics, Business, Finance, Renewable Energy from Sankt Georg Austrian College, University of Istanbul Faculty of Economics, Harvard Business School and International Leadership Academy Japan