The script of disruption and a new order
#GS3 #Pandemic #Economy
Across the globe, the geopolitical and geo-economic fallout of the COVID-19 pandemic could be serious.
- The COVID-19 pandemic is unprecedented, involving as it does far too many variables. The very complexity of the novel coronavirus leads to radical uncertainty.
- It is unlikely that the world will ever be the same again. Abnormal could well become the new normal.
- There is concern that a diminution in human values could occur, and with this, the concept of an international community might well cease to exist.
- Each nation is tending to look inwards, concentrating on its narrowly defined national interests.
Institutions under fire
- It is singularly unfortunate that at a time like this, existing international institutions such as the United Nations, the United Nations Security Council and the World Health Organization (WHO) are seen to have failed to measure up to the grave challenge posed by the pandemic.
- While the UN Security Council is under attack for being slow in dealing with a situation that appears, at least on the surface, far graver than any military threat in recent decades, WHO has been tarred with the charge of bias and of grossly underestimating the nature of the epidemic.
- That prestigious global institutions should have been singled out for attack at this time speaks volumes about the mood prevailing across the world.
- 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.
- There are no serious protests over the fact that many of the powers being vested in the instruments of state in democracies, to meet the current challenge, are eerily similar to those already practised by authoritarian regimes such as China.
West Asia and India
- Coming to West Asia, both Saudi Arabia and Iran are set to face difficult times. The oil price meltdown will aggravate an already difficult situation across the region.
- There may be no victors, but Israel may be one country that is in a position to exploit this situation to its advantage.
- In the meantime, 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.
- Likewise, India’s leverage in West Asia — already greatly diminished — will suffer further, with oil prices going down and the Indian expatriate community (who are among the hardest hit by this downturn) 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.