- Frankly Speaking
- By Shada Islam
Nearly a quarter of our way through the 21st century we have been fortunately spared thus far the devastating wars that blighted the previous century. Yet we have nonetheless experienced an almost uninterrupted flow of systemic shocks that have put Western democracies and the cohesion of our societies under massive stress.
First, there was 9/11 and the global war against terrorism. Then the 2008 financial crisis hit and led to a lost decade of low growth and almost zero interest rates. In 2014, Russia’s annexation of Crimea and incursion into the Donbas brought to an end hopes of building an inclusive and cooperative European security order. NATO started to re-arm and defence budgets went upwards. In 2015 the migrant crisis led to a surge in populist parties across Europe and brought EU solidarity and burden-sharing to its knees. A year later, the Brexit vote in the UK and the election of Donald Trump in the US marked another hammer blow to the cause of multilateralism and the pooling of sovereignty in the name of a higher collective interest.
At every stage of these shocks, Western democracies have tried to deal with the immediate crisis while maintaining business as usual. This was facilitated by the fact that only a small section of our populations or only a limited number of countries were impacted at any one time. Governments went into overdrive and policy elites worried about the consequences, but for everyone else life quickly returned to normal.
The coronavirus crisis is different and its consequences may well prove more long-lasting. At the time of writing over 170 countries have reported cases of infection. Hundreds of thousands of people have tested positive and over a thousand are dying every day. In Iran the rate is one every 10 minutes. The Chief Scientist in the UK believes that the criterion of success will be to keep the number of deaths below 20,000 and Italy has already suffered more deaths (6000 +) than China, where the virus originated.
The overall result may well be a reduced faith in multilateral organisations
Although the global community has had a few close shaves in recent years with near epidemics such as SARS, MERS, avian bird flu, swine fever and Ebola, coronavirus has reached within just a few months the status of a pandemic. Not since the Spanish influenza of 1918-1919, which laid low a world afflicted by the disruptions and food shortages of the First World War, have we confronted a health crisis on this scale. No one knows how much worse things will become before they get better, or even what the true dimensions of the problem really are in terms of the numbers infected.
Timelines before things are expected to return to normal are getting longer and longer as are the lockdowns and shutdowns of economic activity affecting more and more countries. This suggests that COVID-19 will not be followed by a return to the world as it was before. Already some strategic implications are becoming clearer.
First is a retreat back to the nation state. Expats are returning home in their millions, borders are going back up, even in the Schengen area, and governments are resorting to authoritarian postures to impose quarantine on their populations and even to fine or arrest those that do not comply. National leaders are dominating the airwaves and quickly departing from international agreements (such as limiting deficits or allowing transit across their borders) in order to deal with the crisis. States are racing to be the first to develop a vaccine. Military forces are building hospitals and transporting coffins to cremation centres.
The state, recently contested by populist forces or regional parties, is once more in control and rallying all the levers of power to commandeer hospitals, business and the scientific community to fight the virus. As China – where new cases of infection have plummeted – has shown, state authorities that can get a grip on the virus gain a new authority and legitimacy. Those that fail by delaying decisive action may well be punished, but the overall result may well be a reduced faith in multilateral organisations such as the EU which have been invisible or not perceived as adding any value. At a time of crisis only the state provides refuge.
Businesses that have seen globalisation as a boon to achieve economies of scale may now believe that resilience requires bringing supply chains back home or diversifying them
A second implication concerns deficits. As after 9/11 and the 2008 financial crisis, governments have thrown caution to the wind and are pumping billions (perhaps eventually trillions) into their economies to prevent mass bankruptcy and stock market collapse. Austerity is definitely at an end. Even Germany has agreed to abandon its balanced budget financial discipline. But, once the crisis is over with, interest rates at zero or below and debt levels skyrocketing governments will need to rebuild their health services, help all the newly unemployed and pump prime their economies.
Ideas to promote closer integration in the EU through a banking union or debt mutualisation or common fiscal policies are likely to be coolly received. This will also make it harder for the NATO countries to uphold their commitment to spend 2% of their shrinking GDPs on defence or on overseas aid such as the UN Sustainable Development Goals. Money for EU budgets to achieve EU strategic autonomy, such as the European Defence Fund or the upgrading of transport infrastructure to facilitate military mobility, is already under strain and will be even harder to come by. So the quest of the West to rebuild its military forces and acquire new projection capabilities and high-tech weaponry to deter Russia and China may well be frustrated as governments strive to get their finances in order. Will this induce powers like Russia and China to take more risks in challenging a weakened, less confident West?
Third comes globalisation. Already at the World Economic Forum in Davos last January experts were predicting a ‘great decoupling’ between the American and Chinese economies. The closure of Chinese factories at the beginning of the lockdown around Wuhan disrupted global supply chains on which car plants in Europe depend. Now, in reverse, massive shutdowns of businesses in Europe could disrupt production in China which is only now restarting. Therefore, businesses that have seen globalisation as a boon to achieve economies of scale may now believe that resilience requires bringing supply chains back home or diversifying them in the neighbouring region. Will this mean the end of globalisation as we have known it? And what will be the consequences if foreign investment flows and global trade continue to contract? Will the ‘great decoupling’ be accelerated?
Finally, the coronavirus crisis has accelerated rather than replaced geopolitical rivalries. China and the US have accused each other of being responsible for the outbreak. EU governments have accused Russia of being behind fake news and disinformation campaigns exploiting the virus to sow divisions and confuse public opinion. As everyone gets used to working from home and working online, internet use has soared by 50% and more unsecured data is flowing across our IT networks. This makes us even more vulnerable to hackers and cybercriminals who will not hesitate to take advantage of the increased targets and associated vulnerabilities.
Once the rich world has beaten the virus, it may well be still expanding in Africa and refugee camps across the Middle East
At the same time, governments are using data to track the location and movements of their citizens and working with social media companies to gain more access to data on individual communications and behaviour. All in the name of tracing the spread of the virus. China has pushed this far already in terms of the spread of facial recognition technology and partnering with popular sites such as WeChat and AliPay. Once the crisis is over, governments may well not want to return privacy to their citizens but continue to freely access data to better regiment their populations. They will do so all in the name of being ‘better prepared for the next crisis’.
Of course, every cloud has a silver lining and every crisis brings an opportunity. Environmentalists are lauding the reduction in CO2 emissions and the cleaner air as cars disappear from the roads and planes stop flying. Even fish have been spotted in the usually polluted canals of Venice. Experts are once again in vogue as government officials hand over to them in their press briefings and claim that they are basing all their decisions on ‘the science’. This is a far cry from the emotion-driven UK Brexit referendum when British Minister, Michael Gove, proclaimed that the public “had had enough of experts”.
This is a crisis that has affected first and foremost the rich countries that have the resources to cope with it. This is in contrast to previous health crises like Ebola that started in developing countries in Africa. But once the rich world has beaten the virus, it may well be still expanding in Africa and refugee camps across the Middle East. These people do not have the resources to protect themselves or recover. They will need the help of Europe and the rest of the rich world. And if this help is not forthcoming, the danger is that the coronavirus or its successors will head back our way and the crisis will be never-ending.
So, while this crisis may have heralded the return of the nation state, this effort will nonetheless require international organisations like the UN and the EU and an unprecedented and sustained multilateral effort. Which means those international institutions and networks of global cooperation that have had a back seat in the crisis thus far may indeed end up having the last laugh.
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- By Niki Papadogiannakis
- Frankly Speaking
- By Shada Islam
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- By Jamie Shea
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