Covid-19 and crumbling globalization
BY: Irfanul Haq
War and disease have always played a significant role in changing societies and states altogether. Today it is not war but war-like crises are looming large around the globe and cause is SARS COVID-19spectre, which can prove to be the proverbial straw that breaks the camel’s back.
It has become progressively more obvious that pandemics pose one of the biggest threats to the global liberal economy The coronavirus disease-2019 (COVID-19) first exploded in the city of Wuhan in the Hubei province of China. The infection swiftly spread in China, engulfed the whole planet and has been declared a pandemic by the World Health Organization with the USA, Italy, UK and Spain, as the worst hit countries.
The world health system is struggling to cure the global pandemic. The reason of its very acceleration is human hyper-interconnectivity on a regional and global scale. The uncertainty and fear that accompanies this disease has given birth to many a fears at the global level. For instance, the Black Death in Europe resulted in ‘waning of the Middle Ages’. Same can be said for Covid-19 as the disease cutting across all the lines is changing our view regarding world in fundamental ways. These changes seem to be more defining than witnessed in World War II and disintegration of the old giant Soviet Union. This is because each of these events, in fact, had speeded up globalization while the Covid-19 pandemic will reverse the process, perhaps permanently. We are heading towards a ‘new normal’ of life that is in the box as it seems to appear as a worst nightmare for globalization.
The rise of the liberal international economic order (LIEO) particularly after 1990 has been a key factor in the maneuvering people beyond borders, whether for purposes of employment, supply chains and distribution network, international flow of money and finance, and employment, etc. The earlier jolt to this order was the financial crises of 2008 unleashed by the fall of Lehman Brothers since Great Depression, when the American Home Mortgage Investment Co. announced its incapability to meet its financial commitments with regard to funds assured by “sub-prime” mortgages. These crises showed that globalization did not dilute the importance of nationalism and national identities, but makes them more complex and has been a gift to nativist nationalists and protectionists.
The current dynamics of the crises also pointed that liberal order of the global elites is crumbling under the burden of their own contradictions. The ‘borderless world’ as claimed by hyper globalists is under great stress. Now due to Covid-19, states and borders are proving to be relevant and are no longer in the dustbin of history. State with its Hobbesian might is coming to the fore restricting the movement of people, blocking the entry of people mainly worst hit by the coronavirus, as the state itself is the main actor to drag you out of this pandemic despite the broader global efforts which are also important.
Climate change, populism and protectionism all have defied economic globalization and the latest challenge has come in the form of COVID-19 pandemic. The crises has already hard-hit the economies, blocked the supply chains because of global shutdown. The globalization was already in retreat and the term ‘slowbalisation’ was already on board.
While some are saying that the globalization is in ICU, fighting for life, there are others who view the pandemic as a “game-changer” for globalization. In the period between October 2018 and 2019, WTO confirmed 102 new trade-restrictive measures, covering USD 746, 9 billion of trade flows. Now with Covid-19 it is dipping further. The global supply chains are in turmoil as the multilateral institutions of trade and exchange like World Bank, World Trade Organization, etc., are at halt.
Furthermore, the corporations and businesses sectors that benefited only the elites and not the poor are facing shocking ramifications. Tourism, international travel is at halt. Covid-19 accelerated the already de-globalization process as evidenced in the Trump’s policy of ‘America First ‘or ‘Make America Great Again’ and recently his imposition of punitive tariffs on imports from China, Modi’s ‘Make in India’ and China’s ‘Made in China 2025’ — the nationalist stunts to indigenize the production (import substitution) and make economic nationalism the mantra of state. Covid-19 has furthermore drived the states to rethink about immigration policy. Additionally, Trump administration recently stopped the fund to Wealth Health Organization (WHO).
There are waves in air that this very virus is caused by the globalization as it allowed its spread beyond the national frontiers. Realists from decades have argued that greater interconnectedness leads to greater fragilities. The world is heading towards more fragmentation and the challenges before the restoration of globalization can result in death knell of this process as the borders between the states will become higher and strong in near future, taking the world towards an unavoidable shake-up.
The European Union is a case in point which is considered prime example of globalization. European Union which was formed in 1993, as apolitical and economic union is also facing the brunt of COVID-19.The EU, for its part, has been traumatized by the successive Euro zone and migration catastrophe, whereas its adjoining regions were swirled into conflict and out-and-out collapse. Additionally, the Brexit issue also became a reality on 1st of February 2020, when United Kingdom left the European Union. COVID-19 could be the final nail in the coffin of a rules-based global liberal economic order and for the European Union.
The coronavirus has revealed how national instincts and lack of camaraderie are having upper hand at the European level. The unilateral decisions by Latvia, Lithuania, Poland, Denmark, Slovakia and Cyprus to close their borders and ban of medical equipment supply by France and Germany to their fellow member states despite barrier-free single market certainly went in this track. Similarly, Italy’s appeal for medical assistance including protective masks through the EU Civil Protection Mechanism and the European silence has revealed the limits of the Union, particularly vis-à-vis public health, openness and interdependence. In her otherwise impressive television address on 18th of March 2020, Angela Merkel, German Chancellor did not even speak a single word on Europe.
The way 1956 Suez crisis represented the ultimate crumble of the United Kingdom’s as being global power, the COVID-19 could mark the ‘Suez moment’ for US, the leader of globalization and liberal internationalism. More largely, it is reinforcing the voices of those who are in favour of strong government, emphasizing societal needs over individual liberty and national action over global cooperation.
- Author is a Junior Research Fellow at Kashmir University, Srinagar.