Post Covid 19 world
Calamities shape societies. Systems are created and obliterated. Can the current world order which is based on the free movement of people, free trade, deregulated markets, minimum role of governments in economic activities, global supply chains and the excessive role of global financial institutions, withstand this pandemic? Voices have been surfaced about the end of globalization and the moving of the world towards the Westphalian nation-state system. Feeble health structures across the world have already exposed the hollowness of neoliberal economics. This pandemic will impact society in multiple ways but cannot bring end to globalization.
The coronavirus has abridged the movements of people across the globe. Borders have already been shut down to stop its further diffusion. Trade came to halt. Many believe that in the post-corona world, the movements of people would be limited. This argument has no solid foundations. The world came to this stage through the decades of globalization and it will take decades to go back to the Westphalian system. However, this pandemic will affect the free movement for a short period like that of capital flight during the recession but come to normalcy when the pandemic is over.
Secondly, the global supply chains have been severely disrupted but this disruption could not last for a long period. The pandemic cannot completely alter these lines. The decades of globalization have made them complicated and can’t be changed in days. Donald Trump has already tried to relocate American companies from China. Under the Trump pressure, Apple tried to relocate the production of Mac to Texas but failed. Only six percent of United States’ businesses have succeeded to relocate their production. Hence, saying that this pandemic will altogether alter the supply lines is not based on facts and ground realities.
Thirdly, many countries have been embracing stern immigration policies even before the outbreak of Coronavirus. In the United States, under the Trump administration, Mexican border was fenced and visa policies became strict. However, this pandemic could compel the states to adopt more strict immigration policies. Secondly, it could encourage sectarian nationalists and right-wing populists in many countries including the United States, India, UK, and Brazil. However, humanity faced many such issues before but the movements of people did not stop completely.
For the last three decades, the economies of almost all countries have been dictated by the principles of neoliberal economics. It is based on free trade and investment, deregulated markets and privatization. It reduced the role of governments in public services and stimulated the private sector. Privatization debilitated public services especially the health sector and left the people at the mercy of venal capitalists who work only for profit motives. Privatization curtailed the health budget and made the states more vulnerable to such pandemics.
The public health system across the world is poorly equipped and understaffed and cannot cater to such a large number of people. While the private sector cannot provide free medical services to the people in such a pandemic. Moreover, the majority of the population cannot afford private health care due to exorbitant costs. In the United States, one-third of the population has no health insurance and almost same is the case with other developed countries. In the post Coronavirus world, the governments will have to reshape their role by shifting from neoliberalism to Keynesianism.
Alongside this, many conspiracy theories have been surfaced declaring this virus as an instrument of biological warfare between China and the United States. Trump has already declared it a Chinese virus while the Chinese foreign ministry rebutted and said that it was the US army who brought this virus to Wuhan China. According to some media reports, the virus was prepared in UK’s laboratories and brought to China by the United States to stop the economic growth of China. Abdullah Hussain Haroon, Pakistan’s ex-foreign minister also endorsed it in a recent video being circulated on social media. However, now these countries are themselves becoming the epicenter of the virus. If it was meant to stop the Chinese economic growth then it could also be disastrous for the US and its allies as these countries are economically entwined with China. So, it is premature to declare this pandemic a part of US/China biological warfare.
IMF (International Monetary Fund) chief Kristalina Georgieva has warned of a global economic downturn that will require massive funding to help the poor countries. Over eighty percent of the countries have requested emergency relief. According to her, 2.5 trillion dollars would be required to cope with the situation. IMF also provided loans of 250 to 750 billion dollars to the countries hit by the financial recession of 2008.
These global financial institutions were created by the West after the Second World War to keep the newly independent countries fettered as preserving them as their colonies had become impossible due to the fear of losing the ground for communism. These institutions have always exploited such situations and kept the developing world entrapped by their vicious structural adjustment and development support programs. This could increase the role of the west created institutions in manipulating the economies of the developing world. It could also stop the declining faith of people in the dollar and further strengthen the dollar based economic system.
There is no denial that coronavirus will impact the world order but it cannot bring the end to the globalization as the world today is more entwined and complicated. However it would definitely reshape the roles of governments especially in public sectors. In the post Corona world, economics will remain global while politics will be local.