File photo: US President Donald Trump and China's President Xi Jinping. Photograph:( Reuters )
The disruption to global supply chains and its wider impact will make us question the ‘economic value’ of outsourcing, particularly in the manufacturing domain.
Amidst the uncertainties surrounding the coronavirus pandemic, it is certain that this global crisis will amplify the gradual shift towards the new world order.
While the signs of the declining influence of the ‘West’ remain no secret, this pandemic has the potential to be the final milestone of that process.
International political and financial institutions formed in 1940s are gradually becoming irrelevant along with slow and steady retreat of ‘globalisation’. The hyper-globalised world has witnessed the inability or ineffectiveness of UN institutions and US-dominated western bloc in responding to global threats - from terrorism to climate change. World Health Organisation’s (WHO) initial response to coronavirus pandemic is just another example.
The relevance of existing international frameworks and power structures is waning. Many of these institutions
are slowly adopting the role of ‘think-tanks’. We all have witnessed how meetings of international forums from G7 to G20 are increasingly becoming ‘inconclusive’ with little or no real impact. Citizens across the nations are sceptical regarding these institutions’ ability to protect global interests.
It would not be surprising if this pandemic strengthens the calls for wider reforms in the UN system, and particularly in the UN Security Council (UNSC). Reluctance to address these flaws in the system would fuel the shift from international cooperation towards competing and conflicting national interests.
Another major impact of this pandemic is on our understanding of ‘globalisation’. It has exposed risks and vulnerability of existing ‘hyper-globalised’ system. The disruption to global supply chains and its wider impact will make us question the ‘economic value’ of outsourcing, particularly in the manufacturing domain. Preference for localised manufacturing will gain momentum, with global trade increasingly restricted to essential commodities and raw material.
Even the sector like financial systems will see a more regulated flow of ‘foreign’ capital. Threats of new-age colonisation, facilitated by trade, aid, and investments have compounded. Increasing support for nation-state sovereignty and ‘nationalism’ is simply the natural extension of fading ‘globalisation’. The notion of less interdependence for essentials (be it food, medicine or strategic manufacturing) is becoming new normal.
Many have argued that this is not the end of the globalisation, but a shift towards a different kind of globalisation. Professor Mahbubani considers this as an event that 'will only accelerate a change that had already begun: a move away from US-centric globalisation to more China-centric globalisation”. However, it is worthwhile to notice that people’s trust in any kind of ‘globalisation’ is low. ‘America First’ sentiment in the US, Brexit and other inward-looking sentiments across the globe will also resist even China-centric globalisation.
China has attempted to fill the ‘void’ created by retreating the US from global affairs and is visible from its proactive supply of medical aid from Africa and Latin America to Eastern Europe. In continuation of its grand strategy of leveraging economic and military clout along with building credibility, Beijing is also actively seeking support for its system of governance, particularly by showcasing how it has been able to respond in times of global crisis. Yet, it will take decades for Beijing to effectively replace the US in an increasingly multipolar world.
Coronavirus pandemic may perhaps turn out to be the most crucial event since the collapse of the Soviet Union, and probably an event marking the beginning of new world order.
(Views expressed above are the personal views of the author and do not reflect the views of ZMCL)