The script of disruption and a new order

By M.K.Narayan, (Former National Security Advisor)

Introduction:

• Pandemics have often changed the world and reshaped human society. Empires have collapsed. Commentators are already talking of fundamental alterations in governance and business norms.
• What is left unsaid — and likely to pose an even bigger challenge — is the extent to which the pandemic will impact human values and conduct.
• There is already 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.
• Abnormal could well become the new normal.

Institutions under fire

• 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.
• 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.

Economic shock

The World Bank has already predicted negative growth for most nations. 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.

Rise in the role of the state

• Political management and security are terms are set to gain new meanings. The role of the state as an enforcer of public good will almost certainly become greatly enhanced.
• Legislations that were perceived to be anachronistic in a modern democratic set-up — may get a new lease of life.
• There are no serious protests over the fact that many of the powers being vested in the instruments of state in democracies today.
• Post COVID-19, the world may have to pay a heavy price in terms of loss of liberty. An omnipotent state could well become a reality.

China in the spotlight

• China, is presently seeking to take advantage of and benefit from the problems faced by the rest of the world in the wake of the epidemic.
• Already indispensable as the world’s supplier of manufactured goods, China now seeks to benefit from the fact of its ‘early recovery’ to take advantage of the travails of the rest of the world, by using its manufacturing capability to its geo-economic advantage.
• It seeks to shift from being a Black Swan (responsible for the pandemic), to masquerade as a White one, by offering medical aid and other palliatives to several Asian and African countries to meet their current pandemic threat.
• There are enough reports of China’s intentions to acquire financial assets and stakes in banks and companies across the world, taking advantage of the scaled-down value of their assets to support this.
• India seems to have woken up only recently to this threat, after the Peoples’ Bank of China acquired a 1% stake in India’s HDFC, taking advantage of the sharp decline in the price of HDFC stocks.
• Together with its Belt and Road Initiative, which seeks to combine regional connectivity alongside gaining a virtual economic and substantial stranglehold across Asia, China is ostensibly preparing the way for a China-centric multilateral globalisation framework.

A faltering West

• COVID-19 would effectively put paid to the existing global order that has existed since the late 1940s.
• The United States which is already being touted in some circles as a ‘failing’ state, will be compelled to cede ground. Weakened economically and politically after COVID-19 has ravaged the nation, the U.S.’s capacity to play a critical role in world affairs is certain to diminish.
• Europe, in the short and medium term, will prove incapable of defining and defending its common interests, let alone having any influence in world affairs.

West Asia and India

• 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.
• 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 (Inward remittances) to India from the region.