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(GIST OF YOJANA) Geopolitical and Geo-economic Dimensions of Covid-19

[October-2020]

There were significant changes in the global power equations even before the ongoing Covid-19 pandemic, such as the shift in the centre of gravity of economic power to the trans-Pacific from the trans-Atlantic, the emergence of a more loosely structured multi-polarity, the upsurge of nationalist and parochial sentiments in countries across the world stalling the trend towards globalisation.
There is a parallel weakening of multilateral institutions and processes even while the salience of cross-cutting and cross border challenges demanding global and collaborative responses such as Climate Change, has increased. The pandemic has reinforced these pre-existing trends and contradictions. The pandemic itself is a classic global public health issue but we see very little by way of a coherent, well-coordinated global response using instruments of global governance such as the World Health Organization. Countries have mostly responded at the national level.

There is a notable acceleration in the adoption of digital technologies; in fact we are witnessing “galloping globalisation” in the digital space, including the extensive spread of work-from-home (WFH), the rapid adoption of tele-education and tele-medicine and the use of tele-conferencing and online meetings
in place of physical gatherings.
While these trends are related to the constraints imposed by the pandemic, much of the new patterns of behaviour are likely to persist post Covid-19. Newer technologies such as Artificial Intelligence, the Internet of Things and the use of big data will advance faster than envisaged.
The associated challenges will also multiply in particular relating to cyber space and specifically to data privacy. New issues relating to high-tech monopolies, the manipulation of social media platforms and the as yet poorly understood social and changes will occupy the attention of individuals, communities, countries and the international community.

China’s regional and global profile has continued to expand. It has steadily narrowed the power gap with the US and is likely to continue to do so in the aftermath of the pandemic. It is the world’s second largest economy with the largest trading power and has also accumulated high-technology assets such as in Artificial Intelligence and 5-G telecom networks. Even though the Covid-19 virus erupted in China before spreading across the world, it is China which first managed to bring it under control. It is the first largest economy to register steady recovery. This has added to Chinese confidence and self-assurance which is visible in its more assertive and aggressive external behaviour.
Its leadership believes that the pandemic has provided China with an opportunity to advance its interests vis-a-vis other powers particularly the US. This may be seen in the recent coercive actions in the South China Sea, the passage of a highly restrictive National Security Law in Hong Kong, virtually abandoning the One Country Two System policy granting high degree of autonomy to the key international financial centre in Asia.

China’s GDP is destined to overtake the US and this makes it a great economic power, however, in per capita terms it still lags behind. Its per capita GDP is only a quarter of the US.
In military terms, China remains significantly behind the US and is unable to match the global reach of the US-led alliance systems in Asia and Europe. It has set up a base in Djibouti at the Horn of Africa and has acquired the use of ports in several parts of the world which could conceivably serve as military facilities in due course.
The Pakistani port of Gwadar and the Sri Lankan port of Hambantota belong to this category. The BRI is putting in place a worldwide infrastructure and transportation platform which could also be transmuted over time into a military network. But this is no match for the American network of naval bases across the world including at the doorstep of China itself. China’s military expenditure has increased dramatically particularly in the past decade.
There could be a significant flow of capital, technology and advanced knowledge to India if an efficient and congenial economic and regulatory environment could be put in place. The size of the Indian market is an asset as is its political stability and democratic traditions. Economic reforms may be politically difficult but the pandemic is a crisis which could provide an opportunity to drive them.

The pandemic is shaking the very foundations of our economy and our society. It is loosening the rigidities in governance and weakening the power of vested interests which have so far prevented thorough-going and structural reforms; this is therefore a moment to be seized. India is the only country which in terms of its size, its population, its economic potential and proven scientific and technological capabilities and its rich civilisational legacy, can not only match but surpass China. But then we need a strong national will to reach out for this goal.