INTERNATIONAL/ ECONOMY/ GOVERNANCE
Topic: General Studies 2 & 3:
- Impact of policies and politics of developing & developed world on India
- Government policies and interventions for development in various sectors
- Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
COVID-19: Disruption and a new order
Context: Former National Security Advisor M.K. Narayanan analyses the geopolitical and geo-economic fallout of the COVID-19 pandemic. These are as follows
Institutions under fire
- UN Security Council is criticised for being slow in dealing with a situation that is far dangerous than any military threat in recent decades.
- WHO has been alleged of bias towards China and of grossly underestimating the nature of the epidemic.
- 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%.
- Tools used by Democratic governments to tackle COVID-19 are similar to authoritarian regimes such as China and people have welcomed such measures
- The role of the state as an enforcer of public good will become greatly enhanced.
- For instance: Europe has shown a willingness to sacrifice personal liberties in favour of greater state control
- An omnipotent state could well become a reality i.e. present everywhere and monitoring people through mass surveillance
China in the spotlight
- China due to its ‘early recovery’ seeks to take advantage of and benefit from the problems faced by the world in the wake of the epidemic.
- It wants to use its manufacturing capability to its geo-economic advantage.
- Hostile Takeover: China intends to acquire stakes in companies across the world, taking advantage of the scaled-down value of their assets
- It wants to gain soft power by offering medical aid & supplies to other nations
- China aims to dominate the Regional Comprehensive Economic Partnership (RCEP), thus enabling it to exploit market access across the S.E. Asia and E. Asia
- Through pushing its Belt & Road Initiative it is trying to achieve China-centric multilateral globalisation framework.
A faltering West
- Weakened economically and politically after COVID-19, the U.S.’s capacity to play a critical role in world affairs is certain to diminish.
- United States is already being pronounced by some as a ‘failing’ state
- Europe, in the short and medium term, will prove incapable of defining and defending its common interests
- Germany, which may still retain some of its present strength, is already turning insular
- Both France and a post-Brexit United Kingdom will be out of the reckoning
West Asia and India
- The oil price meltdown will aggravate an already difficult situation across the region
- Iran is going to face further difficulties due to US sanction
- Israel may be one country that is in a position to exploit this situation to its advantage.
- Indian expatriate community in West Asia region may return back home leading to reduced inflow of foreign funds
- Economic downturn greatly reduces India’s room for manoeuvre in South Asian region while China gains new friends through its economic diplomacy
Pandemics have often changed the world and reshaped human society. We can expect the same with COVID-19.
Connecting the dots:
- Latin America – Impact of COVID-19
- Sustainable development goals in the post-COVID-19 world