COVID-19 and the Future Global Order

How will the corona virus pandemic change the global order that developed under American leadership after 1945? There will be changes, but one must be wary of assuming that “big causes” always have big effects. For example in 1918, Spanish flu killed more people than did World War I, yet the lasting global effects on the next two decades were not caused by the pandemic but by the war. Moreover, the current COVID 19 crisis is in its early stages.  It is likely to be a play with many acts and we are still in Act 1. History usually saves some surprises for the last act. Nonetheless, certain historical analogies should be rejected at this stage.

Some analysts and many political leaders have said that the pandemic is like a global war, and we know that the balance of power shifts after global wars. Several European empires were destroyed by World War I and the British empire was weakened. World War II gave rise to the bipolarity of two superpowers, the United States and the Soviet Union.  The end of the Cold War led to America’s unipolar moment. Now, some predict that the current pandemic will consolidate China’s rise and it will pass the US as the world’s leading power.  But as I show below, this is unlikely.

Other analysts have hearkened back to ancient Athens and argued that a plague in 430 BC weakened its power and contributed to its ultimate defeat by authoritarian Sparta in the Peloponnesian War. But that defeat had many causes and the plague killed nearly a quarter of the population of Athens. The American situation is in no way similar. Another misused historical metaphor has been to call COVID 19 “America’s Suez Moment” in an analogue to Britain’s 1956 invasion of Egypt that revealed the weakness of the United Kingdom’s remaining imperial pretensions.  But again the American situation today is very different. In 1956, there was a run away from the British pound, and the United Kingdom had to appeal for help to the US and the International Monetary Fund. In contrast, despite that severe impact of the COVID crisis on the American economy, the dollar has strengthened rather than weakened as investors look for a secure haven. In short, analysts should be wary of those who bring gifts of oversimplified historical  analogies. It is a sure path to bad policies.

At the same time, it is not too early to speculate on some possible changes that may appear in the aftermath of the pandemic.  I list a few not because  I believe that they are certain or complete, but to alert us to possible policy issues in the future.

 

  1. Public health may become a major international security issue. President Trump’s 2017 National Security Strategy focused on great power competition, but the damage done by this pandemic to American security is on the scale of a war and the strategy (and budget) had little to say about it. The Trump Administration disbanded the office in the National Security Council that had been established to deal with public health, and cut the budgets for international health issues. Many governments may find themselves giving higher priority to public health and international health issues even if vaccinations leads this episode to subside. China, for example, discovered the inadequacy of its health budget and performance.
  2. Demands for expenditures on health issues, as well as depressed economies, are likely to put pressures on defense budgets in many countries. This may be more acute in democracies, but could also affect authoritarian states like China. At the same time, reduced defense capabilities (and deterrence) may provide opportunistic situations for authoritarian governments such as China and Russia.
  3. Poor states will have greater problems in coping with the pandemic which may come in many waves. The burdens may increase authoritarian responses in some countries, and may lead to political change and even state failure in others. State failure will exacerbate the prospect that some poor countries may become reservoirs for the corona virus which could have seasonal northward surges and emigration. Border closures in developed countries will not stop it. Alternatively, the resurgence may call forth major international aid and assistance projects to help such countries cope – or have both effects at the same time.
  4. If the recovery from the pandemic is slow and the world economy suffers something approaching the great depression of the 1930s, one would expect an accentuation of these trends – more authoritarianism, more nationalist populism, less immigration, more demand for closed borders.
  5. The immediate effects will be a reduction of economic globalization, particularly in trade and flows of people. Supply chains may become more regional for security reasons. But globalization, defined as interdependence across the world’s continents, is caused by changes in modern transportation and communication technology and those technological trends are unlikely to cease. Certain aspects of economic globalization such as trade will be curtailed, but finance less so. And while economic globalization is influenced by the laws of governments,  environmental globalization such as climate change and pandemics are determined more by the laws of biology and physics. Walls, weapons and tariffs will not stop their transnational effects even though complete economic stagnation would slow them down.
  6. Increased international cooperation and reform of multilateral institutions like the World Health Organization is possible, but seems unlikely at this point. One might think that because the corona virus does not care about the nationality of the humans it kills, the humans might cooperate to combat it. Thus far, however, policies of the major powers have tended in opposite direction. Rather than providing a stimulus for multilateral and bilateral cooperation, the first act of the corona virus drama seems to have led to worsening relations between the two largest economies in the world, the US and China.

This century has seen three crises in its first two decades.  The terrorist attacks of September 2001 did not kill very many people, but terrorism is like jujitsu, a game in which a smaller player uses the shock of horror can create disproportionate effects on the global agenda. American foreign policy was profoundly distorted by panic choices that led to long wars in Afghanistan and Iraq.  The second shock, the financial crisis of 2008 brought on the Great Recession which had long lasting effects on the rise of populism in democracies and strengthening of autocratic movements in many counties.  China’s successful stimulus package while the West lagged in its response led many to predict that China would become the world’s economic leader.

The initial responses to the third crisis in this century, the COVID19 pandemic,  has also proceeded down the wrong path. Both Chinese President Xi Jinping and US president Donald Trump started with denial and misinformation. Crucial time for testing and containment was wasted, and the opportunity for international cooperation was squandered. Instead, after costly national lockdowns, the world’s two largest economies engaged in propaganda battles. China blamed the American military for the presence of the virus in Wuhan, and Trump spoke about the “China virus”. Europe, an economy the size of the US dithered in the face of disunity.

The incompetence of the US response hurt its reputational or soft power, and China engaged in aid programs, political manipulation of statistics, vigorous propaganda and “face-mask diplomacy” to try to alter the narrative of its early failure and imply a benign response to the pandemic. However, much of this Chinese effort to restore its soft power is treated with skepticism in Europe and elsewhere. Soft power rests on attraction, and the best propaganda is not propaganda.

Moreover, China starts from a weak position in soft power. Despite its major investments since Hu Jintao announced the objective of increasing China’s soft power at the 17th Communist Party Conference in 2007, Chine has been hindered by territorial disputes with neighbors, and by the repressive nature of its insistence on tight party control which prevents unleashing the full talents of civil society in the way that democracies can. It is not surprising that public opinion polls and the Soft Power 30 Index rank China around 27th in soft power. The top ranks are all democracies.

In terms of hard power, the Chinese and American economies were both hard hit by the pandemic crisis, as were America’s European and Japanese allies. Before the crisis, China’s economy was two-thirds the size of the America’s (measured at exchange rates), but China entered the crisis with a slowing growth rate and its external markets have been badly weakened. In terms of military power, while it had been investing heavily, China was far behind the US on a global scale, and its military investment rate may slow in a more adverse budgetary climate. As mentioned above, among other things that the crisis exposed was the need for China to make major expenditures on its inadequate healthcare system.

 In geopolitical terms the US has advantages that will persist despite the pandemic. One is geography. It is bordered by oceans and friendly neighbors, while China has territorial disputes with India, Japan, and Vietnam. Energy is another advantage. The shale revolution has transformed the US from an energy importer to exporter, while China depends on imports that pass through the Persian Gulf and the Indian Ocean where the US has naval supremacy. America also has demographic advantages. Over the next decade and a half, the workforce is likely to increase by 5 percent while China’s will decline by 9 percent. China will soon lose its first place population rank to India, and its working age population peaked in 2015.  America has been at the forefront in the development of key technologies (bio, nano, information), and  Western research universities dominate higher education.

In short, the COVID pandemic may not prove a geopolitical turning point. The United States will still hold high cards, though misguided policy could cause the US to play its cards poorly. Discarding the aces of alliances and international institutions would be an example. Another mistake would be to try to cut off all immigration. Long before this crisis, when I asked  former Singapore Prime Minister Lee Kuan Yew why he did not think China would surpass the United States as a global power any time soon, he cited the ability of America to draw upon the talents of the whole world and recombine them in diversity and creativity that was not possible for China’s ethnic Han nationalism. If populism leads the US to discard its high cards of alliances and openness, this could change.

Alternatively, a new American administration might take a leaf from the success of the post 1945 American presidents that I describe in my book Do Morals Matter? Presidents and Foreign Policy from FDR to Trump.  The US could launch a massive COVID aid program like the Marshall Plan. As Henry Kissinger has recently argued, leaders should choose a path of cooperation that leads toward international resilience. Instead of competitive propaganda, leaders could articulate the importance of “power with” rather than “over” others, and set up bilateral and multilateral frameworks to enhance cooperation.  Rich countries should realize that new waves of COVID will affect poorer states that are less able to cope, and that such a Third World reservoir will hurt everyone if it spills  northward in a seasonal resurgence. In 1918, the second wave of the pandemic killed more people than the first did. Both for self-interested and humanitarian reasons, the US should lead the G20 in generous contributions to a major new COVID fund that is open to all countries. That would be transformational, though I do not expect it.

If an American president were to choose such a policy, the pandemic  could provide a geopolitical path to a better world order. If policy continues on the current path, however, the new virus will simply accelerate existing trends towards nationalistic populism and authoritarian uses of technology. Such an outcome is likely to see continued weakening of the multilateral framework of world order that was created after World War II, but not its total destruction.  But it either case, it is premature to predict a geopolitical turning point in the global balance of power. And with regard to the possible outcomes cited above, it is worth remembering that the list is not complete and my caution that we are in Act 1 of a long play. History always has surprises.