The trends shaping the post-Covid-19 world

Context: economic Crisis triggered by COVID-19 brought geopolitical trendlines into sharper focus, which is defining contours of the emerging global (dis)order, threat Perception.

• Restoring the balance: Rise of Asia

• Till the 18th century, Asia accounted for half the global GDP, but Industrial Revolution, European naval expansion and colonialism contributed to the rise of the West.
• Asian countries had shown higher resilience during 2008 financial crisis and have demonstrated greater agility in tackling the pandemic compared to the United States and Europe.

• Retreat of U.S

• US played a decisive role in shaping the global order (Treaty of Versailles, League of Nations after World War I, United Nations and Bretton Woods institutions after World War II), but during the current crisis it is moving from “America first” to “America Alone”

• Rising China

• Stronger and more assertive China: Shift of U.S-China relationship from cooperation to competition to confrontation and aggressive promotion of its Belt and Road Initiative, a partial economic de-coupling had begun and will gather momentum.

• Intra-European fission: 

• EU facing challenges due to expansion of membership to include East Europe States, impact of Eurozone crisis and BREXIT negotiations¸ aggravating an intra-European rift due to the transatlantic divide.
• Rising populism—> greater voice to Euro-sceptics—->accepting virtues of “illiberal democracy”.

• North-South divide within Eurozone due to austerity measures by the European Central Bank persuaded by the fiscally conservative states

• Fading Organisation:

• Absence of Multilateral bodies: Institutions like WHO, UNSC, G7 etc. have become victim of politics and are paralyzed. 

• The Energy factor:

• Growing interest in renewables and green technologies along with economic recession and depressed oil prices will exacerbate internal tensions in West Asian countries and create political instability.

Way Forward:

• Using nationalism and protectionism will prolong recession, sharpen inequalities and polarisation.
• EU needs to regenerate its experiment of shared sovereignty.
• Collective global leadership required to deal with institutional challenges.