INTERNATIONAL LIFE AFTER PANDEMIC: ECONOMY, IDEOLOGY AND POLITICS
The 2020 pandemic has become a turning point in many processes - globalization, regionalization, the struggle of nation states for survival. Many were expecting something like this, and the reaction of states and societies to the new virus turned out to be unexpectedly sharp and deep. Under the slogan of fighting the epidemic, many began to openly do what they had long wanted: to close borders, strengthen sovereignty, return production from abroad, and transfer relations with neighbors to a bilateral basis.
The coronavirus pandemic coincided with a global economic crisis, and this time it is not just a financial crisis, but a recession in the real economy. The conditions have been created for the perfect storm in international affairs: the epidemic is forcing countries to isolate themselves and, as far as possible, go over to self-sufficiency. The economic crisis will sharply raise the issue of restoring national economies, primarily about job creation, and this will not happen on the basis of international cooperation, but against the background of the most acute international rivalry. Let's not forget about the numerous sanctions in force. In the absence of a recognized international hegemon (leader), since the United States is no longer it, and China has not yet become one, one can expect the destruction of cooperation in many areas, a global economic recession and an increase in the number of various conflicts. It seems that the starting point of many processes will be the contraction of world trade due to its securitization, that is, the growing understanding that it is not only an economic, but also a political phenomenon that significantly affects the national security and internal stability of states.
Trade
If the governments of the leading states make the appropriate conclusions for themselves, then their priority will be the self-sufficiency of their states in critical areas, and they will rely less and less on foreign trade. This pandemic is not the last, and experience has shown that it is impossible to rely entirely on the international division of labor, and therefore on trade. What is the use of making the production of medical masks or drugs more cost-effective by bringing it abroad if, in the event of a crisis, goods cannot be obtained either due to a halt in production abroad or due to the actual closure of trade routes? Of course, world trade will not completely stop, but its contraction is inevitable. This refers not only to trade in goods and services, but also international investment and technology transfer. Reducing trade will have serious ideological and political consequences.
Investments
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Direct investment will fall for the same reasons that the volume of world trade will decline. Speculative capital will undoubtedly continue to travel the planet, although some national restrictions are also possible here, as happened during the 2008 crisis. In recent decades, direct investment has mainly served the idea of an international division of labor and the use for global production of the relative advantages of individual countries, such as low labor costs, availability of raw materials, and a convenient geographical location. In the context of the securitization of foreign trade due to the pandemic and the general growth of economic nationalism due to the crisis (reshoring, that is, the return of production and the creation of jobs at home), the investment plans of many global companies will be revised. The governments of their home countries will convincingly convey their point of view to them. Of course, direct investment aimed at producing goods for local markets will remain attractive.
World monetary system
In the context of a decrease in the volume of world trade, the demand for the volume of international currency, mainly the US dollar, which serves this trade will decrease. If the volume of trade and investment transactions within the national economy grows in comparison with the number of foreign trade operations, then the demand for the national currency will exceed the demand for the world one. It can also be expected that the majority of emerging economies, such as the BRICS countries, will focus on solving domestic problems and reduce the activity on reforming the global monetary system.
The issue of trust will become more acute. Everyone trusted the dollar in the era of cooperation, but will the trust remain in the new conditions?
Intellectual property
Global Intellectual Property Protection Policy Implemented in the 1990s developed countries that produce this property will be eroded. The countries consuming it have never been interested in complying with the global protection regime, and today they will seize the moment.
First, their economies will be more focused on the domestic market, and the legitimate owners of intellectual property will lose some leverage when they could close their markets from "counterfeit".
Second, the possession of critical technologies is becoming a key factor in national security: if a country needs a vaccine to protect its population, and its cost is high, then it will be stolen. The same applies to other high-tech products and processes.
Third, the global regime for the protection of intellectual property was based on the leading role of international institutions such as the WTO and on the unity of producer countries. The WTO is likely to plunge into an even deeper crisis, and the producer countries will show less and less solidarity. Dissidence and opportunism will flourish among them, and this will give consumer countries an additional chance.
Global Institutions
In contrast to the financial crisis of 2008, global, regional and international institutions like the G-20, the European Union, OPEC this time showed themselves negatively, weakly or not at all. Perhaps their influence will increase later, at the stage of the world economy coming out of the crisis, but so far it is not visible. The role of such a specific and indisputable institution until recently, as the global leadership (hegemony) of the United States, is also imperceptible. America is busy with its own problems, and if in the recent past it created international coalitions to fight Ebola, today it is trying to buy other people's development of a coronavirus vaccine for itself.
The weakening of world institutions and the multilateral regime, which cannot be overlooked, is also pushing states towards a strategy of self-sufficiency, including in the economy.
Migration
The idea of an open world community without national borders dividing it has already been dealt a heavy blow by the migration crisis of 2015. In a pandemic, most nation states have completely closed their borders to foreigners, and they will be slow and reluctant to open them. Most likely, many countries will introduce permanent medical supervision of visitors, which will complicate and increase the cost of travel.
It is difficult to say how much the new realities will affect tourism, especially in countries where tourism is a backbone branch of the economy. But the cosmopolitan idea - a "citizen of the world" who is wherever he wants or where his earnings lead him - becomes irrelevant for the coming years. An entire social group, a way of life will disappear. So, downshifting, when a person rents out his apartment in a metropolis of a developed country or receives a rather modest pension for a developed country, and he himself lives somewhere under palm trees and is content with little, will become impossible.
Ideology
With a very slight stretch it can be argued that liberalism - as the ideology of domestic and foreign policy - is based on the idea of specialization, division of labor and trade. This idea was put forward and substantiated long ago by Adam Smith, David Ricardo, John Mill. The neo-Marxist theories of dependence (Raul Prebisch, Hans Singer, Fernando Henrique Cardoso) and the world-system (Immanuel Wallerstein) are based on the same idea - the priority of international trade. By the way, the ideas of economic nationalism - mercantilism - (Alexander Hamilton, Friedrich List) are also based largely on the regulation of international trade by the national state. If the role of trade in the economy and world affairs decreases, then any leading political philosophies existing today (except for nationalism, perhaps) become flawed,and the inevitable negative economic impact and declining consumption levels around the world devalue these ideas in the eyes of society. The end of history is manifested not in the final victory of liberalism (Francis Fukuyama), but in the devaluation of all ideologies.
For example, the idea of unconditional personal freedoms and rights, freedom of movement and choice of residence, mobility within the framework of one's state (USA) or the dream of moving to Europe (North Africa) is questionable.
The first place is no longer the issues of the political system, the degree of democratic political system, but the cultural, civilizational factor (Huntington).
Cultures of peace in the current situation
In such a situation, judging by the effectiveness of the fight against the pandemic, the cultures representing Greater Eurasia (China, Russia, South Korea, Japan) have a higher potential for resilience.
It turns out to be stronger both in an operational sense, in terms of dealing with new challenges, and in a moral and philosophical one, since the weakening of liberal ideology and democratic political order does not completely knock out the ground from under their feet, than the countries of the Atlantic community risk.
Internal integrity of communities and their member states
The pandemic and the outbreak of the economic crisis have significantly weakened international communities of various types - from civilizational and cultural like the Atlantic community to integration like the European Union. The pandemic has created an atmosphere of mutual mistrust, and the economic crisis, which hit not so much the financial sphere as the real economy, will strengthen the mistrust and lead to economic and political conflicts between countries. The situation will be similar to the Great Depression of the 1930s, when each nation-state tried to solve its economic problems at the expense of others: what is called, the Beggar thy neighbor policy.
At the same time, it can be expected that societies will turn out to be more united by common troubles and problems, and not just right-wing populists will come to power, but nationally oriented leaders who sincerely care for the fate of their countries. This does not promise anything good for the strengthening of the global world order, but the citizens of individual states may feel more comfortable.
Geopolitics
Until today, the dominant and successful geopolitical strategy was not to control territory, but to control world trade through the monetary and logistic systems, as well as through a global military presence. It was for this that the Atlantic community created international institutions and regimes, and it was for this that a global system of military bases and mobile fleet connections was deployed. The era of colonialism is long over, replaced by the IMF, the WTO, a global system of logistics and division of labor, in which citizens of some countries do clean and high-paying jobs, while citizens of others do dirty and low-paid jobs. The intellectual property protection system is also part of the global trading system that has been built in recent decades.
In the absence (or significant reduction) of world trade, these institutions and strategies become meaningless. If the economic motivation of such institutions and strategies decreases or disappears, then they are unnecessary. In the new situation, the land states do not gain and even lose a lot, but the maritime states lose much more. Historically, the countries of Eurasia were much weaker associated with sea trade - foreign trade by sea began to play a noticeable role in their economies only in recent decades. It should be noted that in these conditions, too, they tried to diversify delivery methods ("Belt and Road" - China, pipelines - Russia), partly in order to reduce dependence on the maritime system of world trade, which was controlled by the Atlantic community. Now this system will weaken in principle, and from a huge advantage,source of influence and income will be a serious burden for the Atlanticists.
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A certain feeling of an impending thunderstorm had been in the air for a long time. After the disappearance of the Soviet Union, no intelligible international order was formed, nor a single cultural and ideological space. The world economy was taking on more and more artificial and ugly forms, relying on endless money supply, loans that no one was going to give and growing economic inequality both between countries and within national societies. Social and ideological development also stopped. The baggage of ideas with which mankind lives has remained the same as it was 150 years ago, and the “conservative masses” did not accept the concept of a new ideal world, especially since they do not exist.
The pandemic and the economic crisis served as a trigger for the national elites - no one else could and did not want to wait. Probably, the processes that have begun can be characterized as a reaction of states and societies to rapid economic globalization, despite the fact that the world still consists of nation states and political integration has not been observed, and societies, at least many, still retain their national identity. Other explanations are also possible. One thing is clear, we are entering an era of greater disunity, and the unifying bonds between peoples and countries are rather weak.
The last time a similar picture developed in the interwar period. Analogies in such matters are usually inappropriate, but the similarities between “then” and “now” are visible, it is the separation and absence of a global leader with the weakening of world institutions against the background of a deep economic crisis. We will try to get out of the current situation with low losses, but remember that not so long ago the matter ended in a world war.
Author: MAXIM BRATERSKY