Opportunity in Disguise, Unmitigated Disaster or Something in Between? The Impact of the Covid 19 Pandemic on the Global Economic System, Global Security and International Governance.

Abstract

In this paper, we do an assessment of the global impact of the Covid 19 pandemic on the Global economic system, Global Security and International Governance. The Global economic system is assessed through the indicators of Globalisation, Supply chains, Inequality, Labor Dislocation and Innovation. Global security is assessed through the indicators of Expansion of National Security, Fragmentation of international security understandings, Gray zone actions and the extent of resurfacing of Terrorism. International Governance is assessed through the indicators of Political awakening, Democratic decline and Trust. The pandemic has caused synchronised recessions in both developed and developing countries. The global economic recovery will be gradual. The pace of globalisation will see a visible slow down. Supply chains will see restrictions on exports of pharmaceuticals and medical supplies. In the long term, supply chains will see fragmentation and rationalisation. Supply chains in certain industries will see an acceleration of U.S. – China decoupling. The pandemic will have a disproportionately high adverse impact on low/minimum wage earners, small businesses and weak companies. Over time, the pandemic is set to trigger the first increase in global poverty since 1998. It will give a push to big companies becoming bigger. On the labour front, the global economy is set to witness the largest simultaneous job losses world wide in the last 100 years. In the long term, the global economy will be witness increased barriers in the setting up of new businesses. Patchy economic recovery will affect the vast majority of vulnerable workers and organisations. Innovation will receive a strong push in the form of a considerable increase in online commerce and digital payments. In the long term, shadow banks and digital wallets will increase their presence. Online currencies will increase in value and account for a significantly greater percentage of global transactions. Health security is now recognised to be a part of national security. Going ahead, debt pressures will likely play a critical role in reducing defence expenditure. Geopolitically, fragmentation fissures will deepen as US and Chinese leadership failures begin to take their toll. It is unclear how this might play out in the future. The pandemic will see an intensification of gray zone actions by nation states as they seek to avoid conventional face offs while at the same time scrambling to maintain or drive home the advantage.These gray zone activities will receive further impetus from inadequate defence budgets and increased fragmentation. The pandemic has seen increased activity by violent extremist organisations. The pandemic induced economic vulnerability in nations will facilitate the push by violent extremist organisations to further their agenda. In many geographies, the pandemic has triggered mass protests against inequality and injustice. In the long run, as has been seen with previous epidemics of some scale, a mismatch between the expectations of the public and the responsiveness or the lack of it from the administration has the potential to lead to long term unrest. These developments also have the potential to lead to a popular demand for structural reform. A decline in the intrinsic strength of democratic institutions, especially in countries without robust democratic cultures has the potential of triggering the consolidation of authoritarian and dictatorial anti democratic forces. These tendencies will likely be augmented by the failed responses of populist governments and leaders. In the long run, the world will likely be witness to a continued struggle between the forces of authoritaniarism on the one side and the forces of democracy on the other. The initial stages of the pandemic will likely be witness to an increase in trust in the administration and governments. In the long run the exact opposite is more likely to happen: the engendering of an enduring trust deficit among the young adult generations, especially the millennials.