Foreign Affairs

Will Covid-19 kill globalisation?

It's often said that global problems require global solutions - but will the Covid-19 pandemic help to bolster the case for globalisation, or prove to be its undoing?

The health of the global order amidst the pandemic was the topic of a panel discussion in Wellington last week, hosted by non-partisan international affairs forum Diplosphere.

Opening the discussions, British High Commissioner Laura Clarke painted a fairly gloomy picture.

“I’m afraid I’m going to come out straight away and say I don’t think Covid has killed globalisation, but it has made the world a far more dangerous place ... I fear that the risks outweigh the opportunities.”

Clarke said the glass-half-empty view of the current situation was fairly stark, with countries closing their borders to protect against the virus, international aviation “falling off a cliff”, and numerous international meetings being cancelled or postponed.

The International Monetary Fund was predicting a 5 percent global contraction for 2020, with no country left unscathed - but developing nations likely to suffer disproportionately.

“Years of progress in lifting people out of poverty, from 44 percent of people living in global extreme poverty in 1981 to 8 percent last year in 2019, that progress is going to be reversed.”

Clarke said there was also likely to be greater instability in some parts of the world, with ‘strongman’ leaders emboldened and an accelerating decline in the primacy of liberal states within the international order.

“There is also a serious risk that the urgent climate action that is needed falls into the same bracket of ‘nice to have, non-essential, too expensive’.”

Terence O’Brien, founding director of the Centre for Strategic Studies and a former New Zealand ambassador to the United Nations, offered a similarly pessimistic outlook as he noted that concerns about the state of the international order predated the pandemic. 

British High Commissioner Laura Clarke is among those with concerns about how coronavirus will affect the global system. Photo: Getty Images

“Any question about whether Covid-19 is killing globalisation needs to register the fact first, that well before the virus struck, the authority and prestige and international institutions were being compromised by serial disregard of established laws and norms, especially by certain major powers.”

O’Brien said those at the top tables of the IMF, the G7 and other international institutions had appeared unwilling to make room for emerging economies - particularly China - to help shape the rules-based order, while unilateral economic and financial sanctions from the US had stalled free trade progress and would impede the post-Covid recovery.

The virus had “capsized completely” assumptions about the global economy, with New Zealand’s recovery likely to be influenced heavily by that of Asia.

Then there are the flow-on effects for tackling another global crisis, climate change, as Victoria University of Wellington earth sciences professor Timothy Naish noted.

While Covid-19 had had an enormous global impact, the climate crisis “remains the biggest existential threat to humanity and life on Earth”, Naish said.

“It was estimated recently in The Lancet that coronavirus, unchecked, has the potential to kill 35 million people worldwide ... these numbers are horrible, but they are not as high as the deaths predicted from climate change by the end of the century.”

The “glass half empty” view was that nations would circle the wagons and look inwards as they responded to the pandemic, making it harder to tackle shared global risks like climate change and in fact exacerbating the global oil crisis as economies tried to recover their losses through increased output.

'A global pandemic requires a global response'

It is not all doom and gloom when it comes to international cooperation, however.

“A global pandemic requires a global response,” Clarke said, noting the UK’s own work on ‘vaccine diplomacy’ through a global fundraising initiative as well as its collaboration with other countries to help poor countries unable to make debt payments.

She highlighted climate change as an area of great potential as well as challenge, with the opportunity for a “green recovery” from Covid-19 with sustainable growth at the forefront.

“Covid-19 in its response showed us just how fast we can move ... if we can do it in the face of Covid-19, we should be able to do it with the climate.”

Naish echoed Clarke’s comments, suggesting there was an opportunity for a “win-win” solution as countries rebuilt their economies from the damage done by the pandemic.

“What if the enormous amount of financial stimulus that has been injected worldwide into economies ... what if we use that strategically on infrastructure to transition to a more sustainable world?”

“[Whether] globalisation can kill coronavirus depends squarely on political leadership, and political leadership in the major countries of the world at this present time don’t give us a lot of optimism that they have the will or the ability yet to work collectively together.”

BusinessNZ chief executive Kirk Hope was bullish about globalisation’s vital signs, noting that international trade had helped to lift many out of poverty in the decades before Covid-19 struck and would continue to do so.

“The world remains highly connected: major connecting strategies like the Belt and Road Initiative continue apace, whether we like them or not - that’s happening.

“The big US firms - Google, Facebook, Microsoft - continue to sell their products internationally whether we like it or not.”

But whether the world can work together to seize on the opportunities presented by Covid-19 will rely in part on political will - and it was on that question, concluding the discussions, where O’Brien sounded a bleak note.

“[Whether] globalisation can kill coronavirus depends squarely on political leadership, and political leadership in the major countries of the world at this present time don’t give us a lot of optimism that they have the will or the ability yet to work collectively together.”

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