Throughout history, pandemics have acted as powerful mechanisms for societal change. In the 15th century, the plague outbreak marked the death of the medieval economy and civilization. In the early 21st century, SARS was a major shock to the economy and a wake-up call for many Asian countries to the dangers of viral disease. With COVID-19, there is a sense that we are, again, on the precipice of some great change: this virus presents a fascinating challenge to past economic trends, more specifically, to the very concept of globalism.
Open borders and free trade have become the natural tendency in times of prosperity. In times of crisis, however, both the tendency to follow an every-country-for-itself mentality and the sensitivity of supply chains to global economic turmoil call into question the merits of globalization.
For some countries, especially those in the West, the coronavirus may be the impetus for major shifts against the trend of globalism. For others, the power gap in globalist leadership will present a major economic opportunity. One can only guess what the end result of these shifts will be, but it is prudent to wonder how economic interdependence will be changed as a result of COVID-19.
According to McGill Economics Professor Moshe Lander, there has, for some time, been an observable trend of political realignment from a left vs. right dichotomy to an open vs. closed one. To what degree countries ought to rely on one another economically has already become a highly contentious issue and has been a salient topic in many recent elections, such as the debates over Brexit and the U.S. leaving the Trans-Pacific Partnership (TPP).
The current pandemic, however, presents new challenges to globalism because of the inefficiency of the global supply chain used to produce essentials, such as personal protective equipment and ventilators. Even outside of the products needed to battle COVID-19, concern is rising over how shutdowns in different countries have impacted the production of all goods, including luxury goods such as iPhones, which have a supply chain spanning 43 countries over 6 continents.
Professor Lander notes that the trend of increasing globalism has historically relied on a strong leader, typically the president of the United States, to push for international cooperation. Given President Trump’s tendency to oppose international trade agreements and international organizations as a whole, it is uncertain how future attempts at international cooperation will play out.
According to Todd N. Tucker, the director of Governance Studies at the Roosevelt Institute, the U.S. will likely see more support in the coming years from both sides of the aisle “for the notion that government has a much bigger role to play in creating adequate redundancy in supply chains — resilient even to trade shocks from allies.” We are already beginning to see such changes, with advances such as the intention of the Taiwan Semiconductor Manufacturing Company (TSMC) to build a new semiconductor fabrication facility (“fab”) in Arizona — noteworthy because it is being constructed to allow high-end production capacity within the United States, with the implied purpose of providing for the U.S. military.
If the U.S. is moving away from global economic interdependence, what will that mean for the rest of the world? While the United States has been considered the “leader of the free world” for some time, there is growing consensus that it is ceding its power to other global giants, namely China. Professor Lander notes that at present, the biggest advocate for globalism is Chinese President Xi Jinping, a fact has been very evident since the 2017 World Economic Forum when Jinping expressed his belief that the Chinese are the “leaders of the times” and argued the importance of committing to “growing an open global economy.”
That this virus presents a major opportunity for China to seize economic power is indisputable: being the first country to have recovered from COVID-19, or at the very least its first wave, gives it a distinct advantage over other countries still in the midst of huge economic downturns. A March Horizon Advisory report, with insight from Chinese government and media officials, expressed that China’s post-virus plans are already in action and involve seeking out more foreign direct investment and seizing market share in critical industries. Tian Feilong, of the Beijing Administrative Review Committee, argues that the virus involves “new growth points for China’s foreign aid and exports, thus providing strong support for the international radiation of China’s soft and hard power.”
It is difficult to attempt to predict what the long-term impacts of China’s economic power will be as a result of the bolstering of economic opportunities as a result of the coronavirus. While the country will likely be able to capitalize on current global turmoil in order to increase its economic reach, it is unclear whether or not it will be able to continue to push its globalist agenda, given the opposition it faces from the West. Additionally, whether we are witnessing the death of globalism or merely its transformation, as COVID-19 sheds light on some of the flaws of global supply chains, similarly remains to be seen.
One thing is evident: the coronavirus, like pandemics of the past, will undoubtedly change the way we see the world. Whether or not globalization continues to flourish following this event, the economic impact of the virus will be far-reaching and will continue to be felt long after the development and distribution of a vaccine.
Edited by Samantha Dagres.
The opinions expressed in this article are solely those of the author and they do not reflect the position of the McGill Journal of Political Studies or the Political Science Students’ Association.
Featured image obtained via Pixabay.