The coronavirus pandemic has exposed just how fragile the international system is, fueling changes in alliances, institutions and the global economy, says Assoc. Prof. Paul Poast, a leading University of Chicago political scientist.
In this episode of “COVID 2025: Our World in the Next 5 Years,” Poast discusses how the pandemic is accelerating changes in international relations as nations respond by stepping away from each other rather than taking steps to tackle the crisis together. In the years ahead, these shifts could include China increasingly asserting itself as an alternative to the United States on the world stage, and a retreat by many nations, including the United States, from global institutions such as the World Health Organization.
What’s only beginning to emerge is the potential for sweeping impacts from coronavirus on developing nations, which could have a deep impact on the global economy in the years ahead. In addition, Poast says, watch for the power of the U.S. Federal Reserve to continue to grow globally and increased evidence of the need for global political solutions rather than just advances in technology.
PAUL POAST: The international system is surprisingly fragile that a disease that could spark up in one area of one country could suddenly spread globally and literally shut down the international system.
NARRATOR: The coronavirus is changing life as we know it on a daily basis. In COVID 2025, we'll explore how the pandemic is rewriting our future.
PAUL POAST: The hopes for the future coming out of this crisis is that we really recognize how interconnected he world is. This is something that we give lip service to.
We talk about how oh, the world is connected, and we can go on the internet and talk to someone who's in China right now. And you don't have to wait on them. We talk a lot about this. We're very much aware of the global economy, of the interconnected nature.
But I don't think we recognize how intimately salient that is to us until we suddenly see something like this.
We're seeing states kind of retrench to themselves, protect themselves, raise barriers, and, in a way, avoid kind of the cooperation that might actually be, in some ways, a better solution to this problem. This is just emphasizing or heightening trends that we observed happening prior to COVID-19.
But one of those ways is we're starting to see a fracturing, if you will, of what many people, many scholars, pundits, folks in the media, etc. have referred to as the liberal international order.
One of the key features of it are all the various international organizations, international institutions that had been formed largely since World War II, things like the United Nations, the WTO, prior to that, the General Agreement on Trade and Tariffs, the International Monetary Fund, the World Bank. And most notably, the World Health Organization became an institution that came into existence after World War II, with the purpose of helping to address these very pandemics that we're seeing.
The Chinese government has used COVID-19 as an opportunity to try to begin positioning itself as an alternative to U.S. leadership, if not trying to directly replace U.S. leadership. And these two countries were already viewing each other as competitors. We're witnessing them competing with each other during this crisis. And I think that, following the crisis, we're going to continue to see them competing with each other, whether that is trying to create alternative international institutions.
But the U.S. said: “You know what? We're not going to worry about focusing on creating global institutions. We're going to focus on supporting more regional institutions or institutions that are more specially tailored to U.S. interests.”
And could China do the same thing? Could China create, say, a Chinese Health Organization and encourage countries to join that?
The COVID-19 crisis has highlighted the centrality of the Fed and the U.S. dollar to the international system, and in particular, the global economy. What happened back in 2008, during the international global financial crisis, was the Federal Reserve took a leading role as serving as a lender of last resort, not just for U.S. funds, but globally.
Well, we're seeing this being heightened further in this crisis, where a host of central banks are essentially being lent to by the Federal Reserve. In fact, some observers of this have even said the Federal Reserve has now become the world's central bank, not just the U.S.'s central bank. That's not something that's going to suddenly change once this crisis is over. And so in many ways, this is only further entrenching centrality of the Federal Reserve and the U.S. dollar in the global economy.
That's going to have a profound long-term impact.
We're talking a lot about the United States. We're talking quite a bit about, if you will, problems facing the developed world. But a big point of concern is what's going to happen in the developing world. COVID-19 hasn't yet hit the developing world at the same rate, scale that it's hit the developed world.
There's real concern that this is going to do long-term damage to, say, various nations in Africa. This could become a humongous humanitarian crisis in India. So this is a huge concern.
And given that one expects these to be the major growth markets of the global economy going forward, if they're devastated by COVID-19, that, again, could have profound impacts going forward. An outcome that should be encouraged as a result of COVID-19 is this realization of the fragility of the international system.
The problem is, when the pandemic has gone, the pandemic will be gone. And it may be gone for five years.
And during that time, people have a tendency to revert back to a very myopic view, very short-sightedness of saying: “Well, what's my current problem?” And I'm going to spend money and budget for the current problem.
And I share this phrase with my students, which is that for many, the biggest problems in the world, you can't tech your way out of it. At the end of the day, you need to have a political solution to many of the problems that we face in the world today.