In the last week, stock markets crashed, schools, companies and borders around the world closed, and 64,000 more people became sick with coronavirus. Everyone’s daily life is changing at an unprecedented speed. Thousands are dying in what appears as the world’s prime post-war tragedy. While unexpectedness and uncertainty currently take centre stage, this pandemic will in the long term stimulate adaptation.
Economic recession will push for a reconsideration of global supply chains. Trust in scientific research will become a matter of public debate. Lockdown will bring momentum to the already growing fields of online learning and remote work. But the virus will in more general terms uncover the socio-political deficiencies of our worn-out world order, as it creates leadership opportunity for some and exacerbates the governance challenges of others.
I present here some of the key geopolitical rearrangements taking place, as well as perspectives for a post-pandemic international stage.
ENERGY CRISIS – MIDDLE EAST
Slowdown of Chinese production has reduced demand for oil and gas. OPEC member states, heavily reliant on exports to China, will suffer from low prices through 2020, with the IEA projecting a 50-85% fall in oil and gas income for oil-dependent countries. The Gulf Cooperation Council has long recognised the need for its economies to diversify. Single-resource diversion plans Vision 2030 in Saudi Arabia, Qatar and UAE will be slowed by such low prices, with governments unable to ensure balance in their budgets.
China is the Gulf’s strategic partner par excellence, and regional reactions to the virus confirm this. Mohammed Bin Salman (MBS) ensured maximum support to China in fighting the outbreak. Qatar Airways donated 300 tonnes of medical supplies free of charge to Beijing, Shanghai and Guangzhou. UAE Crown Prince said he was ready to ‘provide all support to China’. Once again, 67% of exports are sold to East Asia. Covid completely challenges the Gulf’s model of enrichment.
OPEC met on 6th March with Russia to discuss potential solutions to the ongoing price decline. Putin rejected the initial Saudi proposal to reduce supply, looking to keep prices low. Moscow seeks to destabilise the US shale oil industry, reliant on high prices to maintain market leadership. This falls within Russia’s grander motivation to undermine American hegemony. In his usual fit of anger, MBS actually directed state company Aramco to increase production to 13mbd (+25%). He wants to flood the market and recuperate market shares.
Two weeks later, an oil price war between Saudi Arabia and Russia has erupted, compromising their alliance of convenience. OPEC is on the verge of collapse. In so doing, MBS has also put American shale oil at risk, and thus his privileged relation with Trump.
Increasingly isolated, the daredevil Crown Prince faces Russia, who has higher production capacity and a budget breakeven price half that of Saudi Arabia. But Putin stands with his arms wide open. The fact is that OPEC frenzy will only further destabilise Levantine and Iranian economies, creating a vacuum for Russian influence. Right now MBS is facilitating Putin’s long-term Middle Eastern policy roadmap.
OPPORTUNITY TO RISE – RUSSIA
While the West and China kept busy with Covid, Putin put through legislation granting him two more terms in power (until 2036), citing the international threat to Russia, compounded by the virus, as a motive. Although Russian growth is set to stagnate and the ruble sits at its lowest in four years, Moscow’s ambitions look steady. Its vision for a shared dominance of Eurasia with China, with the Belt and Road Initiative and Eurasian Economic Union as its meeting point, remains critical.
Russia closed its border with China to contain the virus, but Sino-Russian relations are strong. China is Russia’s first trading partner and largest tourist base. Gazprom and CNPC’s 2014 Sales and Purchase Agreement bound the two countries to a 30-year cooperation on natural gas deliveries to China. Huawei deployed its 5G network in Moscow in September 2019, a symbol of the leaders’ trust in tech for development. The win-win relationship between the Eurasian behemoths will be a pivot in international relations this century; Covid is extending their mutual need for cooperation.
WE ARE THE CHAMPIONS! – CHINA
Extensive lockdown, surveillance and testing have allowed China to rapidly contain Covid’s domestic impact. For the CCP, Chinese state governance comes out the evident winner of its battle for national security. Only weeks after the epidemic’s peak, Xi Jinping’s visited Wuhan, drawing all eyes to the success and efficiency of his leadership.
Propaganda has already propelled Xi to the rank of national saviour, despite constant opposition on social media to measures bound by state repression. A book by the Central Publicity Department and State Council Information Office was announced on 26th February, titled Da guo zhan yi (A great power’s battle with an epidemic).
Now is the opportunity for China to demonstrate the supposed superiority of its system. China’s current focus is to recuperate trust on the international stage through a benevolent mask diplomacy. Having boosted production fivefold to 1.66 million per day, China is sending millions of masks and medical supplies to Iran, Japan, South Korea, Spain, Italy, France and ASEAN members. Chinese doctors sent to Lombardy held a press conference, citing the inefficacies of Italian lockdown. Yet another lesson of China’s supreme approach.
While an evident tool of soft power, mass mask production and delivery also sends a signal that China is back on track with industry. Trade partners can rest assured of its production capacity. This is key for the CCP, whose largest economic blow will be the loss of supply chain monopoly.
One important lesson from Covid so far is that a country cannot sustainably act as the world’s sole factory. After a 20-year process of industrial relocation, Europe and the United States have found themselves face to face with radical undersupplies of electronic and automotive products. China provides most of the world’s penicillin, antibiotics and pain medicines. Corporations around the world will continue to search for low production costs, and perhaps turn to other southeastern Asian countries (Vietnam, Bangladesh, Malaysia) to avoid dependence on China.
BLAME GAME – USA
Trump has adopted his usual isolationist strategy so far in the pandemic, closing borders with Europe without prior consultation and silently attempting to buy patents for a vaccine from German firm CureVac. Such refusal of multilateralism, the dogma of Trumpian diplomacy, is making the leadership seat vacant on the global stage. European countries will not soon forget Trump’s unilateral decision, proof that he views the old continent as a burden.
This crisis has also created opportunity to bash China, the US’s contemporary economic and political rival. Fox News, Mike Pompeo and a number of Republicans have labelled Covid the ‘Wuhan virus’, suggestive of Chinese efforts to disrupt international stability. A fitting title in the model of Chinese demonisation Trump has made clear throughout his term – on the Huawei 5G file, on the CCP’s international investment, on trade.
Foreign policy is never what directs American voters. However, ‘It’s the economy, stupid’ cannot work for Trump this year if Wall Street and shale oil, Trump’s ticket to American energy dominance, sink all the way through to November. More people are betting on Biden’s election this month than since the start of the Democratic Primaries. Although unwilling and unable to undermine the running battle between two visions of global governance, Biden would at least try to alleviate the US’s downhill relationship with China. A Trump re-election signals the inevitable intensification of the New Cold War currently on strategists’ minds.
STUCK IN THE MIDDLE – EUROPE
Confined by America First, Russian opportunism and visionary China, Europe stands more alone, disjointed and threatened than ever. EU member states are reporting the most Covid cases outside China.
Covid comes as a big test for the Union on leadership and cooperation. So far, the closure of borders (violation of European free travel regulation) and restriction of medical supply exports (violation of the Single Market) are reaffirming fractures. The eastern bloc is acting alone. Italy praised Chinese support for its medical assistance, one that Von der Leyen could not satisfy. The President of Serbia (not a member-state) called out the inexistence of European solidarity. The crisis has accelerated the manifestation of resurged European nationalism. So far, unity lacks amongst European nations.
Trump has turned his back on Europe, putting the very conception of the West at risk. Westlessness, the recurring term at the Munich Security Conference in February, captures this unique period in European post-industrial history, characterised by the Occident’s lack of direction. At a time when the US systematically bypasses NATO and closes its borders without warning European allies, one can reasonably quantify the final days of absolute transatlantic partnership. Europe should turn to enhanced sovereignty and integration, said Macron in Munich, focus on a Russian rapprochement and regulation of corporate giants. Coronavirus has only precipitated the onset of such reshuffles.
FINAL THOUGHTS
Sinophobic sentiments around the world are tied to fear. Fear that a far-away other seeks to conquer our collective imaginary. Exacerbated by the virus, this fear forms part of a wider process of geopolitical divergence, whereby today’s economic and military powers are becoming more hostile towards another, more independent and more doubtful of the globalisation in place. International institutions appear futile against the promises of national governments, and the egoism of certain state leaders only escalates risk. Covid-19 is forcing the necessary emergence of a new status quo, shaped by the world order as it is now, and not as it was in 1945. Multipolarity must not, however, wipe out multilateralism.
VALUE IN NATURE 