Tag Archive for: Coronavirus

The geopolitics of the pandemic year

We have reached the mid-point of the year of Covid-19.

Pandemics surge with the seasons while we seek order using the chronology of the calendar.

Halfway through 2020, much has exploded, some old stuff has been re-energised and many trends have sped up. These are the roughest of orderings, seeking to discern what’s terminal and what’s trend, and whether the energy is expiring or expanding.

Covid-19 has exploded the spheres of health and economics. This column will look beyond those smashed-up places at what these six months have done to geopolitics.

Two guides in the search for meaning are the virus and regional order series from the Council for Security Cooperation in the Asia Pacific (CSCAP) and ASPI’s After Covid-19, volume 1, Australia and the world rebuild. Watch out for volume 2, due for publication near the end of July.

Global balance shakes: The world is going multipolar, but there’s not much balance and the poles are all over the place. Pandemic adds more wayward energy to the unbalanced feeling.

In his ASPI chapter on the global balance of power, Rod Lyon notes that the balance is always shifting. ‘Pandemics’, he says, ‘tend to magnify and accelerate geopolitical changes already underway in the international system’.

Ralph Cossa, in the CSCAP series, doesn’t see a geopolitical game-changer so much as more power for old habits: ‘patterns and attitudes that are already evident will be accentuated’.

Cossa in Hawaii and Lyon in Canberra are two of my sages (my Ralph and Rod reference points). When their views rhyme, take it to the bank.

Add to that rhyme the line the secretary-general of the United Nations, Antonio Guterres, has often used since starting in the role in January 2017: ‘We no longer live in a bipolar or unipolar world, but neither are we yet in a multipolar world. We are in a chaotic situation of transition.’

The malaise of multilateralism: The chaos of the new world disorder helps power the pandemic. Covid-19 pushes rather than creates the malaise. As Jusuf Wanandi comments from Jakarta, ‘international cooperation has been late and lax’.

At the mid-point of 2020, we have fundamental lessons about the need for robust and trusted multilateral institutions (calling the World Health Organization). The experience has switched Australia’s government from parroting neoconservative nostrums about ‘negative globalism’ to a new understanding of what multilateralism could and should deliver.

Governments are back: They never went away. Yet the pandemic shows anew that some things, only government can do. Turn to the state for quarantine, tracking and treatment—and the vaccination we pray science can discover. Covid-19 re-energises government. Competent government, even better, which leads to …

Experts and science are back: The world of alternative facts and fake news confronts a deadly challenge. As ASPI’s Fergus Hanson writes, the crisis demonstrates the limits of ‘post-truth populism, with its simplistic denial of reality … The governments that tried to treat the virus as though it were a culture war issue and beatable through bluster paid a devastating price among their citizens.’

You can’t actually pick your own facts, no matter how loud you shout. And that brings us to …

The US president: For the first three years of Donald Trump’s presidency, commentators pondered how he’d handle a real crisis. Now we know. As Lyon notes, the pandemic has killed more Americans than were lost in World War I (116,000), Korea (37,000) or Vietnam (58,000).

When the US economy surges, sitting presidents get re-elected. At the start of this year, Trump was well placed to win in November, with his highest approval rating in three years. Now he has a one-in-five shot at re-election. Trump has bungled his war and lost his economy.

China and the US in Asia: The two giants are going to compete and challenge each other to compel changes. The coronavirus provides a new performance metric.

As ASPI’s Peter Jennings judges: ‘Covid-19 has further accelerated strategic change, made the challenges of dealing with an assertive China more immediate and difficult, highlighted the inadequacies of the Trump administration and deepened worries about American capacity and intent to underwrite Indo-Pacific security.’

In the CSCAP collection, Cossa comments:

It’s hard to see the US–China relationship going any way but backwards. This is usually the case in an American election year. This year, with China’s failings more evident and with the pandemic hitting the US so badly, the political class will focus even more on China and in particular the Administration will want to blame China.

From Singapore, Peter Ho predicts China will emerge from this crisis stronger and more confident:

The Trump Administration’s unsympathetic handling of international institutions has come to a head with the decision to freeze funding for the WHO. There is now an inherent question about how much reliance can be placed on American leadership. In Asia, many governments will continue to harbour suspicions about China, but they will hedge their bets even more.

Entering 2020, the fireworks of a US presidential year were always going to put fizz and fuss into the multilateral malaise and the shaky global balance in the chaotic transition towards a multipolar world. Add to this mix a vicious virus.

As the death toll grows, the sense of pandemic panic has actually ebbed. However dreadful, experience always delivers some understanding. Along with anger and aguish, there’s adaption and adjustment. At the mid-point in the year of Covid-19, the world knows what’s been smashed and what must be saved and remade.

Australia must address the risk of radicalisation posed by recession

Australia’s official unemployment rate hit 7.1 % in May, our highest since 2001. It’s almost inevitable that as the federal government eases its Covid-19-related stimulus measures, like the JobKeeper payment, the figure will rise further.

Understandably, getting the economy back on track is a crucial priority for all Australian governments, from local councils to the Commonwealth. However, historically high rates of unemployment, coupled with a trend of chronic underemployment and declining trust in government, will have second-order and third-order impacts that will also need policy responses.

One area of serious concern for the federal government should be the increased vulnerability of some Australians to radicalisation by extremist groups.

In February, ASIO Director-General Mike Burgess argued that ‘the security threats confronting Australia remain formidable and are continually evolving’. There can be no doubt that this statement accurately reflects the terrorist threat as Australia slowly emerges from what might be only the first wave of the pandemic.

Despite Covid-19 and the health-security measures it’s brought about, Australian authorities have continued to enjoy success in collecting counterterrorism intelligence and disrupting terror plots. And they should be commended for achieving those results in such challenging times.

Investment by federal, state and territory governments in the detection, investigation and disruption of terror plots remains critical to Australians’ security. However, as the former head of ASPI’s counterterrorism program Isaac Kfir and I noted in this year’s counterterrorism yearbook, ‘despite terrorism developments, attacks are in decline, which has led some states to reduce their threat levels … due in no small part to positive developments in countering violent extremism’.

Even before Covid-19, it appeared that Australia had entered a new phase in its counterterrorism campaign which has seen a reduction in the overall number of terror plots and attacks. There were already signs that with this success governments needed to change the focus of their counterterrorism strategy. That meant putting an increased emphasis on developing further measures to prevent radicalisation rather than focusing mainly on disrupting terrorist plots. However, the pandemic occurred before this new thinking had the opportunity to take hold.

While Covid-19 has drastically reduced terrorist groups’ freedom of movement, its effects have also created increased strategic vulnerabilities, especially to radicalisation. The economic and social impacts of the crisis, such as higher unemployment and lower social mobility, are producing the sudden and unexpected changes that make an increasing number of Australians vulnerable to radicalisation.

In making this assessment, I recognise that the empirical evidence suggests that the journey to radicalisation is highly personalised. However, there’s also evidence that there are push and pull factors that influence this personal journey.

It’s true that there’s insufficient empirical work to prove a causal link between unemployment and radicalisation. However, the Brookings Institution has found that ‘while it seems to be true that unemployment on its own does not impact radicalization, unemployment among the educated leads to a greater probability of radicalization’.

Unfortunately, Covid-19-generated unemployment has disproportionately affected young and often already underemployed Australians. The pandemic will also have a lasting impact on young Australians’ economic confidence. In After Covid-19: Australia and the world rebuild, my ASPI colleagues argue that these impacts ‘have exacerbated pre-existing and underlying economic insecurities and intergenerational wealth disparities that concern many young people’. Declining levels of trust in government will aggravate the situation.

There is clear evidence to suggest that ‘individuals whose expectations for economic improvement and social mobility are frustrated are at a greater risk of radicalization’. Increased levels of radicalisation during and after recessions in Western liberal democracies are not unprecedented. The United Kingdom’s 1980s recession saw an increase in radicalisation, for example.

Without a targeted policy response from the federal government, many young Australians will be increasingly vulnerable to embarking on, or continuing along, a path to radicalisation.

It’s unlikely that right-wing extremists or Salafi jihadists are blind to the opportunity to target the rising number of politically and economically frustrated young Australians.

Australia’s counterterrorism strategy needs to be adapted and enhanced to deal with the next phase of the terrorism challenge. The appropriate response, though, won’t be another tranche of legislation, additional investigative powers or increased intelligence and surveillance capabilities.

Of course, programs focused on countering violent extremism will play a critical role in this next phase, even though they experience mixed rates of success. Similarly, deradicalisation will play an essential part in mitigating the security threat, even though these approaches have had poor rates of success.

What the federal government should do is increase its programmatic efforts to prevent radicalisation in the first place. While counternarratives will remain critical, our response will need to be far more multifaceted than that.

The government should focus on giving young Australians a political voice to express their frustrations with the economic situation they face. In developing this response, young Australians’ understanding of how to engage with governments will need to be enhanced. And the government will need to prove to young Australians that it’s willing to listen to them.

The government should also provide the necessary economic measures to increase young Australians’ meaningful employment. And it will need to address the fatalist economic attitudes held by many young Australians.

The states, territories and the Commonwealth will need to implement a comprehensive program to counter the messages sent out online by a variety of terrorist groups and other proponents of politically motivated violence.

While the number of terror attacks and plots in Australia is in decline, and our counterterrorism efforts have so far been incredibly successful, the government cannot afford to wait until the next generation of radicalised Australians materialises. And it would be ill-advised to try to address the challenge with a security approach, because it may not get the support of security-weary and economically frustrated Australians.

The world waits for no country

The United States finds itself confronting several daunting challenges simultaneously. There is the Covid-19 pandemic, which has already claimed nearly 120,000 American lives and shows little sign of abating in large swaths of the country. The economic impact has been devastating, with some 40 million currently out of work and the Federal Reserve projecting that many of them will remain unemployed for a prolonged period.

On top of all this is the explosion of protests in the wake of the killing of George Floyd, a 46-year-old African American man, at the hands of police in Minneapolis. The protests, which have spanned the country, have highlighted not just the enduring problem of deep-seated racism in the US, but also of police behaviour, which all too often is violent and outside the law that those wearing uniforms have sworn to uphold.

It comes as no surprise that the American public and their elected officials have focused their energies on these domestic challenges. The problem is that much is happening in the world that calls out for America’s attention and isn’t getting it.

Worse, what attention US President Donald Trump’s administration is giving the world is mostly the wrong kind: threatening to withdraw nearly a third of US armed forces stationed in Germany and all in Afghanistan, and announcing America’s departure from the World Health Organization and the Open Skies Treaty. The result is heightened concern among America’s allies about its reliability—and quite possibly increased vulnerability to adventurism by US rivals and foes.

Meanwhile, several problems around the world are growing worse—fast. Last month, China’s legislature rubber-stamped a security law for Hong Kong that spells the end of the ‘one country, two systems’ arrangement that China accepted when it regained sovereignty in 1997. A harsh crackdown on the former British colony seems to be only a matter of time. China has also been acting assertively along its contested border with India and using sharper rhetoric about Taiwan.

Moreover, North Korea has announced that it will cut all lines of communication—including military hotlines—with South Korea, raising new questions about stability along the world’s most heavily armed border. The country followed this up with a statement dismissing diplomacy with the US and vowing instead to increase its nuclear arsenal. The bottom line is that North Korea boasts more nuclear weapons and more (and improved) ballistic missiles than it did before the summits between Trump and North Korean leader Kim Jong-un.

Iran is once again becoming a nuclear concern as well. The International Atomic Energy Agency reports that Tehran has refused to cooperate, with inspectors probing reports of unaccounted-for nuclear material.

Iran’s stockpile of enriched uranium, while still at a level of purity far below what is needed for weapons, has increased by 50% in the past few months. The country now holds some seven times the amount permitted under the 2015 nuclear accord it signed with the five permanent members of the United Nations Security Council, Germany and the European Union. This means that the world would have far less time to react were it to discover that Iran was racing to complete a small arsenal of nuclear weapons and present its new status as a fait accompli.

Elsewhere in the Middle East, there’s a high chance that Israel, with American encouragement and support, will annex parts of the West Bank. Doing so could end whatever slim hope remains for a Palestinian state. Annexation could also undermine stability in Jordan and the Israel–Jordan peace treaty. And it could jeopardise Israel’s future as a democratic and Jewish state; Israel can have one or the other, but not both, if it proceeds with annexation.

Heightened conflict isn’t the only risk the world is facing. Brazil has emerged as a major obstacle to combating climate change, which could well become the defining international challenge of this century. Under President Jair Bolsonaro, destruction of the Amazon rainforest is accelerating. This matters because the rainforest absorbs a significant amount of the world’s carbon dioxide and influences global weather patterns; as it is cut down or burned, the pace of climate change will increase, harming the planet and all living on it.

Brazil’s irresponsibility is to some extent a by-product of the country’s domestic turmoil, compounded by a fast-growing Covid-19 outbreak and populist politics. Alas, it is not unique. The pandemic is also raging in Mexico, Iran, Egypt, Russia and Bangladesh, reflecting inadequate public health systems, poor leadership, or both.

Fortunately, the news is not all bad. Perhaps the most promising development is in Europe, where the European Commission and the European Central Bank, with the backing of France and Germany, are taking steps to help countries ravaged by the pandemic navigate the resulting economic crisis and recover. It is a welcome sign that, in the wake of Brexit, the European Union is showing renewed relevance and determination to make a difference.

But this positive development is the exception that proves the rule. Against a backdrop of deteriorating relations between the US and both China and Russia, a host of regional and global challenges are growing. America is less able and willing to address them, its partners and allies lack the power to do so on their own, and China offers a model and an agenda that few find appealing. One can only hope that the US sorts itself out sooner rather than later. History has no pause button.

Containing the anger virus

The small landlocked Himalayan kingdom of Bhutan, which lies between China and India, is not only a tourist mecca. The country has also long pioneered the concept of ‘gross national happiness’, which its architects regard as far more comprehensive and accurate than the conventional measure of an economy, gross national product.

But with the Covid-19 pandemic triggering unemployment alarm bells almost everywhere, it may be time to consider establishing a third indicator: gross national anger. Why should we not measure the stirrings of the human soul as we do the earth’s entrails, using a Richter scale of emotions? Such an approach might help governments to act before popular anger boils over. As the 19th-century Italian statesman Camillo Cavour argued, ‘Reforms made in time weaken the revolutionary spirit’.

The ‘age of anger’—the title of a 2017 book by the Indian essayist Pankaj Mishra—may well be upon us. Anger is no longer largely the preserve of the peoples of the global south. It has become truly universal, as amply demonstrated in the United States by the large-scale protests that have erupted over the killing of George Floyd—an unarmed, subdued black man—by a police officer while three others kept appalled onlookers at bay. For the furious crowds gathering in all 50 states, the days of tolerating such abuses of power—and the systemic racism that encourages and facilitates them—are over.

Barring a possible sudden second wave of Covid-19, many countries may now be past the peak of the pandemic in public health terms. But the peak of social, economic and political anger is most likely still to come—and, in this sense, some countries, such as France, are more vulnerable than others.

The more that power is centralised and embodied in one person, the more fragile it is. In the United Kingdom, for example, the queen’s symbolic power is separated from the real power wielded by the prime minister. In France, by contrast, both types of power are vested in the president, who is both stronger and also more vulnerable as a result.

In addition, the more that popular mistrust of the state and its representatives feeds on previous negative perceptions, as in the case of France’s ‘yellow vest’ movement, the more likely it is that fear and humiliation will result in anger.

In the era of Covid-19, the primary cause of anger is the sense of inequality regarding the risk of infection. True, almost everyone accepts the greater vulnerability of the elderly as a fact. But when people in positions of authority and relative safety tell those who are most at risk that the protection they demand is unnecessary, many suspect them of dishonesty as well as incompetence. Anger explodes.

The ongoing ‘quarrel of the masks’ in France aptly illustrates this phenomenon. How dare white-collar workers, many of them protected by their ability to work from home, tell blue-collar workers on the front lines of the crisis that their fears are exaggerated? Some wealthy and powerful people have also died from Covid-19, but that is not enough to create a sense of justice.

Asking citizens to spend more time at work in the current exceptional circumstances is not in itself shocking. During Asia’s severe economic and financial crisis in 1998, for example, citizens in countries such as South Korea worked much longer hours than before (just as France was embarking on a 35-hour workweek). But it is very difficult to ask people to make an extra effort when trust and equal, shared commitment are lacking.

Likewise, we cannot realistically expect collective responsibility if the sense of unequal destiny is too strong and that of solidarity too weak. This is even more the case when public anger precedes the pandemic.

Indeed, the second main cause of today’s anger is cumulative: annoyance, like fear, adds up, and today’s anger opens the scars of yesterday’s furies. It is all too easy for someone to lapse into rage when they are already filled with fear and humiliation.

Happiness, on the other hand, cannot always be explained. It is often the product of a natural disposition or a reflection of a personal attribute (although it is no doubt easier to be happy when you are rich and healthy).

Anger is not only explainable, but also seeks scapegoats. Like the coronavirus itself, it seeks to attach itself to something, and some political leaders are more vulnerable than others in this regard.

France and the UK again offer a particularly interesting comparison. A majority of British citizens may think that Prime Minister Boris Johnson has managed the country’s health crisis incompetently, but many continue to like him—and not only because of Johnson’s personal battle against the virus.

This may be profoundly unfair, but it is a fact. As French President Emmanuel Macron has learned the hard way, there is no objectivity when it comes to anger. (Indeed, Johnson’s own approval ratings have fallen recently, mainly because of his refusal to fire key adviser Dominic Cummings, who drove across England in what most voters regard as a breach of national lockdown rules.)

Although the fear that dominated the first stage of the Covid-19 crisis will persist as long as there is no vaccine, anger is now taking over. The only safeguards are tangible demonstrations of solidarity between citizens and countries—in part through taxes and wealth redistribution.

The first phase of the pandemic has been largely bad for populists, with countries where they’re in power among the hardest hit by Covid-19. But if the current mounting anger is not successfully contained, then the second, economic phase may fuel their comeback.

Coronavirus winners and losers

Herewith a preliminary assessment of losers and winners from the global pandemic. The list is subject to change without notice.

Losers

The United States may turn out to be the biggest loser of all. Washington’s confused and vacillating leadership has been so woeful that it may produce a pivot in geopolitical power. Unconscious of the irony, the US replicated the initial Chinese playbook of denials, cover-ups and blame-shifting. The pandemic may exhaust America’s economic capacity and moral authority for global leadership. President Donald Trump’s astonishing display of incompetence to the point of recklessness, ignorance and self-regard had already deepened questions about the capacity of the US—as a nation and as a political system—to respond swiftly and coherently to the increasingly complex challenges confronting it and the world. The nationwide protests by day—and riots by night—that have rocked numerous cities since the killing of George Floyd by an almost casually indifferent white policeman in Minnesota will have reconfirmed the growing conviction in many of the dystopian state of Trump’s America.

China won’t be far behind in the losers sweepstakes. Beijing’s behaviour in the early stages of the outbreak was inglorious and many countries and commentators won’t easily forget or lightly forgive. For six critical days, China’s leaders engaged in a systematic cover-up of the dangerous new virus in Wuhan, misinformed their own public, and actively dissembled and denied to the outside world and the World Health Organization. The Chinese government lied and hundreds of thousands around the world died. Countries will work hard to decouple from China, causing a decline in foreign investment and tourism. The ability of President Xi Jinping’s ‘wolf-warrior diplomats’ to contain the diplomatic and economic fallout will be limited.

The European Union let a defining moment slip by. Instead of coming together against a common threat, most countries chose to fend for themselves. Some resisted efforts to share the costs of borrowing to help the worst-affected members, showing the limits to EU solidarity in a bloc already reeling from Brexit and resurrecting north–south divisions and prejudices. Italy was in love with the European project that was consummated in Rome, but the ‘small print and cold shoulder’ response to its moment of need may have snapped the romantic attachment. On 16 April the EU issued ‘a heartfelt apology’ to Italy for letting it down.

The Atlantic alliance was in deep trouble before the coronavirus crush already. Trump expressed repeated resentment of unfair burden-sharing. Europeans in turn had grown increasingly anxious about Washington’s reliability, goodwill, good sense and good faith. The pandemic has aggravated all the pre-existing fissures. The G7 couldn’t issue a communiqué because of the Trump administration’s insistence on calling out the ‘Wuhan virus’. Italy’s former prime minister Enrico Letta countered that the biggest danger for the EU is the ‘Trump virus’.

For several weeks the WHO put its own imprimatur as the world’s leading specialised health agency on Chinese obfuscations and misinformation. It has come under fierce criticism, not all unjustified, from Americans, Australians, Britons, Europeans, Indians, Japanese and Africans. Without a major overhaul, it could be crippled.

Epidemiological modelling has been another casualty. On 5 March, the WHO published a fatality rate of 3.4% for the coronavirus that badly misled epidemiologists in their modelling of the likely infectiousness and lethality of the virus and led many governments into lockdowns with deadly tolls on lives and livelihoods. Because modelling has real-world consequences of exceptional gravity, the profession could do with more prudence and caution.

Under the Australian model’s best-case scenario under lockdown (Appendix A, table 2), 2.9 million would be infected, 200,000 would require hospitalisation and nearly 5,000 people would need to be in intensive care at peak demand. With infections just over 7,200 and ICU peak occupancy at 96, the predicted numbers are off 400-fold and 50-fold, respectively. This challenges the model’s worst-case estimates that justified the lockdown measures.

Another loser is free market ideology and its accompanying tenet of globalisation. More broadly, not many democracies have demonstrated great competence in their governance, and the liberal component of their organising philosophy has been badly compromised with the vast expansion of state power without precedent even in wartime, reinforced by censorship by big tech (the Financial Times calls it censortech) of sceptical and dissenting opinions.

Considering that, an inquisitive, detached and critical press should have asked tough questions on justifications and evidence. Instead, most of the media became pandemic porn addicts. Just as with foreign military interventions, the threat was exaggerated, the evidence to justify the policy was lacking and thin, and the lack of an exit strategy led to mission creep from flattening the curve to eliminating the virus.

Winners

The biggest winner is the East Asian model of competence, good governance and social capital regardless of regime type. Japan, Taiwan, South Korea, Vietnam, Singapore drew on their intrinsic strengths of high-quality health governance, social cohesion, trust in public institutions and keenness to learn from and correct past mistakes.

China is the only nation in both lists. Ironically, the disease that originated there and spread like wildfire around the world because of the initial cover-up and disinformation by Chinese authorities, could potentially mark the moment of ascendancy in the ‘psychological balance of power’ as China moves to fill the global leadership vacuum vacated by Trump’s America.

China put on an impressive, if delayed, display of state capacity and power to suppress the outbreak and provide assistance to many other countries. Ian Bremmer tweeted: ‘It hurts to see China sending humanitarian aid to the US and Europe.’ If the economic damage to the US is the more substantial, the virus will accelerate the power shift, even as doubling down on the America First organising principle of foreign, trade and security policy adds to the US’s unreliability for traditional allies and friends.

As countries prepare to end their overdependence on China for critical medical supplies, the post-coronavirus world will offer India an unexpected, longer-horizon opportunity to play a larger role in revamped global supply chains, expand its manufacturing base and become the pharmacy to the world. On 19 April, PM Narendra Modi exhorted India to rise to the occasion and become ‘the global nerve centre of … multinational supply chains in the post-Covid-19 world’.

US, European and Japanese companies could be courted, but only if Modi is prepared to act decisively on reforms, end tax terrorism, ease labour market and land acquisition rigidity, and agree to arbitration by international tribunals that offer international investors more of a level playing field than national structures subject to government capture.

Reimagining a more sustainable Australia after the pandemic

The social isolation driven by the worldwide pandemic is providing opportunities to think, not just about Covid-19, how we got here or even why people hoarded toilet paper. While some have helped to put the toilet paper–buying into context with the hilarious memes that flooded social media, it’s worth contemplating for a moment what drove the frantic hoarding.

Perhaps it was panic. Or simply a need to take control of something, anything. Or was it the (flawed) perception that all of our consumables, including toilet paper, originate in China? (For the record, Australia manufactures 80% of its toilet paper.) Perhaps it can only be explained by accepting that people tend to do ‘people things’ in a crisis and sometimes reality gets in the way.

Social distancing has reinforced our dependence on all things digital. We’ve been driven online more than ever to perform our work, to learn, to shop, to be entertained and to have our dinners delivered to our homes. This increased online activity not only comes with increased risk to cybersecurity and the possibility of digital infrastructure failure, but it also deepens our national dependence on others.

The World Economic Forum says we’re in the midst of ‘globalisation 4.0’, driven by the digital economy of e-commerce, online services and 3D printing that’s enabled by artificial intelligence, but threatened by cyberattacks and cross-border hacking. This digital economy has the potential to increase the global dominance of China and the US.

The impact of Covid-19 in Australia is awakening us to the fact that our long-term reliance on others makes us highly vulnerable.

Australia’s habit of exporting raw materials only to import them as consumer goods has been long debated. There are valid, well-honed, and often polarised, arguments supporting one case or the other. Our trade policies drive our dependence on others. It’s time to question whether we should continue to export the current level of primary production, metal ores, minerals and coal while importing our resources back as processed food, clothing, machinery and fuels. Even our manufacturing base is highly dependent on others given that ‘around 18% of refinery feedstock is produced domestically and the rest is imported’.

The time is right for a more nuanced trade position that avoids the ideological extremes of the past.

This pandemic is also undermining social cohesion in Australia. A study commissioned by the Human Rights and Equal Opportunity Commission in 2003 found that, following the 11 September 2001 terrorist attacks in the United States and the October 2002 Bali bombings, Arab and Muslim Australians experienced increased prejudice because of their race or religion. We’ve seen the same phenomenon play out on the world stage, with references by US President Donald Trump to the ‘China virus’ and, domestically, in the early and irrational decline in patronage of Chinese restaurants well before Covid-19 reached pandemic status. There was also aggressive behaviour towards supermarket staff when Covid-19 started to spread. Covid-19 is affecting our national psyche.

As we enter the next phase, we need to appreciate the opportunity for a sea change through which we can create a better future. It all comes down to what we do next.

The evidence that we need to do better is clear. The OECD’s economic survey of Australia highlighted that globalisation and automation are having a negative impact on parts of the labour force, that the gap between Indigenous Australians and the rest of the population is narrowing too slowly, and that Australia has made little progress in reducing its environmental footprint. It is unimaginable that we’ll reject globalisation entirely, but we must adopt a more holistic approach to achieve a better blend of economic, social and environmental wellbeing.

In our efforts to assist the recovery of our devastatingly fire-ravaged communities, we started to think and act locally. Briefly, in the time between the fires and the onset of the pandemic, we visited local communities with empty eskies and planned our next holiday within Australia’s borders. While that behaviour was sympathetic and well meaning, at its extremes it could inadvertently drive us towards inward and narrow-minded thinking.

A rebalancing is needed that places more emphasis and value on whole-of-nation sustainability rather than solely economic growth. The cost of the Covid-19 federal response is now $320 billion across the forward estimates, representing 16.4% of GDP. Pressure is mounting to claw back that investment. Of course, we must, but we also need to grab the opportunity to lift our social and environmental performance to establish a more sustainable economy.

Post-pandemic, let’s not retreat within our national, state and regional boundaries to become isolated and parochial. Instead, we need to reimagine a nation that more effectively integrates global, national and local thinking and solutions for our collective benefit.

How Covid-19 infected global trade

The rules of global trade went out the window between February and April as nations fought like cats to secure supplies of personal protective equipment (PPE). It was each for themselves and the devil take the hindmost.

A shipment of face masks donated by China to Italy was seized en route by the Czech Republic in what it said was an ‘anti-trafficking’ operation. French officials claimed US agents appeared at Shanghai airport offering three times the price they had paid for a consignment of face masks that was already loaded onto an aircraft about to depart.

Brazil similarly complained about the US gazumping its purchases of PPE from China, with its trade minister alleging the US had sent 23 of its largest cargo aircraft to scoop up all available supplies. Israel deployed its intelligence service, Mossad, to secure coronavirus testing kits.

Members of the European Union also behaved badly. Germany and France both banned exports of hospital equipment in March—including to Italy, which was suffering more than anywhere else at the time. The EU stepped in, saying they could not bar sales to fellow members, but agreed to block all EU exports of protective equipment to anyone else.

It then had to amend the prohibition to exempt non-members Switzerland and Norway, but Russia, which had purchased US$4.3 billion worth of PPE from the EU in 2019 and was facing a raging epidemic, was left in the cold.

Possibly inspired by the EU, the Trump administration invoked wartime powers under the Defense Production Act to ban exports of respirators, masks and gloves. Manufacturer 3M was ordered to halt PPE exports from its US factories to Latin America and Canada. Some exemptions were later extended on the proviso that 3M would direct output from its Chinese factories exclusively to the US. Canada’s prime minister, Justin Trudeau, warned of retaliatory measures, noting that the US also imported PPE.

Peterson Institute of International Economics analyst Chad Bown has estimated that the US export restrictions applied to US$1.1 billion of exports while the country imported US$6.2 billion of similar goods in 2019. If trade partners were to retaliate, he argued, the US would be left worse off. He noted that US production of hospital-grade protective garments depended on supplies of specialty pulp from a Canadian paper mill.

The US export bans hit a number of countries hard. Jamaica, Bermuda and the Dominican Republic rely on the US for between half and three-quarters of their supplies of respirators and masks.

While China engaged in ‘face-mask diplomacy’, making high-profile donations of PPE to selected countries in need, the Peterson Institute’s analysis shows that it had been largely responsible for the shortages on the world market at a time of peak demand.

In the first two months of the year, as the Covid-19 crisis peaked in China, it imported 8.7 million more kilograms of masks than in the same period of 2019 (when imports were negligible) and it exported 22.8 million fewer kilograms. This combined to reduce China’s net exports of masks to the world by 24%.

Bown says the position improved in March, but China’s net exports were still down by 5% on the previous year, despite soaring world demand. With blatant profiteering by Chinese suppliers, the average export price of its face masks in March was almost three times the level of the previous two months.

Australia is home to the world’s leading manufacturer of medical and industrial PPE, Ansell, which has operations in 55 countries, structured around the global free trade of goods. Its chief executive, Magnus Nicolin, told the Financial Times that the national restrictions were ‘messing with the flow’ of goods and their input supplies and leading to more inefficient production.

Financial Times analysis of World Trade Organization data shows that more than 70 nations have placed export restrictions on face masks and eye protection, while around 50 have bans on exports of protective garments and gloves and 30 are curbing exports of sanitisers and disinfectants.

Australia imposed a ban on the ‘non-commercial’ export of PPE and sanitiser products, which was intended to prevent individuals and criminal syndicates from hoarding, price-gouging or otherwise profiteering. The measure coincided with reports of Chinese individuals arranging airlifts of face masks from Australia to China.

However, Australia has sought to be a voice of order amid the chaos of PPE supply chains. A meeting of G20 trade ministers on 30 March produced a weak communiqué declaring that members would take necessary measures to facilitate trade in essential medical goods ‘consistent with national requirements’, while saying any emergency trade barriers should not cause ‘unnecessary’ disruptions of supply chains.

Trade Minister Simon Birmingham followed up a month later with a tougher statement, jointly signed by his counterparts in New Zealand, Singapore, South Korea and Canada, calling on G20 members to refrain from export restrictions on medical supplies, pharmaceuticals and food to preserve the ability of all countries to import the supplies they needed. He urged nations to work on their logistics and customs clearance processes to facilitate the smooth flow of trade.

Birmingham also put his name to an open letter, joining again with counterparts from Singapore and New Zealand and also from the UK, declaring the importance of an open, rules-based global trading regime and calling on nations to roll back their trade barriers. The Covid-19 outbreak should ‘lead us to deepen our commitment to shared rules for the governance of global trade and investment’, the letter said.

But the very act of signing such minority statements underlines the reality that the majority are putting their own interests first. The Trump administration put its most hawkish trade adviser, Peter Navarro, in charge of securing the Covid-19 supply chain. China is not about to embrace transparency about its own demand for and production of essential goods that would enable others to have faith in its supplies. In the European Union, the Covid-19 crisis has again exposed the weakness of the bonds between its members.

The head of the WTO, Robert Azevedo, abruptly announced his resignation on 14 May. He didn’t explain his reason, but as the guardian of the global trade rules, it could well have been despair.

China is its own worst enemy

The global backlash against China over its culpability for the international spread of the deadly coronavirus from Wuhan has gained momentum in recent weeks. And China itself has added fuel to the fire, as exemplified by its recent legal crackdown on Hong Kong. From implicitly seeking a political quid pro quo for supplying other countries with protective medical gear, to rejecting calls for an independent international inquiry into the virus’s origins until a majority of countries backed such a probe, the bullying tactics of President Xi Jinping’s government have damaged and isolated China’s communist regime.

The backlash could take the form of Western sanctions as Xi’s regime seeks to overturn Hong Kong’s ‘one country, two systems’ framework with its proposed new national security laws for the territory, which has been wracked by widespread pro-democracy protests for over a year. More broadly, Xi’s overreach is inviting increasing hostility among China’s neighbours and around the world.

Had Xi been wise, China would have sought to repair the pandemic-inflicted damage to its image by showing empathy and compassion, such as by granting debt relief to near-bankrupt Belt and Road Initiative partner countries and providing medical aid to poorer countries without seeking their support for its handling of the outbreak. Instead, China has acted in ways that undermine its long-term interests.

Whether through its aggressive ‘Wolf Warrior’ diplomacy—named after two Chinese films in which special-operations forces rout US-led mercenaries—or military-backed expansionist moves in China’s neighbourhood, Xi’s regime has caused international alarm. In fact, Xi, the self-styled indispensable leader, views the current global crisis as an opportunity to tighten his grip on power and advance his neo-imperialist agenda, recently telling a Chinese university audience, ‘The great steps in history were all taken after major disasters.’

China has certainly sought to make the most of the pandemic. After buying up much of the world’s available supply of protective medical equipment in January, it has engaged in price-gouging and apparent profiteering. And Chinese exports of substandard or defective medical gear have only added to the international anger.

While the world grapples with Covid-19, the Chinese military has provoked border flare-ups with India and attempted to police the waters off the Japanese-controlled Senkaku Islands. China has also recently established two new administrative districts in the South China Sea and stepped up its incursions and other activities in the area. In early April, for example, a Chinese coastguard ship rammed and sank a Vietnamese fishing boat, prompting the United States to caution China to ‘stop exploiting the [pandemic-related] distraction or vulnerability of other states to expand its unlawful claims in the South China Sea’.

Meanwhile, China has made good on its threat of economic reprisals against Australia for initiating the idea of an international coronavirus inquiry. Through trade actions, the Chinese government has effectively cut off imports of Australian barley and blocked more than one-third of Australia’s regular beef exports to China.

Whereas Japan readily allowed the International Atomic Energy Agency to conduct a full investigation into the 2011 Fukushima nuclear disaster—a probe that helped the country to improve safety governance—China strongly opposed any coronavirus inquiry, as if it had something to hide. In fact, some Chinese commentators denounced calls for an inquiry as racist.

But once a resolution calling for an ‘impartial, independent and comprehensive evaluation’ of the global response to Covid-19 gained the support of more than 100 countries in the World Health Organization’s decision-making body, the World Health Assembly, Xi sought to save face by telling the assembly, ‘China supports the idea of a comprehensive review.’ At the last minute, China co-sponsored the resolution, which was approved without objection.

The resolution, however, leaves it up to the WHO’s controversial director-general, Tedros Adhanom Ghebreyesus, to launch the review ‘at the earliest appropriate moment’. Tedros, who has been accused of aiding China’s initial Covid-19 cover-up, may decide to wait until the pandemic has come ‘under control’, as Xi has proposed.

Make no mistake: the world will not be the same after this wartime-like crisis. Future historians will regard the pandemic as a turning point that helped to reshape global politics and restructure vital production networks. Indeed, the crisis has made the world wake up to the potential threats stemming from China’s grip on many global supply chains, and moves are already afoot to loosen that control.

More fundamentally, Xi’s actions highlight how political institutions that bend to the whim of a single, omnipotent individual are prone to costly blunders. China’s diplomatic and information offensive to obscure facts and deflect criticism of its Covid-19 response may be only the latest example of its brazen use of censure and coercion to browbeat other countries. But it represents a watershed moment.

In the past, China’s reliance on persuasion secured its admission to international institutions like the World Trade Organization and helped to power its economic rise. But under Xi, spreading disinformation, exercising economic leverage, flexing military muscle and running targeted influence operations have become China’s favorite tools for getting its way. Diplomacy serves as an adjunct of the Chinese Communist Party’s propaganda apparatus.

Xi’s approach is alienating other countries, in the process jeopardising their appetite for Chinese-made goods, scaring away investors and accentuating China’s image problem. Negative views of China and its leadership among Americans have reached a record high. Major economies such as Japan and the US are offering firms relocation subsidies as an incentive to shift production out of China. And India’s new rule requiring prior government approval of any investment from China is the first of its kind.

China currently faces the most daunting international environment since it began opening up in the late 1970s, and now it risks suffering lasting damage to its image and interests. A boomerang effect from Xi’s overreach seems inevitable. A pandemic that originated in China will likely end up weakening the country’s global position and hamstringing its future growth. In this sense, the hollowing out of Hong Kong’s autonomy in the shadow of Covid-19 could prove to be the proverbial straw that breaks the Chinese camel’s back.

Covid-19: the crisis we didn’t have to have

How will the Covid-19 mega-crisis end? I don’t know, and nor does anyone else. So, perhaps it would be more productive to reflect on how it started. By addressing that issue, we might be able to improve our chances of averting another pandemic in the future.

The current crisis is hardly the first of its kind. In early 2003, another coronavirus, SARS-CoV-1, suddenly spread from southern China across Southeast Asia, but it ultimately remained regionally contained. Later, we learned that SARS (severe acute respiratory syndrome) had been spreading in southern China for some time, and that Chinese officials had been reluctant even to admit its existence and issue a warning, let alone take appropriate measures to contain it. Only after the epidemic had reached Hong Kong, a key global financial hub, did alarm bells go off.

Nonetheless, coordinated international action soon followed. There was a sharp drop in air traffic in the region, and many areas were cordoned off. The World Health Organization’s leaders at the time criticised China for its slow response, and the Chinese health minister was duly fired. By early July, the WHO was able to declare the crisis over, lifting its remaining recommendations for restrictive measures. The world returned to normal.

Why have we failed so spectacularly in 2020 after succeeding in 2003? Any answer to that question will be tentative, because there is much that we still don’t know about Covid-19 or the early months of the outbreak. Still, I see four factors that might help to explain the difference between now and then.

First, it took time for Chinese authorities to wake up to what was happening, sound the alarm and start taking resolute action. From what we know, Covid-19 first emerged in China in mid-November 2019, and had been detected spreading through Wuhan by mid-December, when reports started circulating in Taiwan. Finally, on 31 December, China alerted the WHO of a potential outbreak.

During those early weeks, local authorities in Wuhan sought to cover up the outbreak, including by concealing information from the central government in Beijing. We may never know just how much time was lost to Wuhan officials’ obfuscation. But we do know that after China’s first report to the WHO, it took another three weeks for Chinese authorities to lock down Hubei province. By that point, many residents had left for the Chinese New Year holiday, spreading the novel coronavirus, SARS-CoV-2, to other parts of the country (meanwhile, Wuhan allowed street celebrations to proceed).

A second factor that makes this crisis different from the one in 2003 is that SARS-CoV-2 seems to be much more contagious than its predecessor. This has magnified the consequences of Chinese foot-dragging. During those initial five to seven weeks, and in the weeks after the WHO sounded the alarm, when the rest of the world did very little, Covid-19 was able to spread much farther and wider than SARS ever did, and the result has been far deadlier.

The third, related, factor is that the world of 2020 is much more interconnected than the world of 2003 was. Wuhan, an inland city with 11 million people, has sometimes been called the Chicago of China, owing to its wide-ranging integration into global supply chains. Over the past few decades, the city has developed into a major hub. Before the lockdown pandemic, there were six flights per week from Wuhan to Paris (as well as five to Rome and three to London), and frequent non-stop flights to San Francisco and New York. What happened in Wuhan did not stay in Wuhan.

The last factor that cannot be ignored is the geopolitical dimension. The world was already falling into a persistent state of confrontation and disarray long before the Covid-19 crisis erupted. Back in 2003, it was only natural that the international community would come together quickly to coordinate a joint response. But in 2020, that scenario wasn’t even on the table. Even after the virus had gone global, US President Donald Trump’s administration remained in denial. And to this day, it has not made even the slightest gesture towards providing global leadership.

America’s historic abdication of its traditional role has trickled down, infecting most of the established instruments of global cooperation. When the WHO declared Covid-19 a pandemic on 11 March, it might already have been too late. But the confused and flailing reaction from the United States and other major countries has clearly made matters far worse.

My tentative conclusion is that these four factors together explain why this episode is so much more severe than the SARS epidemic. A novel coronavirus has plunged the world into a mega-crisis the likes of which we have not seen in modern times. We should consider what that says about the state of global governance.

Again, nobody knows how this crisis will end. But by understanding how it started, we might be able to prevent, or at least mitigate, the next one.

Resolution, recovery and reinvention: How Australia can help Southeast Asia respond to Covid-19

After the Covid-19 pandemic is over, we are likely to face a world in which the nations with strong foundations are stronger and the weak are further weakened. The World Bank has already predicted that 11 million additional people in East Asia and the Pacific region will fall below the poverty line, and other economic performance predictions are even more dire. In Southeast Asia, in particular, socioeconomic disparities  are likely to deepen. The repercussions of Covid-19 are, in many ways, already undoing the regionalism efforts that ASEAN has been pursuing for decades.

So far, the Covid-19 death toll hasn’t exceeded the total average annual deaths from air pollution, traffic accidents, diabetes, heart disease, regular flu and standard natural disasters such as typhoons, floods and droughts. In better-case scenarios, we may see limited stress on governments, an economic slowdown and some intrusions against personal privacy as a result of Covid-19. Tighter controls over citizens may well remain long after the pandemic, in which case political activism, already chronically challenged in the region, will suffer further damage.

However, this pandemic has the potential to trigger far worse scenarios. Southeast Asia is one of the world’s most densely populated regions, so in many places social-distancing measures are simply not practicable. The region is also home to large numbers of refugees, displaced persons, stateless people and unreported migrants. All of them are highly vulnerable, and their limited access to medical facilities raises the potential for worsening the crisis. See here for analysis of the perennial threats to, challenges to the governance of and economic vulnerabilities of the region, and how they are exacerbated by the crisis.

How can the Australian government prioritise its response and make the most difference?

It’s important to remember that this crisis is affecting Southeast Asian nations differently and Canberra should understand those differences and pay close attention to developments across the region. While vulnerabilities are high, there have been also a number of strong performances worth noting. For instance, Vietnam has been the first country in the region to ease social-distancing restrictions and gradually open up its economy. Indonesia, on the other hand, may have to wait a while before attempting to do so.

Australia should actively and regularly communicate with its Southeast Asian neighbours individually as well as through broader ASEAN Plus expert discussions on Covid-19. Canberra should also closely monitor other security challenges beyond the virus.

There are three basic phases of the response to the Covid-19 crisis: resolution, recovery and reinvention of political, economic and healthcare systems. Canberra needs to be thinking of them all simultaneously. In considering how to best assist its immediate neighbourhood, Australia should lay out a strategy for its engagement within that framework.

We’re still in the resolution phase, but we need to already be planning specific steps for recovery. Resolving this crisis requires healthcare assistance, including help with personal protective equipment, ventilators, other medical support and a vaccine if and when it becomes available.

Right now, Australia could offer test kits to Indonesia, which has an extremely low testing ratio and currently has the highest death rate in the region. Acting early could help reduce the number of people infected and avoid Italy’s or the US’s coronavirus trajectories.

Australia, like any other country, should also share its knowledge of best practices in detecting the virus, containing the number of infections, treating infected people and researching this novel virus. Not all countries in the region have the capacity to conduct research to develop a vaccine. Australia’s CSIRO is a frontrunner and may be one of the first organisations to deliver a vaccine that’s accessible to all, despite economic disparities among nations. That expertise is one of Australia’s great strengths and an asset that it needs to share with the region and the world.

The recovery phase will include the continuation of medical and scientific work but will also have a heavy emphasis on economic revival. The speed of the recovery will depend greatly on how effective the earlier phase has been. This will be a global project and it will depend on the health of many other major economies. Given the interconnectedness of the global economy, Australia, like other middle powers, should also make sure that access to economic institutions and solutions is equal for all and do its part in leaving no vulnerable people behind—at home or abroad.

Beyond recovery is reinvention, meaning the modernisation of regional economies. Southeast Asia before Covid-19 was a global hotspot for start-ups and innovation. The region will need to go through a rapid digitalisation in an acceleration of that already prevalent trend. Australia should prioritise the region’s technological and scientific development, and help accelerate digitalisation, which will increase countries’ resilience to and preparedness for future challenges.

Australia can make a difference in helping make access to technology and connectivity more equal and, in so doing, allow the continuation and renewed growth of education and economic activities.

This post is adapted by the author from her chapter in volume 1 of ASPI’s After Covid-19 series, ‘Southeast Asia’, which examines the ways in which the pandemic is exacerbating the perennial threats, challenges to governance and economic vulnerabilities in the region.