Reviving Multilateralism Post-COVID-19 – Economics

Table of Contents

The coronavirus pandemic has made a fresh demand for a revived multilateralism.
In this backdrop, India could play a pivotal role, given the deficit of trust existing with China in many countries.
The value of multilateralism and the necessity to preserve it is newly reminded by the coronavirus pandemic.
Cooperation among nations will be necessary:-
to reduce the further spread of the virus
to develop effective medical treatments
to curtail the worst effects of the inevitable recession that is already in the offing
The assumption of the post-war multilateral system was that increasing economic integration and shared prosperity would help enhance affinities and contribute to peace.
Countries with fundamentally different domestic systems of governance did not form a part of this multilateral order. E.g. the Soviet bloc in the Cold War years
The multilateral institutions were supposed to enhance the well-being of all.
But apparently, the ties of interdependence were themselves “weaponized” for nationalistic gain, at the expense of other players.
There was misuse of existing rules (or loopholes in them) by several countries.
E.g. China – via forced technology requirements, intellectual property rights violations, and subsidies
They thus gained an unfair advantage in trade relations, and this was already attracting critique in the last years.

China’s response

As death tolls rose, many countries responded with export restrictions on critical medical supplies.
Countries were facing shortages of masks, personal protective equipment, ventilators and more to deal with COVID-19.
Recognising this, China offered to sell these products to countries in need.
For instance, when the European Union (EU) put up export restrictions, China stepped in at Serbia’s request.
When India complained that test kits imported from China were faulty, China slammed it for “irresponsible” behaviour.
On Australia’s indication of an independent investigation of China’s early handling of the epidemic, China threatened it with economic consequences.
The pandemic is thus teaching countries, through bitter experience, that weaponised interdependence is not just a theory but a practice.
This suggests multilateralism, in its current form, is incapable of dealing with misuse by “systemic rivals.”

There are repeated calls by heads of governments and international organisations urging countries to remain committed to multilateralism.
The issue of the goals and values that underpin the rules must be addressed.
Need for reassurance and policies that reflect a renewed commitment to the revival of multilateralism.
A “retreating” U.S. must show its commitment to strengthening global supply chains based on the promise of ensuring global stability.
Urgent need for some strategic decoupling, handled smartly in cooperation with other like-minded countries – closer cooperation with some and distancing from others.
Deep integration to countries with shared first-order values – pluralism, democracy, liberalism, animal welfare rights….

India may be uniquely positioned to help revive multilateralism.
The U.S. is facing multiple internal challenges including the prospects of a deeply divisive Presidential election in November 2020.
So India together with like-minded partners could assume leadership.
It can work towards strengthening constructive transnational cooperation.
India could work closely with the Alliance for Multilateralism (an initiative launched by Germany and France).
It is critical to not be seen as immediately isolating China.
So, at a time when China is facing a global crises of credibility, India could lead a coalition to bridge this deficit of trust.