The Covid-19 pandemic points sharply to the need for enlightened global leaders who can balance domestic interests with the need to bolster the resilience of the global economy. This is especially necessary to support the most vulnerable regions in the world.
Weak regions are set to be badly battered by the coronavirus and left with a much-reduced capacity to respond to long-standing developmental challenges. In the absence of a globally co-ordinated effort to support post-Covid-19 economic reconstruction, this is likely to be the fate of Africa.
Unfortunately, enlightened leadership is unlikely to emerge given rising tensions between major powers. World leaders are also increasingly moving apart as they focus more narrowly on domestic responses to Covid-19.
So far, they have not been able to formulate a global response that goes beyond platitudes. Even a region as formidable as the EU has wobbled in developing a common approach to support its vulnerable members, such as Italy.
Various other countries have taken unilateral action, setting out stimulus packages to support their economies. These are not anchored in multilateral processes and have not taken full account of growing risks in regions such as Africa and other developing countries.
It is not possible to have a stable global economic system in a world that is fractured.
What is missing is a recovery framework on the scale of the Marshall Plan that will support vulnerable regions and lay the foundation for economic reconstruction in the wake of the pandemic.
There are, however, few examples that leaders can draw on in fashioning the kind of response that would bolster economic resilience and support reconstruction.
The end of World War 2 gave rise to a global order underpinned by multilateral institutions such as the World Bank, the International Monetary Fund, the UN and the General Agreement on Tariffs & Trade. These mechanisms, aimed at fostering international trade, economic prosperity and peace, are under strain.
Indeed, the strain on the current global order was visible long before the outbreak of Covid-19.
The US and China have been locked in trade and tech wars since President Donald Trump ascended to the White House. They have ratcheted up their hostilities over tariffs, investment regulations and artificial intelligence-based technologies.
The Trump administration has shown strong antipathy towards global institutions: it’s pulled out of the Paris Agreement on climate change, railed against the UN Human Rights Council, threatened to leave the World Trade Organisation and withdrawn funding from the World Health Organisation.
As the coronavirus spreads around the world, the US and China have traded accusations over who should be held responsible, instead of seizing the moment to build new bridges. Covid-19 has intensified geopolitical tensions between the two countries, reinforcing their rivalry for supremacy in science, technology and trade.
Right now none of the world’s leading powers offers an inspiring vision of a system that could replace the current, decaying global order.
But there is an urgent need for countries to work together more closely to quell the current health and economic storms. Co-ordinated action is required to build new foundations for post-Covid-19 economic reconstruction. Some of this should be sustained on renewed multilateral institutions and some should take place within regions.
The world that may emerge after Covid-19 is likely to be characterised by deep fractures and high levels of mistrust between leaders.
The disruption in global supply chains has driven many countries to become more inward-looking. A resultant relocation of supply chains for local sourcing could bring about major changes in the structure of global production, with various countries shifting away from interdependence to self-sufficiency.
We may see the emergence of harmful trade practices in advanced industrial economies, with restrictive measures keeping out foreign products and investors. Immigration laws may become tighter — especially for citizens of developing countries.
The world we are facing is one of sealed borders and weak international co-operation. This is due to the absence of leaders who can skilfully balance domestic and shared global interests.
There is an alternative vision that should be championed: normative convergence, a balance of interests and shared leadership at the global level are more important than ever before.
The Covid-19 pandemic offers an opportunity for increased international co-operation and interdependence that is based on shared interests to support balanced economic development and system stability. This, however, will require greater foresight among the world’s leaders.
- Qobo is head of the Wits School of Governance at Wits University
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