Hayam Qayyoum
Member Board of Experts,
Center for Global & Strategic Studies (CGSS), Islamabad & Senior Lecturer, Researcher, Department of Media Studies at Bahria University Islamabad
Post COVID-19 pandemic compelled us to rethink global geopolitics in terms of dialogue to cater the regional dynamics and overcome geo-economic disconnect for the sake of peaceful movement of medical equipment and logistics, trade of health care products, cash transfer and public diplomacy.
The transnational coronavirus disease 2019, COVID-19 pandemic slowed down the economic activities of the world. According to Bloomberg, there will be a decline of 3 per cent in the world economy. Researchers of US Federal Reserve Bank measuring the effect of flue on global economy concluded that such depression of economy occurred in 1918 Influenza viral attack where 40 million people died worldwide and 675,000 people in the United States. In consort with such turbulent condition of the world and lockdown, the downfall of the economy is persistent leading to halt manufacturing and reducing bank assets causing a gap in supply and demand ratio.
According to the World Bank, the fastest growing economy of South Asia comprised of GDP of 7 per cent played a significant role in global economics in 2018. In 2019, the revelry between Pakistan and India, India and Sri-Lanka in the region had slowed down the growth rate of the South Asian region from 15 to 20 per cent. Indian economy faced falling trend of 4.5 per cent in 2019. The economy of India never showed an upward trend though lowering of interest rate by the Central Bank was a great support. The other set back to the economy of the South Asian region was Citizenship Amendment Act 2019 of India that has created chaos and distress in the country and miffed the South Asian region especially northeastern region bordered with Bangladesh. Malaysia, Turkey, Iran, Qatar, and Indonesia boldly condemned India on this discriminatory act. The Middle East criticized this act and Pakistan warned India to dilute “refugee crisis” on immediate basis. Another issue that halted regional growth rate was revoking of Article 370, which 35A is part of the Indian Constitution to Jammu and Kashmir special status and a part of 2019 election manifesto for the winning party. This Himalayan region is a major dispute between India and Pakistan that downgraded trade, compromised regional stability and relegated regional geopolitics. Despite, Pakistan dawdled over to cope with regional dynamics, neglected structural reforms and inept to maintain the least growth rate of 2.5 per cent and failed to create employment in the country. To avoid imminent collapse due to fiscal deficit, Pakistan needed capital injection from the IMF for economic stability. On the other side of the border, India and Sri-Lanka relation were instable. Fishermen’s problems at Palk Strait, a crossing of International Maritime Boundary Line, historical issue of the Kachchativu island, a threat from terrorism and Tamil refugees had led both countries at the brink of a war that affected the economy of both countries and had caused regional instability. The half part of the world like Saudi Arab and Russia is fighting over oil price. Organization of the Petroleum Exporting Countries (OPEC) and Russia kept on increasing rates of oil production whereas Saudi Arab wanted to cut down production of oil to remain stable. The war has created the unbearable loss especially as crude oil price has fallen to 30 per cent. Because Saudi Arab has sold 2.6 million barrel crude oil /day with cut-price to European clientele.
The second largest economy emerged in 2010 was China that challenged the global supremacy of the United States. The trade war between both countries for adjusting themselves in the international market system ending up in economic and ideological rivalry. In “the clash of two civilizations,” the geopolitics may change appraising the breakdown of Soviet Union.
The economy of the world is swathed in a quarantine of COVID-19 pandemic expected to impel towards recovery in coming days. According to the South Asian Economic Focus, the recovery rate is slower to 5.9.percent 2019 i.e. 1.1 per cent down in the South Asian region. Hence, the expected recovery rate will be 6.3 and 6.7 per cent in 2020 and 2021. However, COVID-19 had slower the recovery rate of South
Asian counties. At that juncture, what would be the global economic and geo-political strategy of the survivors.
The head of the International Monetary Fund (IMF) has warned about the upcoming recession caused by COVID-19 pandemic. Human, financial and artificial capital are at stake and war zones exposed to this pandemic. United Nations General Secretary also appealed the war and conflict areas to a cease-fire for the outreach of humanitarian aids and practice medical and preventive measures peacefully.
South Asian countries like Syria, Iran, Afghanistan, Pakistan, India and the Middle East strive for mutual geo-economic and geo-political strategies for the stability of the region. Pakistan government has shown interest to collaborate with India and called for to remove Curfew in Jammu and Kashmir for delivery of health equipment, services and cash transfer. This act can link various nations to provide humanitarian and medical aid to each other. Middle Eastern countries have started diversifying oil business by foreseeing the recession. Saudi Arabia, UAE and Qatar started investing in Pakistan, India and Afghanistan.
Only Qatar’s investment interest is about USD 350 million in Turkey, Pakistan and India to attract European market to invest in the Asian market. Saudi Arab 2030 plan of diversification to invest in South Asia and China. China, the emerging superpower had a multilateral strategy to develop economic globalization network and framework with all developed countries of the globe. However, China clogged India’s multidimensional strategy of the indo-pacific region for competing in a global financial system for the win-win trade policy. In this milieu, India has aligned towards the United States to sustain its individuality to combat the threat of looting of China through the Indian Ocean. India started investing in Bangladesh, Srilanka, Nepal, and Bhutan. Apart from this convergence, Australia and Japan are collaborating to face China’s economic rise. The strategic partnering of the United States and Japan is beyond the control of India as well as China. Pakistan explored markets of Iran, Central Asia, Russia and Western China and Afghanistan may serve as a transient country as well. US-Afghan peace deal opening avenues of investment for the globe. As 75 per cent, Middle East business tycoons want to invest in Asian market till 2025. According to the National Bureau of Statistics of China, the production of goods and services decreased to 13.5 and 13 per cent at the beginning of this year due to the quarantined Wuhan. Purchase Manager’s Index (PMI) also shrunk to 37 per cent. As China primed an economic plan for export and investment models. China geared up to normalize monetary policy and handled the financial risk in a few days. The contagious COVID-19 diluted the “letter X” relation and steered the United States and China to work on medical, diagnosis and treatment service and share prevention strategies on the humanitarian quay. The United Arab Emirates and Kuwait offered aid to Iran on humanitarian grounds to fight against the pandemic. United States offered aid to North Korea (NK) who shut down its border with China where 90 per cent of smuggled items move from china to NK daily. North Korea demanded the United States to ease in economic sanctions after firing two short-range ballistic missiles into the sea during the global pandemic this year in March. India in a video conference at South Asian Association for Regional Cooperation (SAARC) pledged $10 million as an Emergency Fund to control COVID-19 for SAARC countries. In actual, such tactics convoke geopolitics and geo-economic individuality of India. On the other hand, the emergence of South and West Asia converged the trade, connectivity and digitalization. Likewise, land, areal and marine connectivity, infrastructure, Road and belt initiative among Central Asia, China, Pakistan and Russia changing the geography of the globe.
Attributable to the China Pakistan Economic Corridor that opened the labor market for China in Pakistan. Gwadar Port is a unique selling proposition for Pakistan where China working on marine trade through the Indian Ocean to the rest of the world. Six economic corridors of China linking central and west Asia economic corridor, second connecting China and Pakistan, third linking Bangladesh, China, India and Myanmar, forth is new Eurasia land bridge, fifth joining China, Mongolia Russia and sixth uniting China Indo-China peninsula. For peaceful transportation and trading through areal, land and marine network, joining the globe and reducing the distance among countries would reinforce the countries to revise the geopolitics and geo-economic models and keep peace in the region.
Digitalized economy, usage of artificial intelligence and virtual reality are three major positive outcomes of the COVID-19 quarantine. The whole world shrunk into a tiny byte. China is leading the globe in tele-med, digital research, online awareness campaign, digital commerce and online movements of goods and services from one part of the world to the other part. This is the Post COVID-19 revolution, which would not take into account the conventional geopolitics and geo-economics of the globe.
