EMERGING FROM THE PANDEMIC: HOW SUPERPOWER RIVALRY IS SHAPING RECOVERY
BY LONDON & CAPITAL
When the world first shut down to contain coronavirus, talk of the ‘new normal’ was ubiquitous. Now, over a year later, amid all the discussion and debate, we’re uncovering exactly what the new normal is.
We’re six months into President Biden’s new term and he has largely fulfilled his promise to unwind some of Trump’s protectionist acts like the withdrawal from myriad trade agreements and unwinding years of global commitments and agreements. However, in shaping his new internationalist agenda, how is the US’s relationship with other global superpowers shaping up?
In this exclusive webinar, the Financial Times’ Chief Foreign Affairs Commentator, Gideon Rachman, explores the far reaching impact that jostling global superpowers could have on our politics, the COVID recovery and our economies.
Russia is flexing its muscles internationally in its involvement in international affairs, but it could be argued that Putin is in a weaker position than he was a year ago. The popular support shown for Navalny has forced Putin to be much more overtly aggressive in his suppression of opposition. However, total support for the Russian President is unclear as he clearly has a large support base outside of Moscow.
Biden meeting Putin in Geneva
Whilst the US/Russia reset under Obama’s presidency didn’t yield results, it set a precedent of acknowledging that there is a relationship to be managed. Biden and Putin’s meeting is not expected result in a change in major policy, but if the US is able to develop a working relationship with Russia, then there may be hope that Russia may pull away from China slightly.
China becoming more aggressive
China is becoming more aggressive and assertive, threatening that they may be in a position to invade Taiwan. As rivalry between the US and China notches up, the inter-dependence with the two countries are fighting out over tech could become a flashpoint.
Russia or China – the bigger threat?
At the moment, the two eastern superpowers’ fear of US sponsorship of domestic democratic movements binds them. Which poses the larger threat for the US remains debatable. Whilst Russia wants the recognition of a meeting on a global stage, they may be viewed more of a problem to be managed in the shadow of China’s larger threat.
COVID-19 & Supply Chains
The global pandemic has resulted in a global rethink in supply chains, moving from the previous ‘just-in-time’ model to one which may be less efficient but more resilient. For example, whilst the most efficient place to make semi-conductor chips is in Taiwan, the disruption to global supply chains in the first wave of lockdowns has resulted in increased pressure to on-shore production in the US.
Economics v. Geopolitics
This is where we can see the economic policies resulting from the pandemic beginning to spill into geopolitics, as countries try to become more resilient in the long road out of lockdown. For example, having a domestic vaccine production base to ensure smooth vaccine distribution will avoid economic disruption, if further COVID variations appear.
Biden and the UK
How much of an influence Biden will have on relations between Britain and the EU, particularly in respect of Northern Ireland is making British politicians nervous. The Irish lobby remains strong in the US, with Biden identifying with his Irish roots and Nancy Pelosi holding up the Good Friday agreement as a model example of diplomacy. Ultimately the trend seems to be that British politicians are assuming that the US is more committed to Britain however they remain ready to walk away from a US trade deal for Northern Ireland.
It is difficult to predict where the next flashpoints may come from as, by their nature, they largely come out of left field, which is why they cause such great disruption. It does seem that a large flashpoint of the scale of COVID-19 comes along every decade or so and it has caused thought about other potentially large issues such as a cyber meltdown.
If Cryptocurrencies were to become, they would be a game changer. The US Dollar being the global reserve currency gives the US enormous legal and political reach beyond their shores. Cryptocurrency could potentially be a replacement, uncontrolled by a state, global in reach and gaining more and more followers.
In conclusion, as major economies navigate their way out of COVID-19, there is a major re-shaping of the global order, not just in political manoeuvres but also where fiscal policy spills over to geopolitical implications. However the outcome of this international jostling is yet to be seen.
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