Multilateralism in the COVID Era

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Context: The global COVID-19 pandemic is plunging the world into a socio-economic and financial crisis of an unprecedented scale, in addition to the acute health crisis. The crisis has exposed and exacerbated vulnerabilities and inequalities in both developing and developed countries, deepening poverty and exclusion and pushing the most vulnerable even further behind. COVID-19’s ruthless sweep across the world demands a bold multilateral response.

Relevance:
Mains: GS II-

  • Issues relating to the development and management of Social Sector/Services relating to Health, Education, Human Resources.
  • Issues relating to poverty and hunger.
  • Important International institutions, agencies and fora- their structure, mandate.

How COVID-19 has reshaped International Cooperation?

  • The worst pandemic since the 1918-20 influenza outbreak is rapidly morphing into a systemic crisis of globalization, potentially setting the stage for the most dangerous geopolitical confrontation since the end of the Cold War.
  • In the space of just weeks, the COVID-19 pandemic has shut down one-third of the global economy and triggered the largest economic shock since the Great Depression.
  • Looking ahead, the most important factor that will shape how this crisis evolves is collective leadership.
  • But that crucial component remains absent.
  • With the United States and China at each other’s throats, global leadership will have to emerge from somewhere other than Washington, DC, or Beijing.
  • Moreover, to pave the way for renewed international cooperation, three myths need to be debunked.
    1. The first is that COVID-19 qualifies as an unexpected “black swan” event for which no one could have prepared.
      • In fact, public-health advocates like Bill Gates and major epidemiologists have been sounding the alarm for years about the systemic risks posed by coronaviruses and influenza, as have leading intelligence agencies.
      • The sheer depth of the current crisis is the product of our collective failure to think in non-linear terms or to heed scientists’ clear warnings.
      • Worse, COVID-19 is probably just a dress rehearsal for the disasters that await us as a result of climate change– especially after we pass the warming threshold of 1.5°C above pre-industrial levels, starting in the early 2030s.
    2. The second myth is that COVID-19 has discredited globalization.
      • To be sure, international air travel did spread the coronavirus around the world much faster than older travel methods would have.
      • Yet globalization has also furnished us with the information, medicine, technology, and multilateral institutions needed to defeat not just viruses, but all other collective threats, too.
      • Because there is now a global scientific community linked through information and communication technologies, the genome of the novel coronavirus was sequenced and made publicly available.
      • And now, researchers around the world are sharing their findings in pursuit of a vaccine.
      • Never before have so many people across so many countries collaborated on the same project.
    3. The third myth is that our current policy tools and institutional arrangements can see us through the crisis.
      • In fact, international organizations can mobilize only a fraction of the resources required to contain the virus and its economic fallout.
      • Unless we change how institutions like the World Health Organization operate and do more to leverage the resources of private actors, our expectations will not be met.
  • The COVID-19 pandemic has come at a critical moment, accelerating a deeper crisis of international cooperation.
  • Resolving both will require significant innovation, and a massive cooperative effort to achieve a stable equilibrium between economic growth and social wellbeing.
  • This will not be easy.
  • Not only must we change our institutions and broader economic systems, but we also must change ourselves.

 


The Ongoing Threats to Multilateralism

Increasing Incidences of Lawfare:

  • It means the misuse of existing International and national laws by several countries (via forced technology requirements, intellectual property rights violations, and subsidies), to gain an unfair advantage over other countries.
  • For example, Paralysis of the World Trade Organization (WTO), due to the tussle between the developed and developing world.
  • The imposition of extraterritorial sanction (under CAATSA) by the US has affected development in developing economies like India and China.
  • The trade war between the US and China has challenged the existing global trade.
  • The developed countries are using international institutions to halt or to destabilize the economies and politics of developing and least developed nations. 


Dual Use of Global Supply Chain

  • Some of the developed countries have jurisdiction and control over global supply chains.
  • Due to growing convergence between commercial interests with strategic goals, these supply chains enables them to have vast extraterritorial influence and has created new power asymmetries.
  • For example, China through BRI is enhancing its role in global economic governance.
  • The internet has become a distributed system of surveillance.
  • There are fears pertaining to dual-use (commercial viability and military application) of Industrial Revolution 4.0.


Lack of Global Framework

  • The global community has not been able to come on a single platform or frame a Global Agenda on issues related to terrorism, Climate Change, cybersecurity etc.
  • Also, due to the lack of any global public health framework, Covid-19 has spread into a pandemic.

Why is there a need for 'True Multilateralism'?

COVID-19’s ruthless sweep across the world demands a bold multilateral response. There are immense inequalities in the capacities of governments to respond both to the health emergency and to the social and economic fallout.

  • The social and economic damages of COVID-19 will be particularly pronounced in countries with
    1. weaker health systems,
    2. higher levels of debt,
    3. less fiscal space to organize stimulus packages,
    4. less easy access to international liquidity, and
    5. weak productive capacity and associated low incomes.
  • A strong commitment is needed to maintain open and free trade; to keep open borders, with restrictions only for clear health reasons; and to help the poorest countries, particularly least developed countries (LDCs), weather the economic shock they are facing.
  • The COVID-19 crisis only strengthens the call for a new multilateralism in which
    1. global rules are calibrated towards the overarching goals of social and economic stability, shared prosperity and environmental sustainability and
    2. chronic risks are recognized and addressed,
      for example through the risk pooling a reserve fund enabling the protection of the most vulnerable countries.
  • At the national level, the COVID-19 crisis gives governments a unique opportunity to set the terms of public, private and third sector interaction, making the SDGs the missions to achieve and adopting innovative approaches to policy, regulation and partnerships.
  • Fundamentally, the COVID-19 crisis is an opportunity to re-evaluate how public and private sectors collaborate to shape a better kind of capitalism.
  • Beyond the immediate crisis and the need to strengthen social protection systems and provide specific support for the poor and vulnerable during the crisis, governments must reclaim their role in supporting the development of productive capacities to ensure structural transformation and resilience.
  • The COVID-19 crisis is laying bare how too many countries cannot take care of their own basic needs (e.g. medicines, personal protective equipment, ventilators) and how export-oriented economies cannot rely on other countries to supply basic medical supplies or roll-over finance when they need it the most.
  • Strategic industrial strategy can help build structural resilience and capacity in manufacturing food, health services, energy and financial services.
  • The more than 400 national, regional and multilateral development banks around the world can play a vital role not only in minimizing economic decline and supporting recovery but also in financing structural transformation, helping to lay the foundations for a financial model that is conducive to an equitable and greener economy.
  • The benefits of globalization will be enhanced in the long run if the multilateral system and national industrial policies support the development of productive structures that address the great challenges faced by the global community.

The Committee for Development Policy (CDP) of the United Nations supports five principles to guide the design of a new multilateralism:

Formulated before the COVID-19 crisis, these principles remain relevant:

  1. Global rules should be calibrated towards the overarching goals of social and economic stability shared prosperity and environmental sustainability and protected against capture by the most powerful players;
  2. States share common but differentiated responsibilities in a multilateral system built to advance global public goods and protect the global commons;
  3. The right of States to policy space to pursue national development strategies should be enshrined in global rules;
  4. Global regulations should be designed both to strengthen a dynamic international division of labour and to prevent destructive unilateral economic actions that prevent other nations from realizing common goals;
  5. Global public institutions must be accountable to their full membership, open to a diversity of viewpoints, cognizant of new voices and have balanced dispute resolution systems.

Issues that need to be urgently reformed are:

  1. Rules that limit the capacity of countries to implement progressive tax systems, mobilize fiscal resources, manage international capital flows and curb illicit financial flows;
  2. Provisions in global, regional and bilateral trade and investment agreements that limit the ability of countries, in particular, least developed and other developing countries, to adopt policies to develop their productive capacities and industries in a way that would enable them to move towards equitable and sustainable development;
  3. Intellectual property rights rules that limit access to or increase the cost of technology related to essential goods, including medicines and inputs for smallholder farmers;
  4. The current fragmentation of environmental multilateralism, including climate change architecture, which is incompatible with the interdependencies between global environmental problems. The environment should not be relegated to a secondary status in the multilateral system;
  5. Governance arrangements that do not guarantee adequate representation of developing countries in international institutions.

 

Multilateral Measures to fight COVID-19
  • Some measures are already underway, including
    1. those under the UN health response,
    2. the COVID-19 Global Humanitarian Response Plan,
    3. the United Nations global framework for the immediate socio-economic response to COVID-19, and
    4. the G20 debt moratorium
  • The response should also include
    1. the issuance of the IMF’s Special Drawing Rights by at least $500 billion, and
    2. for the advanced economies to put their shares into a trust fund to finance programs in emerging market and developing economies;
    3. the establishment of a multilateral currency swap facility within the IMF;
    4. debt restructuring and greater debt relief for developing countries;
    5. and coordinated use of capital controls.
  • Critically, in the direct response to the pandemic, rapid universal access to quality-assured vaccines, treatments and diagnostics must be ensured in all countries, with need prioritized over the ability to pay, in line with the 2030 Agenda pledges of leaving no one behind and reaching the furthest behind first.

 

How can India play a vital role in Reviving Multilateralism?

  • The Covid-19 pandemic has highlighted the varying nature of the challenges faced by the world. First, these challenges are cross-national in character.
  • They respect no national boundaries and are not amenable to national solutions only.
  • Second, these challenges are cross-domain in nature, with strong feedback loops.
  • A disruption in one domain often cascades into parallel disruptions in other domains.
  • The intersection of cross-national and cross-domain challenges demand multilateral approaches to reach out any solution.
  • However, there has been an upsurge in narrow nationalism, an assertion of parochial interests over the pursuit of global (shared) interests, and a fostering of competition among states rather than embracing collaboration.
  • Thus, multilateralism is possibly at its weakest today.
  • In this context, Indian Prime Minister remarks that the world is facing a huge challenge in the form of Covid-19 and the way to combat this pandemic is through the resolution of ‘Collaborate to Create’.
  • Thus, the current pandemic may be an opportunity for India to help revive multilateralism.
  • India may be uniquely positioned to help resuscitate multilateralism.
  • With the United States facing multiple internal challenges including the prospects of a deeply divisive presidential election in November, New Delhi (together with like-minded partners even beyond the usual suspects) could assume leadership in strengthening constructive transnational cooperation.

Shift from Non-Alignment to Multi-Alignment

  • In the Post cold war era, Indian foreign policy has moved from a policy of non-alignment (policy of being neutral with US and USSR blocs) to the policy of Multi-alignment (India is having friendly relations with almost all great powers and developing world).
  • Multi-alignment is the very essence of India’s foreign policy and the economic policy of India today.
  • This presents an opportunity for India to become a global mediator and help in developing a framework on Global Issues.

India’s Role in International Activism

  • India is a key G-20 member country and the world’s fifth-largest economy (and 3rd largest on purchasing power parity) with a long tradition of international activism and promotion of rule-based multilateralism.
  • India’s foreign policy is based on the ethos of “Vasudhaiva Kutumbakam” and Good Samaritan.
  • In pursuance of this:
    • India’s long-standing commitment to multilateralism can be reflected in the call for U.N. system reforms.
    • India has taken the lead in promoting various multilateral initiatives like International Solar Alliance, proposing CCIT for combating terrorism, Asia-Africa Growth corridor.
    • India is the pharmacy to the world (world’s largest producer and exporter of cost-effective generic drugs).

Collaborating with Like-minded Countries

  • Working together with a group of countries from the developed and developing countries could further amplify India’s voice.
  • Here, India could work closely with the Alliance for Multilateralism (an initiative launched by Germany and France) to shape both the alliance itself and the reform agenda at large.
  • India must redouble its efforts, along with partners such as the USA, to push for a multi-stakeholder model of internet governance.

Decoupling From China: Opportunity for India

  • China has been the factory to the world, but global investors have been seeking a gradual decoupling from China.
  • This is due to the increasing cost of production and the trust deficit in China after Covid-19 pandemic.
  • This provides India with an opportunity to become the world's manufacturing hub and stable economic power.
  • This will help India in assuming leadership roles and maintaining a stable global economic system.
  • At a time when China is facing a global crisis of credibility, India may even consider a last-ditch attempt at mediation; to temper what is increasingly seen as Beijing’s unilateralist revisionism
Alliance for Multilateralism

The “Alliance for Multilateralism” launched by the French and German Foreign Ministers is an informal network of countries united to promote a rules-based multilateral order for international stability and peace and addressing common challenges.

  • The Alliance aims to renew the global commitment to stabilize the rules-based international order, uphold its principles and adapt it, where necessary.
  • It aims to protect and preserve international norms, agreements and institutions that are under pressure or in peril.
  • It seeks to pursue a more proactive agenda in policy areas that lack effective governance and where new challenges require collective action.

Conclusion:

Despite hardships, India can, and must, take the lead in bringing the world together to practice a new multilateralism that places the common interests of humanity above narrow national interests. In this context, India has taken initiatives to develop a joint response in bringing SAARC together to fight the pandemic. This neighbourhood collaboration should be a model for the world.



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