Global cooperation need of the Covid vaccination times

This year, China became much stronger, while the United States and Europe became much weaker. China could limit the damage due to the Covid-19 pandemic, while the western powers and many other countries are still struggling to do so. The dominance of the world by the sole super power, the US, is coming to an end. China has emerged as the principal challenger. In the emerging bi-polar world, the trade flows of goods, services, and technology can see significant changes in the coming decade.

Under President Donald Trump, the US has been weakening the global institutions like the World Trade Organization, World Health Organization, and even the United Nations. The relations with its allies in Europe have also been strained. Joe Biden is likely to reverse the process. However, the approach towards China is unlikely to change. In any case, the first priority of the Biden Administration is to deal with the spread of Covid-19 virus and its economic fallout. 

Under President Xi Jinping, China has been building infrastructure in many poorer countries, winning their goodwill. Sections of people in the countries neighbouring India are also somewhat better disposed towards China than earlier. Chinese companies have increased their investments in many Asian, African, and even Latin American countries. Chinese companies are competing with the American firms in the field of latest technologies also. 

China has, however, annoyed many countries, especially the US, India, Australia, and Japan and courted countries like Iran and Turkey. So, while the attitudes toward China have hardened in some countries, they have softened in some others. All these developments point to new alliances emerging, not only on the diplomatic and military front, but also in the areas of trade in goods and services, technology transfer and global issues like climate change. 

Thirteen countries of East Asia plus Australia and New Zealand signed up the China-dominated Regional Compre­hensive Economic Partnership (RCEP) agreement. India walked out of the trade deal after years of negotiations, fearing cheaper imports hurting the domestic producers. It will be more difficult for India to penetrate the markets in Asia. 

This year our government made significant policy shifts in agriculture, industry, mining, telecommunication, education, health care, and foreign trade and relations. Most of these have medium- and long-term implications. There is some divergence on the merits of some of these policy shifts among analysts but there is near unanimity that some of these were long overdue and some were dictated by the repercussions of the lockdown and the clashes with the Chinese forces at the border. 

In March, our government came out with incentives for investment and production and plans to raise tariffs in a phased manner to protect and help the electronics sector become more competitive. Later, similar incentives were extended to more sectors to help them increase the scale of production and export in a big way to emerge as global champions.  The idea is to help exploit the global opportunities. 

The merits of globalisation were visible when the medicines and equipment to cope with the pandemic flowed from the producers in some countries to those in need in many other countries. Indeed, the need for global cooperation is more appreciated now to distribute the vaccines developed in some countries to help the needy in many other countries.

Email : tncrajagopalan@gmail.com