Coronavirus: who will be winners and losers in new world order?

Andrà tutto bene, the Italians have taught us to think, but in truth, will everything be better the day after? It may seem premature, in the midst of what Emmanuel Macron has described as “a war against an invisible enemy”, to consider the political and economic consequences of a distant peace. Few attempt a definitive review of a play after the first three scenes.

Yet world leaders, diplomats and geopolitical analysts know they are living through epoch-making times and have one eye on the daily combat, the other on what this crisis will bequeath the world. Competing ideologies, power blocs, leaders and systems of social cohesion are being stress-tested in the court of world opinion.

Already everyone in the global village is starting to draw lessons. In France, Macron has predicted “this period will have taught us a lot. Many certainties and convictions will be swept away. Many things that we thought were impossible are happening. The day after when we have won, it will not be a return to the day before, we will be stronger morally. We will draw the consequences, all the consequences.” He has promised to start with major health investment. A Macronist group of MPs has already started a Jour d’Après website.

In Germany, the former Social Democratic party foreign minister Sigmar Gabriel has lamented that “we talked the state down for 30 years”, and predicts the next generation will be less naive about globalisation. In Italy, the former prime minister Matteo Renzi has called for a commission into the future. In Hong Kong, graffiti reads: “There can be no return to normal because normal was the problem in the first place.” Henry Kissinger, the US secretary of state under Richard Nixon, says rulers must prepare now to transition to a post-coronavirus world order.

The UN secretary general, António Guterres, has said: “The relationship between the biggest powers has never been as dysfunctional. Covid-19 is showing dramatically, either we join [together] ... or we can be defeated.”

The discussion in global thinktanks rages, not about cooperation, but whether the Chinese or the US will emerge as leaders of the post-coronavirus world.

In the UK, the debate has been relatively insular. The outgoing Labour leadership briefly searched for vindication in the evident rehabilitation of the state and its workforce. The definition of public service has been extended to include the delivery driver and the humble corner shop owner. Indeed, to be “a nation of shopkeepers”, the great Napoleonic insult, no longer looks so bad.

A potato delivery to Mr Crolla's fish and chip shop in Tranent, Scotland

The obvious and widely drawn parallel has been, as so often in Britain, the second world war. In The Road to 1945, Paul Addison’s definitive account of how the second world war helped turn Britain to the left, he quotes the diary of the journalist JL Hodson in September 1944: “No excuses any more for unemployment and slums and underfeeding. We have shown in this war we British don’t muddle through. Using even half the vision and energy and invention and pulling together we’ve done in this war and what is there we cannot do? We’ve virtually exploded the argument of old fogies and Better Notters who said we cannot afford this and mustn’t do that. Our heavy taxation and rationing of food has willy nilly achieved some levelling up of the nation.”

In the same vein, Boris Johnson has been forced to unleash the state, but the impact in Britain seems more noticeable on civil society than politics. The famously standoffish British are no longer bowling alone. The sense of communal effort, the volunteer health workers, the unBritish clapping on doorsteps, all add to the sense that lost social capital is being reformed. But there is not yet much discussion of a new politics. Perhaps the nation, exhausted by Brexit, cannot cope with more introspection and upheaval.

In Europe, the US and Asia the discussion has broadened out. Public life may be at a standstill, but public debate has accelerated. Everything is up for debate – the trade-offs between a trashed economy and public health, the relative virtues of centralised or regionalised health systems, the exposed fragilities of globalisation, the future of the EU, populism, the inherent advantage of authoritarianism.

It is as if the pandemic has turned into a competition for global leadership, and it will be the countries that most effectively respond to the crisis that will gain traction. Diplomats, operating out of emptied embassies, are busy defending their governments’ handling of the crisis, and often take deep offence to criticism. National pride, and health, are at stake. Each country looks at their neighbour to see how quickly they are “flattening the curve”.

The Crisis Group thinktank, in assessing how the virus will permanently change international politics, suggests: “For now we can discern two competing narratives gaining currency – one in which the lesson is that countries ought to come together to better defeat Covid-19, and one in which the lesson is that countries need to stand apart in order to better protect themselves from it.

“The crisis also represents a stark test of the competing claims of liberal and illiberal states to better manage extreme social distress. As the pandemic unfolds it will test not only the operational capacities of organisations like the WHO and the UN but also the basic assumptions about the values and political bargains that underpin them.”

Many are already claiming that the east has won this war of competing narratives. The South Korean philosopher Byung-Chul Han, in an influential essay in El País, has argued the victors are the “Asian states like Japan, Korea, China, Hong Kong, Taiwan or Singapore that have an authoritarian mentality which comes from their cultural tradition [of] Confucianism. People are less rebellious and more obedient than in Europe. They trust the state more. Daily life is much more organised. Above all, to confront the virus Asians are strongly committed to digital surveillance. The epidemics in Asia are fought not only by virologists and epidemiologists, but also computer scientists and big data specialists.”

He predicts: “China will now be able to sell its digital police state as a model of success against the pandemic. China will display the superiority of its system even more proudly.” He claims western voters, attracted to safety and community, might be willing to sacrifice those liberties. There is little liberty in being forced to spend spring shut in your own flat.

Indeed, China is already on a victory lap of sorts, believing it has deftly repositioned itself from the culprit to the world’s saviour. A new generation of young assertive Chinese diplomats have taken to social media to assert their country’s superiority. Michel Duclos, the former French ambassador now at the Institut Montaigne, has accused China of “shamelessly trying to capitalise on the country’s ‘victory against the virus’ to promote its political system. The kind of undeclared cold war that had been brewing for some time shows its true face under the harsh light of Covid-19.”

The Harvard international relations theorist Stephen Walt thinks China may succeed. Offering a first take to Foreign Policy magazine, he suggests: “Coronavirus will accelerate the shift of power and influence from west to east. South Korea and Singapore have shown the best response and China has managed well in the aftermath of its initial mistakes. The governments’ response in Europe and the US has been very sceptical and likely to weaken the power of the western brand.”

Many on the European left, such as the Slovenian philosopher Slavoj Žižek, also fear an authoritarian contagion, predicting in the west “a new barbarism with a human face – ruthless survivalist measures enforced with regret and even sympathy, but legitimised by expert opinions”.

By contrast, Shivshankar Menon, a visiting professor at Ashoka University in India, says: “Experience so far shows that authoritarians or populists are no better at handling the pandemic. Indeed, the countries that responded early and successfully, such as Korea and Taiwan, have been democracies – not those run by populist or authoritarian leaders.”

Francis Fukuyama concurs: “The major dividing line in effective crisis response will not place autocracies on one side and democracies on the other. The crucial determinant in performance will not be the type of regime, but the state’s capacity and, above all, trust in government.” He has praised Germany and South Korea.

South Korea is in fact selling itself as the democratic power, in contrast to China, that has best handled the crisis. Its national press is full of articles on how Germany is following the South Korean model of mass testing.

But South Korea, an export-oriented economy, also faces long-term difficulties if the pandemic forces the west, as Prof Joseph Stiglitz predicts, into a total reassessment of the global supply chain. He argues the pandemic has revealed the drawbacks of concentrating production of medical supplies. As a result, just-in-time imports will go down and production of domestically sourced goods will go up. South Korea may gain kudos, but lose markets.

The loser at the moment, apart from those like Steve Bannon who argued for “the deconstruction of the administrative state”, risks being the EU.

Some of Europe’s most scathing critics have been the pro-Europeans. Nicole Gnesotto, the vice-president of the Jacques Delors Institute thinktank, says: “The EU’s lack of preparations, its powerlessness, its timidity are staggering. Of course, health is not part of its competency, but it is not without means or responsibility.” The first instinct was to close borders, hoard equipment and assemble national responses. In times of scarcity it emerged every person was for themself, and Italy felt most left to itself.

But the dispute has widened into an ugly battle between north and south Europe over the isssuance of common debt, or the conditions that could be set for any credit issued by the eurozone bailout fund. The Dutch and Germans suspect Italy is using the crisis in Lombardy to rebrand the rejected concept of eurobonds in which the north finances the debts of the feckless south. The Italian prime minister, Giuseppe Conte, is pushing the issue, telling the bloc “it has an appointment with history”. If the EU fails, it could fall apart, he has warned.

The Portuguese prime minister, António Costa, spoke of “disgusting” and “petty” comments by the Dutch minister Wopke Hoekstra, while the Spanish foreign minister, Arancha González, wondered whether the Dutch understood that “a first-class cabin would not protect you when the whole ship sinks”.

The former Italian prime minister Enrico Letta has been scathing about Dutch resistance to helping Italy, telling the Dutch press that the Italian view of the Netherlands has been seriously damaged: “It did not help that a day after German customs officials stopped a huge amount of masks at the border, Russian trucks carrying relief supplies drove through the streets of Rome and millions of masks were sent from China. Matteo Salvini is waiting for this type of action from the Netherlands and Germany so that he can say: you see, we have no use for the European Union.”

The EU’s position is not irretrievable. Salvini’s closure agenda has not yet found its footing, since Conte’s popularity does not make the prime minister an easy target. Conte has become the single most popular leader in the history of the Italian republic. Individual German politicians, such as Marian Wendt, have also undone some of the damage by organising for a group of Italians to be flown from Bergamo to Cologne for treatment.

But with the death toll mounting across Europe, and the crisis just starting to penetrate Africa, the EU discourse so far has been dominated by an unedifying and highly technical row about how to fund the EU’s

Europe’s chief solace is to look across the Atlantic and watch the daily chaos that is Donald Trump’s evening press conference – the daily reminder that rational people can plan for anything, except an irrational president. Nathalie Tocci, an adviser to Josep Borrell, the EU foreign affairs chief, wonders whether, much like the 1956 Suez crisis symbolised the ultimate decay of the UK’s global power, coronavirus could mark the “Suez moment” for the US.

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Borrell himself insists the EU is finding its feet after a rocky start and the case for cooperation is being won. Writing in Project Syndicate, he claims: “After a first phase of diverging national decisions, we are now entering a phase of convergence in which the EU takes centre stage. The world initially met the crisis in an uncoordinated fashion, with too many countries ignoring the warning signs and going it alone. It is now clear that the only way out of it is together.”

He may be proved right, but at the moment the scales are evenly balanced. There is, as yet, a world still to be won.