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The Financial Express

The tunnel, the light, the battle-plan


The tunnel, the light, the battle-plan

Mapping the COVID-19 spread-effects shows a resemblance with the Great Recession of 2007-10 and the Black Monday-anchored 1987 recession. On the one hand was an epicentre located in the global 'north', and on the other, the spread-effects spilling out across the global 'south'. An increasingly fluid concentric-circled pattern awaits us.

Whereas a rough 1987 map shows an Atlantic epicentre, with the subsequent 1990s economic rally becoming one of the longest 20th century growth-rate phases, a 2007 map also finds a similarly located epicentre, this time followed by a decade-long global economy still sputtering. One inherent message from this post-recession comparison may critically explain why the current COVID recovery is being so uphill: when the US economy rallied after 1987, it carried the rest of the world's recovery, since a fading Japan's claim to global economic leadership was clipped right there, China was still a half-baked world leader, and Europeans diverted more of their attention and resources to continental economic integration than any global leadership scrambles; yet after the Great Recession, neither the United States, nor any other country, has what it takes to hold the world together. COVID recovery misses that anchor.

Whereas the 1990s rally evoked over-confidence, prompted by foot-loose neo-liberalism, which facilitated sub-prime borrowing that the entire pre-2007 housing expansion was premised upon (even though other secular forces that accompany ageing societies also crept in elsewhere, particularly in developed countries--DCs), the Great Recession emanated from the excesses of neo-liberalism, to add to which were the simultaneous military expenditures spike and terrorism-laced developments. COVID responses have been trapped by the labour free-flows facilitated by the 1990s rally, in particularly of illegal forms, but suspicion generated by the newly constructed alliances after 9/11, especially related to the Middle East, extinguished any economic steam.

By the time of the COVID-19 crisis, both these forces had left decay in societies barely rejuvenated, as new technologies also squeezed the middle classes, while demographic changes similarly left DC societies increasing older to make those changes. Thus, as the COVID-19 epicentre shifts from China towards the Atlantic, littoral countries already have a bagful of worries to respond as briskly to as before, while dispersing populism merely reiterated that shortfall by supplying accusatory fingers. In its own turn, the COVID-19 crisis will both strengthen those forces and highlight populist holes, expose the Chinese economy to the harsh realities of severe economic downturns that can no longer be covered up, and disseminate those forces beyond the Atlantic pivot to Africa and Asia.

Against such forces, multilateral action may be needed the most, but since regional responses may do better, clipped multilateral wings may signal the end of an auspicious century-long multilateral experiment. Simultaneously, national policy preferences paving the way for selective external mindedness, seem appropriate vehicles to feed both China's Belt Road Initiative and other of its multilateral efforts, and Donald Trump's 'America is great' refrain.

We already see this in South Asia. Amid the COVID-19 crisis, a Hindutva-ridden Narendra Modi, after banning flights and travel from selected countries, mentioned the need to revive the SAARC (South Asia Agreement on Regional Cooperation) machine, and all of these before returning to the possible global alliance he was exploring through US President Donald J. Trump's February 2020 visit. Bangladesh has promised similar projections, but from a different trajectory: with its dominant ready-made garments (RMG)-driven economic and export-earner effectively neutralised by COVID-19 (inputs from China disrupted and markets across the Atlantic depicting lock-downs), regional trading arrangements, preferably with Bhutan, Indonesia, and Nepal, as well as routinely with India-based South Asian Association for Regional Cooperation (SAARC) neighbours have emerged as top-of-the-line options (even though resurrecting RMG input-purchase and export-market access plans have not been diminished). In short, regional-mindedness gains more credence now than ever before.

This may be the global pattern: put the domestic house in order before exploring like-minded neighbours to keep the machines lubricated. It could not have come at a more opportune moment, diversification because of its RMG infatuation (in reality, low-wages were so lucrative worldwide, no RMG-importing country wanted to abandon Bangladesh), and regionalism because circumstances may be riper for the idea (the country being better prepared with proper negotiations undertaken, or in the pipeline). By diversifying, Bangladesh restructures on two COVID-driven fronts: domestic industries, even if only to absorb the many RMG lay-offs); and export partners (since countries at the receiving end may fluctuate more dangerously between populist policies, defined by sine qua non policy changes, and previously practised laissez-faire).

Building new post-RMG industrial infrastructures within Bangladesh must now get far more conscious attention to establishing non-economic infrastructures, particularly those that can be activated against epidemics/pandemics/other crises. Health facilities at every port-of-entry and easily conducted traveller inspection (as too shipments scrutiny), must be in place, the sooner the better since airborne diseases and illegal contrabands can only be quickly captured with the highest available technology; easier mobility for those entering and leaving the country, but especially one-stop-shops for business travellers and permits, if only to eliminate the bureaucratic nightmares currently enveloping these; and freer movements across the country, as is being pursued already through the massive megaproject campaign underway.

Exclusive economic zones (EEZs) deserve extra mention. These should become the lifeblood of a developed Bangladesh, each fully equipped with environment-safe factories and production, housing, hospitals, as well as educational and recreational facilities. Fitting under-construction EEZs/special economic zones (SEZs) with immunisation and insulation capabilities gives extra mileage by preparing against future COVID-type crises. Learning COVID lessons may be the most rewarding domestic exercise in the quagmire many countries face today.

Simultaneous efforts to bring to conclusion trade negotiations with our Southeast Asian neighbours would go a long way, again a process already underway. They may give us the one missing tool in negotiating with India (or China): leverage. We need to pry more concessions and playing-field levelling. Multiplying steady trading partners may be the answer. Reaching out to distant neighbours, such as Japan and Down-under, would be the next friendship-concentric circle.

Multilateralism, a never-to-be-abandoned policy option, stands last in line, portraying the emergent global pattern, of beginning at the local level, admitting selective regional partners, then exploring the world beyond. Not all will succeed: those in the 1987 and 2007 epicentre (north Atlantic countries), may pay the highest cost, since much more ground/advantage will have to be yielded to 'newcomers', with the United States haunted most through its evaporating competitive edge, Europeans for demographic reasons.

If anything, an Atlantic epicentre reflects the expectations of an 'American Century' (as Henry Luce and others believed), COVID-19 exposed how a 'Chinese Century' is being too undermined logistically for China's legitimate management. While it regroups, other ascendant countries, like Bangladesh, should see more global light at the end of a COVID tunnel. No fatal blow to end exogenous intervention can be seen on the horizon as to give a clear signal where we must look for a guide to the rest of this century, but multilateralism does not beckon.

 

Dr. Imtiaz A. Hussain is Dean (Acting), School of Liberal Arts and Social Sciences (SLASS) and Head, Global Studies & Governance Program Independent University, Bangladesh

imtiaz.hussain@iub.edu.bd

 

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