Post-Corona Political-Economic Developments

2020/04/14 | Economy, interview, top news

Strategic Council Online: Citing international developments in the post-Corona era, an international affairs analyst said: "It seems that the outbreak of the Coronavirus will lead to substantial changes in various global arenas, the culmination of which is already clear."

Seyed Reza Mirtaher, in an interview with the website of the Strategic Council on Foreign Relations, pointed out the political dimensions of these changes and noted: “Politically, governments will gain more power and will increase their scope of supervision both within the country and at the borders. So in the future, we will face far more centralized governments with more authority and perhaps more authoritarian.

 

 

Growing Importance of Cyberspace

He stressed the need for governments to enforce strict laws to control the flow of citizens, calling it “unprecedented in history” and adding that the adoption of quarantine policy has made people more focused on their homes. Thus the use of cyberspace and the Internet have grown exponentially. Naturally, we should expect cyberspace, along with real space, to be of equal value and perhaps the former being more important than the latter and that the trends taking place in this space will influence the structure of developments in various fields.

 

 

 

Unprecedented Challenges of Regional Blocs & European Union

“Increasing attention from governments to domestic issues and imposing various restrictions on internal movements as well as between countries, has made many regional blocs, especially the European Union, face unprecedented challenges because based on the philosophy of regionalism and regional integration the countries of a region must be able to pursue unified policies in coordination, cohesion and convergence.

But the reality is that after Corona, EU member states, instead of adopting unified and coherent policies, began pursuing their own policies and increasing restrictions and prohibiting traffic between the countries, and forgot all about many of the basic principles of the European Union, especially the Schengen Agreement, as well as the harmonized European policies.

 

Possibility of EU Collapse in Future

Mirtaher explained: “At the European level, the countries with the highest corona outbreak were left alone and they did not receive much help from powerful European countries, especially France and Germany. This is likely to lead to the collapse of the European Union in the future.”

The analyst did not see this divergence and inconsistency solely in the political, health and medical fields, saying that even requests for economic assistance from weaker EU countries were rejected by stronger states, indicating that the EU was fundamentally challenged by its philosophy of existence. In this way, divergent and separatist tendencies from the European Union, especially from a country like Italy, are expected to intensify in the future, as many senior European officials have sounded the alarm.

Referring to the German chancellor’s remarks that corona is the biggest challenge Europe has ever faced, the analyst said: “The growing attention to nationalism will weaken regionalist and internationalist tendencies, and globalization and related processes will be strongly challenged.”

Thus, talking about the global economy in a not-distant future will not be very justified and accurate, because according to many senior international health officials, the corona is not going to disappear from human society so soon. Therefore, there are many obstacles in the way of international trade, which will arise from the requirements originating from the observance of health and safety regulations and will monitor the control of traffic at the regional and international levels.

Mirtaher also cited the economic dimensions as one of the most important changes in the post-corona world, and referring to the WTO Secretary-General’s statement that COVID 19 could lead to the deepest recession in human history, said: According to WTO the outbreak of corona disease will lead to a 13 to 32 per cent drop in trade in 2020, and the collapse of financial markets will be much more severe than the 2008 financial crisis, and even if all countries work together, it will not be possible to return to normal conditions until 2021.

Europe, the US Already in the Throes of Economic Recession

“Europe and the United States are already battling with recession,” he said, adding that the unemployment rate in a country like the United States, which Trump has always been proud to have succeeded in reducing it and see as one of his achievements, is rising sharply. Unemployment is reported to be around 10 million in the United States, and even the Treasury Secretary has said that it could rise to 20 to 30 per cent, which will have a negative effect on Trump’s chances of winning the November 2020 election.

Emphasizing that the most severe blows from the coronavirus have been in the economic dimension, Mirtaher added: “In the first place, the global economy or the globalization of the economy has now been severely questioned and the rate of international trade has fallen sharply.” At the same time, a widespread economic recession is expected to spread in many countries; unfortunately, developing countries will suffer the most in this regard.

Referring to the sharp decline in demand for raw materials and energy as one of the consequences of the global corona outbreak, as well as the effects of the Saudi-Russian oil war, the expert said: “These issues, along with creating and increasing restrictions on trade in goods and products will certainly reduce global trade and hurt the growth of the global gross domestic product, especially for export-oriented countries or countries whose economies are export-oriented, and this is another major damage that the global economy will suffer along the way.”

Referring to the severe losses in the consumer and semi-consumer industries, as well as the high demand for medical and pharmaceutical items that will lead to the growth of these industries, he added: “Corona has the biggest impact on the services and micro-businesses and employees who didn’t have permanent jobs. In particular, industries such as tourism, restaurant management, cafeteria, and transportation, which will not only increase unemployment in the country but will also confront governments with a new and enormous problem of all kinds of riots and social unrest.”

Impacts of Corona Crisis on US Economy

He also said that one of the most important areas of global development in the last four years was the trade war between China and the United States, which Trump was its creator and promoter. He added: “In the last agreement between the two sides, Trump claimed that the United States has achieved full success but the corona epidemic and its effects, especially on the US economy, have now turned the page on China. Although the Chinese suffered a loss of more than $300 billion, now all the gains Trump thought had made after winning the trade war with China are completely lost. The United States is in a situation that if China had gone to a full and several year trade war with the United States it would still be unable to strike such blows at the US economy and Trump.

“The United States is now on the brink of a deep economic recession, and not only will American citizens face a sharp drop in income, but to a large extent it is China that has been able to cope with corona epidemic with more efficient management of the crisis, and now at least in appearance, Beijing claims to have been able to control corona.

 

Trump Style Administration Doomed to Failure Worldwide

Referring to the predictions that the Chinese will become the world’s number one economy between 2025 and 2030, Mirtaher said: “The implications of the corona epidemic may accelerate this process.” However, the undeniable reality is the inefficiency and mismanagement of the Trump administration in handling the corona crisis. It can be said that the Trump-style administration in the world has now failed, and perhaps this can be considered one of the international consequences of the corona crisis, which has led to a sharp decline in Trump’s popularity in the United States as well.

He also blamed rising domestic violence and divorce petitions, as well as increased surveillance and influence of cyberspace, as a consequence of the Corona outbreak. It is considered a global burden. This has led to an increase in acts of violence against Chinese and Asian nationals in Western countries, especially the United States, and Chinese people in these countries are seeking to buy weapons for self-defence, which will naturally increase violence.

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