Effects of Covid-19 Pandemic on the Interconnected World

Souravie Ghimiray
June 21, 2020



Image Courtesy: Promarket.org

In today’s globalised world, a web of an interconnected network of economic activities and technological links have penetrated well-defined territorial sovereign boundaries of countries. The urgency of guarding the global commons is growing more than ever before, and the threats arising from environmental damage remains a massive challenge for the entire world to resolve. In a report by the RAND Corporation in 2012, it had identified five threats in the world necessary for multiple parties to join hands for addressing those issues. Those were nuclear proliferation, Middle East conflict, climate change, water scarcity and pandemics. While these are observable threats except pandemics, which can occur abruptly without any prior warning, similarly, the current COVID-19 pandemic occurred abruptly as mentioned in the report. This raises the pertinent question, how devastating and dislocating change it will bring along in the world post-COVID-19? 

Pandemics and diseases throughout history have contributed to transforming the course of global history. The plagues brought by the European explorers in North and South America led to the downfall of the Inca and Aztec civilisations. It was powerful enough to wipe out the indigenous population on a large scale, which in turn helped the Spanish to conquer the disease ravaged people. In the recent past, pandemics like the Spanish flu took a massive toll on the lives of people estimated to have affected around 500 million people worldwide and causing 50 to 100 million deaths around the world (In Pale Rider by Laura Spinney). Given the huge number of deaths during the Spanish flu and further compounded by the World War the world was indeed transformed to significant levels. The effects of pandemics have profound socio-economic-political impacts. But unlike the era of Spanish flu, the world today is at a different stage where technology has taken over every aspect of our lives and international trade and commerce defines the national economies of countries to a great extent.

The increasing use of social media not just for leisure but the information flow of several vital functions related to economy, trade, politics, have made these platforms inseparable entities from our lives and now this is true even in the case of the COVID-19 outbreak. Although technological advancement is seen in a positive light, there is a downside to it. The prevalence of technology in every aspect of our lives accelerated by Capitalism had allowed high levels of individual isolation. It has created adverse psychological effects such as loneliness as a growing source of preventable deaths. The emergence of economic models which run on the network of powerful algorithms has made human intervention for certain jobs outdated. The unprecedented growth of automation and AI can be clearly seen to be potentially accelerating in the post COVID-19 era. 

The rise of unemployment triggered by the COVID-19 will certainly have a debilitating effect on the world economy with small companies and businesses suffering the most. The plunge in oil prices due to dip in demand already created tension between Russia and Saudi Arabia, and it has hit other poorer countries like Iraq hard, which solely depends on oil production for their revenues. The export of global goods, according to the WTO forecasts, may fall as low as the late 2000s levels. This indicates a harmful scenario, especially in today’s much more complex world economy. Although it does not imply that globalisation will meet its demise, instead, there will be hastening of the existing trends of adoption of new technology, strengthening of global supply chains and deeply connected oligopolies. 

The politics of countries have already been affected by the COVID-19 situation. The superpower frictions have destabilising effect on the global business and rising tensions between countries will further add complexity in the world affected by the pandemic. The growing number of countries, as they move towards populism with governments having inward-looking policies it will increasingly stand in stark contrast with the idea of globalisation and international cooperation. COVID-19 has possibly led to an expansion of power of the state by allowing pandemic related control policies for ideological competition. In such a precarious situation, the countries are becoming more concerned about the company’s origins and where are they coming from and whether the governments have good relations – these aspects have become significantly important, more than ever. Public opinion about the effects of globalisation has been negative due to COVID-19 and has hindered the previous support for immigration and trade. The ease of international travel did hasten the spread of the disease, and its economic distress can lead nations to impose protectionist trade policies. The nationalist governments will tend to call out the failures of international coordination to bolster opposition to globalisation.

In conclusion, the post COVID-19 world will no doubt recover from the damage but, its socio-economic and political impact can linger well beyond its immediate exit. Nevertheless, even the most negative forecast about the economies of countries may not imply that the world can survive on a disconnected and isolated world. The power politics and superpower rivalry will continue to make headlines. Tumbling of the internal flow of trade and rising opposition to globalisation may create business opportunities and challenges. It is a chance for the winners coming out of the current crisis engendered from the pandemic, like big businesses and MNCs, to focus on the world’s capabilities and sustain the recovery. This pandemic may not create an unfamiliar world, but the way in which social movements, political actors and international powers choose to respond to it, certainly will.


** The author is a PhD scholar of US Studies Programme at the Centre for Canadian, US and Latin American Studies, School of International Studies, JNU.**