If there is one thing we learned from the last year, it is that humanity is capable of immense adaptation and resourcefulness in the face of crisis. Before COVID-19, the idea of closing borders, locking down economies and demanding months of social isolation and almost obsessive hygiene en masse was part of Hollywood movies, not to mention trillions of dollars in aid. economic to hundreds of millions of people. struggling citizens around the world, as well as the rapid development of highly effective vaccines less than a year after the start of a pandemic.
History also shows that major external shocks, from the Spanish flu a century earlier to the Great Depression, can radically reshape the trajectory of human societies. As studies by leading economists such as Daron Acemoglu and James Robinson have shown, cataclysmic events such as plagues can lead to institutional drift, similar to genetic drift in evolutionary biology, with profound consequences for humanity. The pandemic can change the models of growth and governance in Asia.
The relative success of Asian countries in dealing with the pandemic should therefore not obscure long-term challenges.
By all indications, post-pandemic Asia is likely to become more economically unequal, socially unstable, and geopolitically contested.
Certainly, the pandemic has accelerated some encouraging developments. We have seen investments in green technologies, especially electric cars, skyrocket. The US and China have also taken more decisive action to tackle climate change, with US President Joe Biden and Chinese leader Xi Jinping pledging to create carbon-neutral economies by mid-century. Prime Minister Yoshihide Suga made a similar pledge.
Importantly, the pandemic has also highlighted the importance of good governance and strong institutions. Asian countries as diverse as Vietnam, with a communist regime overseeing a developing economy, and Taiwan, with a democratic regime overseeing an industrialized economy, have shown remarkable resilience in the face of the pandemic.
The two Asian countries are among the few economies to have seen growth in the past year, while largely containing the pandemic through proactive public health measures. Even larger countries such as China and Japan have enjoyed relatively high success, as have countries in Southeast Asia such as Singapore and Thailand.
Yet the generic account of the alleged Asian success takes a more disappointing turn when looking at major nations such as India, Indonesia and the Philippines, which have posted one of the largest COVID-19 outbreaks in the world. world and have suffered severe economic contractions.
In fact, the International Monetary Fund estimates that India and the Philippines will experience the greatest decline in growth (relative to their pre-pandemic potential) over the next half-decade among any economies. Both Asian economies saw their GDPs contract by around 10% last year, a dramatic reversal in the Asian tiger narrative of the past decade.
Despite the encouraging headlines, slow and ineffective vaccination programs will hamper economic recovery, requiring loosening of lockdowns. Large Asian countries such as Indonesia and the Philippines are likely to be among the last countries to achieve any semblance of collective immunity, possibly around 2023, according to The Economist Intelligence Unit.
The result is the emergence of a three-speed Asia in which a few successful countries like China and Vietnam are rapidly climbing the economic rankings; relatively prosperous countries like Singapore, South Korea and Thailand are on the right track to recovery; and laggards, like the Philippines, India and Indonesia, lag behind their peers for years, if not generations, to come.
Despite the oasis of success and the encouraging image of many states in the region (from tiny Taiwan to the Chinese giant), the general implications for Asia are far from reassuring. There are three long-term trends that should prevent even an iota of complacency among regional policymakers.
First, the pandemic has bolstered China’s renaissance, paving the way for an even more intense geopolitical rivalry with the United States and its key allies. The Asian powerhouse is almost certain to become the largest economy in the world during this decade, further strengthening its maritime and territorial assertion thanks to rising defense spending and major technological advancements.
Although China is believed to be the source of the pandemic, the relatively transparent containment of the crisis in Beijing, especially compared to its Western rivals, has also bolstered Xis’ ideological self-confidence and ambitions. global. Paradoxically, with greater power comes greater paranoia. With anti-Chinese sentiment reaching historically high levels across much of the West, particularly the United States, China is now bracing for a period of turbulent change.
China is right to be concerned about the commitment of the new Bidens administration to build a strong network of allies, both across the Atlantic and the Indian Oceans, to preserve a free and open international order. In Beijing’s view, the United States is enthusiastic about establishing nothing less than an Asian NATO to constrain its growing ambitions, especially in adjacent waters, but also in the field of advanced technologies. and investments in infrastructure.
Bidens has opened the warning about long-term extreme competition and his commitment to promoting democratic values only exacerbates China’s strategic concerns, paving the way for a new long-term cold war between the two superpowers in Asia. . The Sino-US rivalry will send shock waves throughout the region, both in terms of regional manufacturing networks but also strategic alignments.
Second, full of liquidity and determined to assert regional leadership, China is now in a privileged position to exploit economic turmoil between neighboring states, especially US allies and frontline countries in Southeast Asia. Of concern is the prospect of Chinese bargain hunting in struggling but strategically relevant countries, which are now desperate for investment and economic assistance.
In recent years, Beijing has looked avidly at prized infrastructure and sensitive sites across the Philippines, including huge shipyards and new fields near military installations in Subic Bay and Palawan, two areas that also encompass the disputed South China Sea and regularly host the US Navy assets.
In the absence of significant assistance from the United States and like-minded powers, countries like the Philippines, Cambodia and Myanmar after the coup might be tempted to trade their sovereignty for a short-term economic survival.
Third, there is long-term democratic regression in major Asian democracies. The pandemic has been a boon to full-fledged and aspiring despots in the region, as governments opportunistically exploited emergency powers in the name of public safety to bludgeon the opposition and disfigure democratic institutions.
In Indonesia and the Philippines, the pandemic saw the defense establishment’s systematic infiltration into civilian government, with former generals and acting generals becoming the main architects of apparent public health responses to the crisis.
A related concern is the long-term misery of the middle classes, which has been the backbone of democratization in Asia over the past century. In the midst of widespread misery, many progressives as well as working-class citizens in distress may simply choose to leave their countries or focus on their day-to-day survival rather than continue risky political activism.
As we have seen in countries ranging from Turkey to Thailand, economic distress could reinforce reactionary and authoritarian tendencies of the general population, especially the middle class, as voters seek a steady hand for the recovery and public safety. Asia may be the most dynamic region on the planet, but it could also become a hotbed of inequality and instability in the absence of good governance.
Richard Javad Heydarian holds a chair in geopolitics at the Polytechnic University of the Philippines and author, among others, of The Indo-Pacific: Trump, China and the New Struggle for Global Mastery.
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