An Interview Series on the Political Implications of the Pandemic
By Fabiana Natale and Gilles de Valk
For this interview series, Fabiana Natale and Gilles de Valk speak to experts from different backgrounds on the political implications of the COVID-19 pandemic in their respective fields. From their living rooms in France and The Netherlands, they will explore the (geo)political, security, and societal consequences of this pandemic. This interview series marks the launch of a new type of content for the Security Distillery, one which we hope can provide informative and entertaining analyses of an uncertain and evolving development in global politics.
For this fourth episode, we interviewed Velina Tchakarova, Head of Institute at the Austrian Institute of European and Security Policy (AIES). In our conversation, we discussed the future of the global order and Europe’s role in it.
Can you tell us something about AIES and your work?
AIES was launched in 1996 following the accession of Austria to the European Union (EU) in 1995. The institute aims to cover all relevant European and global developments related to foreign, security, and defence policy and their impact on Austria as a member.
My research area for the last ten years has been twofold. On the one hand, I cover the six countries (Belarus, Ukraine, Moldova, Azerbaijan, Georgia, and Armenia) that are located between the EU and Russia. In this so-called ‘grey zone’, some countries are closer to the EU and others are closer to Russia, so this area is relevant to Europe’s foreign and security policy. On the other hand, I focus on ‘Global System Transformation’, trying to make sense of global networks and structures, how they are interlinked, and what happens when they are under pressure. By now, I have placed myself at the intersection of these two areas. It's a merger of politics and economy, where I try to understand the long-term implications of geoeconomic and geopolitical developments.
Could you tell us a bit more about ‘Global System Transformation’? And are we witnessing a global system transformation right now?
Global affairs have become increasingly complex. After the collapse of the Soviet Union, the bipolar system gave way to a period of unilateral United States (US) leadership and globalisation, creating intertwined networks, which facilitated the flow of people, goods, capital, services, and now also data. Globalisation, however, is not a new phenomenon, but a cyclical systemic development that rises and declines over the time. Now, we are in the middle of a de-globalisation cycle. Anyway, these developments and networks merged into something called the ‘global system’. This means that if something happens to one of these networks, it will have long term implications for the others.
Can you give an example?
The 2007/2008 financial crisis, for instance, started in the financial system, but it spread very quickly to the economic and trade system. Hence, the globalisation cycle was then replaced by a de-globalisation cycle. A transformation occurred.
What is really dangerous, however, is a phenomenon called ‘systemic risks’. This concerns shocks with unforeseen effects on other networks and those shocks cannot be absorbed by the system any longer. This actually happened following the 2007/2008 financial crisis, but it is a possible outcome of the Covid-19 pandemic as well. Before the pandemic, we were already in a transitional period of de-globalisation, economic and trade stagnation, determined by fears of a recession, and shocks to the energy system. The sum of all these shocks might produce a large-scale shock to the global system, which will produce a transformational moment and we do not know in which direction it will lead (collapse or adaptation to a new system).
At an online conference in March, you said the pandemic will probably cause a greater shock to the global system than the 2007/2008 financial crisis [1]. Why would that be the case?
The supply chains, which are the bloodlines of the global system, became highly stressed because of the restrictions many countries implemented to contain the pandemic. It caused a crash on the demand side, but also on the supply side. Even when China started to exit the lockdown, there was little demand for Chinese products, as many other countries were still in lockdown.
Now, we are still in a situation of global supply chain stress. Several foreign companies are considering withdrawing from China, as it became clear that some had become dependent on one single state actor. This dependency makes the system less adaptable and robust. Reconfiguring those supply chains, however, is not something that takes one or two years; and it is not sure whether it will be successful. Companies will face defaults or will disappear from the market. Then again, governments will be busy bailing out the big players to save their economies.
I think the pandemic already caused a much bigger and quicker shock than the financial crisis in 2007/08. However, governments and financial institutions were quick in their response compared to the financial crisis and they launched measures of unprecedented scope.
You pointed out the need for European countries to become less dependent on one country, such as China. But will Europe be able to do that, considering the fact that China has large technological assets?
There is no such thing as 100% independence in international relations, although some countries are more dependent than others. China, for instance, will seek autonomy when it comes to technological developments. On the other hand, the EU and its member states can be regarded as a large trade and economic power. However, Europe cannot translate this economic power into geopolitical leverage and hard power, so we are not considered as a powerful collective geopolitical actor. I do not think this is going to change much in the next decade, although I expect there will be efforts by the EU and its member states in all these areas. If this does not succeed, Europe will have to play along geopolitical and geo-economic interests of other external actors, which would be shaping its agenda, or it will be squeezed between rivaling powers.
Personally, I think Europe’s efforts are too late and too little. The EU will not be able to compete with China or the US on a technological level unless there will be tremendous funding, which I do not see happening anytime soon because of the financial impact of the pandemic. The only option would be to align with like-minded third countries.
Do you think the pandemic could be an opportunity for the EU to implement some of the changes that are necessary to become a major geopolitical actor?
I expect there will be a reconfiguration of the supply chains to some extent, bringing production processes back to Europe. However, if I look at the current signals coming from EU institutions and some member states, it seems they try to navigate the muddy waters of volatile, insecure politics. On the one hand, they are trying to be a loyal security partner to the US, while keeping the business relations with China, on the other. I think this is an unsustainable attitude in the long term, because at some point, there will be a moment when relevant actors like the EU and its member states will have to take a side. This will become more difficult the longer they postpone it, even though I understand it might seem better for now. There will be a struggle until the political system finds a new equilibrium and right now, we need more people who have ambitions for our European future, otherwise someone else (external actors) is going to shape it.
In your article ‘The Global Covid-19 System Crisis’, you outlined two possible scenarios: 1) a ‘violent’ systemic decoupling, or 2) a systemic co-existence between a US-led and China-led bloc [2]. Which scenario is the most likely at the moment and why?
In the short term, we are moving towards a ‘violent’ systemic decoupling between US and China. With ‘violent’, I do not mean an armed conflict, but another range of confrontations, such as economic, financial, and trade warfare, that we could already witness last year. I think this will take place regardless of the outcome of the US elections. It might take a different shape under a Democratic president, but it is important to understand that this systemic decoupling has been taking place for the last seven to eight years, so also under the Obama administration. When it comes to the US elections, I think Trump’s only competitor is the way he tackles the pandemic. Prior to March, I did not see a real chance for Democratic candidate Joe Biden, but now I would say the chances are fifty-fifty.
In the long term, however, a new kind of bipolar global order is more likely. A new equilibrium could be reached in global affairs with a US-led and a China-led bloc, while the most relevant geopolitical actors would have to take a side. Nevertheless, it is going to be a very fluid global order. Meanwhile, China’s domestic struggles could change the outcome. Because of COVID-19, China is going through a phase of growing internal pressure. In response, Xi Jinping has begun to centralise his power and to create networks that can consolidate it. In order to be a global competitor, it is necessary to secure power within a country.
However, this does not seem to prevent China from trying to consolidate (economic) power abroad, also in Europe. What can you say about China’s, but also other foreign actors’ activities in the Western Balkans?
We should recognise the fact that foreign actors are active in this region. The Western Balkans are part of China’s Belt and Road Initiative. Ultimately, it aims for the industrial heart of the EU in Western Europe, but it sees the Western Balkans as a possible backdoor entry. Meanwhile, China seeks to gain a political and economic foothold by offering loans for transportation or energy projects, for example. Hence, Europe needs a grand strategic project that focuses on connectivity and infrastructure. As long as this is not in place, other actors will try to offer their projects.
Russia, on the other hand, tries to gain political influence in the region. If China and Russia would merge their economic and political activities, it would be really worrisome for Europe.
The US are present in the region as a security provider and are very much respected. Though when it comes to investments, they are not a substantial actor. On top of that, Turkey and the Gulf States are trying to deepen the relations with countries in the region as well.
Meanwhile, the EU has mobilised a package to support the Western Balkans in addressing the pandemic. To what extent will this package improve the relations between the EU and the Western Balkans, since the relations worsened over disputes regarding EU accession?
The EU is by far the greatest financial supporter in the region but is not always perceived as such. If you look at recent polls in Serbia, for instance, citizens were asked which foreign actor was the greatest contributor - the majority thought it was Russia. This does not reflect the reality. This shows support is also about PR and creating a narrative.
Nevertheless, I would describe the EU accession processes of the countries in the region as positive, because most of those countries as well as most EU member states are interested in their accession. My expectation is that the EU will push for a quicker process and will seek to integrate them rather sooner than later. The region is a big gap on the European map regarding connectivity.
What are the key takeaways of the pandemic?
Pandemics happened in the past and will happen in the future, so we have to make sure that we are better prepared institutionally, politically, economically, and in terms of our health systems. When it comes to a European response, we will have to do better next time on the level of the European institutions as well as the member states. On top of that, we have to realise a pandemic can become a security matter. In that sense, the pandemic was also an eyeopener.
Sources
[1] No Author (2020), ‘Coping with Coronavirus – Euro-Gulf Perspectives’, AIES
https://www.aies.at/aktuell/2020/coping-with-coronavirus.php *
[2] Tchakarova, Velina (2020), ‘The Global Covid-19 System Crisis’, Medium https://medium.com/@vtchakarova/the-global-covid-19-system-crisis-d8d803fade50
The views and opinions expressed are solely those of the interviewee and do not reflect those of the Security Distillery, the IMSISS consortium or its partners and affiliates.