Covid-19 crisis has big geopolitical implications for Australia

The coronavirus pandemic will affect the power of countries in different ways. The biggest impact will be reductions in the economic, and therefore military, strength and relative power of competing major states.

The American historian Walter Russell Mead says that ‘the balance of world power could change significantly as some nations recover with relative speed, while others face longer and deeper social and political crises’.

Henry Kissinger’s view is that ‘the world will never be the same after the coronavirus’. He stresses the need for the democracies to defend and sustain the liberal world order. A retreat from ‘balancing power with legitimacy’ will cause the social contract to disintegrate both domestically and internationally. The challenge for world leaders is to manage this crisis while building the future, he says, and ‘failure to do so could set the world on fire’.

Most importantly, the pandemic has widened the confrontation between the US and China, with uncertain results for Australia.

China stands to be a loser, not because its economic power won’t bounce back, but because its ideology forced this pandemic on the rest of the world when it could have been contained at the very outset. By suppressing information about the outbreak in Wuhan, the authorities lost the world at least four to six vital weeks when Beijing could have contained what is now an unprecedented global disaster.

China had been warned about the origins of the 2003 SARS epidemic, which, like the coronavirus, started in a major Chinese city. In both instances, the virus appears to have been transmitted to humans from wild animals sold in China’s wet markets. The leaders from President Xi Jinping down will carry the legacy of their denial and repression as a millstone that will be long remembered outside China as causing large numbers of unnecessary deaths worldwide.

In one fell blow, China has fatally undermined the advantages of globalisation—not only in a health sense, but also in Western countries’ dependence on China for medical drugs and equipment. Countries such as the US will diversify away from such reliance on China, even if that increases costs.

America’s reputation has also been damaged, by its inability to provide leadership in arguably the worst crisis since the end of the World War II. Allan Gyngell, a former head of Australia’s Office of National Assessments, has said that the US ‘looks irrevocably weakened as a global leader’. While China is now belatedly ‘offering its resources and experience in handling the virus to build relationships with other countries’, including in Europe, he notes that the US is ‘absent from any international leadership’.

President Donald Trump has failed to provide consistent and credible responses as the crisis has unfolded.

Rather than prompting a multilateral response, the Covid-19 crisis has ramped up extreme nationalism and harsh border-protection measures as the virus spread rapidly from one country to another. Nations are becoming acutely introverted as they give absolute priority to staving off massive deaths and the threat of calamitous economic damage, and even collapse for some.

In the longer term, this pandemic will likely fade away and most, but not all, advanced economies will snap back into economic growth. But it will be the most damaging crisis by far that our populations have experienced. The remarkably sudden and abrupt onset of this calamity will lead to greater uncertainty, and even fear, about our futures.

Australia will find itself weaker in the post-pandemic world. Serious economic damage may well have a long-term impact on cohesion and trust in our society. The reputation of our American ally has been badly damaged. And it remains to be seen whether we should allow our trade with China to resume its previous predominance.

A major lesson we should learn is to diversify our economic relationships and become more self-reliant, including in terms of our national security. This will involve a radical rethinking of the credible circumstances in which we will have to take the lead during security crises in our region without American involvement.

We will need to re-examine our vulnerabilities in such key areas as fuel supplies, critical infrastructure, and protective and offensive cyber resources. We should rapidly develop a new strategic posture, giving high priority to long-range missile attack capabilities to deter any power from threatening our strategic space.

A further serious geopolitical issue should not be underrated. It’s highly likely that neighbouring countries, critically important to us strategically, will suffer severe structural damage to their societies and economies. The health systems of Indonesia, Papua New Guinea, Timor-Leste, Solomon Islands and Vanuatu may be overwhelmed, with very high death rates.

They will need our help to fight this virus and to restructure their economies. Australia and New Zealand should lead the way. If we don’t, China will probably step in and offer massive economic and medical assistance as it seeks to entrench a sphere of influence in Southeast Asia and the South Pacific, which will directly threaten our own security.

The future of the democracies in Australia’s primary area of strategic interest to our north and east must deeply concern Australian policy planners. We should ensure that our natural focus on our own serious problems doesn’t lead us into the trap of isolationism.

Indonesia, with over 270 million people, and Papua New Guinea, with nearly 8 million, must be priorities. If the coronavirus overwhelms their potentially fragile societies, we should be prepared to contribute generously to a prolonged and expensive effort to rebuild their health systems and economies. It’s not in Australia’s interests to see such strategically crucial neighbours collapse.

Australia’s former ambassador to Indonesia John McCarthy believes that the Covid-19 crisis could fuel support for extremist groups in Indonesia and place the nation’s stability at risk. We need to think carefully about the geopolitical impact of the virus on countries in our immediate region and give it our highest priority.

The nation-state has decisively reasserted itself as a prime actor in the global fight against Covid-19. There will be much greater calls for self-reliance, but as the international community becomes more fractious and the liberal order recedes, we must not lurch into a new bout of introversion.