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Publication by

King’s College London Geopolitical Risk Society OCTOBER 2020

SPECIAL REPORT

Crossing the Geopolitical Rubicon: Assessing the Risks in a post-COVID Age THIS ISSUE • •

• •

IN PARTNERSHIP WITH

SOUTH & CENTRAL ASIA - A clash of titans: How far will India and China go to protect their strategic interests in Ladakh? RUSSIA, EASTERN EUROPE & THE BALKANS - Putin’s foreign policy in an anarchic world: Where does Russia stand as a great power in a post-COVID world order? TRANSNATIONAL - Does COVID-19 mark the end of the road for global financial deregulation? And many more


Editorial Team EDITOR-IN-CHIEF

Archishman Ray Goswami

SENIOR EDITOR & CREATIVE DIRECTOR Marcus Tao Mox Lim

COPY EDITORS

Caroline Kamper | Roxana Neagoe

Contributing Writers

William Elliott | Camilla Kristensen | Andoni Hormaza | Sara Lucia Pastrana | Jonas Decker | Iago Rodriguez Clemente | Caroline Kamper | Gabrielle Heal | Paakhi Bhatnagar | Chloe Delaitre | Pauline Darrieus | Natalia Vasnier | Marcus Tao Mox Lim

Credits Images:

Front Cover: Angelina Bambina/Shutterstock Table of Contents: https://www.axios.com/china-coronavirus-censorship-6b563ae2-8778-407d-860b-9c85cb4e33bc.html Editor’s Note: https://www.politico.eu/article/coronavirus-europe-failed-the-test/

Layout & Design Influences:

United Nations Development Programme, “UNDP Brief Gender-Based Violence and COVID-19”, Published May 2020, https://www. undp.org/content/undp/en/home/librarypage/womens-empowerment/gender-based-violence-and-covid-19.html CIMB ASEAN Research Institute, “China’s Belt and Road Initiative and Southeast Asia”, Published October 2018, https://www.lse. ac.uk/ideas/Assets/Documents/reports/LSE-IDEAS-China-SEA-BRI.pdf


KCL Geopolitical Risk Society is the only student society dedicated solely to intelligence and political, security, environmental and financial risk at King’s College London and is one of the only societies of its type in the UK. Our aim is simple. To educate GPRIS members on how political and security risks affect business, NGOs, investors, and society at large. From the ramifications of human rights violations in Xinjiang on sales of tech start-ups in Silicon Valley to the impact of extreme temperature variations in the Peruvian Andes on coffee prices in UK supermarkets, geopolitical risk is all around us in today’s increasingly interconnected world. At GPRIS we have a passion for exploring how risk is identified, analysed, and managed by governments, corporations, NGOs and other stakeholders at all levels from the local to global. Through our offering of speaker panels, networking events, and workshops, we create an environment of opportunity by connecting passionate students with experts in this booming industry. kclgpris.com

KCL International Relations Today is a student-led multimedia publication aimed at giving journalistic exposure to undergraduate students of all disciplines with an interest in international affairs. Alongside our blog on Wordpress, we have a YouTube channel where we upload videos introducing students to theories of international relations as well as videos on contemporary international affairs. We also have an up and coming podcast (https:// soundcloud.com/irtodaypodcast) where students can express their views on contemporary politics. Our goal is to bridge the gap between pedagogy and practice: we want to to engage students in how theories of international relations can be used to understand contemporary international affairs. We pride ourselves in being a diverse and enthusiastic community with a passion to extend the understanding of IR to students of all backgrounds. irtodayblog.wordpress.com @IRblogKCL

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All rights reserved. No part of this publication may be reprinted or reproduced or utilised in any form or by any electronic, mechanical or other means, now known or hereafter invented, including photocopying or recoding, or in any information storage of retrieval system without proper acknowledgment of King’s College London Geopolitical Risk Society. The views, responsibility for facts and opinions rests exclusively with the writers and their interpretation of not necessarily reflect on the views of KCL Geopolitical Risk Society and KCL International Relations Today.

FOREWORD

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foreword

elcome to our first ever Special Report. GPRIS first published larger projects, to supplement our blog, a few years ago with our Annual Risk Report, which will soon be in its third year. We have been thinking of expanding our editorial offering for some time, and there is no time more opportune than this to launch our inaugural Special Report. Our Special Reports will allow our work to be more reactive to geopolitical events, and will be sharp documents of analysis focussed around a specific theme.

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Coronavirus has initiated a new chain-reaction. It has changed the way we live, work and interact. It has shifted the geopolitical axes, created new tensions and given rise to new alliances. It has altered consumer behaviour, and has shocked economies in ways not seen in the West since the Financial Crisis. Its impact will continue to be felt, globally, for years and decades to come, in ways that we might not have even comprehended. It is for this reason that GPRIS was compelled to write on such a monumental topic that is Coronavirus.

Marcus Lim Tao Mox

President & Senior Editor, King's College London Geopolitical Risk Society

We are lucky to have collaborated with KCL International Relations Today, another fantastic student publication at King’s, to ensure our analysis is far reaching and sharp. We would like to thank them for their support. Of course, there would be no report without the contributors. Thank you to all the contributors to this Special Report - you have produced an impactful report that the even largest companies would be proud to publish. A special mention goes to Archishman Ray Goswami, our Editor-in-Chief, for his dedication to this Report. Finally, thank you to you, the reader, and to KCL GPRIS members for your support. We are very excited to start rolling out our plans for the 2020/21 academic year and hope you will continue to join us! Enjoy reading our first Special Report! Marcus Lim & Carla Tilsiter

Carla Tilsiter

Vice President, King's College London Geopolitical Risk Society


foreword

he post-COVID future of the international system is perhaps one of the most important policy concerns facing national and international organizations today. Rising socioeconomic disparity, new modes of warfare, a potential clamp down on international mobility as we know it are all challenges refashioning the contemporary world order. International Relations Today is pleased to collaborate with the Geopolitical Risk Society in addressing some of these important challenges impacting politics as we know it.

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On behalf of IR Today, we would like to thank everyone who contributed to this 2020 October special risk report. We are very proud of having collaborated with the GPRIS team in the creation of this special report, covering how the pandemic has changed the geopolitical landscape of countries around the world and what are the different risks associated with a post-COVID political future. Working with the GPRIS team has been an honour and we would like to specially thank the GPRIS President, Marcus Tao Mox Lim, as well as the GPRIS Editor-in-Chief, Archishman Goswami, who made this collaboration possible.

Paakhi Bhatnagar

Editor-in-Chief, KCL International Relations Today

International Relations Today is a student-led multimedia publisher opening up the world of publishing to university students who are interested in voicing their thoughts on contemporary affairs. Our collaboration with the GPRIS team has been a fantastic way of expanding our commitment to providing our readers with high quality journalism in order to offer a comprehensive understanding of current affairs. It has been an utmost pleasure to work on this project. Paakhi Bhatnagar & Chloe Delaitre

Chloe Delaitre

Editorial Assistant, KCL International Relations Today

FOREWORD

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KCL GPRIS SPECIAL REPORT

Editor’s Note

BY ARCHISHMAN RAY GOSWAMI

Archishman is a second-year BA International Relations student. He is the Editor-in-Chief of KCL Geopolitical Risk Society Blog. He is interested in geostrategy in South, Central and Southeast Asia as well the ways by which interactions between intelligence services, terrorist organisations and organised crime determine contemporary geopolitics

s the international community rallies against the Coronavirus pandemic, one fact has become abundantly clear worldwide, among both policymakers and the citizenry: that the pandemic has broadly defined the trajectory that geopolitics will take over the course of the 2020s. Consequent anti-China public sentiment in several countries across the world has translated into policy on several occasions. What seemed to be a relic of the Cold War in the contemporary geopolitical age characterised by the growing power of non-state actors and the development of transnational capabilities by states in space and in the digital arena – the bipolar world order – appears to be making a comeback. As the world grows increasingly divided and instability becomes something of a new normal, governments and stakeholders in international politics need to brace themselves for great competition, yet remain open to concepts of multilateral and bilateral cooperation.

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It is in this context that the theme for the King’s College London Geopolitical Risk Society 2020 Special Report – ‘Crossing the Geopolitical Rubicon: Assessing the Risks in a post-COVID Age’ – holds the relevance that it does. The articles published in this publication cover a variety of regional issues of global importance, outlining and forecasting the risk that they pose in the post-COVID age. From the global risks of resurging financial deregulation to the contagion’s consequences for Nordic socio-political solidarity, and from the political risk posed by Latin American organized crime outfits’ responses to the pandemic to the knock-on effects of the skirmishes in the Galwan Valley this summer between Indian and Chinese troops, the diverse range of topics written about in the 2020 Report highlight different perspectives on geopolitical risk, as our writers of

various nationalities offer their own unique forms of analysis on issues impacting geopolitics in the age of the Coronavirus. The constant state of flux that characterises the modern world order is palpable as I write this. If any of the developments analysed in the articles published in this year’s Report, written just a month or so before publication seem dated to an audience reading this in October 2020, it only serves to highlight the volatility and constantly-transforming geopolitical environment that we all live in at the moment. Of course, none of this would be possible without the help of our partners. We are immensely appreciative of the support we have received for this project from KCL International Relations Today. Much more remains to be said, but I believe that that would take away from the sharpness and objective nature of the writings published here. We hope that you are as excited about reading KCL GPRIS’s Special Report 2020 as much we were while editing and publishing it!


About the Analysis in this Report In this report, and in forthcoming GPRIS publications, each piece contains a graph. The graphs form part of the GPRIS Risk-O-Meter, an analysis tool developed by our Vice-President, Carla Tilsiter, that helps to quantify our analyses of risk. The Risk-O-Meter aligns GPRIS’s work more closely with industry. Firms in the industry quantify their risks, and so the Risk-O-Meter is a natural step to bring us further in line with industry practice. A blog-post explaining the reasoning behind our Risk-O-Meter can be found at: kclgpris.com/risk-o-meter Methodology The Risk-O-Meter produces a score out of 15. As a general rule-ofthumb, the greater the score, the greater the risk. The framework is deliberately simple, and so there are only 5 categories - we are a student society with limited resources. These assess: Probability - What is the probability that the risk will materialise? Impact - What is the predicted size of impact? Speed - What is the expected speed of onset Involvement - Will regional or non-regional actors be involved? Spill-over - What is the probability of spill-over? Our contributors decide on the score they give to the risk-in-question. They use their understanding of the risk-in-question to produce a score, backed up with data they have analysed where possible. Of course, this score is best-fit and is based solely on contributors’ understanding.

Please kindly note that the Risk-O-Meter is for education and student analytical purposes only. A Risk-O-Meter score or any discussion in likeness to the Risk-O-Meter does not constitute any form of advice or recommendation, financial or otherwise.

RISK-O-METER | 07


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THE WORLD AFTER COVID-19 Crossing the Geopolitical Rubicon: Accessing the Risks in a post-COVID age

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North & Central America Paakhi Bhatnagar & Chloe Delaitre

Latin America & the Caribbean

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Iago Rodriguez Clemente

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Sub-Saharan Africa Lucia Pastrana

Middle East & North Africa (MENA) Pauline Darrieus

South & Central Asia Camilla Kristensen

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Western Europe

Russia, Eastern Europe & the Balkans

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East & Southeast Asia

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Oceania

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Transnational Impact

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Scandinavia

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William Elliott

Gabrielle Heal

Caroline Kamper

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Jonas Decker

Natalia Vasnier

Andoni Hormaza

Conclusion: Litmus Test for Global Governance Marcus Tao Mox Lim

Copyright Š King's College London Geopolitical Risk Society All rights reserved. Published October 2020. No part of this publication may be reprinted or reproduced or utilised in any form or by any electronic, mechanical or other means, now known or hereafter invented, including photocopying or recoding, or in any information storage of retrieval system without proper acknowledgment of King’s College London Geopolitical Risk Society. The views, responsibility for facts and opinions rests exclusively with the writers and their interpretation of not necessarily reflect on the views of KCL Geopolitical Risk Society and KCL International Relations Today.

TABLE OF CONTENTS

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North & Central America

BY PAAKHI BHATNAGAR & CHLOE DELAITRE

Paakhi Bhatnagar is a third year International Relations student. She is the Editor-in-Chief of IR Today and the Copy Editor for Strife Journal. She also writes for London Student as the City News Editor. Her areas of interest include socio-economic development, cybersecurity, and the use of digital technologies in conflict reconciliation. Chloe is a second year International Relations student. She is the Editorial Assistant of IR Today. She is extremely passionate about international affairs. Her multicultural background allows her to tackle international issues through different perspectives.

growth of the median income of the upper class has been, on aggregate, 48% more than the lower class. In fact, the same survey has highlighted that as of 2016, upper class families have 75 times as much wealth as lower class families. [2] For a developed country boasting a freedom and democracy, these are dire statistics both for its image as a liberal global leader internationally and internally.

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he Covid-19 pandemic has rapidly become one of the worst economic crises faced by the liberal capitalist system. With global governments stretched too thin: juggling unemployment, political instability, and containing a global pandemic; socioeconomic disparity has become an important risk factor disrupting the invisible hand of our neoliberal system. This report analyzes the risks relating to increased socioeconomic disparity within the United States.

1. Rise in Unemployment for the lower class

Economic crises have a tendency to accelerate existing trends meaning that this socioeconomic disparity is very likely to increase over the course of the next five years. During the first two years of recovery after the 2007 economic crisis, the aggregate net worth of the wealthiIncreasing income inequality: dwindling faith in American ne- est 7% of US households increased by oliberalism 28% whereas that of the lower 93% decreased by 4%. [3] Even before the onset of the COVID-19 pandemic, American society had been riddled with inter-class disparity. A 2018 survey Pietro Pizzuto has shown us that income conducted by the Pew Research Center indicates that from 1970 inequality continues to rise for over 5 to 2018 income in lower class households has only increased by years after an economic crisis. [4] Al43.5% as opposed to an increase of 64.5% in the upper class. [1] ready, the unemployment rate in the UK The middle class has only seen an increase of 49% in the same has surpassed that of the Great Recestime period. sion. However, a unique aspect of pandemic-induced unemployment is that This trend highlights that since the Great Recession, the rate of with the temporary shutdown and down-


sizing of the service sectors, precarious workers (like waiters, domestic workers etc.) are disproportionately affected than those with a higher education degree and working in tertiary sectors. [5] This leads to further the compounding of class disparity in an already capricious environment. 2.

wealth as black families and 3 times as much as Hispanic families. [7] This research shows how low levels of wealth are much more prevalent among black and Hispanic households than among white households.

Clamping down on Social Services

The fiscal pressure of the The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the cost of heavy bailouts has rendered the American economy more vulnerable than ever before. Despite the generous funds set aside in the CARES Act for households and businesses – it is unlikely that the American society can rely on the government to cushion their recovery after the pandemic. Although recent discourse has been fixated on a seemly end to austerity, the reality of the revenue from withholding tax (already at an all-time low in this fiscal year- see figure below) might squeeze government’s ability – and want – to put money aside for social services. With the unemployment benefits already scrapped, America is likely to see the onset of austerity in order to cover the large losses in tax revenue and mitigate tax-payer compliance. [6] Since it is the lower class that rely more heavily on social services (like state-funded education and healthcare) it will be these classes that will bear the brunt of a slow and torturous economic recovery. Increasing Social Inequality: decreasing faith in America’s political culture The disproportionately higher rates of COVID-19 fatalities amongst Black and Hispanic communities along with the recent murder of George Floyd by a police officer has put a magnifying racial lens on socioeconomic disparities within America. 1. COVID-19 has drawn the veil on systemic racism and inequality One of the systemic inequities in American society that COVID-19 has highlighted is America’s persistent wealth disparity between white households and their black and Hispanic counterparts. According to research carried out by the Pew Research Center in 2018, among lower income and middle-income households, white families have 4 times as much

America’s racial and ethnic wealth inequality is intrinsically linked to how the healthcare crisis has had the heaviest toll on communities of POC, as economic vulnerability often translates to poorer health outcomes. The fact that black Americans and Hispanic communities are disproportionately represented among lowwaged, front line, essential workers which are unable to safely quarantine makes these groups much more vulnerable to the virus. [8] Indeed, the data is clear; systemic racism across all socioeconomic areas of society has made POC the targets of the pandemic. Latino and African-American residents have been three times as likely to become infected by their white neighbors, and are twice as likely to die from the virus as their white counterparts[9]. These communities are now at greater risk than ever as the socioeconomic disparities that had simmered in the background of American consciousness are blatantly killing Americans according to race and ethnicity. 2. BLM: the pandemic has changed America’s political culture The death of George Floyd at the hands of the police in Minneapolis sparked a surge of national outrage at the treatment of Black Americans in American socie-

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ty, especially in the criminal justice system. The Black Lives Matter protests have demonstrated a nation eager to reckon with the darker sides of its society; four recent polls, including one released by Civis Analytics, a data science firm that works with businesses and Democratic campaigns suggests that about 15 million to 26 million people in the United States participated in the protests. [10]

This indicates that America may well be at a racial and political crossroad. With over 50% of Americans supporting BLM, there is a stronger awareness of racism and discrimination, and an overwhelming consensus about confronting racial inequality. This is especially prevalent amongst the millennial and Gen Z groups, meaning that this Spring’s mass uprisings may prove a galvanizing cause for the political engagement of America’s racially diverse generations. Current polling reveals a shift to the left in the public position on key race related issues, demonstrating that BLM may well have changed America’s political culture and that this shift in attitudes may certainly impact the upcoming presidential elections. Conclusion The COVID-19 pandemic has laid bare America’s many domestic problems: both socioeconomic and political. This report has highlighted two important facets that pose the greatest risks for American society: class disparity and racial tensions. American society seems to be moving more left than its government is ready to handle. In order to ensure that class and racial disparities are not worsened by the aftermath of the pandemic, it is important for Washington to adopt a more systemic and long-term big government approach. This includes providing sustained social security for its most vulnerable economic classes as well as unrooting systemic racism prevalent in the country.

Sources [1] Juliana Menasce, Horowitz, Ruth Igielnik, and Rakesh Kochhar, “Trends in Income and Wealth Inequality,” (Pew Research Center: January, 2020), https://www.pewsocialtrends.org/2020/01/09/ trends-in-income-and-wealth-inequality/. [2] Ibid. [3] Susan K. Urahn and Erin Currier, et. al., “Pursuing the American Dream: Economic Mobility Across Generations,” (The Pew Charitable Trusts, 2012). [4] Davide Furceri, Prakash Loungani, Jonathan D. Ostry, and Pietro Pizzuto, “COVID-19 will raise inequality if past pandemics are a guide,” VoxEU, (Center for Economic Policy Research, 2020), https://voxeu.org/article/covid-19-will-raise-inequality-if-past-pandemics-are-guide. [5] Rakesh Kochhar, “Unemployment rose higher in three months of COVID-19 than it did in two years of the Great Recession,” (Pew Research Center: June, 2020), https://www.pewresearch. org/fact-tank/2020/06/11/unemployment-rosehigher-in-three-months-of-covid-19-than-it-did-intwo-years-of-the-great-recession/. [6] Fiscal Affairs, Special Series on Fiscal Policies to Respond to Covid-19, (International Monetary Fund, 2020). [7] Kochhar, “Unemployment rose higher in three months of COVID-19 than it did in two years of the Great Recession.” [8] Miriam Jordan and Richard A. Oppel Jr., “For Latinos and Covid-19, Doctors Are Seeing an ‘Alarming’ Disparity,’ (New York Times, May, 2020), https://www.nytimes.com/2020/05/07/us/coronavirus-latinos-disparity.html. [9] “Editorial: COVID-19 is disproportionately killing minorities. That’s not a coincidence,” Los Angeles Times, (April, 2020), https://www.latimes.com/opinion/story/2020-04-08/coronavirus-racial-disparity. [10] Christine Ro, “Coronavirus: why some racial groups are more vulnerable”, BBC, (April, 2020) https://www.bbc.com/future/article/20200420-coronavirus-why-some-racial-groups-are-more-vulnerable. Image Credits https://www.axios.com/coronavirus-timeline-trump-administration-testing-c0858c03-5679410b-baa4-dba048956bbf.html https://freedomhouse.org/article/how-covid-19-restrictions-have-deepened-existing-inequality


Latin America & the Caribbean

BY IAGO RODRIGUEZ CLEMENTE

Iago Rodríguez Clemente is a final year Philosophy, Politics and Economics student. His interests include transnational security threats, conflict resolution and international trade across Latin America and both shores of the Mediterranean. Particularly, he is interested in researching at the intersection between conflict, aid and development in the context of the stabilization of fragile states.

COVID-19 and violence in Latin America: How is organized crime responding to the pandemic?

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he recession stemming from the health crisis continues to pose a challenge for public administrations throughout the world, after having already delivered a severe blow to the private sector. This is not only true for legal businesses. Illicit trade is agonizing amid border restrictions, lockdowns, and the disruption of global supply chains.

Latin America contains salient examples of governance by nonstate actors whose revenues depend to an extent on accessing illegal markets. Across the region, a number of criminal organizations have proved capable of collecting taxes, enforcing law and order, and providing public goods. Most remarkably, some armed groups have become de facto administrators of areas where state institutions are nonexistent and government presence is weak. The question that motivates this article is whether criminal groups will be able to capitalize on the health crisis to expand their power, whilst innovating ways to continue to operate in illegal markets under new, worldwide restrictions. The pandemic has highlighted the areas in Latin America where these regional actors enjoy a higher state capacity than national

governments. Brazil’s largest criminal organizations, Primeiro Comando da Capital (PCC) and Comando Vermelho¸ have imposed curfews, banned tourists from entering areas under their control, provided hand sanitizer, and applied price controls to prevent speculation with medical products. [1] In some rural areas of Colombia, Ejército de Liberación Nacional announced a unilateral ceasefire and enforced quarantine restrictions through threats, altogether with less organized sub-militias formed after the demobilization of FARC. [2] Barrio 18 and MS13, two criminal groups with a major presence in El Salvador and Honduras, suspended extortion demands to local businesses, a payment known as ‘renta’, and delivered food baskets. The latter group also established opening hours for businesses and allows only one family member to do shopping in an attempt to contain the virus in their communities. [3] The governance role played by all these non-state actors in responding to the pandemic confirms that the relations between criminal organizations and local communities are far more complex than merely an extraction of revenue. Criminal groups secure a degree of popular legitimacy by offering protection in areas administered by them. Legitimacy is required to maintain the group’s monopoly on the use of violence and allows organizations such as the PCC to manage disputes and punish infractors through criminal tribunals. [4]

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In information-centric theories of asymmetric conflict, an effective provision of public goods by criminal organizations is expected to increase violence against state forces. [5] Although technically and militarily superior, government agencies are dependent on information provided by civilians to disrupt illicit activities and target criminals. Civilian populations will only tolerate a certain level of violence inflicted in their community before deciding to share information with state actors. Citizens are aware that the services and aid provided by criminals are conditional on these groups controlling the territory; they also know that there is no alternative welfare mechanism provided by the government. With increased security and welfare provided by criminals, civilians will become more violent-tolerant. In other words, the threshold at which citizens decide to tip information will rise and organized crime will adjust the level of violence accordingly.

Preliminary data on violence since lockdowns were implemented across Latin America suggested a generalized drop in violent crimes across the region, with the exception of Brazil. Overall, those countries which implemented stricter lockdowns also experienced sharper decreases in crimes against strangers on the street. [6] This was the case in Mexico, Colombia and in the northern triangle (Honduras, Guatemala, El Salvador). In the latter, once one of the bloodiest countries in the world, violent crimes dropped 28.7% during the first three months of 2020 compared to the previous year. [7] The simplest explanation for the decline in crime rates against civilians is that it was due to people complying with curfews and trying to be off the street. This can potentially accommodate why countries like Brazil,

which had softer or inexistent lockdowns in some areas, have not seen sharp decreases in crime rates. Nevertheless, this trend has been reverted over the last months due to a surge in homicide rates across several regions in Mexico, Colombia, Brazil and Honduras. Although violence against civilians still remains at historic lows in many areas, the rise in lethal crimes is led by a surge in inter-gang violence. [8] Armed groups are starting to compete for shrinking markets and use violence to exert their control over market shares. Registered homicides in Brazil have followed an upward trend since January, and are higher relative to last year’s statistics. [9] In particular, the highest increase in lethal crimes happened in the state of Ceará. This region has seen the bloodiest February since 2013 with an average of 26 deaths per day. Mean deaths in Ceará during February ‘19 were around 8 per day. [10] The north-eastern region is disputed by several criminal factions as the area is crucial for controlling one of the most prominent drug trafficking routes to Europe. The restructuring of illicit narcotics trade will continue to alter violence trends in the months to come. Sources [1] Blois, Caio. 2020. “Tráfico Impõe Toque De Recolher Em Favelas Do Rio Em Meio A Crise Do Corona”. Notícias UOL. [2] Asmann, Parker. 2020. “Implicaciones Del Coronavirus Para La Gobernanza Criminal En América Latina”. Investigación Y Análisis De Crimen Organizado. Insight Crime. [3] Martínez, Carlos, and Efren Lemus. 2020. “Pandillas Amenazan A Quien Incumpla La Cuarentena”. El Faro. [4] Berg, Ryan, and Andrea Varsori. 2020. “COVID-19 Is Increasing The Power Of Brazil’s Criminal Groups”. LSE Latin America and Caribbean Centre. [5] Berman, Eli, and Aila M. Matanock. 2015. “The Empiricists’ Insurgency”. Annual Review Of Political Science 18 (1): 443-464. Berman, Eli, Joseph H Felter, and Jacob N Shapiro. 2018. Small Wars, Big Data: The Information Revolution in Modern Conflict. [6] Contreras, Chino. 2020. “As Coronavirus Cases Rise In Latin America, Murder Rates Fall.”. COVID-19 World News. [7] Ibid. [8] EUROPOL. 2020. “Beyond The Pandemic: How COVID-19 Will Shape The Serious And Organized Crime Landscape In The EU”. European Union Agency for Law Enforcement Cooperation. [9] Carvalho, Ícaro. 2020. “Homicídios Aumentam 28% Durante O Mês De Abril No RN”. Tribuna Do Norte. [10] “Número De Homicídios Cresce 90% No Ceará Nos 22 Primeiros Dias De Abril”. 2020. Ceará G1. Image Credits https://www.fes.de/en/e/when-will-latin-american-governments-realize-that-they-are-in-a-state-building-competition-with-organizedcrime-did-covid-19-change-the-game https://www.infobae.com/america/colombia/2020/04/12/paradoja-del-coronavirus-en-colombia-los-grupos-criminales-entraron-en-tregua-y-amenazan-de-muerte-a-quien-incumpla-la-cuarentena/


South & Central Asia BY CAMILLA KRISTENSEN

Camilla is a second-year International Relations student, who is interested in politics, diplomacy and international law. She is the Secretary-General of ATUMUN.

the spread of the pandemic and having exploited it diplomatically and economically. Therefore, the economic efforts taken by the Indian government against China are unlikely to work as a temporary measure, and may indeed intensify as military and diplomatic tensions grew again in later August and early September 2020. However, neither country is interested in an armed conflict with the other, given both New Delhi’s and China’s status as declared nuclear-armed states.

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How will COVID-19 influence the border conflict between China and India?

ven as the COVID-19 pandemic gathers momentum the world over, the Sino-Indian border has borne witness to resurging violence and hostilities. Along with the outright risk of armed conflict at the border, the current pandemic has amplified dormant concerns within India on New Delhi’s economic dependence, or the lack thereof, on China. This has led to restrictions on foreign direct investment from countries with which India shares a border. How will COVID-19 affect the economic and financial relationship between India and China? Which financial risks will a prolonged pandemic bring? Are we at risk of kinetic war between the two most populated countries in the world? How will the Indian public opinion of the Chinese government influence the Indian government’s response to the conflict? I will attempt to answer some of these questions in the article and will argue that policymakers in both India and China will need to account for global and domestic reactions, although as a democracy, domestic reactions will hold greater consequence for India. Indian public opinion of the Chinese government remains unfavourable, with both the public and the country’s broader strategic community blaming the Chinese government for having facilitated

What happened in the Galwan Valley? On June 15th 2020, the deadliest clash between India and China since 1967 took place in the Galwan valley. About 20 Indian soldiers were confirmed dead and Chinese deaths were reported too. [1] According to the International Institute for Strategic Studies (IISS), there is evidence that both countries have since reinforced their positions on the border significantly. [2]The stakes are always high when soldiers from the two nuclear powers engage in skirmishes along their frontier, as such conflicts can trigger a chain reaction with a variety of unforeseen consequences. Why did this conflict occur? It is reasonable to claim that China has taken advantage of the pandemic to further its geopolitical agenda. [3] [4] Chinese foreign ministry spokesperson, Lijian Zhao, has claimed that India deliberately provoked the Chinese troops as they crossed the Line

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of Actual Control. [5] Alternatively, the clashes can be viewed as China’s retaliation against India’s consolidation of political control over Kashmir in 2019 and the Indian Army’s construction of strategic infrastructure along the border. [6] However, according to Indian analyst Brahma Chellaney, the skirmishes were the culmination of months of preparation and calculations. [7] Indian policymakers, such as Mr Chellaney, argue that China is using the pandemic to further its geopolitical position without interference. Seen in a wider geopolitical context, these claims are supported by evidence such as Beijing’s enforcement of national security laws in Hong Kong to dismantle the “one country, two systems” framework. [8] Thus, there are grounds for such an argument which Thomas Joscelyn points out in his article for the Foundation for Defense of Democracies. [9]

Indian public opinion and its effects on the Sino-Indian relationship The negative public perceptions of China within India are forecast to manifest in the diplomatic relations between the two countries. Reports indicate that the Chinese government was not transparent about the level of spread of COVID-19 and silenced both doctors and WHO. [10] As of the 30th of July 2020, India had 1,639,350 cases of COVID-19. [11] The economic crisis following lockdown will likely be large, and the Indian public is likely to blame China for the damage. Already, the Indian economy experienced the most drastic fall in decades in the second quarter of 2020 by a striking 23.9%. [12] In regards to the Indian public opinion of China and COVID-19, many within the Indian diplomatic community have echoed

the rising anti-China sentiment worldwide amid COVID-19 and have blamed China for its initial response, pointing to the lack of transparency and democracy in China as part of the problem. [13] Additionally, according to a study done by the Pew Research Center, only 23% of Indians surveyed had a favourable view of China in 2019 and there is no doubt that the ongoing pandemic has intensified this mistrust. [14] While South Block might not blame China officially, Chinese behaviour will deepen the distrust with China and impact the Sino-Indian relationship and further lead to greater domestic scrutiny in India with regards to this relationship. [15] While India’s Prime Minister Narendra Modi will have to respond to public pressure to act against China, neither he nor his Chinese counterpart are willing or able to risk full-scale war. [16] The Indian public opinion and anti-Chinese sentiment will make the process of agreement difficult and thus lead to the risk of this conflict being unsolvable. COVID-19 and the economic relationship between India and China In April 2020, India tightened its policy on foreign direct investment from neighbouring countries in response to China’s territorial revisionism. [17] This means that any investment from Chinese industries must be pre-approved by the Indian government. As of September 2019, Chinese investment activities in India were worth approximately US$ 5.08 billion in total. Additionally, China remains India’s largest trading partner. [18] Therefore, India’s efforts to reduce economic dependence on China holds great significance for her, especially as policymakers in New Delhi step up efforts to strengthen domestic industries and become increasingly self-sufficient. This partially explains the growing worries within the industrial sectors of both countries regarding the geopolitical risk posed by the possibility of war. To sum up, the financial and economic relationship between the two countries are deteriorating rapidly. Although neither party wants a kinetic war, growing domestic anti-Chinese sentiment make it increasingly difficult for Prime Minister Modi to take any actions that are seen as appeasing China, even if this is done to stabilise their mutual economic relationship. Thus, there are large scale financial risks for South Asia as a whole to consid-


er given the possibility of an Indo-China conflict. Superpower involvement Another possible risk to consider is the possibility of superpower involvement as this border struggle draws attention from large powers such as the US and Russia. US President Donald Trump offered to mediate between India and China back in May. [19] Similarly, Russia remains in communication with both sides and has expressed its appreciation of efforts taken to de-escalate the conflict. [20] In June, the Indian Defense Minister Rajnath Singh visited Moscow during the Victory Day parade. It has been confirmed that a meeting between representatives from India, China and Russia took place during the parade. [21] This illustrates not only the level of threat but also the eagerness of other powers to become involved. When it comes to the established diplomatic relations between the US and China and India, the current tensions between the US and China are definitely expected to play a role. The US and India largely agree when it comes to China, as they agree that China poses a challenge for both countries, and further agree that their partnership is critical for any response to Chinese territorial ambition. [22] Contrary to the sanctions the US has put on China in response to the national security laws in Hong Kong, the US has not been as aggressive in its response to the border skirmishes. [23] This could be explained partially by how high the stakes are, if tensions are further heightened between two nuclear powers. On the other hand, Russia’s relationship with the two countries is more complicated. Russia has long-standing diplomatic ties with India and a strong economic relationship with China, illustrated by the fact that China and Russia traded for US$ 110 billion in 2019. [24] Even though the two large powers have interests in these conflicts, it is unlikely that this will catalyse a potential conflict in any way, as neither party is interested in a kinetic war and both superpowers have emphasised the need for China and India to cooperate. Conclusion Whilst the episode in the Galwan valley might heighten the perception of geopolitical threat, an outright war between India and China is unlikely. [25] COVID-19 will have a significant impact on Sino-Indian relations in the future, where the changes in economic relations can lead to significant financial destabilisation and risks. Further, the anti-Chinese sentiment rampant in India’s domestic and policymaking circles makes it unlikely that

this will change any time soon. There is automatically a significant level of risk with such a border conflict, which is also evident from the superpower interest. Despite the attention from the two superpowers, it is unlikely that this will accelerate the conflict, as neither party is interested in a kinetic war and both superpowers have emphasised the need for China and India to cooperate. Sources [1] Shiv Aroor, “Violent India-China clash at LAC: What really happened that night”, indiatoday.in, 17/06/2020, [2]Wendy Wu, “Coronavirus, not border clash, to top agenda at China-India-Russia talks, observers say”, scmp.com, 20/06/2020 [3]Al Jazeera, “China says progress made in latest border talks with India”, aljazeera.com, 15/06/2020, [4]Brahma Chellaney, “India’s Appeasement Policy Toward China Unravels“, project-syndicate.org, 05/06/2020 [5] BBC, “Galwan Valley: China accuses India of ‘deliberate provocation’“, bbc.com, 20/06/2020 [6] Antoine Levesques, “India–China tensions: what next for India?”, iiss.org, 30/07/2020 [7] Chellaney, 2020 [8] Thomas Joscelyn, “CHINA’S SKIRMISH WITH INDIA IS ONLY ITS LATEST AGGRESSION DURING THE PANDEMIC”, fdd.org, 17/06/2020, [9] Ibid, [10] Rajeswari Pillai Rajagopalan, “How Is COVID-19 Reshaping China-India Relations?”, thediplomat.com, 02/04/2020 [11] Worldometer, “world/countries/India,” Worldometer.info, 30/07/2020 [12]Sameer Yasir and Jeffrey Gettleman, “India’s Economy Shrank Nearly 24 Percent Last Quarter“, nytimes.com, 31/08/2020 [13]Tanvi Madan, “How is the coronavirus outbreak affecting China’s relations with India?“, Brookings.edu, 30/04/2020 [14] Kat Devlin, “While India’s public views Trump positively, there’s less enthusiasm for his trade policies”, pewresearch.org, 20/02/2020 [15] Rajeswari Pillai Rajagopalan, “How Is COVID-19 Reshaping China-India Relations?”, thediplomat.com, 02/04/2020 [16]Bloomberg, “Modi accused of surrendering to China after denying border incursion”, smcp.com, 20/06/2020, [17] Brahma Chellaney, “India’s Appeasement Policy Toward China Unravels“, project-syndicate.org, 05/06/2020 [18]Embassy of India, Beijing, “Economic and Commercial Data to be updated on the Mission Website”, eoibeijing.gov.in, 2020 [19]Elizabeth Puranam, “Trump offers mediation in China-India dispute”, aljazeera.com, 28/05/2020 [20]Sidhant Sibal, “India-China stand off: Russia in touch with New Delhi, Beijing“, wionews.com, 04/06/2020 [21]Yuandan, Guo, “Chinese Defense Minister to attend Russian parade, meeting with Indian counterpart ‘likely’”, globaltimes.cn, 23/06/2020 Abhinav Sahay, “India confirms participation in trilateral with China and Russia on June 23“, hindustantimes.com, 18/06/2020 [22] Tanvi Madan, “The pitfalls and promise of a US-India partnership driven by China“ Brookings.edu, 27/02/2020 [23] Thomas Hale, “Hong Kong and China hit back at US sanctions”, ft.com, 08/08/2020 [24]Danil Bochkov, “Why Russia’s relations with India and China will survive Galwan border clash“, smcp.com, 30/06/2020 [25] Meia Nouwens and Henry Boyd, “Understanding the military build-up on the China–India border”, iiss.org, 18/06/2020 Images Credits https://news.sky.com/story/coronavirus-record-daily-jump-in-infections-take-indias-covid-19-cases-above-2m-12044101

SPECIAL REPORT: SOUTH & CENTRAL ASIA

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Russia, Eastern Europe & the Balkans

BY WILLIAM ELLIOTT

William is a final year undergraduate student at King’s College London, studying Classics with English, due to graduate in 2021. His academic interests include analysing geostrategic interactions between countries and assessing how these dynamics impact foreign policy, domestic politics and financial markets. Alongside his studies he works as an intern at The Cabinet Office in Whitehall.

2008 could resurge whenever Russia’s activities in the region, or Putin’s approval ratings, are threatened. Such undeterred attrition diminishes Western Europe’s opportunity to establish a substantial presence in the region. However, the European Union response has lacked robust action. In 2017, the EU Commission President at the time, Jean-Claude Juncker, said: ‘We must also maintain a credible enlargement perspective for the Western Balkans... Accession candidates must give the rule ussia’s plans concerning Eastern Europe and the of law, justice and fundamental rights utBalkans have been no secret. Soft-power incentives, most priority’. [3] assertive diplomacy and outright military intervention have led to deep incursions into the region. Russia’s Western Balkan states acquiring EU continued presence is reinforced by systematic real estate invest- membership has long been promoted ment, natural gas exports, pipeline development, tourist revenue as essential to balancing power dyand political mediation. Underlying historical and cultural align- namics in the region. However, raisment have also facilitated the Kremlin’s strategic endeavours, ren- ing the standards necessary to attain dering Western influence diminutive. However, the ramifications EU membership have not yet come to of the COVID-19 pandemic cannot be underestimated. What has fruition - a process initiated in the midoften been considered Russia’s insurmountable grip is now at risk. 1990s. [4] COVID-19 risks exacerbating Historically, Eastern Europe and the Balkans have been integral this disparity rather than reconciling it. to Russian foreign policy, resulting in a profound connection with Preempting a second wave, prioritising the Russian people. Following annexation of the Crimean Penin- economic recovery and adjusting to the sula in 2014, Vladimir Putin benefitted from a stratospheric rise in ‘new normal’ are the central issues preoccupying Government. Managing seishis approval ratings. [1] mic COVID-19 implications have for the Crimea was not just a rebuttal to Western interference in the re- time being displaced efforts to complete gion, it was considered a historic reunification which resonated arbitrary EU milestones. with millions of Russians. Such consensus emboldened the Kremlin’s interventionist ethos. The alleged 2016 Russian-sponsored Similarly, the EU cannot offer the decicoup in Montenegro demonstrates this.[2] Inevitably, this poses sive leadership required to guide Balkan nations into Europe as member states. an ongoing risk to non-Russian interests in the area. Events like those in Montenegro, Crimea and the brief Russo-Georgian war in Recent figures show European econom-

R


ic recovery stalling as COVID-19 cases rise in Spain, France and Germany. Rosie Colthorpe, of Oxford Economics, said: ‘Recent flare-ups of the virus in several European countries risk derailing this recovery’.[5] Diverted by the complex impact of COVID-19, the European Commission’s Balkans strategy risks further delay. This only assures Russia’s hold on the region. Incisive Russian autocracy is anathema to tentative EU strategy. Resolute, authoritarian Government will always be more decisive than a supranational organisation run by committee. In relation to the Balkans, the EU Commission is a step behind the Putin Government. Whilst the EU offers the prospect of coveted membership, Russia provides the greatest source of foreign direct investment.[6] Indeed, Russian tourism accounted for nearly 30% of overnight stays in Montenegro last year alone. [7] Russian investment is so profound, the Montenegrin Ministry of Sustainable Development and Tourism has asked the National Coordination Body for Infectious Diseases to allow Russians to reenter the country.[8] Additionally, Russian real estate investment in Montenegro is unparalleled - a trend replicated across the Western Balkans. Human capital and financial revenue will determine the future of the Balkans and Eastern Europe post-COVID-19. Influxes of capital from Russian tourists, businesses and Government may be immediately prioritised over further negotiations and delay with the EU.

Lack of an actionable EU strategy has also encouraged a multilateral field of state actors to vie for position. Turkey’s gas exports partnership with Russia demonstrates this. ‘TurkStream’ was inaugurated on February 8, 2020, and Russian gas reserves will now be delivered directly to Turkey’s transportation network via the Black Sea. However, the state-owned Russian energy giant, ‘Gazprom’, has planned the infrastructure project into two ‘strings’.[9]

The second phase, when constructed, will offer 15.75bn cubic meters of gas to Balkan consumers in South and Southeastern Europe. ‘Gazprom’s’ manoeuvre is a testament to geostrategic ingenuity. By securing the gateway of gas exports into Europe, Russia has consolidated its foothold in the European energy market - as Ukraine’s own transit role diminishes. Whilst Europe’s ability to compete rapidly erodes, Russia’s position as the preeminent supplier of energy to Europe appears increasingly certain.

However, COVID-19’s impact on the oil-and-gas industry has been phenomenal. ‘Gazprom’ alone is expecting a 37% decrease in total gas export revenue in 2020 compared to 2019.[10] Russia and Turkey’s diplomatic relationship, especially in the Balkans, depends on this revenue. In 2015, the Turkish Air Force shot down a Russian aircraft. Putin warned Turkey of ‘serious consequences’.[11] Ultimately, Russia’s response was non-committal. Instrumental to this restraint was ‘TurkStream’ - gas shipments which would go on to reach 201.8bcm in 2018.[12] Energy exports sustain their relationship. Diplomatic ties dependent on commercial prosperity are vulnerable in an economic downturn. Plunging energy prices may, at least temporarily, impact joint efforts in the region. COVID-19’ ‘new normal’ which will encourage a shift towards more sustainable energy - could permanently undermine relations. Furthermore, immediate political turmoil compounds issues. Russia’s expansionist energy policies are not exclusive to Eastern Europe. Prior to ‘TurkStream’ was ‘NordStream’, ‘Gazprom’s’ gas pipeline stretching from Vyborg in Russia to Greifswald in Germany. Calls for its

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sequel, ‘NordStream2’, to be scrapped have gained traction following the alleged poisoning of Kremlin opponent, Alexei Navalny. German Chancellor, Angela Merkel, is under increasing pressure to discontinue the project. However, Merkel is non-committal. Norbert Röttgen, chairman of the Bundestag’s influential foreign affairs committee, says: ‘Once again it’s been proven that [Putin] has nothing to fear from Europeans’.[13] The likelihood of ‘NordStream2’ being discontinued in its entirety is slim. However, Russian infrastructure projects are becoming politically unviable. Aligning with Russia’s antagonistic brand risks unsettling Russia’s Western partnerships and may impact future projects. Russia’s valuable energy subsidies underpin foreign relationships. If those agreements diminish in value this risks disrupting geopolitical hierarchy in Eastern Europe and the Balkans. Belarusian President, Alexander Lukashenko’s, turbulent relationship with Putin exemplifies the potential for instability. Energy is central to economic cooperation between Russia and Belarus. Indeed, their supranational ‘Union State’ intended to establish a close political relationship, incentivised through discounted oil prices for Belarus. However, Yauheni Preiherman, Director of the Minsk Dialogue Council on International Relations, argues: ‘Russia has begun to condition all its economic relations with Belarus on deeper integration...but [Minsk] declared that it would not allow any supranational body to limit its sovereignty’.[14] Oil-and-gas incentives alone may no longer be enough to impel unconditional assent. COVID-19’s direct impact on market value has further weakened Russia’s most vital commodity and undermined its principal negotiating tactic. Despite this, Russia’s resources comprise many alternatives to purely economic enticement. In Belarus, Lukashenko’s sixth election was the toughest of his 26-year tenure. His primary opposition, Svetlana Tikhanovskaya, attracted global recognition and significant domestic support.[15] Overwhelming election results in favour of Lukashenko provoked an unprecedented, ongoing backlash from Belarusian demonstrators, political institutions and global media. Olga Karatch, an activist from Vitebsk, said: ‘This is the first time Belarusians believe - really believe - we can change something’.[16] Clearly in Belarus there is a desire for regime change. However, support for

Lukashenko’s embattled administration is something Vladimir Putin can provide. In a recent interview, Putin declared: “[Lukashenko] asked me to form a dedicated reserve of law enforcement officers, and I did it”.[17] We could see more reliance on similar methods to sustain Russia’s interests in Eastern Europe and the Balkans.

During periods of regional volatility the Kremlin can respond innovatively. When Putin’s Government encounters emergent complexity it remains undeterred in consolidating power. Political scientist, Gleb Pavlovsky, compared Putin’s administration to a jazz band - prone to improvisation.[18] COVID-19-induced instability presents an opportunity for Russia to once again improvise and become indispensable to Eastern Europe and the Balkans. Foreign direct investment, political alignment and even vaccine research at the world-renowned Gamaleya Institute could facilitate this. So, COVID-19 alone is unlikely to vanquish Russia’s influence. However, Russia in economic retreat and socially maligned may become less persuasive to regional leaders. Over time, and perhaps for the first time in modern memory, power dynamics in the region are susceptible to being redefined. However, only if the West comprehensively responds and the people in Eastern Europe and the Balkans are receptive to real change.


Sources [1] Taylor, Adam. ‘Washington Post’, ‘Putin’s approval rating hits 80%’ (Accessed 2/8/2020). https://www.washingtonpost.com/gdpr-consent/?next_ url=https%3a%2f%2fwww.washingtonpost.com%2fnews%2fworldviews%2fwp%2f2014%2f03%2f26%2fputins-approval-rating-hits-80-percent%2f. [2] Crosby, Alan. ‘Montenegrin Coup Verdict A Wakeup Call To EU’. RadioFreeEurope (Accessed 2/8/2020).. https://www.rferl.org/a/montenegrin-coup-verdict-a-wakeup-call-to-eu-on-russia-s-rising-role-in-balkan-instability/29933787. html. [3] European Commission. ‘Communication from the Commission to the European Parliament, the Council, European Economic and Social Committee’ (Accessed 5/8/2020). https://ec.europa.eu/commission/sites/beta-political/files/communication-credible-enlargement-perspective-western-balkans_en.pdf. [4] Rastovic, Milos. ‘Illusory enlargement of the European Union’. EuropeNow (5/8/2020). https://www.europenowjournal.org/2020/06/02/illusory-enlargement-of-the-european-union/. [5] Rees, Tom. ‘Europe faces double dip downturn’. Sunday Telegraph Business (Accessed 5/8/2020). https://www.pressreader.com/uk/the-sunday-telegraph-money-business/20200802/281560883130078. [6] Russia Business Today. (Accessed 5/8/2020) https://russiabusinesstoday. com/economy/russia-grows-into-largest-foreign-investor-in-western-balkans-report/. [7] Kajosevic, Samir. ‘Bad Blood Aside’. BalkanInsight (5/8/2020). https://balkaninsight.com/2020/07/28/bad-blood-aside-montenegro-eyes-russia-as-saviourof-summer-season/. [8] Ibid. [9] Gazprom (Accessed 8/8/2020). https://www.gazprom.com/projects/turkstream/. [10] Statista (Accessed 8/8/2020). https://www.statista.com/statistics/1116401/ covid-19-impact-on-gazprom-export-gas-price/. [11] Guardian, ‘Putin condemns Turkey after Russian warplane downed’ (Accessed 8/8/2020). https://www.theguardian.com/world/2015/nov/24/turkeyshoots-down-jet-near-border-with-syria. [12] Warsaw Institute, ’Gazprom Confident of its Position in Europe’ (Accessed 8/8/2020) https://warsawinstitute.org/gazprom-confident-position-europe/. [13] Chazan, Guy. ’Merkel faces calls to scrap Nord Stream 2’. Financial Times (Accessed 6/9/2020) https://www.ft.com/content/81e7d355-e478-49fc-ba7549f43cbfc74f. [14] Preiherman, Yauheni. European Council on Foreign Relations. ‘Unsettled Union: the future of Belarus-Russia’ (Accessed 9/8/2020). https://www.ecfr.eu/article/commentary_unsettled_union_the_future_of_the_belarus_russia_relationship. [15] Magnay, Diana. Sky News, ‘Belarus: The three women “on a mission” ’ (Accessed 9/8/2020). https://news.sky.com/story/belarus-this-is-not-the-election-thatstrongman-president-alexander-lukashenko-had-planned-12044698. [16] Shotter, James and Max Sneddon. ‘This is the first time Belarusians believe we can change something’. Financial Times (Accessed 9/8/2020). https://www. ft.com/content/dc98f3e2-94fa-4903-959a-8909dad2ff7b. [17] Foy, Henry and James Shotter. ‘Russia ready to deploy police in Belarus’. Financial Times (Date Accessed 3/9/2020). https://www.ft.com/content/bebb8bc5-3e92-46a9-a4ad-3c81748a1ffb?segmentId=6bf9295a-189d-71c6-18fbd469f27d3523. [18] Financial Times. ’Russia’s fragile one-man rule’ (Date accessed 5/9/2020). https://www.ft.com/content/143d3496-bc59-11ea-a05d-efc604854c3f. https://foreignpolicy.com/2019/09/03/putin-plays-erdogan-like-a-fiddle-syria/ https://www.themoscowtimes.com/2020/08/06/a-color-revolution-in-belarus-notyet-a71065 Images Credits https://www.aljazeera.com/news/2020/09/protests-lukashenko-arrives-russia-talks-putin-200914081656116.html https://www.sciencemag.org/sites/default/files/styles/article_main_large/public/ russiavaccine_1280p.jpg?itok=7_Ii8r2X https://foreignpolicy.com/2019/09/03/putin-plays-erdogan-like-a-fiddle-syria/ https://www.themoscowtimes.com/2020/08/06/a-color-revolution-in-belarus-notyet-a71065

SPECIAL REPORT: RUSSIA, EASTERN EUROPE & THE BALKANS

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Oceania

BY GABRIELLE HEAL

Gabrielle Heal is a third year International Relations student at King’s College London. She is also a Staff Writer for International Relations Today. She is particularly interested in the energy transition and the link between environmental policy and human rights.

pandemic, and a complex position between the world’s superpowers, a focus on Australia offers an exciting perspective on Oceania and the impact coronavirus has had on global affairs.

Between a Rock and a Hard Place Australia in a post-COVID World Order

C

aught between its two most critical alliances, Australia is facing unique consequences from the rapidly deteriorating relationship between the US and China. COVID-19 has put a strain on the carefully constructed balance between Australia’s national values, which align with the US, and its economic prosperity, which depends on China. In this report, I will weigh the risk of the deterioration of these key alliances against one another, forecasting which of the two Australia will prioritize and the accompanying impact this decision would have on Australian economics and foreign policy, as well as the larger Oceanic region. Oceania at a Glance With strict border control, much of Oceania has been spared from COVID-19’s worst. Many small Pacific island nations such as Samoa and Tonga have yet to report a single case. New Zealand has found itself in the media spotlight for its admirable response to the outbreak, successfully controlling the disease’s introduction to and spread in the country. Australia, however, has strayed from this path of safety. With by far the most COVID-19 cases in the region, a special leadership role in the international response to the

Australia and China Firstly, the coronavirus has made clear that Australia’s overdependence on Chinese investment and trade runs counter to Australia’s national values, and this overdependence therefore poses a great economic risk to the nation.[1] As an outpost of Western beliefs and culture in the Oceanic region, Australia has and continues to be a strong promoter of human rights, democracy, and the rules based international system. However, COVID-19 has put on full display the danger that China’s authoritarian system poses to this rules based order through the country’s failure to release intelligence on the outbreak of the disease. [2] Australia’s leadership in pushing for a private investigation into the virus’ origins in China exudes a bravery in standing up to China that Australia has rarely shown. In comparison to its allies, specifically the United States and Japan, Australia has been the most tentative in its confrontation with China over the period that their trade relationship has grown. [3] However, Australia’s recent ban on 5G and strong resistance to Chinese investment in “critical information and national infrastructure” paints a very different picture. [4] In fact, Australia will be investing nearly a third of its 1.35 billion Australian dollar ($930 million) de-


fense budget into hiring cybersecurity experts this year, a move clearly inspired by recent cases of Chinese cyber-attacks. [5] The pandemic has brought Australia to the conclusion that it can no longer turn a blind eye to China’s meddling for the sake of economic cooperation. As strategic affairs analyst Malik Mohan bluntly puts it, “values matter more than trade.” [6] China-Australia two-way trade grew from $127 billion in 2017-2018 to $154 billion in 2018-19, and therefore an increasingly massive amount of resources firmly ties these two countries to one another. [7] If Australia truly wishes to take a strong political stance in the region it must be capable of absorbing the economic shocks that would inherently follow. This risk, however, can be significantly lessened if Australia forges stronger relationships with its other neighbors, especially Indonesia and Japan. [8] By investing in the Oceanic region and strengthening its trade relationships with these neighbors, Australia would be able to take a stronger stance against China’s authoritarian tendencies without fearing economic disaster.

One such stance would have to be in the South China Sea. China’s incremental encroachment in this region has been met with regional backlash from ASEAN countries, but this backlash has not been enough to challenge the superpower’s claims. [9] In Australia’s efforts to diversify significant trading partners, the South China Sea transit routes become increasingly important in order to reach these ports. [10] Therefore, Australia may find it in its best interest to help unify the ASEAN voice in order to reprimand China’s efforts. This would surely be a significant opportunity for Australia to flex its middle-power muscles and instigate change in the region, asserting itself as a powerful Oceanic actor with an interest

in promoting growth and prosperity in the region. Australia and The United States Since the end of the Second World War, the United States has been Australia’s principal ally. [11] Although almost 9,500 miles separates these two nations, many factors have contributed to the strengthening of their friendship. In light of a rising China, Washington has benefited from Canberra’s key location near Asia that poses as a prime military outpost for the superpower. The US has also benefited from Australia’s unwavering military support in its deployment of troops into the Korean War, Vietnam War, and the invasions of Afghanistan and Iraq. [12] On the other hand, Australia has enjoyed the benefits of American military equipment and nuclear deterrence which has allowed the country to invest elsewhere. [13] The two nations share a common culture and language, and most importantly, they share a common goal: to maintain the rules based international system and promote liberal democracy. China often criticizes Australia’s position in this relationship, mocking Canberra for blindly following in the US’ footsteps and for not having the courage to stray from the path the US sets out in front of it. These criticisms aren’t entirely baseless; however, Australia has consistently deflected these attacks and reiterated that its foreign policy aims are unique to the country, that it does not sit in the shadow of the US. As the US Department of Defence itself describes in its 2019 Indo-Pacific Strategy Report, “The U.S. offers strategic partnerships, not strategic dependence.” [14] This echoes the Nixon Administration’s Guam Doctrine of 1969 which similarly laid out the limits of the relationship between Australia and the US. [15] In recent years, and increasingly in the COVID-19 pandemic, Australia is putting action behind these words. While the relationship between the US and Australia may appear a fairly harmonious one, COVID-19 has revealed the turbulence that has been disrupting this peaceful partnership. The United States, particularly under the Trump administration, has been consistently proving itself to be an incredibly unreliable ally, one that Australia cannot afford to trust too readily. The increasingly aggressive ‘America First’ campaign is forcing Australia to ask itself important questions about the discrepancies between its own

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foreign policy aims and those of the US. [16] Moreover, the country’s inability to control the spread of virus within its own borders has sidelined any international leadership from the superpower, Canberra subsequently taking this position in its stride.

The risk of any complete collapse or abandonment of this strategic partnership is admittedly small. While many scholars squabble over whether Australia ought to abandon China for the US or whether it should continue its balancing act, ew argue that the US-Australia alliance will fail. Ultimately, in any major decision between the two sides of the pseudo-Cold War, Australia will side with the United States due to its deeper connection with what the country stands for. The important difference between the pre-pandemic alliance and the current one, however, is that Australia is more of an independent ally with its own foreign policy than it ever has been. Trump’s government has given Australia the shove it needed towards taking more control over its own situation, and this has been exacerbated by the current state of disarray that the international system has fallen into. Conclusion Andrew Carr believes that it is these “periods of flux and uncertainty,” like that which we face currently with COVID-19, that “are the times of greatest opportunity” for middle-sized powers. [17] Australia is stepping into a remarkable leadership role and beginning to distance itself from the US-China rivalry in a manner that will allow it to blossom as a strong voice for the Oceanic region. It is proving itself as not just a toy to be thrown around in the games of the superpowers, not just a blind follower of the US or a weak sympathizer of China’s. It is freeing itself from some of the constraints it has placed on its own foreign policy, some of the uncomfortable positions that have necessitated tiptoeing through situations. Australia as an influential middle power is surely on the rise, and the COVID-19 pandemic is accelerating this process.

Bibliography [1] Davis, Malcolm. Australia as a Rising Middle Power, p. 5 [2] Cave, Damien and Kwai, Isabella. “China is Defensive. The U.S. is Absent. Can the Rest of the World Fill the Void?” [3] Yuan, Jingdong. A Rising Power Looks down Under: Chinese Perspectives on Australia, p. 25 [4] Davis, Malcolm. Australia as a Rising Middle Power, p. 15 [5] Cave, Damien. “Australia Spending Nearly $1 Billion on Cyberdefense as China Tensions Rise.” [6] Malik, Mohan. “Australia, America and Asia.” p. 593 [7] Council on Foreign Relations, Australia: Is the United States still a Reliable Ally? [8] Davis, Malcolm. Australia as a Rising Middle Power, p. 16 [9] Blaxland, John. “Strategic Balancing Act: Australia’s Approach to Managing China, the USA and Regional Security Priorities.” p. 26 [10] Ibid. p. 29 [11] Yuan, Jingdong. A Rising Power Looks down Under: Chinese Perspectives on Australia, p. 22 [12] Ibid. p. 23 [13] Davis, Malcolm. Australia as a Rising Middle Power, p. 13 [14] US Department of Defense, Indo-Pacific Strategy Report, RefID: 0-1C9F36A, Washington DC, 1 June 2019. [15] White, Hugh. “A very nonreassuring bombshell: Richard Nixon and the Guam Doctrine, July 1969.” The Strategist, July 25, 2019. [16] Cave, Damien and Kwai, Isabella. “China is Defensive. The U.S. is Absent. Can the Rest of the World Fill the Void?” [17] Carr, Andrew. Winning the Peace: Australia’s Campaign to Change the Asia-Pacific, Melbourne University Press, 2015 Images Credit https://www.theguardian.com/business/2019/sep/21/ wrong-place-at-the-wrong-time-how-the-us-china-tradewar-is-putting-the-squeeze-on-australia https://www.foodnavigator-asia.com/Article/2020/06/01/ Not-COVID-19-retaliation-Analysts-claim-Australia-China-trade-war-is-over-sensationalised https://www.voanews.com/usa/us-australia-seek-new-military-cooperation-face-china


Scandinavia

BY CAROLINE KAMPER

Caroline Kamper is a second year International Relations student. She has a deep interest in Nordic relations and the transatlantic cooperation, which resulted in her first-year internship at the Danish Atlantic Council. She had the opportunity to work with a broad range of topics, including the Nordic initiatives in a more conflict prone Arctic and the current developments in the transatlantic relationship.

closed their doors and a ban on public events with more than ten people was imposed. In Norway, the first case was seen 26 February and two weeks later, on 12 March, the country went into a national lockdown with a following travel ban. Finland had its first case at the end of January but managed to contain the spread at the time by quarantine and contact tracing.

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The Nordic Model(s) – when Scandinavia met COVID-19

he Nordic countries are known as small, smart states with strong welfare systems. They rank at the top of global lists on socio-economic equality and general population happiness, and the shared universal welfare models are said to make the region the most innovative and competitive in the world and create a strong government-citizen relationship, valuing equality, solidarity and opportunity. As the global number of confirmed COVID-19 cases started to rise earlier this year, the Nordic states moved away from all kinds of Nordic cooperation and took on different strategies. This report analyses the strength of the Nordic model in a time of crisis and questions whether solidarity comes through amongst the Nordic states at these unprecedented times of the coronavirus.

First Nordic cases The first case of COVID-19 was reported in Denmark on 27 February as the first ski tourists came back from Central Europe. On 13 March, the unforeseen announcement came from Prime Minister Mette Frederiksen to close the Danish borders. Five days later, Denmark went into a national lockdown, where all public services

A month later, on 26 February, Finnish skiers returning from Italy and Austria brought the disease back to Finland, which resulted in the Government declaring a state of emergency on 16 March, shutting down schools and public facilities and closed down the national borders. Sweden, like Finland, had its first case with a traveller from Wuhan in January that was subsequently fully isolated upon detection. However, the first case of a Swede returning home contaminated was the 26 February, and in the following days, several new contaminations were reported. Despite a similar timeline and a rapid rise in numbers of both infected and dead, Sweden has run the least restrictive strategy of Nordic countries, leaving public services and amenities open and allowing gatherings of up to 50 people. A method that essentially places a heavy reliance on the social responsibility and common sense of the public. Different approaches The cumulative number of cases in Sweden reached around 87 thousand SPECIAL REPORT: SCANDINAVIA

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as of 25 August, while Denmark, the Nordic country with the second-highest number of cases, had around 16.5 thousand as of this date. Finland and Iceland had case numbers below ten thousand at the end of July. Simultaneously, the mortality rate per million capita in Denmark, Finland, Norway respectively stands at 108.15, 60.89, 49.68, compared to the Swedish rate at 573. Iceland has only had ten deaths since the outbreak. Although criticism has risen on the minimal measures implemented in Sweden, the state epidemiologist Nils Tegnell stands firm, arguing that the Swedish method has “served us [Sweden] well” in a July interview with CNN. The Swedish “no-lockdown” approach can be characterised by prioritising guidelines above restrictions and keeping in the country open in order to secure herd immunity. Nordic efforts to combat the virus and its effect have been recognised widely in the media: Finland for its preparedness, Iceland for its massive testing and contact tracing, all the Nordic countries for their economic support packages, the Faroe Islands for being the first country reporting zero cases, Denmark and Norway for recognising the need for national leaders to speak directly to children about the situation and Sweden for trusting the population to do the right thing.

All these efforts speak to the level of trust in the small Nordic societies that feel confident about making decisions based on science. Sweden, however, still receives massive international criticism for their implementations – or lack thereof, as highlighted by the former state epidemiologist, Annika Linde, who argues that a lockdown would have gifted the Swedish Government with more time to lay out a proper strategy to protect the vulnerable and partly blames the health agency’s unwillingness to adapt to the pre-prepared strategy built on the experience of influenza pandemics such as the Spanish flu and swine flu. Lost solidarity? In a joint message from a conference call on 17 March, the Nordic Foreign Ministers stressed regional solidarity. The message emphasised continuing to allow Nordic citizens to move freely through the Nordic countries’ respective airports and ensuring

appropriate access to consular services when needed. However, following the joint message, all subsequent actions and measures have been on a national basis with no reference to Nordic solidarity and especially Sweden has suffered from the national lockdowns in Norway and Denmark. It is clear that the Nordic countries could have led an example of extensive regional cooperation. Instead, numerous media reports conduct comparisons showcasing the different approaches of the Nordic states leading to a divisive competition of who can claim to have gotten it right in the end.

Drastic political decisions, like closing borders, could have been avoided and unified measures could leave the Nordic states better equipped to deal with the unprecedented economic recession that has followed the lockdowns. The actions of the state leaders are, however, also very understandable. In a time of crisis, states initiating different measures than otherwise recommended by your national experts will be seen as a threat to national security. Although there is strong cooperation at other levels of Nordic governance, the tone set by the national health authorities should have been unified based on collective scientific knowledge, which would have made the grounds for re-


gional cooperation more attractive. However, so far the tendency, not only by the Nordic countries but the international community, has been to go national instead of regional or global in our responses to the pandemic. This might sadly become one of the legacies of COVID-19. A new beginning for regional cooperation In every challenge, there are also opportunities, and they need to be explored. The high level of trust that exists between the Nordic countries should be strengthened when facing such an enormous challenge as COVID-19 still proves to be. In such a scenario, the Nordic countries should use the inter-parliamentary body of the Nordic Council to distribute responsibilities according to respective capacities. Working together in securing necessary medical equipment, sharing best practices and merge both efforts in testing and science and research, would be extremely beneficial to the Nordic region and the international community in general. In a time when the international world order is being threatened, playing into the hands of authoritarians and populists all over the world, the Nordic region could deliver a strong political message stressing the importance of multilateralism and solidarity. From such an exercise the region would be better equipped to deal with the next global crisis and be a strengthening factor for the international community, whose support otherwise has been challenged by right-wing parties in the UK, France and Germany. In the end, the Nordics remain proud of their reputation and can still set the tone for best-practice sharing - something more than ever relevant with a second COVID-19 wave pushes the newly rising number of Nordic cases.

Bibliography “Coronakrisen Bliver Håndteret Vidt Forskelligt: Fire Lande, Fire Løsninger: Hvad Virker Bedst?”. 2020. Politiken. https:// politiken.dk/indland/art7753113/Fire-lande-fire-løsningerHvad-virker-bedst. “Coronavirus: Why The Nordics Are Our Best Bet For Comparing Strategies”. 2020. The Conversation. https://theconversation.com/coronavirus-why-the-nordics-are-our-bestbet-for-comparing-strategies-135344. “Nordics: Coronavirus Cases 2020 | Statista”. 2020. Statista. https://www.statista.com/statistics/1102257/cumulative-coronavirus-cases-in-the-nordics/. “Sweden ‘Wrong’ Not To Shut Down, Says Former State Epidemiologist”. 2020. The Guardian. https://www.theguardian. com/world/2020/may/24/sweden-wrong-not-to-shut-downsays-former-state-epidemiologist. “Sweden Tries Out A New Status: Pariah State”. 2020. Nytimes.Com. https://www.nytimes.com/2020/06/22/world/europe/sweden-coronavirus-pariah-scandinavia.html. “Sweden’s Chief Epidemiologist Praises Country’s Strategy - CNN Video”. 2020. CNN. https://edition.cnn.com/videos/ tv/2020/07/23/anders-tegnell-amanpour-sweden-coronavirus.cnn. “Sweden’s Unorthodox Response To COVID-19: What Went Wrong?”. 2020. Aljazeera.Com. https://www.aljazeera.com/ programmes/talktojazeera/2020/07/sweden-unorthodox-responsecovid-19-mistake-200730093401428.html. Hansson, Pia. 2020. “The Nordics And COVID-19: Together Or Apart?”. Danish Institute for International Studies. https:// www.diis.dk/en/research/the-nordics-and-covid-19-together-or-apart. Wiking, Meik. 2020. “A Happiness Report In The Age Of Corona”. The Happiness Research Institute. https://www. happinessresearchinstitute.com/news4. Images Credit https://vm.ee/en/news/nordic-baltic-foreign-ministers-discussed-joint-efforts-address-coronavirus-crisis https://www.euronews.com/2020/06/02/coronavirus-ishard-hit-sweden-being-snubbed-by-its-scandinavianneighbours

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Sub-Saharan & Southern Africa BY LUCIA PASTRANA

Lucia Pastrana is a second-year BA International Relations student. She is interested in poverty, migration and conflict in the Global South as well as economic strategies to work towards sustainability and development in the region.

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The Sub-Saharan and South Africa (SSSA) region is currently experiencing the first economic recession in 25 years due to the pandemic. [1] Amid the COVID-19 crisis, regional governments have had to face a healthcare and economic crisis while dealing with the threat of terrorism and debt distress. Juggling between geopolitical risks, healthcare, and economic crisis demands a considerable amount of efforts and resources. For instance, Africa needs approximately $200 billion to respond to healthcare demand and invest in economic recovery. [2] Additionally, the risk of terrorist expansion could account for an extra billion, considering that 18 African countries targeted by terrorism have spent a total of $259 billion on securitization from 2007 to 2017. [3] In the light of pressing demands to fund healthcare services, invest in economic recovery and securitize terrorism hotspots, governments might not have the fiscal space to serve external debt with China. Namely, because of the high debt-to-GDP ratios of SSSA countries, that express when foreign borrowing is not proportional to domestic economic growth and revenue generation. Therefore, this report will be exploring how geopolitical risks in the region, posed by terrorist groups, negatively impact GDP growth necessary to serve Chinese debt and the implications on defaulting.

Terrorist Expansion and its Economic Implications Terrorism poses a significant risk for geopolitical security in the SSSA region because groups such as Boko Haram have exploited the pandemic to launch attacks and expand their sphere of influence across borders. Since governments of countries near the Lake-Chad Basin region had diverted their efforts and security forces into containing the spread of the virus [4], Boko Haram and its affiliates have launched attacks originated in North Nigeria, expanding cross borders to neighbouring countries such as Chad, Cameroon and Niger [5]. This behaviour highlights the regional spill-over effect of armed conflict, which might complicate public finances not only for Nigeria but for the neighbouring countries involved. As such, African governments are being financially stretched because if an effectively counter-terrorism strategy is to be developed, they must direct resources into security and insurance services. [6] The economic cost of securitizing can be quite significant. For example, Nigeria is the top spender in securitization, accounting for almost $98 million USD in 2017 alone. [7] Hence, the economic demand of securitisation to contain terrorist expansion poses a major risk for the state of public finances in various African countries. The large sums demanded in counterterrorism efforts could be directed towards pressing issues such as healthcare services, economic incen-


tives to overcome recession or paying back the outstanding debts with China. Moreover, the risk of terrorist expansion hinders economic recovery and stability. The United Nations Development Program observed that countries with high levels of terrorism show weaker GDP growth. [8] Terrorism in Sub-Saharan Africa has had negative implications on GDP growth because it disrupts economic productivity, namely agriculture. [9] An example is Boko Haram’s expansion from North-west to NorthEast Nigeria, disrupting local agricultural activities. [10] Farmers are being forced to migrate from the region, adding to the Internally Displaced People toll and leaving agriculture on a standstill. Considering, that agriculture is a crucial part of the Nigerian economy and employs two-thirds of the population [11], reduced productivity can negatively impact the share of agriculture and food in total GDP and employment.

Furthermore, industrial productivity has been impacted particularly in recent months. The case of Mozambique has shown how terrorist activity can disrupt the oil and gas industry, where the Islamic State (IS) targeted a gas project owned by Exxon Mobil in the North part of the country on the 13th of August. This attack resulted in major costs for the company which is now reconsidering any further investment due to insecurity in the region. [12] Gas projects in the country represented Foreign Direct Investment with $95 billion over 25 years that could have contributed to GDP growth by increasing revenue and employment. [13] Terrorist expansion is creating an atmosphere of conflict and

instability, jeopardizing country’s economic productivity and investment. Without productivity and investment driving GDP growth, governments are unable to produce revenue according to the debt they are accountable for, resulting in high debt-to-GDP ratios.

High GDP-to-Debt Ratios and Chinese Debt Defaulting The high debt-to-GDP ratio in most SSSA countries places them in an increasingly vulnerable and risky position. When a country has high ratios, it shows that it does not possess entirely the capacity to efficiently serve the debt. This implies that if a sudden shock or crisis arrives, governments might lack fiscal space to respond. In the case of SSSA, many countries have increasing high percentages of debt to GDP ratios. External shocks such as the COVID-19 crisis and risk of expanding terrorism can have a direct impact GDP growth. Consequently, shrinking economies contribute to increasing debt-to-GDP ratios and eventually enhance the risk of debt defaulting to its largest single creditor, China. [14] Since 2017, SSSA countries have been exceeding the debt to GDP ratio limits suggested by The African Monetary Cooperation program (60%) and the IMF (55%). [15] Borrowing from Chinese government, banks and private investors for infrastructure projects and economic development programs becomes unsustainable when it is not accompanied

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by GDP growth and enough revenue creation to payback. Last year, the IMF declared 18 African countries in debt distress or at high risk of it because they were borrowing more than reasonable. Such as Guinea who signed a $20 billion loan worth 200% of its GDP.[16] Or Mozambique, who was placed under debt distress by the IMF [17], with a 130% debt to GDP ratio [18], and has recently experienced terrorist attacks. Similar cases to Mozambique, struggling with poor economic performance and terrorist expansion are at high risk of debt defaulting.

example may be seen in Cameroon, given its high levels of debt, her position as one of the top 11 recipients of Chinese loans with approximately $5,570 million on the continent, her difficulty in controlling the expansion of ISIS, [21] and the separatist Anglophone crisis in North Cameroon. Subsequently, the country’s economic productivity might not provide the necessary revenue to serve Chinese debt, and thus, YaoundÊ may have to appeal to RBL as collateral. The issue is that the Chinese resource extraction industry, especially in the gold mining sector, is largely damaging the land with heavy machinery.[22] These practices are significantly damaging the local environment because Chinese companies are not respecting environmental laws, destroying farms and cattle ranches which provide much of the income for local communities.[23] Environmental damage could exacerbate if Chinese banks are provided with more access to mining as a collateral of defaulting debt.

Resourced-Backed Loans and Environmental Implications If some SSSA countries default on Chinese debt, there is a potential risk they may consider the option of Resource-Backed Loans (RBL). RBL allows SSSA governments to use resources such as oil or minerals and their respective methods of production as a collateral to guarantee debt repayments to the main lenders, in this case, Chinese Exim Bank and China Development Bank. [19] Between 2004 and 2018, 30 loans were negotiated under RBL schemes, accounting for 66 billion. The main two Chinese banks lent 53% of the loans, 35 billion, and 11 SSSA countries were the recipients. [20] Chad figured amongst the top recipients of these loans backed with oil, where China National Petroleum Corporation has severely violated environmental regulation while engaging in unsustainable oil extraction processes, raising controversy. If reduced economic productivity and investment pushes countries under high debt distress to engage with RBL as collaterals, violations of environmental regulations and damage to the local environment could increase or continue without restriction. As more countries reach high levels of debt distress, the risk of adopting RBL as a collateral increase. The risk is closely linked to the negative impact that Chinese mining and oil extracting industry is having on the environment. One real-life

In these pessimistic circumstances, it is possible to envisage how geopolitical risks posed by terrorist expansion has a domino effect that aggravates and enhances new risks that can manifest through public finances, debt defaulting and the environmental damage. It is imperative to continue with the efforts already taking place to bring peace and stability to SSSA such as Silencing the Guns Initiative by the African Union. [24] It is increasingly evident that only in an atmosphere of peace and security will it be easier to reactivate the economy after the COVID-19 crisis. If SSSA countries manage to successfully recover from the predicted post-COVID global recession, it will also become crucial for them


to pay closer attention to the implications of Chinese loans and how transparent negotiations can lead to equal benefit for both parties, without sacrificing their commodities and natural resources. Sources [1] World Bank. “COVID-19 (Coronavirus) Drives Sub-Saharan Africa Toward First Recession in 25 Years”. April 2020, World Bank. https://www. worldbank.org/en/news/press-release/2020/04/09/covid-19-coronavirusdrives-sub-saharan-africa-toward-first-recession-in-25-years. [2] Sallent, Mickaël. “External debt complicates Africa’s COVID-19 recovery, debt relief needed”. Africa Renewal. July/2020, https://www. un.org/africarenewal/magazine/july-2020/external-debt-complicates-africas-post-covid-19-recovery-mitigating-efforts. [3] Measuring the Economic Impact of Violent Extremism Leading to Terrorism in Africa. UNDP,2019. Accessed 1st of September 2020, https:// www.undp.org/content/undp/en/home/librarypage/democratic-governance/measuring-the-economic-impact-of-violent-extremism-leading-to-te. html. [4]Bukarti, Audu Bulama, “How Is Boko Haram Responding to COVID-19?”, Institute for Global Change, May 2020, https://institute.global/ policy/how-boko-haram-responding-covid-19. [5]Kishor, Nanda. “Terrorism and COVID-19: Brutality of Boko Haram in Africa”. Modern Diplomacy. August 2020, https://moderndiplomacy. eu/2020/08/09/terrorism-and-covid-19-brutality-of-boko-haram-in-africa/. [6] Gold, David. The Costs of Terrorism and the Costs of Countering Terrorism. 2005. https://www.files.ethz.ch/isn/10698/doc_10729_290_en.pdf. [7]Measuring the Economic Impact of Violent Extremism Leading to Terrorism in Africa. UNDP,2019. Accessed 1st of September 2020, https:// www.undp.org/content/undp/en/home/librarypage/democratic-governance/measuring-the-economic-impact-of-violent-extremism-leading-to-te. html. [8] Ibid. [9] Ibid. [10] Samuel, Malik, “ISS TODAY: Nigeria’s growing insecurity offers expansion opportunities for Boko Haram”. Daily Maverick. August 2020, https://www.dailymaverick.co.za/article/2020-08-03-nigerias-growing-insecurity-offers-expansion-opportunities-for-boko-haram/. [11] “Nigeria at a glance | FAO in Nigeria | Food and Agriculture Organization of the United Nations”. 2020. Fao.org. http://www.fao.org/nigeria/ fao-in-nigeria/nigeria-at-a-glance/en/. [12] Kajjo, Sirwan. “Coronavirus, Militant Attacks Impacting Gas Projects in Mozambique”. August 2020, Voice of America. https://www.voanews. com/extremism-watch/coronavirus-militant-attacks-impacting-gas-projects-mozambique. [13] Hill, Matthew. “Mozambique Expects $95 Billion of Gas Revenue Over 25 Years”. Bloomberg.com. 2019, https://www.bloomberg.com/news/articles/2019-05-16/mozambique-expects-95-billion-of-gas-revenue-over25-years. [14]Sun, Yun. “China and Africa’s debt: Yes to relief, no to blanket forgiveness”. Brookings. April 2020, https://www.brookings.edu/blog/africa-in-focus/2020/04/20/china-and-africas-debt-yes-to-relief-no-to-blanket-forgiveness/. [15] Onyekwena, Chukwuka & Ekeruche, Mma Amara. “Is a debt crisis looming in Africa?”. Brookings. April2019 https://www.brookings.edu/ blog/africa-in-focus/2019/04/10/is-a-debt-crisis-looming-in-africa/. [16] Payne, Julia. “Chinese commodity-backed loans crippling Africa and Latin America -report”. Reuters, February 2020, https://www.reuters.com/article/commodities-loans-africa-americas/chinese-commodity-backed-loans-crippling-africa-and-latin-america-report-idUSL5N2AP3NL. [17] ”List of LIC DSAs for PRGT-Eligible Countries”. June 2020, IMF, https://www.imf.org/external/Pubs/ft/dsa/DSAlist.pdf. [18] Sallent, Mickaël. “External debt complicates Africa’s COVID-19 recovery, debt relief needed”. Africa Renewal. July/2020, https://www. un.org/africarenewal/magazine/july-2020/external-debt-complicates-africas-post-covid-19-recovery-mitigating-efforts. [19] Mihalyi, David; Adam, Aisha & Hwang, Jyhjong. Resource-Backed Loans: Pitfalls and Potential. Natural Resource Governance Institute. February 2020, https://resourcegovernance.org/sites/default/files/documents/ resource-backed-loans-pitfalls-and-potential.pdf.

[20] Ibid. [21] Ochab, Ewelina. “Terrorist Organizations Use COVID-19 Lockdown to Expand Territory”. Forbes. May 2020 https://www. forbes.com/sites/ewelinaochab/2020/05/18/terrorist-organizations-use-covid-19-lockdown-to-expand-territory/#382f531854bb. [22] Kindzeka, Moki Edwin. “Cameroon Villagers Say Chinese Miners Are Ruining Local Environment”. Voice of America. September 2019, https://www.voanews.com/africa/cameroon-villagers-say-chinese-miners-are-ruining-local-environment. [23] Ibid. [24] African Union “Silencing the Guns by 2020 | African Union”. 2020 Au.int. https://au.int/en/flagships/silencing-guns-2020. Images Credit https://institute.global/policy/how-boko-haram-responding-covid-19 https://www.npr.org/sections/coronavirus-live-updates/2020/04/09/830765778/world-bank-coronavirus-is-pushingsub-saharan-africa-to-first-recession-in-25-ye?t=1600286357220 https://umaizi.com/south-sudans-oil-potential-confirmed-by-cnpc-discovery/ http://www.chinadaily.com.cn/a/201803/23/WS5ab51cc5a3105cdcf6513f4a.html

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Middle East & North Africa

BY PAULINE DARRIEUS

Pauline Darrieus is a second year History and International Relations student. She is the Sub-Saharan Africa editor for International Relations Today, and is particularly interested in diplomacy, neocolonialism, and civilizational conflicts.

on August 8th. [5] More than 150 members of the royal family had already contracted the virus at the time of writing. [6] The stakes of this crisis are various: how will such developments impact Riyadh’s relationships with her allies? Will this alter the current regional balance of power? How is it going to shape the country’s long-term development strategies? Like many other countries across the world, Saudi Arabia was faced with an unprecedented challenge in terms of health system as a consequence of COVID-19 crisis. In spite of the imSaudi Arabia in the COVID-19 crisis: the plementation of drastic measures like what are the risks for its geopolitical massive testing, as a part of a nationstrategy to demonstrate the country’s ambitions? al modernity and power, the oil crisis exactates in the international system aim to maximize erbated existing problems linked to the their relative power positions over other states. The pandemic. [7] reason is simple: the greater the military advantage one state has over other states, the more secure it Saudi Arabia has already booked a defiis’, says Mearsheimer. [1] Applied to the current world situation, cit of $29 billion for the second quarter and according to the Realist lens, Saudi Arabia’s geopolitical risks of the year because of the unrelenting should be evaluated in comparison to those of its political rivals. drop in oil prices and demand, perhaps the logical consequence of lockdowns, Before analysing current events, here are a few features of the bans on travelling and teleworking. [8] Saudi Kingdom one should keep in mind. Saudi Arabia is the larg- Oil prices started declining at the beest country of Middle East, and can be, geographically, summa- ginning of January with the lockdown of rized as ‘arid and sparsely populated’. [2] However, it is gifted with China, the largest customer of Saudi oil. its geographical location at the centre of global maritime trade Prices dropped to $55.66/barrel in Febroutes. More importantly, its natural resources, oil and gas, endow ruary, and fell as low as $32.01/barrel by her with the position of the world’s second largest producer and March 2020. [9] exporter of oil. [3] Regarding religion, Saudi Arabia, like a few other in the region, is an ultra-conservative Sunni Islamic country. [4] However, the pandemic is not the only factor responsible for this dramatic seLike her main geopolitical rival, Iran, Saudi Arabia was badly hit by quence of events: Russia’s refusal to acthe Coronavirus pandemic in 2020. Indeed, she was the worst hit cept OPEC’s agreement on production country of Middle East, with more than 285,000 cases confirmed cuts is detrimental to Saudi Arabia’s in-

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terests and foreshadows several risks. [10] A potential change of partners and a prolonged oil crisis because of diminishing collaboration and growing price competition within an already weakened oil market is only one of these. Furthermore, Saudi Arabia may not be able to maintain her consequent advantage in future negotiations on global oil prices, thus furthering the economic crisis, as oil prices fall to their lowest levels in seventeen years. [11] Despite the austerity measures taken to absorb the damage of the economic crisis, such as the tripling of value-added tax rate and eliminating allowance for state workers,[12] it seems that more will be needed: “A pullback in spending is essential for containing the deficit,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank. [13] Moreover, Iran has been less affected by the collapse of oil prices. [14] Which may represent a bigger risk when one knows Saudi Arabia is engaged in all-out war with Iran for the regional leadership of the Middle East.

Economic austerity seems to be an increasingly likely solution given that a major second source of income of the Kingdom is also crumbling from the pandemic. The Hajj, or the greatest pilgrimage for Muslims all around the world, that takes place every year in Mecca, happened with a vastly reduced capacity. [15] An event that earned more than 6 billion dollars in 2015 thanks to the 2.5 million pilgrims. A figure that has fallen significantly this year, as Saudi officials take precautions by only admitting up to 10 000 people in 2020. This is barring the fact that to the Hajj earns the Saudi economy approximately 16 billion dollars on average per year. [16] More generally, the closure of mosques and bans on group prayers are unprecedented, raising questions about religion’s role in Saudi society even as she prepares

to endure in a post COVID world: ‘Will religious expression, as people knew it, ever return once the COVID-19 era has passed? [17] Indeed, such restrictive measures foreshadow various risks, as shown by Sheikh Abdullah al-Saad, a Saudi Islamic scholar, who denounced the health precautions as ‘a violation of Islamic law’,[18] and was subsequently arrested by authorities. Or the sealing the Eastern Qatif Province, home to 500 000 Shia Muslims (a religious minority in the country), that was strangely the only province of the country to be completely quarantined and cut off. [19] The oil crisis threatens Saudi Arabia’s position as the largest economy of Middle East and ‘energy superpower’. The government starts planning on loans and massive privatisation of state assets. [20] But to absorb such financial loss, one must consider whether or not the Kingdom of Saudi Arabia will not be forced to find another source of revenues and cut some tremendous spending. The development of tourism remains a possible solution for the future- in particular, domestic tourism- as a recent state-funded advertising campaign proved to be very successful. [21] It is no secret, that in the last few years, Saudi Arabia started thinking seriously about diversifying its economy away from oil. The Coronavirus pandemic may have catalysed this thought-process. After voting the implementation of an e-visa about a year ago, the Saudi council of ministers has decided to vote a plan of four billion dollars to develop tourism. [22] Becoming a world class tourism destination would also participate in the Kingdom’s soft power, and serve its interest, by bringing it closer to the front of the geopolitical scene and decision-making processes. Assuming that Riyadh simultaneously chooses to follow a policy of economic cuts, some may argue that the military sector may be the first to be targeted. Indeed, one may argue that reducing investment in the defence sector would have positive, peaceful ramifications for the broader region. Yet this line of argumentation fails to appreciate that buying fewer arms from the US- Saudi Arabia’s principal global strategic ally dating back to the unification of the country by Ibn Saud in 1932- would most-likely have adverse consequences for bilateral ties, harming

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Saudi interests in the long-term. [23] Moreover, this overall perspective does not match at all the country’s ambition to make its military stronger, to become the region’s defence powerhouse. More directly, Saudi Arabia is involved in a proxy war with Iran out of a fierce rivalry for hegemony in the Middle East, exacerbated by religious differences. As a result, it has been providing various degrees of support to opposing sides in civil wars, like in Syria and Yemen. [24] And they will not stop unless the other side does too. If Saudi Arabia keeps spending that much money on the military, the main risk is that of a humanitarian crisis. Given that the population is already in a difficult situation as the measures taken by the government only benefit the national population, when 80% of the workers are foreigners. [25] On the other hand, if Saudi Arabia maintains the current level of military involvement, the risk is that this ‘retreat’ from the forefront will give place to increasing risk-taking behaviours from opportunistic, smaller players in the region. The question is to know whether, as realists like Waltz argue, an anarchic system naturally tends towards equilibrium, for an ‘unbalanced power, whoever wields it, is a potential threat to others’. [26] Hence despite this analysis, the answer to one crucial question still remains unknown. Assuming that all the risks facing Saudi Arabia discussed above materialise and destabilise the current regional balance of power, will the Kingdom be able to prevent another power from growing in terms of influence and possibly threatening its leadership of the region? But that is a story for another day. Sources [1] Mearsheimer, ‘The false promise of International institutions’, International security, vol.19, n°3, (1995), pp. 5-49. DOI: 10.2307/2539078 [2] ‘Saudi Arabia, arid, sparsely populated Kingdom of the Middle East’, Harry St. John Bridger Philby, accessed August 2020. https://www.britannica.com/place/ Saudi-Arabia [3] ‘Saudi Arabia Oi’, Worldometer’, accessed August 2020. https://www.worldometers.info/oil/saudi-arabia-oil/ [4] ‘Saudi Arabia – Religion’, EncyclopaediaBritannica, accessed August 2020. https://www.britannica.com/place/Saudi-Arabia/Religion [5] ‘Coronavirus: Saudi Arabia sees steady increase of 1,567 COVID-19 cases’, Al Arabiya, August 9, 2020. https://english.alarabiya.net/en/coronavirus/2020/08/07/ Coronavirus-Saudi-Arabia-sees-steady-increase-of-1-567-COVID-19-cases [6] Gregory Brew, ‘COVID-19 and the oil price crash’ Instituto Affari Internazionali, May 2020. https://www.iai.it/en/pubblicazioni/covid-19-and-oil-price-crash-twincrises-impacting-saudi-iran-relations [7] ‘Saudi Arabia takes a giant leap in CSR during sanitary crisis’, KAWA, July 9th, 2020. https://kawa-news.com/en/saudi-arabia-takes-a-giant-leap-in-csr-during-sanitarycrisis/ [8] Mohamed Al Hwaity, ‘Saudi Arabia books $29-Billion deficit in Q2’, Reuters, July, 2020. https://www.rt.com/business/496619-saudi-arabia-books-deficit/

[9] ‘Crude oil Brent US dollar per barrel’, Countryeconomy. com. https://countryeconomy.com/raw-materials/ brent?dr=2020-03 [10] N. Gould-Davies, ‘Russia’s failed OPEC gamble’, IISS, April 2020.https://www.iiss.org/blogs/analysis/2020/04/russia-opec-agreement [11] ‘Oil prices hit lowest level in 17 years as demand plunges’, Financial Times, March 2020. https://www.ft.com/content/d63d0618-6928-11ea-800d-da70cff6e4d3 [12] ‘Saudi Arabia imposes austerity measures as its economy founders’, The Wall Street journal, May 2020. https:// www.wsj.com/articles/saudi-arabia-unveils-austerity-measures-as-its-economy-founders-11589203069 [13] ‘Saudi Arabia books $29-Bln deficit in Q2’, The Energy Bulletin, July 2020. https://daily.energybulletin.org/2020/07/saudi-arabiabooks-29-bln-deficit-in-q2/ [14] G. Brew, ‘COVID-19 and the Oil price crash’, Instituto Affari Internazionali. https://www.iai.it/en/pubblicazioni/covid-19-and-oil-pricecrash-twin-crises-impacting-saudi-iran-relations [15] Lina Farelli, ‘Hajj 2020 sous COVID-19 : un pèlerinage très limité pour une édition hors du commun’, SaphirNews, July 18th, 2020. https://www.saphirnews.com/Hajj-2020sous-COVID-19-un-pelerinage-tres-limite-pour-une-editionhors-du-commun_a27279.html [16] ‘The economics of the Hajj’, Think Ahead, July 2018. https://www.accaglobal.com/an/en/member/member/accounting-business/2018/07/insights/economics-hajj.html [17] ‘Are COVID-19 restrictions inflaming religious tensions?’, Brookings, April 2020. https://www.brookings.edu/ blog/order-from-chaos/2020/04/13/are-covid-19-restrictions-inflaming-religious-tensions/ [18] G. Abdo and N. Elnahla, ‘The pandemic tips the balance between mosque and state’, Foreign Affairs, August 2020. https://www.foreignaffairs.com/articles/ middle-east/2020-08-13/pandemic-tips-balance-betweenmosque-and-state [19] K. Abderrahmani, ‘Islamists angry over moque closures, use COVID-19 as a propaganda tool’, AsiaNews.it, March 2020. http://www.asianews.it/news-en/Islamists-angry-over-mosque-closures,-use-COVID-19-as-a-propaganda-tool-49654.html [20] D. Barbuscia and M. Rashad, ‘Saudi Arabia to widen privatisation scope, finance minister says’, Reuters, July 2020. https://www.reuters.com/article/us-saudi-economy-privatisation/saudi-arabia-to-widen-privatisation-scope-finance-minister-says-idUSKCN24N1YE [21] S. Bridge, ‘Staycations: the importance of domestic tourism to Saudi Arabia’, Arabian business, August 2020. https:// www.arabianbusiness.com/travel-hospitality/451224-the-importance-of-domestic-tourism-revealed-in-saudi-arabia [22] Rosie Spinks, ‘Saudi Arabia invests $4 Billion into tourism development’, Skift, June 22nd, 2020. https://skift. com/2020/06/22/saudi-arabia-invests-4-billion-into-tourism-development/ [23] Alain Decaux, Destins Fabuleux, Librairie Académique Perrin, (1987). [24] Jonathan Marcus, ‘Why Saudi Arabia and Iran are bitter rivals’, BBC News, September 16th, 2020. https://www.bbc. com/news/world-middle-east-42008809 [25] Mohammed Rasooldeen, ‘Saudi Arabia has 11 million foreign workers from more than 100 countries’, Arab News, December 1st, 2017. https://www.arabnews.com/ node/1201861/saudi-arabia [26] Wohlforth, ‘The stability of a unipolar world’. Images Credits https://www.middleeasteye.net/news/coronavirus-turkey-saudi-arabia-hiding-cases-covid19


Western Europe

BY JONAS DECKER

Jonas Decker is a third year BA International Relations students and the current Director of European Affairs for King’s Think Tank. His research interests include post-Cold-War imaginations, European Affairs, and the importance of identity for politics and foreign affairs.

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The Enemy Within: COVID inside Europe

he COVID-19 pandemic has fractured the Schengen area with states becoming more introverted, isolationist and ultimately more selfish. While some authors have suggested that more cooperation between states during COVID-19 points to increasing solidarity between states and more geopolitical influence of the bloc, this analysis will argue that Europe’s progress during this pandemic merely serves to obscure the deep rifts that persist throughout the bloc by concealing the damage that COVID is doing to European identity. Further integration has long been the EU’s preferred tool of solving internal crises and, using Max Bergmann, [1] the analysis will show that the EU is trying yet again to integrate further to solve the COVID-19 crisis, but, drawing on Alkopher and Blanc’s theory [2] of migration-related threat perceptions, it makes clear that instead of uniting the bloc, COVID-19 widens the rifts between member states by further fracturing the sense of a common European self.

on the observation of renewed EU confidence in both geopolitical assertion and economic policy, citing Europe’s response to a Chinese security law and the impressive COVID-19 aid package. He therefore maintains that Europe has grown together during the pandemic and that this will increase its geopolitical sway because member states are more likely to delegate power to Brussels. [4] This, however, is a misperception. While it is true that European leaders agreed on an aid package of epic size and the EU for the first time can borrow as a common market, [5] significant opposition by member states means that strict governance rules have been put in place that allow individual states to raise objections to how a fellow EU state spends EU money, while the allocation of the funds is strictly tied to preapproved technocratic indicators. [a] It is clear that member states are desperate to find relief for their national economies, but at the same time it seems that they struggle to sell their national publics on further integration. [b]

This reluctance by the public to integrate stems from the very nature of the European integrative project. Turkuler Isiksel argues that “the European integration project represents a socioeconomic solution to the problem of identity politics.” [6] Essentially, each attempt to integrate further sought to obscure the different positions that each member Max Bergmann argues that “the COVID-19 pandemic appears to state is in, but did little to correct the unhave awakened the continent from its decades-long economic and derlying problems. [c] Simon Hix argues political slumber.” In fact, he claims that the pandemic “reinvigor- that since the 1990s EU power and inated the EU integration project.” [3] Bergmann bases this claim tegrative measures have increasingly SPECIAL REPORT: WESTERN EUROPE

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become the subject of national elections. In fact, he notices a “growth in the support for anti-European populist parties.” [7] He concludes that further integration will continue to be prevented by nationalism in member states, which stands opposed to a shared vision of a European Self. It is thus clear that in order to locate the threat that COVID-19 poses to Europe, this analysis must examine more closely the effect COVID-19 has on European identity. It is here that Alkopher’s and Blanc’s theory of Immigration-Related Threat Perceptions becomes relevant. It argues that because migration cannot be stopped at the EU borders, states start to question norms about collective action and “old ideas about collective identity [are] supplanted by new ideas.” [8] Ultimately, the Other, which was held outside Europe’s borders, becomes internalised as mistrust in the neighbour states’ ability to combat the situation festers. [d] This is comparable to the situation that Europe faces today with COVID-19. As the disease spreads through Europe and can not be stopped by a Schengen-wide immigration ban, states started to question their neighbours’ ability to combat the pandemic and restricted movement within the Schengen area. It is true that movement has also been restricted within countries, but governments have been careful not to implement blanket quarantine requirements when moving between national counties. [e]

of ideas and identities among great powers.” [10]

Therefore, when COVID, to borrow Alkopher’s and Blanc’s words, “becomes an ‘internal’ issue, the security perceptions of member states change” [9] and they turn inward and more selfish. While there are still signs of solidarity and outreach towards other states does happen, these states are not viewed as part of the Self, but rather as a friendly Other that needs assistance. [f] While the concepts are certainly related, solidarity is not the same as a unified identity. [g] The Other therefore no longer resides outside Europe’s border, but lies within them, significantly harming the project of pan-European identity. A weakened European identity can have real geopolitical consequences. Bentley Allan et al. claim that “the strength and stability of hegemonic orders also depends on the distribution

As COVID continues to erode trust between member states, Europe – the beacon for Human Rights and environmental protection laws – will have trouble defending its role on the global stage. It is true, that, as Bergmann points out, “Europe gained global prestige” through its COVID-19 response. [11] However, the fractures in European identity that are produced and exposed throughout the pandemic will outlast even the longest global COVID-19 response. If identity is what convinces smaller states to stay on board with great power policies, Europe might just be outcompeted by China, Russia, or the US. These countries display a coherent national identity and do not rely on unanimous decision-making between countries that are increasingly growing apart. Phenomena like Brexit have shown impressively just how powerful a fractured identity can be as a divisive force that leaves Europe at a significant geopolitical disadvantage. The EU is at its strongest when it works together as one with all states pushing towards the same goals on an international stage. [12]


The EU can be an important international player that upholds democratic values. In fact, Allan et Al. argue that the rise of China is prevented by a democracy-friendly ideology throughout the West, which prevents the acceptance of a Chinese hegemonic system in the world. They treat hegemony as a “phenomenon encompassing elite and mass beliefs” and therefore assert that ideology and identity are important concepts for shaping the current hegemonic order. [13] Essentially, the rise of China is prevented by an ideological clash between the Chinese model of governance and the Western values of a large part of the world population. However, these values are shaped to no small extent by EU member states that share a common vision of global governance. As the EU identity, however, continues to fracture and some member states take authoritarian turns, [h] this dominant hegemonic democratic ideology diminishes in importance and paths the way for a rise of China. Even before the pandemic, states like Italy collaborated with China on the Belts-and-Roads Initiative. During COVID-19 they have turned towards China and Russia for cheap aid. [14] This yet again underlines how countries are willing to undermine EU strategic interest for economic and selfish gain. The EU must outgrow this economic legacy by growing together as a nation that shares a common identity if it wants to maintain its standing in the world.

tity. The closure of borders and the ‘turning inward’ by member states works to internalise the Other and lastingly impact how states perceive each other. The Corona Aid Package does represent a remarkable diplomatic achievement, but it too fails to lastingly address the deep-seated issue of European identity as one source of division within the bloc. Therefore, while many have suggested that COVID-19 will be a form of rebirth for European geopolitical sway, these predictions are misguided for they fundamentally misjudge the damage to European identity that the pandemic will leave in its wake. Notes [a] In fact, member states changed the Brussels draft to link spending directly to harm done by the pandemic, adjusting for any pre-COVID inequalities. At the same time, Italy and the Netherlands managed to pressure countries into agreeing to a governance mechanism that would give member states more sway over how their neighbours spend their share of the money. See Jim Brunsden, Sam Fleming, and Mehreen Khan, “EU recovery fund: how the plan will work,” Financial Times [online] (2020). [b] Poland’s Prime Minister, for example, striving to create a sense of Polish autonomy, proudly announced that the aid package was linked to less rules than the commission asked for. See “Coronavirus: EU leaders reach recovery deal after marathon summit,” BBC, 2020, 2020, https:// www.bbc.co.uk/news/world-europe-53481542. [c] In fact, Simon Hix claims that crises such asFrench rejection of the union in the 1950s, stagflation in 1970s, or concerns over UK budget contributions in the 1980s were solved by further integration. See Simon Hix, “Decentralised Federalism: A New Model for the EU,” in Brexit and Beyond: Rethinking the Futures of Europe, ed. Benjamin Martill and Uta Staiger (London: UCL Press, 2018), p72. [d] Alkopher and Blanc identify five steps that gradually erode the Schengen security community. Their argument makes the case that the Other is being internalised within the Schengen area as practice changes prompt states to lose confidence in their neighbour’s ability and willingness to combat migration-related issues and adhere to joint treaties. See Alkopher and Blanc, “Schengen area shaken: the impact of immigration-related threat perceptions on the European security community,” p525-30.

In conclusion, the issue of pan-European identity is a complicated one. EU-wide identity co-exists always with the national identities of member states and as such an inherent conflict can be found in many cases. [i] Nevertheless, the EU Commission and the EU member states have, to a certain extent successfully, managed to externalise the Other beyond Europe’s border using, amongst other things [j], open border regimes to create some notion of a coherent European Self. Europe’s response to COVID-19 puts this common project at risk and further widens existing cracks within European iden-

[e] The UK, for example, has maintained freedom of movement between England, Scotland, and Wales in an effort to uphold national unity. [f] The European Solidarity index catalogues signs of cross-national solidarity between member states. While it finds that solidarity has increased during COVID-19, at time of writing a sheer majority of these displays were statements made by governments, which do not necessarily represent a national identity. See Claire Busse et al., “European Solidarity Tracker,” (European Council on Foreign Relations, 31.07.2020 2020), Database. https://www.ecfr. eu/solidaritytracker.

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[g] There was significant solidarity for the US #BlackLivesMatter movement within Europe, but this cannot be translated into a coherent sense of Self between the US and Europe. [h] The Freedom House index measures freedom in the world. Its 2020 report found that two per cent of European countries are not free, while 17 per cent are only partly free. While this includes 15 non-EU countries, the report specifically names the Czech Republic and Poland as problematic. See Freedom House, Freedom in the World 2020 - A Leaderless Struggle for Democracy, Freedom House (Washington, DC, 2020), p24. [i] Depending on the distribution of nationalist vs cosmopolitan identities this conflict may be more or less pronounced. See Tanja A. Börzel and Thomas Risse, “From the euro to the Schengen crises: European integration theories, politicization, and identity politics,” Journal of European Public Policy 25, no. 1 (2018/01/02 2018), https://doi.org/10.1080/13501763.2017.1310281, https://doi.org/10.1080/ 13501763.2017.1310281. [j] Other measures may include symbolisms – such as the European Anthem and the European flag – and a common currency. See Michael Bruter, “On what citizens mean by feeling ‘European’: perceptions of news, symbols and borderless‐ness,” Journal of Ethnic and Migration Studies 30, no. 1 (2004/01/01 2004), https://doi.org/10.1080/1369183032000170150, https://doi.org/10.1080/1369183 032000170150. Sources [1] Max Bergmann, “Europe’s Geopolitical Awakening,” Foreign Affairs [online] (2020). [2] Tal Dingott Alkopher and Emmanuelle Blanc, “Schengen area shaken: the impact of immigration-related threat perceptions on the European security community,” Journal of International Relations and Development 20, no. 3 (2016), https:// doi.org/10.1057/s41268-016-0005-9, https://browzine.com/articles/59472618. [3] Bergmann, “Europe’s Geopolitical Awakening.” [4] Bergmann, “Europe’s Geopolitical Awakening.” [5] “Recovery Plan for Europe,” European Union, 2020, accessed 4th of September, 2020, https://ec.europa.eu/info/live-work-travel-eu/health/coronavirus-response/recovery-plan-europe_en#mobilising-investment. [6] Turkuler Isiksel, “Square peg, round hole: Why the EU can’t fix identity politics,” ed. Benjamin Martill and Uta Staiger (UCL Press, 2018), p241. [7] Hix, “Decentralised Federalism: A New Model for the EU,” p73-74. [8] Alkopher and Blanc, “Schengen area shaken: the impact of immigration-related threat perceptions on the European security community,” p526. [9] Alkopher and Blanc, “Schengen area shaken: the impact of immigration-related threat perceptions on the European security community,” p532. [10] Bentley B. Allan, Srdjan Vucetic, and Ted Hopf, “The Distribution of Identity and the Future of International Order: China’s Hegemonic Prospects,” International Organization 72, no. 4 (2018): p844, https://doi.org/10.1017/ S0020818318000267, https://www.cambridge.org/core/article/distribution-of-identity-and-the-future-of-international-order-chinas-hegemonic-prospects/6B178D9A058C016F6C7A50A089AA7290. [11] Bergmann, “Europe’s Geopolitical Awakening.” [12] Bergmann, “Europe’s Geopolitical Awakening.” [13] Allan, Vucetic, and Hopf, “The Distribution of Identity and the Future of International Order: China’s Hegemonic Prospects,” p840-43. [14] Francesco Bechis, “Polls show concerning effect of Chinese coronavirus charm offensive in Italy,” New Atlanticist, The Atlantic Council, 2020, https://www. atlanticcouncil.org/blogs/new-atlanticist/polls-show-concerning-effect-of-chinese-coronavirus-charm-offensive-in-italy/. Images Credits https://www.bloomberg.com/opinion/articles/2020-04-29/coronavirus-what-bankers-are-really-worried-about https://www.politico.eu/article/coronavirus-europe-crisis/ https://euobserver.com/foreign/147559


East & Southeast Asia

BY NATALIA VASNIER

Natalia Vasnier is a second-year History student from France. Her academic interests include public affairs and foreign policymaking particularly in the Middle East and Southeast Asia. She too, has an interest in humanitarian response to conflict and disaster.

who depend solely on one revenue making them the first victims in this economic crisis. Since these less diverse economies have been harshly impacted by the pandemic there is a risk that their governments will decide to become more nationalistic in their policies. This has caused an outflow of capital leading to a rapid depreciation of the exchange rates over the whole region. The UN conference on Trade and Development, estimated that Foreign Direct Investment (FDI), towards Asia would fall by a dramatic 45% in 2020. [3]

C

Southeast Asia the battlefield of an international trade war: a blessing or a curse?

On one hand, some economists predict that there will be long lasting effect on local economies even though the region has outperformed other regions during the outbreak. [4] On the other, others predict Southeast Asia could recover faster than other countries in a global financial crisis. Concurring with the latter, the Asian Development Bank, ADB, said that a recovery of ASEAN’s economy is possible for 2021, and Southeast Asia is expected to grow by + 4.7%. [5] It is only logical to ask how can Southeast Asia thrive while the rest of the world plummet into the abyss of financial instability.

Southeast Asia (SEA) may have been the first region to witness a COVID-19 case outside China, but it has also been the least affected by widespread infections inflicted by the pandemic. In fact, SEA currently has twenty-two times less cases than the United States but three times more that of China. [1] Each of these powerhouses have, prior to COVID-19, pushed and boosted ASEAN’s economies. But with the current pandemic we can ask ourselves what risks are now upon the Southeast Asia region in a post COVID-19 world. The current trade war between the US and China has only become more intense during the pandemic. Therefore, Southeast Asia has become the new battlefield of this international trade war, but is The Sino-US Trade War this a blessing or a curse? As anti-Chinese sentiment grew in US political circles over the 2010s, the COVID-19’s impact on SEA economies Trump administration used the opportuLike most countries in the world, ASEAN nations went into national nity that it provided to increase tariffs on lockdown that resulted in sectors such as tourism, retail, and man- Chinese-made products in 2018. This ufacturing to be affected. Travel tourism has contributed by 12.6% was further amplified by accusations by to ASEAN’s economy in 2018, making the Philippines, Cambo- the US about China’s misinformation dia, and Thailand currently vulnerable to an economic collapse. about the pandemic. Some specialists [2] COVID-19 poses a risk to less economically diverse countries even argue that we are entering a secSPECIAL REPORT: EAST & SOUTHEAST ASIA | 39


ond Cold War between these two world leaders. [6] To respond to US policies Chinese companies are expanding their global influence by investing in other Asian countries. This will allow China to access a new market and reduce its trading with the United States. These firms include Chinese tech giants ByteDance and Alibaba. Alibaba has purchased its first international property in Singapore which is to host the company’s headquarters. The reason being that SEA has a booming population of which 64 percent of the population is connected to the internet and tech start-ups are seeing the advantages of implanting themselves in the region. This trade war is powered by rivalry between the US and China but also by new opportunities that SEA can offer them. Rise of foreign interests in SEA As mentioned beforehand the loss of FDI will generate risks and economic uncertainties in SEA. There is a risk that ASEAN could close itself back on their region to encourage mutual growth without the help of foreign intervention. Thus, making the region stronger and apt to cope with another decreasing of FDI. Or the region could also innovate and propose new attractive propositions to foreign investors to survive the current financial crisis. Since SEA is heart of the Sino-US Trade War, the latter risk could be highly beneficial as each rival will be competing to invest in the most advantageous ASEAN markets. Once more challenging not only their political rivalry but also their economical one. Currently, Southeast Asian countries are entering a post-COVID stage and are assessing how to recover. The contraction of investments in Southeast Asia has created a vacuum which provides opportunities for investors to install new businesses. Experts are saying that Vietnam could benefit the most, with multinationals seeking to invest and place their production chain in the country. A report released by the World Bank predicts that Vietnam is the only SEA country which maintained a positive +1.5 % growth in 2020 compared to the US whose growth fell by 6%. [7] To explain this growing interest to invest in Southeast Asian countries in a post-COVID-19 world, it is imperative to look at the ongoing economic rivalry between the world’s biggest trading partners: The US and China. In the last decade, Southeast Asia has posited itself as an arena for Sino-American strife, with each superpower trying to implant themselves in this new booming Asian economy. It is

unquestionable that the trade war has and will be a risk for the region, but whether this risk will translate into a positive impact is something worth exploring. The blessing of the Trade War The Sino-American trade war is said to be powering the “lift-off” of Southeast Asian economies. Indeed, prior to the COVID-19 pandemic, the region witnessed a growing flow of FDI. Western investors have become less eager to concentrate their investments on one single country, i.e. China. Therefore, they seek to increase their trade agreements with South East Asia’s growing markets. As example of this current trend, Japan under a supplementary budget approved the equivalent of 219 million USD in subsidies to spread out their production to Southeast Asia. [8] Most countries are competing to become more attractive to FDI by offering tax exemptions or lowering the price of land to build industrial parks. Indeed, start-up investments in the region has nearly doubled despite COVID-19. A striking example is the Bangkok based fintech start-up Synqa Holdings within this year second quarter, April to June, raised $80 million from Thai and Japanese investors. [9] This has enhanced China to become more aggressive in its trading policies. According to UNIDO database, China has done what is called a “global V-shaped” recovery of their business activity since February 2020. Making their investments towards SEA denser than that of the US who is currently living a financial crisis. In result, this trade war is an opportunity for SEA to boost their economies, create jobs, and make the region more attractive to new investors. [10] Growing tensions between China and Vietnam As the country is becoming a manufacturing penthouse in Asia it has seen growing tensions with its neighbour China. Decades of enmity between the two countries were born from territorial disputes in the South China Sea over the Parcels Islands. Vietnam’s claim over the archipelago is weaker than that of China, the latter has since its increased military presence, expanding existing Islands and created artificial ones. The reason being that the South China Sea holds many resources and is the gateway to trade with ASEAN but most importantly the state who owns the island is rightfully the owner of the territorial waters and the Exclusive Economic Zone around it. [11] Made in Vietnam can become a risk since it will challenge again China’s economic


influence. Indeed, like with many of its trading associates China has created a tense partnership, which could result in a conflict between the two countries. There is a risk of a conflict between the two countries If ever China decides to forcefully challenge Vietnam, the country alone will have little chance to stand strong even if it has been modernizing its armed forces. The trade war powering FDI towards SEA and Vietnam Since 2018 Vietnam has been considered a trustworthy alternative of China for foreign investors due to its attractive market. The US were aware of this and launched in 2018 the Indo-Pacific Economic Vision to increase Vietnamese and American trade. [12] This comes to prevent China’s “string of pearls” policy. This policy has long been a reality in the Southeast Asian region with China trying to influence and to expand markets towards marginalised countries. [13] China over the last years has managed to implant itself around key trade routes in the word mainly at major maritime checkpoints through the Belt Road Initiative (BRI) with the Hong Kong cooperative, Hutchison ports INC. [14] However, ASEAN leaders are increasingly sceptical of US intentions, as to whether they really want to rebalance Asia’s political landscape that is becoming increasingly pro-China, as the latter example of Hutchinson INC. puts forwards. Or does the US just seek to challenge once more China by showing their high influence and to end the trade war. This constant rivalry can also be seen in the shareholders of SEA companies, such as Voyager innovations. The SEA company managed to raise $120 million in this year’s Q2 due to its US and Chinese shareholders. [15] Such investments are financial boosters for ASEAN economies, allowing them to survive in a post-COVID-19 world. It is fair to say that both aspects fuel FDIs towards SEA and Vietnam. But the main reason is the advantageous tariffs and opportunities the region offers. Vietnam has recently seen a growth in FDI mainly in manufacturing services due to its strategic geography, and a large demographic work force. According to the ASEAN Policy Brief of April 2020, Vietnam’s revised forecast of its GDP growth remains unshaken by the impact of COVID-19. Conclusion Southeast Asia prior to COVID-19 was to become the beacon to alter current trends in world trade and economies. ASEAN, which encapsulates emerging and developing countries has been the centre of an economic trade war between two world leaders: China and the US. The pandemic and the trade war have to some extent blessed Southeast Asia. Their effective response to the pandemic allowed their

financial sectors to thrive by offering attractive deals for FDI. The ongoing rivalry between China and the United States has powered a rise in interest by international investors in the region. Vietnam’s economy has been the only one to grow during the pandemic, thus looking at a very promising future ahead. Made in Vietnam could become the new made in China. Now that ASEAN’s population is growing alongside its purchasing power, investors are finding this region to become the potential new Eldorado of economic growth. Sources: [1] “COVID-19 Coronavirus Pandemic”. Worldometer. https:// www.worldometers.info/coronavirus/?utm_campaign=homeAdvegas1?,. (accessed September 18, 2020). [2] Economic Impact of COVID-19 Outbreak on ASEAN. Jakarta: ASEAN Policy Brief, April 2020. [3] “Investment flows to developing countries in Asia could fall up to 45% in 2020”. UNCTAD, June 16, 2020. https://unctad.org/ en/pages/newsdetails.aspx?OriginalVersionID=2399. (accessed July 25, 2020). [4] Searight, Amy. The Economic Toll of COVID-19 on Southeast Asia: Recession Looms as Growth Prospect Dim. Washington DC: CSIS, April 2020. [5] Economic Impact of COVID-19 Outbreak on ASEAN. Jakarta: ASEAN Policy Brief, April 2020. [6] “Indo-Pacific Economic Vision Defining Future Bilateral Relations”. American Chamber of Commerce, September 13, 2018. https://www.amchamvietnam.com/events/indo-pacific-strategy-defining-future-bilateral-relations/. (accessed July 25, 2020). [7] “United States”. The World Bank. https://data.worldbank.org/ country/united-states. (accessed August 17,2020). [8] Jibiki, Koya. “Southeast Asia vies for foreign manufactures leaving China”. Nikkei Asian Review, July 4, 2020. https://asia. nikkei.com/Economy/Southeast-Asia-vies-for-foreign-manufacturers-leaving-China. (accessed July 25, 2020). [9] Iwamoto, Kentaro. “Startup investments in Southeast Asia nearly double despite COVID”. Nikkei Asian Review, July 23, 2020. https://asia.nikkei.com/Business/Startups/Startup-investments-in-Southeast-Asia-nearly-double-despite-COVID. (accessed Sept 19, 2020). [10] Devanesan, Joe. “China tech firms look to Southeast Asia as US rivalry intensifies”. Techwire Asia, June 2, 2020. https:// techwireasia.com/2020/06/china-tech-firms-look-to-southeastasia-as-us-rivalry-intensifies/. (accessed July 20, 2020). [11] Chiu Hungdah, Park Choon-Ho. Legal status of the Paracel and Spratly Islands: Institute of Marine, November 2009. [12] Blanchard, Jean-Marc F. “The Investment War with China: Assessing American Pressure”. The Diplomat, January 3, 2020. https://thediplomat.com/2020/01/the-investment-war-with-china-assessing-american-pressure/. (accessed July 28, 2020). [13] Kynge, James, Campbell Chris, Kazim Amy, Bokhari Farhan. “How China rules the waves”. Financial Times, January 12, 2017. https://ig.ft.com/sites/china-ports/. (accessed July 25, 2020). [14] Hutchison Ports. https://hutchisonports.com/en/ports/asia/. (accessed Sept 19, 2020). [15] Iwamoto, Kentaro. “Startup investments in Southeast Asia nearly double despite COVID”. Nikkei Asian Review, July 23, 2020. https://asia.nikkei.com/Business/Startups/Startup-investments-in-Southeast-Asia-nearly-double-despite-COVID. Images Credit https://thediplomat.com/2020/04/explaining-successful-and-unsuccessful-covid-19-responses-in-southeast-asia/

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Transnational Impact BY ANDONI HORMAZA

Andoni is a third year BA International Relations student from Spain. His interests include international development, global migration and international law. Career-wise, he is passionate about journalism and the NGO sector. He is involved in the committees of KCL War Studies Society, IR Today and KCL Think Tank.

might be beneficial in the short-term for borrowing countries, past crises show the shortcomings of excessive financial deregulation.

From one crisis to the next: COVID-19 and the delusion of financial deregulation

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he COVID-19 pandemic has debilitated the global financial system. In the private sector, financial companies have rapidly identified a series of ‘emerging risks’, both to the industry and consumers, ranging from increased market fraud or money laundering, to cybersecurity and data protection issues. [1] In the public sector, the IMF has spoken of ‘a crisis like no other’, [2] with a predicted growth downturn of 5% and a rise in global debt, now 40% higher than at the start of the Financial Crisis and doubling last year’s amount in the same period. [3] By May, more than 100 countries had asked the IMF for help, and The Economist estimates that more than 30 emerging economies are in economic ‘distress’ due to the pandemic. [4] This has led to growing concerns over risks of widespread sovereign defaults. I argue that, while increasing levels of debt matter, this misses the forest for the trees. Higher default risk forms part of a broader trend towards financial deregulation. Over the past decades, increased capital liberalization and speculation have attracted investors to ‘riskier’ emerging markets. While unchecked borrowing

Echoes from the past The broader issue of financial deregulation came to prominence in 1997, after the Asian Financial Crisis demonstrated the crisis-prone nature of freer capital movements. [5] As capital restrictions were lifted, capital inflows skyrocketed, and public and private domestic institutions were able to borrow extensively abroad. However, by 1997, what had originally been a considerable surplus turned into capital flight, as concerns over the stability of local currencies arose, and countries across East Asia found themselves unable to repay the amassed debt. As in previous occasions, the IMF stepped in, applying tight conditions on loans and bailouts, and severely restricting countries’ control over their own economic policies. [6] Lack of appropriate regulation was also a decisive catalyst in the 2008 Financial Crisis. In response, the Basil Committee on Banking Supervision came together in 2010 to set a series of preventive risk measures, including requirements to maintain certain liquidity coverage ratios and capital reserves. [7] However, their implementation was deemed voluntary. Fast-forward to today, and the initial response to the COVID-19 pandemic has been to prioritize even more deregulation, with the ‘final’ implementation date now being pushed to January 2023. [8] And despite calls and promises for more


regulation, documents leaked between 2014-2016 from the Trade in Services Agreement negotiations reveal the contrary. [9] Risk-minimizing initiatives were identified in the secret negotiations as ‘obstructive’ to global financial operations. These included measures such as limiting the size of financial institutions, requiring that financial data be held onshore or regulating hedge funds. [10] Consequently, it might not be too cynical to doubt whether external regulation has ever truly been on the table. Reflecting on the inability of most economists and practitioners to predict the 2008 Crisis, former Chair of the US Federal Reserve Alan Greenspan asserts that ‘more than 99% of all insured institutions’ actually met or even exceeded pre-crisis regulatory requirements. [11] Commercial banks were essentially being allowed to self-regulate by applying their own risk models. Little has changed since then. Most recently, the International Institute of Finance, a global association of leading investment corporations, has released a new framework to ‘facilitate voluntary private sector involvement’ in debt suspension initiatives for various emerging economies hard-hit by COVID-19. [12] However, chances of success rely, at best, on voluntary ethical concerns to pardon debt. At worst, it is simply impossible, given the fiduciary duties creditors have towards clients, complicating granting debt moratoriums. [13] Argentina: A country in crisis A case in point is Argentina. In 2001, the country defaulted after the IMF suspended financial support amidst the ongoing recession. [14] Over the subsequent years, the IMF bailed the country several times, imposing austerity packages, and, in the process, fraying the relationship between the country and the IMF, leading to countless protests. [15]

Although previous government administrations were not blameless, the IMF compounded risks by lending money with virtually no conditions, including a $57bn one-off loan. [16] The conditions came afterwards in the form of austerity. The issue of deregulation comes into greater focus when looking beyond the IMF. The country’s second default in the past two decades, in 2014, partly originated due to demands from a small percentage of the country’s creditors for full repayment, despite successful negotiations with the vast majority for lower short-term repayments. [17] After the litigators brought the case to a US court and won, Argentina was forced to default, worried that doing otherwise might trigger a ‘right upon future offers’ clause, rendering all other negotiations void. This issue brings to prominence the extent to which private creditors go to secure high-short term profits, spinning tales of government profligacy to push interest rates upwards, resulting in a vicious circle of higher debt for borrowing countries. Argentina defaulted once again in May 2020, amidst the COVID-19 pandemic. This time, the IMF has acted more leniently, calling upon private creditors to engage in global debt relief initiatives. Yet figures from end-2019 show that the IMF held only 14% of the country’s debt, while private creditors amassed more than 40%. Consequently, Argentina’s economic and social security rests in the hands of foreign private bondholders, who are going to have to choose between profit and ‘good faith’. Elsewhere, a similar image appears, with countries’ ability to borrow dependent on the internal ratings given by private agencies such as S&P. Amidst the ongoing increase in borrowing, a recent UN report shows that in low-income developing countries, commercial credit has increased three-fold since 2010, with the rise even more acute in the least-developed economies, (those labelled ‘high-risk’ by rating agencies), where 38% of public debt is owed to private creditors. [18] These figures reflect how a lack of appropriate regulatory mechanisms has fuelled private specSPECIAL REPORT: TRANSNATIONAL IMPACT | 43


ulation. In the wake of COVID-19, these conditions, coupled with current levels of borrowing, can lead to countries becoming even more dependent on external credit, increasing their vulnerability to shocks. Although the effects might be more apparent in countries with weaker institutional systems, increased financial dependency can have costly geopolitical consequences across different regimes, affecting governments’ financial control and political legitimacy. Widespread protesting, as in Argentina and elsewhere, might only be the first step towards a spiral of instability. Conclusion The broader issue of deregulation and lack of transparency is thus at the root of the current risk of widespread global defaults. As seen above, transparency and accountability problems not only pervade relations between private hedge funds and investment banks, but also spill over into the IMF and sovereign entities such as the US, complicating the issue even further. The COVID-19 pandemic has exacerbated these risks due to the exponential increase in borrowing across the world. Current short-term treatments, such as the voluntary application of debt moratoriums, are not enough, as they postpone the inevitable by increasing the amount that borrowing economies will need to pay in the longterm. Unregulated borrowing has led to global debt being spread out across a wide number of private and public creditors, raising the stakes even higher. Past crises show how self-regulation can lead to an unhinged pursuit of economic self-interest and hide the risk of an impending crash. As long as internal regulation is prioritized in the name of efficiency, it will be difficult to avert future crises. To quote Plato: ‘And the different forms of government make laws […] with a view to their several interests; and these laws, which are made by them for their own interests, are the justice which they deliver to their subjects’. [19] Sources [1] Joseph Stiglitz, ‘Argentina Chooses Right Man at Right Time to Reignite the Economy’, The Guardian, December 2019, https://www.theguardian. com/business/2019/dec/24/argentina-chooses-right-man-at-right-time-toreignite-the-economy. [2] Alexandra Ulmer, ‘Argentina Mulls Initial Payment to Holdout Creditors, Final Deal in 2015: Newspaper’, Reuters, June 2014, https://www. reuters.com/article/us-argentina-debt-negotiations/argentina-mulls-initial-payment-to-holdout-creditors-final-deal-in-2015-newspaper-idUSKBN0EX0TB20140622.

[3] Shari Spiegel, Oliver Schwank, and Mohamed Obaidy, ‘COVID-19 and Sovereign Debt’, Economic Analysis (United Nations, Department of Economic and Social Affairs, May 2020), https:// www.un.org/development/desa/dpad/publication/un-desa-policybrief-72-covid-19-and-sovereign-debt/. [4] Plato, The Republic, trans. Benjamin Jowett, 1998, http://www. gutenberg.org/ebooks/1497. [5] James Lewis, ‘Covid-19 Insights-Emerging Risks’ (KPMG, April 2020), https://home.kpmg/xx/en/home/insights/2020/04/covid-19insights-emerging-risks.html. [6] ‘A Crisis Like No Other, An Uncertain Recovery’, World Economic Outlook Update (International Monetary Fund, June 2020), https://www.imf.org/en/Publications/WEO/Issues/2020/06/24/ WEOUpdateJune2020. [7] Gordon Watts, ‘Covid-19 Crisis Sparks Global Debt Risks’, Asia Times, June 2020, https://asiatimes.com/2020/06/covid-19-crisissparks-global-debt-risks/. [8] ‘Which Emerging Markets Are in Most Financial Peril?’, The Economist, May 2020, https://www.economist.com/briefing/2020/05/02/which-emerging-markets-are-in-most-financialperil. [9] Jagdish N. Bhagwati, ‘The Capital Myth: The Difference between Trade in Widgets and Dollars’, Foreign Affairs 77, no. 3 (May 1998): 7. [10] Ibid., 9. [11 ‘The Basel Committee’s Response to the Financial Crisis: Report to Eh G20’ (Basel, Switzerland: Basel Committee on Banking Supervision, n.d.), 2, https://www.bis.org/publ/bcbs179.pdf. [12] ‘Governors and Heads of Supervision Announce Deferral of Basel III Implementation to Increase Operational Capacity of Banks and Supervisors to Respond to Covid-19’, Press Release (Bank for International Settlements, March 2020), https://www.bis. org/press/p200327.htm. [13] ‘Trade in Services Agreement, Annex on Financial Services’, June 2015, https://wikileaks.org/tisa/document/20150925_Annex-on-Financial-Services/. [14] Jane Kelsey, ‘Memorandum on Leaked TISA Financial Services Text’ (WikiLeaks, April 2014), https://wikileaks.org/tisa/analysis/ Analysis-of-20140414_Annex-on-Financial-Services/. [15] Alan Greenspan, ‘Never Saw It Coming: Why the Financial Crisis Took Economists by Surprise’, Foreign Affairs 92, no. 6 (October 2013): 94. [16] Press Release, ‘IIF Releases New Framework to Facilitate Voluntary Private Sector Involvement in the G20/Paris Club Debt Service Suspension Initiative’, Institute of International Finance, May 2020, https://www.iif.com/Press/View/ID/3918/IIF-Releases-New-Framework-to-Facilitate-Voluntary-Private-Sector-Involvement-inthe-G20Paris-Club-Debt-Service-Suspension-Initiative. [17] Sydney Maki, ‘Why There’s a Looming Debt Crisis in Emerging Markets’, BloombergQuint, May 2020, https://www.bloombergquint.com/quicktakes/why-there-s-a-looming-debt-crisis-inemerging-markets-quicktake. [18] Benjamin N. Gedan, ‘Argentina’s Friendships Could Jeopardize Its Debt Relief’, Foreign Policy, April 2020, https://foreignpolicy. com/2020/04/08/argentina-regional-diplomacy-imf-debt-relief/. [19] Claudio Lozano and Esteban Castro, ‘Argentina: Massive Marches Against International Monetary Fund’, TeleSur, February 2020, https://www.telesurenglish.net/news/Argentina-Massive-Marches-Against-International-Monetary-Fund-20200212-0010.html. Images Credit https://assets.weforum.org/project/image/Cx7DEoMF7T4pwbDtpRbjdDnNDNPw9gw5Zd3yadoC7uY.jpeg https://www.ft.com/content/e45ca6ea-75b7-11ea-90ce-5fb6c07a27f2


CONCLUSION

The Dawn of a New World: A Litmus Test for Global Governance

BY MARCUS TAO MOX LIM

Marcus is a third-year BA International Relations student. He is the President & Senior Editor of KCL Geopolitical Risk Society as well as the East Asia Regional Editor at KCL International Relations Today. His research interests include historical and modern-day imperialism, British imperial policy and decolonisation in the post-war period.

orecasts project that COVID-19 will claim 40 million lives and reduce global economic outputs by USD $12.5 trillion at the end of 2021. [1] While ending the pandemic is in the interests of the international community, supranational organisations that were designed to solve global issues as such, remained paralysed. The UN, WHO and EU failed not only to grasp the severity of the pandemic in earlier stages, but more importantly, failed to take the helm in a time of crisis.

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There is a disparity in performance between countries that managed the pandemic better: some countries opted to take robust approaches at the early onset of the outbreak whereas some states delayed responses. In essence, there was a lack of a concerted approach and understanding of the virus’s severity by said-organisations. Nonetheless, the inherent reversion back to ‘nation-first’ approaches that most states had adopted had subconsciously placed strains on the legitimacy of international institutions and by

extension, the liberal international order. COVID-19 is a litmus test for the effectiveness of current architectures of global governance. Put simply, it has not gone well. The pandemic has revealed the inadequacies and weaknesses of the current international order. Given the mismanagement of the pandemic and its looming economic impact, a tide of populist nationalism could sweep the globe. Will the institutional legitimacy of international organisations be resilient enough to endure the political pressures post-COVID? The unstoppable tide of nationalism Populist nationalism is one of the many adverse effects of COVID-19, bringing out the ‘ugly’ side of domestic politics. Precursors of nationalism saw a silent acceptance of finger-pointing, blatant xenophobia and open racism towards Asian communities in the West: reinforcing a ‘we versus them’ dynamic built on a landscape of fear. As the infection rates surpassed the initial overconfidence of states, leaders in pursuit of ‘getting the situation under control’ SPECIAL REPORT: CONCLUSION

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took decision to their own hands. Through visibility of ‘decisive’ border controls, draconian measures and travel bans, there is a subconscious notion of the return to the primacy of the state as the ‘responsible enforcer’. The ‘nation-state’ is now seen to be the ‘active’ player in managing the crisis thus, putting the WHO’s effectiveness into question. The pandemic has also exposed the vulnerabilities of certain economies, some states having to rely on others for critical medical supplies could potentially move towards reorienting supply lines and industries to achieve economic autarky, applying brakes to an already precarious globalised world. COVID-19 has too revealed inequalities in the existing order: with countries in the Global South suffering more than the Global North. Poorer countries with densely populated cities and weak public health infrastructure will hit hard as basic hygiene and running water becomes indispensable in containing outbreaks. The fact that Africa, having a population three times of Europe has only two testing facilities is testament to the inequalities of wealth and power in the Global South. [2] Many Global South economies have seen a stunted growth as a result of a decline in air travel and tourism which makes up a large part of their income. As a result of the pandemic, the World Bank estimates 60 million people globally will be pushed into extreme poverty. [3] Historically, periods of prolonged socioeconomic hardships usher in a tide of nationalism and populism. A recent example, the 2008 Global Financial Crisis had created a fertile ground for populist movements to grow in the US, UK and continental Europe. As unemployment and inflation soars, the political class will channel their discontent, voting in leaders that promise to relieve short-term hardships and inequalities. Mistrust amongst the global community will increase as states move inwards, speeding the decline of multilateralism. [4] In the near term, governments will remain stable as civil rights have been temporarily restricted: barring protests, gatherings and elections postponed. However, as mismanagement-driven discontent and the ripples of economic hardships continue to brew, the pressure will inevitably generate a powerful inertia for aspiring politicians to take advantage of. Fukuyama goes to the extent to suggest that there might be a ‘resurgence of fascism around the globe’. [5] While this might be a rather extremist approach, the other worrying element to this is the constant comparisons of effective COVID-19 management attributed to non-democratic regime types. The devaluation of American leadership America under the Trump administration have seen its prestige slip away with its bungled response to the pandemic. Allowing its ‘America First’ rhetoric to permeate onto the world stage, America had failed to rise to the occasion to salvage some form of lost global leadership. Recent demonstrations of police brutality, racial violence, social inequalities and xenophobia have taken a hard hit on America’s eroding soft power.

Rather than galvanising a global response, the Trump administration had repeatedly politicised the pandemic through antagonising Beijing, spreading disinformation and even moved to withdraw from the WHO. Coupled by sheer arrogance towards allies on the world stage, the symbolic implications of a devalued world status labels the US as an inconsiderate, irresponsible and unreliable world player. In April, President Trump sabotaged relations with India by warning retaliation when Indian Prime Minister Narendra Modi put an export ban for hydroxychloroquine that was meant for Indian domestic consumption. [6] In late June, the US secured world stock of a potential COVID-19 drug Remdesivir, leaving none for the UK, EU and the rest of the world for 3 months. [7] Relations with Europe were further hampered when he imposed a travel ban on the EU without consultation and, attempted to persuade CureVac (one of the leading firms for a vaccine) to move from Germany to the US. [8] What does this mean for American leadership? Fukuyama predicts that the ‘global distribution of power will continue to shift eastward as East Asia had done better at managing the pandemic’. [9] China has taken America’s failings on the global mantle to vamp up its eminence on the world stage. Within months of containing the pandemic within its borders, Beijing sent out medical supplies and experts to Italy in a bid to get the crisis under control. Viewing Washington’s loss of its ‘mandate of rule’, Beijing is actively seeking to displace America’s role as a global supporter in times of crisis. With its new given confidence, a CCP-owned think tank is soliciting opinions to gauge how the world would react to a Chinese alternative to the WHO. [10] America’s mismanagement of COVID-19 has not only presented Beijing the chance to eclipse its infamous reputation in Wuhan by recasting itself as a responsible global player but also, a platform to advance its geopolitical interests. A eulogy to internationalism The pandemic is ultimately an issue that requires international governance and compliance: the chaotic global response has


seen countries turning inwards, adopting travel bans, implementing export controls and hoarding information – perhaps, an antithesis to multilateralism. The failure of the WHO to prepare for a global outbreak cannot be blamed on a lack of warning. When Chinese authorities locked down Wuhan in January, the WHO failed to comprehend the severity and take action. Only after a week, it had designated COVID-19 as a public health emergency, after countries had already shut borders. Only in June did the WHO release a U-turn in public guidance on wearing face coverings: for months, the WHO stuck to the line that masks would ‘encourage a false sense of security’ [11] – by then, many countries had already made face coverings mandatory in public spaces. It was ‘actor-less’, it acted upon the responses of states, rather than acted on states. EU nations, despite pledging to an ever-closer union, reacted selfishly which disrupted commerce and stranded EU citizens once the threat became eminent: “governments misled Brussels about their readiness, hoarded essential equipment and shut borders”. [12] When Germany banned exports of protective medical equipment to its Swiss and Austrian neighbours, the de facto bloc leader left the integrity and confidence of EU solidarity at stake. Perhaps the largest red flag was raised in February, when Italy’s request for EU assistance was met by deafening silence. The international response to COVID-19 had exposed the structural problem-solving capacities of liberal international institutions, governments had repeatedly forsaken opportunities for consultation, joint planning and collaboration, opting instead to undermine the WHO. Other equally important institutions like the G7, G20 and UNSC failed to rise to occasion, with the world’s seven largest advanced market democracies failing to meet until March. Weak international cooperation was a choice, as leaders turned their back away from the international. On the other hand, one thing can be certain: realpolitik stops for no one. China, having come under international scrutiny for a lack of veracity and failing to contain the virus shows no desire to rein in its assertiveness. Provocative actions in Hong Kong, India, Taiwan, Philippines, Vietnam and the South China Sea since the onset of COVID-19 has raised eyebrows within the international community. The general narrative is that China has exploited the vacuums propped up by the pandemic to make geopolitical advances. While this is somewhat counterproductive to its ‘mask diplomacy’ of winning points on the world stage. On one hand, it is asserting dominance over Asia during a pandemic, while on the other it is playing a ‘saviour’ card, offering medical assistance and supplies global-

ly. Mask diplomacy, perhaps, connotes to Beijing’s unapologetic ‘no shame no game’ attitude even in today’s political landscape. In a post-COVID age where geopolitical maps are bound to be redrawn, the dawn of a new world awaits: unless urgent structural reforms on international institutions are on the agenda, the current international order will snap under various pressure points. Sources [1] Bollyky, Thomas J., and Chad P. Bown. “The Tragedy of Vaccine Nationalism.” Foreign Affairs, August 13, 2020. https://www.foreignaffairs.com/articles/united-states/2020-07-27/vaccine-nationalism-pandemic. [2] Herszenhorn, David M., and Sarah Wheaton. “How Europe Failed the Coronavirus Test.” POLITICO. POLITICO, April 10, 2020. https:// www.politico.eu/article/coronavirus-europe-failed-the-test/. [3] Reinhart, Carmen, and Vincent Reinhart. “The Pandemic Depression.” Foreign Affairs, September 11, 2020. https://www.foreignaffairs. com/articles/united-states/2020-08-06/coronavirus-depression-global-economy. [4] Ibid. [5] Fukuyama, Francis. “The Pandemic and Political Order.” Foreign Affairs, August 3, 2020. https://www.foreignaffairs.com/articles/ world/2020-06-09/pandemic-and-political-order. [6] Pti. “Trump Talks Tough, Warns of ‘Retaliation’ If India Doesn’t Export Hydroxychloroquine to U.S.” The Hindu. The Hindu, April 7, 2020. https://www.thehindu.com/news/international/would-be-surprisedif-india-doesnt-allow-export-of-hydroxychloroquine-to-us-trump/article31276161.ece. [7] Boseley, Sarah. “US Secures World Stock of Key Covid-19 Drug Remdesivir.” The Guardian. Guardian News and Media, June 30, 2020. https://www.theguardian.com/us-news/2020/jun/30/us-buys-upworld-stock-of-key-covid-19-drug. [8] Bennhold, Katrin, and David E. Sanger. “U.S. Offered ‘Large Sum’ to German Company for Access to Coronavirus Vaccine Research, German Officials Say.” The New York Times. The New York Times, March 15, 2020. https://www.nytimes.com/2020/03/15/world/europe/ cornonavirus-vaccine-us-germany.html. [9] Fukuyama, Francis. “The Pandemic and Political Order.” Foreign Affairs, August 3, 2020. https://www.foreignaffairs.com/articles/ world/2020-06-09/pandemic-and-political-order. [10] Allen-Ebrahimian, Bethany. “State-Owned Think Tank Floats China-Led WHO Alternative.” Axios, March 4, 2020. https://www. axios.com/china-coronavirus-think-tank-world-health-organizationc0c4348f-d481-4e5c-9391-f54000248a2f.html. [11] “Coronavirus: WHO Advises to Wear Masks in Public Areas.” BBC News. BBC, June 6, 2020. https://www.bbc.co.uk/news/ health-52945210. [12] Herszenhorn, David M., and Sarah Wheaton. “How Europe Failed the Coronavirus Test.” POLITICO. POLITICO, April 10, 2020. https:// www.politico.eu/article/coronavirus-europe-failed-the-test/. Images Credit Illustration: Sarah Grillo/Axios https://www.axios.com/china-coronavirus-think-tank-world-health-organization-c0c4348f-d481-4e5c-9391f54000248a2f.html


Copyright Š King's College London Geopolitical Risk Society Published October 2020. All rights reserved.

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Special Report: Crossing the Geopolitical Rubicon: Assessing the Risks in a post-COVID Age  

This special report aims to discuss the different risks associated with a post-COVID political future in different geographic regions. Contr...

Special Report: Crossing the Geopolitical Rubicon: Assessing the Risks in a post-COVID Age  

This special report aims to discuss the different risks associated with a post-COVID political future in different geographic regions. Contr...

Profile for kclgpris
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