• July 19, 2024

Cost of a divided world

Let me draw your attention to four of my pieces that appeared in this space in the past two years. On June 1, 2019, in my piece titled “The Huawei Inflection Point”, I pointed out the perils of the Trump administration’s dangerous campaign against Huawei. As we examined in this space the reasons given behind the ban were full of platitudes and contained a laundry list of complaints. From national security to Donald Trump’s trade war with China this mixed bag of objections was a serious threat to the industry. Apart from the major disruption it could cause to the burgeoning tech industry, I pointed out that there were three possible outcomes if the ban was taken to its logical conclusion. 1) That the company’s international business dies and is replaced by other Chinese companies. 2) That Trump eventually concludes a trade deal with China and even the company’s real offences are whitewashed. 3) There is no resolution and the world is split into two irreconcilable software spheres, one led by Chinese companies, the other dominated by American tech giants.

If Trump had won in 2020 the second outcome was the most probable one because the two sides were very close to concluding the second round of a trade deal. He did not. And his short-term pressure tactics had long-term consequences.

On June 29, 2019, I wrote another piece titled “How Not to Train a Dragon”, in which I pointed out that China was indicating that it was ready to have a dialogue and open up as a consequence. That to do that the United States and its key partners needed to win its trust. Without trust good luck having any progress in talks with Beijing. Trump knew this instinctively and was able to engage effectively. This would have produced some lasting results had it not been for two developments.

As the election season set in and Covid-19 exploded on the world stage, China became an easy target of partisan point-scoring. Trump would go on to refer to the coronavirus as the China virus. This had a seriously negative consequence for the Asian American or the AAPI community. But at that time China knew and indeed was privately assured that all this rhetoric was meant to win the next election and once elected the incumbent would pick up the thread of negotiations where it was left.

But an issue with an open society is that lobbyists of all sorts take full advantage of every momentary fissure that opens up in any affair. Consequently, while Trump is gone, the toxic rhetoric he helped spread continues unabated. Hate crimes against the AAPI community continue despite timely legislative action by the Biden administration. So, do the calls to decouple the US and the Chinese economies.

On March 14, 2020, I wrote “Covid-19 and Collective Security”, where the core argument was that the new lethal disease needed cooperation between all nations of the world and the old patterns of the balance of power or containment could have lethal consequences. Another piece titled “Failure, Paranoia and Decoupling”, on March 21, 2020, reminded readers of how interconnected and interdependent the world economy was and the idea of decoupling was highly counterintuitive and counterproductive. And if this transparent truth was discernible to this humble mind, I am sure it must be to the policymakers and lobbyists of the world. But given that we knew of the source of these calls for decoupling and that they only grew in time, you could notice how benighted, selfish and short-sighted some powers can be that they do not care what happens to the world with them in it as long as their short-term goals are met. Bureaucracy and populism make a lethal mix.

Look at the consequences. In a brilliant article titled “The Missing Chips”, which appeared in Foreign Affairs, Chad P Bown laid bare the impact of Trump’s trade war and the Covid-19 fallout on the tech industry and the semiconductor chips. While Trump’s measures were meant to isolate China for a short period, they ended up punishing the American and western tech companies which use these semiconductor chips in a wide range of products that they produce from smartphones and household appliances to electric cars and even bigger products. Instead of correcting the trade balance between the US and China, it has only worked to wipe out many opportunities for wealth creation for all in trade. There are enough unmeasured and untabulated variables out there in this post-Covid world which can easily take us to an unprecedented global economic meltdown. No country can or should risk triggering such an outcome.

And it doesn’t end here. To borrow Michele Gelfand’s term, the comity of nations will always be a loose society and culture. This means that if enough paranoia exists between two or more members it can wreak havoc in every society. And that is precisely what we have witnessed. In every country, the government’s response to Covid-19 has actively been undermined by its own citizens. And this sad story continues even as the world has lost over four million lives. The propaganda against vaccines, measures to contain the virus and each government’s intentions has made the world a sad and ugly place. If the virus survives as a lingering concern for long it can permanently reverse the progress the world has made in fighting poverty and suffering in the past many decades. It can further destroy the chances of a timely global economic revival.

Vaccine nationalism is becoming another serious challenge. The way different regions of the world are refusing to accept vaccines produced by a potential rival as a legitimate cure will only compound and exacerbate our collective suffering. The West seems reluctant to accept vaccines produced by China and Russia. The eastern parts see a propaganda campaign against the western vaccines which due to the interconnectivity of the world swiftly reaches the western societies and destroys serious efforts to combat the virus. This sorry state of affairs cannot go on forever or it will destroy the world in ways we have not even imagined. In the 1920s and 30s, when the world had so much paranoia, some of the worst political elements emerged on the stage and destroyed millions of lives and scarred countless generations. In this age, even a remote semblance of the emergence of such a phenomenon will have a disproportionately bleaker impact owing to the presence of far superior technology. Unaffordable.

Published in The Express Tribune, July 17th, 2021.

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