If there is one thing that the past year has taught us, it’s that humanity is capable of immense adaptation and ingenuity in the face of crisis. Before COVID-19, the idea of shutting down borders, locking down economies, and requiring months-long social isolation and almost obsessive hygiene en masse was the stuff of Hollywood movies — not to mention the trillions of dollars in economic aid to hundreds of millions of struggling citizens across the world, as well as the rapid development of highly effective vaccines less than a year into a pandemic.
History also shows that major external shocks, from the Spanish flu a century earlier to the Great Depression, can radically reshape the trajectory of human societies. As studies by leading economists such as Daron Acemoglu and James Robinson have shown, cataclysmic events such as plagues can lead to “institutional drift,” similar to “genetic drift” in evolutionary biology, with far reaching consequences for humanity. The pandemic can change patterns of growth and governance in Asia.
The relative success of Asian countries in managing the pandemic therefore shouldn’t obscure the long-term challenges.
By all indications, post-pandemic Asia will likely become more economically unequal, socially unstable and geopolitically contested.
To be sure, the pandemic has accelerated some encouraging developments. We have seen skyrocketing investment in green technology, especially electric cars. Both the United States and China have also adopted more decisive measures to combat climate change, with U.S. President Joe Biden and Chinese leader Xi Jinping pledging to create carbon-neutral economies by the middle of the century. Prime Minister Yoshihide Suga has made a similar pledge.
Crucially, the pandemic has also highlighted the significance of good governance and strong institutions. Asian countries as varied as Vietnam, with a communist regime overseeing a developing economy, and Taiwan, with a democratic regime overseeing an industrialized economy, have shown remarkable resilience in the face of the pandemic.
Both Asian nations are among the few economies to have grown last year, while largely containing the pandemic with proactive public health measures. Even larger nations such as China and Japan have been relatively successful — and so have Southeast Asian nations such as Singapore and Thailand.
Yet, the generic narrative of supposed “Asian success” takes a more sobering turn when one looks at large nations such as India, Indonesia and the Philippines, which have posted among the biggest COVID-19 outbreaks in the world as well as suffered steep economic contractions.
In fact, the International Monetary Fund estimates that India and the Philippines will suffer the largest growth decline (relative to their pre-pandemic potential) over the next half a decade among all economies. Both Asian economies saw their GDP contracting by about 10% last year, a dramatic reversal from the “Asia’s rising tigers’’ narrative of the past decade.
Despite upbeat headlines, slow and inefficient vaccination programs will hamper economic recovery, which requires a relaxation of lockdowns. According to The Economist Intelligence Unit, large Asian nations such as Indonesia and the Philippines will likely be among the last nations to achieve a semblance of “herd immunity,” perhaps sometime around 2023.
The upshot is the emergence of a “three-speed” Asia in which a few successful countries such as China and Vietnam are rapidly climbing up the economic rankings; relatively successful countries such as Singapore, South Korea and Thailand are on a glidepath to recovery; and laggards, such as the Philippines, India and Indonesia, are falling behind their peers for years, if not generations, to come.
Notwithstanding the oasis of success and encouraging picture of numerous regional states (from tiny Taiwan to giant China), the big picture implications for Asia are far from reassuring. There are three long-term trends that should prevent even an iota of complacency among regional policymakers.
First, the pandemic has strengthened a resurgent China, paving the way for even more intensified geopolitical rivalry with the United States and its major allies. The Asian powerhouse is almost certain to become the world’s largest economy within this decade, further augmenting its maritime and territorial assertiveness on the back of rising defense spending and major technological strides.
Although China is believed to be the origin of the pandemic, Beijing’s relatively seamless containment of the crisis, especially in comparison to its Western rivals, has also boosted Xi’s ideological self-confidence and global ambitions. Paradoxically, with greater power comes greater paranoia. As anti-China sentiment reaches historic high levels in much of the West, especially in the United States, China is now preparing for a “period of turbulent change.”
China is right to be worried by the new administration of Biden’s commitment to build a robust network of allies, both across the Atlantic and the Indian oceans, to preserve a free and open international order. In Beijing’s view, the U.S. is gung-ho on establishing nothing short of an “Asian NATO” to constrain its rising ambitions, especially in adjacent waters but also in the realm of cutting-edge technology and infrastructure investments.
Biden’s open warning of long-term “extreme competition” and his commitment to promote democratic values are only deepening China’s strategic anxieties, setting the stage for long-term new Cold War between the two superpowers in Asia. The Sino-American rivalry will send shock waves across the region, both in terms of regional manufacturing networks but also strategic alignments.
Second, flush with cash and determined to assert its regional leadership, China is now in a prime position to exploit economic troubles among neighboring states, especially U.S. allies and front-line nations in Southeast Asia. An area of concern is the prospect of Chinese “bargain hunting” in heavily distressed yet strategically relevant nations, which are now desperate for investments and economic assistance.
In recent years, Beijing has greedily eyed prized infrastructure and sensitive sites across the Philippines, including massive shipyards and greenfields close to military facilities in the Subic Bay and Palawan, two areas that also happen to embrace the disputed South China Sea and regularly host American naval assets.
Absent significant assistance by the United States and likeminded powers, countries such as the Philippines, Cambodia and post-coup Myanmar may be tempted to trade their sovereignty for short-term economic survival.
Third, there is a long-term democratic regression across major Asian democracies. The pandemic has been a boon to full-fledged and budding despots across the region, as governments opportunistically leveraged emergency powers in the name of public safety to bludgeon the opposition and defang democratic institutions.
In Indonesia and the Philippines, the pandemic saw the systematic infiltration of the defense establishment into the civilian government, as former and acting generals became key architects of ostensible public health responses to the crisis.
A related concern is the long-term immiseration of the middle classes, which have been the backbone of democratization across Asia over the past century. Amid generalized wretchedness, many progressives as well as distressed working class citizens may simply choose to leave their countries or focus on daily survival rather than continue risky political activism.
As we have seen in countries from Turkey to Thailand, economic distress could reinforce reactionary, authoritarian tendencies among the general population, especially among the middle class, as voters seek a steady hand for recovery and public safety. Asia may be the most dynamic region on Earth, but it could also end up as a hotbed of inequality and instability in the absence of good governance.
Richard Javad Heydarian is a professorial chairholder in geopolitics at the Polytechnic University of the Philippines and author of, among others, “The Indo-Pacific: Trump, China and the New Struggle for Global Mastery.”
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