31 March 2020. PenzaNews. The pandemic of the new coronavirus infection COVID-19 (Coronavirus Disease 2019) will have a serious impact on the global economy and political relations between the countries, says Andres Ortega, a council member of ECFR and a senior research fellow at the Elcano Royal Institute, in his article “The deglobalisation virus” published in several foreign media.

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“Covid-19 comes at a time when the world’s governments have fewer tools for fighting against its effects than they once did,” the author believes.

In his opinion, the coronavirus is bringing the world to a standstill, barring conflicts such as Syria and its refugees, Libya, and Iraq.

According to the analyst, this standstill entails tremendous risks – Covid-19, the contagion that has been so widespread largely because of human hyper-interconnection, is dramatically accelerating the process of deglobalisation which originated in the reactions to the 2008 crisis and has profound effects on our present and future.

“Combating the virus involves keeping people apart, the opposite of what we have experienced in recent decades and previously. Borders – on land, at sea, and in the air – are staging a comeback, sometimes unilaterally, even in the European Union,” Andres Ortega says.

“The Covid-19 crisis has become the third great shock of the century, after the 9/11 attacks and the process unleashed by the fall of Lehman Brothers in September 2008, which triggered economic and financial contagion. This is simultaneously a human shock, a supply-side shock (involving production), and a demand-side shock (involving consumption), with the added danger of unleashing a new financial crisis,” the ECFR council member says.

In his opinion, the recession will cause huge losses: increasing numbers of supply chains are seizing up or stalling, many factories making machinery, cars and other products have had to cut or cease production for lack of vital components.

“Air and other forms of travel are in abeyance; the same goes for the movement of shipping containers – that analogical invention so crucial to globalisation. Global tourism has taken a massive hit, from which it will take time to recover. The pandemic has laid bare our mutual dependence, the degree of interdependence on which we rely,” the author says.

“Many companies have realised the risks of this over-interdependence, and mean to curb it. A recent Bank of America report states that 80 percent of multinationals investigated plans to repatriate part of their production, known as re-shoring, a trend that Covid-19 could turn into a tidal wave,” he notes stressing that the virus is going to lead to greater national or regional emphasis on production.

According to the expert, the situation is complicated by the existing process of the technological decoupling of Beijing and Washington being pushed by the Trump administration.

“As though in response, China, with its own pandemic apparently under control, is airlifting massive deliveries of health supplies to Italy and Spain; whereas Trump has unilaterally suspended flights between Europe and the US – contrary to the advice of the World Health Organisation, precisely in order not to disrupt the supply of medical aid – thereby damaging transatlantic relationships even further,” the experts explains.

“Confronting the Ebola epidemic that emanated from Africa in 2014–2016, the US – with Barack Obama in the White House – put itself at the forefront of the fight. In the face of the coronavirus, Trump has sown confusion,” Andres Ortega believes.

However, while Covid-19 and the way of addressing it is slowing physical globalisation down, it is also promoting an ever more digital, online form of globalization, he adds.

“Remote working has won converts, as have online services […] and systems using drones and other autonomous systems have made headway in China during this crisis. The same applies to digital services for detecting illnesses using artificial intelligence, and robots for all manner of services,” the analyst says.

At the same time, according to him, the crisis has also involved the comeback of the state, albeit requiring multi-level management, in which not only international organisations and governments but also companies and members of the public participate.

“These are times demanding individual leadership, certainly, but above all collective leadership, something that is not yet taking place in Europe. They also require rehabilitating the idea of a global community in the face of what is undoubtedly a global menace,” the author says.

“But what it is not putting a lid on is discrimination or national narratives, which have come back with renewed vigour when what is imperative is international cooperation. […] When the pandemic is overcome, globalisation will resume but in a guise that is less intense and different from the one we have known up to now. The global standstill will have lasting and not necessarily positive consequences,” Andres Ortega concludes.