The post-Covid ‘multilateral’ reality is evolving

It is not good practice either in academics or in everyday coffee-room discourse to refuse to understand the nature of politics. No crisis can be spoken of if it is not properly identified. Are we experiencing a food crisis today?

No we are not. A few queues for some scarce items do not make for a scarcity of food. What we need is the patience to wait, and those who make unreasonable assessments about a food-related calamity are not being dispassionate observers of politics.

The political economy of the post-pandemic period is still an under-explored subject. There should therefore be no peremptory conclusions arrived at. Global trade is suffering from a massive supply chain crisis and a severe energy crunch.

Some say that this is the ’70s revisited. The then energy crisis and the ramifications from it produced stagflation. But that aside, the world has often seen post-pandemic booms – during the time of the Industrial Revolution, etc.

Those were periods of great social upheaval. Those who speak of a food crisis today do not know what a proper food shortage is. We had one in the ’70s. Bread was sold by what were called Janatha Committees on a strict ration basis.

Sweet potatoes and manioc became part of the people’s diet. Cloth was in short supply, and every male was allocated a few yards of polyester material annually, on a coupon basis.

Production goals


Head of WEF Klaus Schwab

Not that the then rulers thought that scarcity should be on the one hand offset by production goals. The country had no production to speak of. The economy was an unmitigated disaster. It would be correct in many ways to say that from then on the country never had a full-blown economic crisis. There were fleeting perceptions of economic calamity during the war, for instance, but the perception that there is a food crisis now or any other commodity crisis for that matter, shows how cosseted we as a people have been for scores of years.

Since the J.R. Jayewardene economic policies took off, the country has been on a roll (relatively speaking of course) decade after decade, and has never seen any real scare until the global economy buckled under the pressures of a pandemic-hit global supply chain breakdown.

What we are seeing now is a low-intensity economic reset after decades. People have almost forgotten that the pandemic has been cited as the time for the ‘great reset’. Klaus Schwab, the head of the World Economic Forum (WEF), first mooted the idea of the great reset in an article published before the annual Davos summit, before this concept of a reset was hijacked by conspiracy theorists.

However the plan for this realignment if you will, though explained in somewhat copious detail at the Davos summit, remains sketchy. It is therefore rather fitting that the ‘reset’ had to be improvised by leaders and this seems to be what is happening in Sri Lanka today. There is a low intensity recalibration underway, and it may take months if not years to see exactly where it leads.

Multilateralism

At the moment people are anxious about economic calamity, and most of the food scare stories are worry-driven. Food inflation has caused a certain amount of hardship, but this cannot be equated to a full-blown food crisis.

This current Sri Lankan Gotabaya Rajapaksa led administration and other Governments around the world are just beginning to see through the fog of what is emerging as the global economy, after the pandemic.

The first thing that people recognize is that there is increased multilateralism in which a so-called multi-stakeholder economy is evolving.

In this global multi-stakeholder economic reality, there are many corporate actors that are stakeholders. The outcome of this global emerging economic paradigm is not yet defined.

Partially, this multi-stakeholder reset is bound to give corporations more leeway in deciding global policy, and global economic direction in particular. In this world of stakeholder capitalism, Governments are still trying to find their sea legs after the pandemic cast them in choppy waters.

A stock of Pfizer vaccines arriving in Sri Lanka.

In Sri Lanka we have become a partner in this stakeholder capitalism ‘reset’ to some extent. The Government is cooperating with certain entities to ensure there are more doses of the Pfizer jab for instance, and such initiatives are an indication of direct private sector participation in the multi-stakeholder global economy.

 Most global leaderships are tying up with these new trends because they feel they stand to benefit. Any assessment of these changes cannot be made until this period of reset so-called, is over.

It seems more than a little far-fetched to say that an administration that is an active participant in the global stakeholder economy is following the insular policies of the Bandaranaike ’70s.

It seems nothing can be further from the truth. This is a regime that has tied itself to the international stakeholder economy, and the vaccine policy is one definite sign of that.

 A regime that is not isolationist nor insular and is tying up with the top tier international suppliers of vaccines to ensure that there is no shortage of jabs, cannot be seen as a Government fostering insularity and shortage.

Those who say there is a food shortage seem to do so because they feel compelled to draw a comparison. They are over eager to see systemic collapse.

That is not a dispassionate political analysis. Any political commentator that acts as if Covid never happened in making an assessment of relative economic conditions of countries is being disingenuous. However, Covid is the reality. Most commentators write or speak as if the economic difficulties now being experienced in the country were not effected by Covid, and the global supply chain issues and other international repercussions due to Covid are not important.

When official forecasts in the industrialized nations are that there is an around 50 percent loss of GDP in Covid-hit economies, the global economy is in a tailspin. There is also a negative perception factor, for the simple reason that there are new variants. For instance, China is said to be battling a fresh variant these days even as this article is being written.

Vaccine mandates

The issue of stakeholder capitalism is also blurry. Nobody is sure what vaccine mandates would be there for various international and domestic travel and other purposes, and is it true that a great deal of the decisions on these matters would be made by private sector stakeholders with the concurrence of the World Health Organization (WHO)? That would be a paradigm shift in the way the global economy is operated.

These are shifting sands and there are years to go before the long-term repercussions of the Covid-related events can be felt. Would there be a substantial reset of the global economy and the way things are organized, or would the changes, if any, be cosmetic?

The Davos picture of private stakeholder involvement may take time to be a reality, and Covid may have planted the seeds for that to happen. However, the tech companies too are under siege and the recent Facebook whistleblower testimony is now being repeated in the UK.

But the private stakeholder involvement in the global economy may not have much to do with the tech-companies. A clearer picture is gradually emerging, but to make sense of everything it may take some years. Short-term assessments can be made and though Sri Lanka gets high marks in some areas, the way the economy is assessed differs from the way the health aspects of recent governance are assessed.

However, the Governments that botched both the health and the economic responses are bound to be in greater trouble than the Governments that did well in some fronts, but are struggling in others. For the moment there is mixed global reaction to the way things are panning out in Sri Lanka, but to say the least, the jury is out on it.  But some pundits do not so much as want to consider all the bearings and the ramifications, and that is unfair and rather sad.

Sri Lanka has followed an open economic policy since 1977.

– Daily News Sri Lanka

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