Overly complex interdependencies develop systemic risks and flow into our international system. A lesson from the pandemic is the importance of managing systemic risks due to globalization. The entire world is facing a trust recession due to the rise of populist politics and protectionist sentiments. We should regain trust and strengthen economic globalization and promote multilateral agenda. There are four factors identified for the widening trust deficit. If the trust is restored, there will be definite positive outcomes such as strong intra-regional trade, developed economy, and cross-border security. The pandemic exacerbated domestic nationalist viewpoints in many nations; taking this opportunity, pandemic nations like Sri Lanka had parliamentary elections and amended the constitution, shifting power to the president. The present ultra-nationalism and populist policies would further fuel and instill domestic malign mercantilism.
TopGlobalization: Complex Interdependencies & Systemic Risks
Globalization has brought us many benefits, integrating communities, rapid transportation networks to urbanization to megacities. Robert Keohane and Joseph Nye call this the ‘complex interdependencies’ (Nye 2011) is what the world has experienced. Further, the scholarship published back in 1977 suggest conventional thinking have overemphasized states and has over aggregated power, this was the predominant failure to understand before the largest terror attack on the US soil 9/11, that the most powerful nation could be vulnerable to small bands of terrorists attributed to patterns of asymmetrical interdependence. While globalization was seen by many as a benefit to uplift human conditions from poverty and bring people closer to the technological advancements of the 4th industrial revolution (Schwab 2016), the patterns of asymmetries in globalization were developing along with the progress. The patterns of asymmetries triggered multiple threats from terrorism, financial crisis to the present-day pandemic. It is as if there was not much investment done by policymakers to understand these asymmetries and risk factors of globalization.
These overly complex interdependencies would develop systemic risks within the system.
With great benefit, there are risk factors that flow into our international system. While many national leaders confine their focus on national issues, they tend to ignore systemic risks generated from rapid globalization between countries. What triggered in the dawn of 2020 was a global systemic risk which most nations couldn't cope with due to the rapid spread of the Pandemic. Most leaders have been pushed to a multilateral platform by the Pandemic. Pandemics and the health risk from Globalization are areas not discussed broadly across nations and are somewhat absent or limited in the international relations agenda. What happens in Wuhan (WHO 2020) China ended up in so many countries so fast due to the ‘Butterfly defect' in globalization. The butterfly defect concept was introduced by Prof. Ian Goldin, referring to the work of American mathematician Edward Lorenz (Lorenz 1963) work in Chaos theory which found the ‘Butterfly Effect’. Explaining how a hurricane formation is influenced by minor perturbations such as the flapping of the wings of a distant butterfly several weeks earlier. A small change in one place can lead to major differences in a remote area. In the same manner, negative unintended ripple effects of Coronavirus that triggered in Wuhan ended up affecting many nations including Iran, Italy, Spain, and the USA currently holding the highest infected cases.