New multilateralism with old paradigms?

The world has turned on its head in many ways, particularly in terms of our paradigms. Despite the end of the Cold War, our paradigms had not changed. Foreign policy experts remained obsessed with “hard power”, making strategic calculations about military superiority and economic dominance. So-called “softer” issues, such as public health or environmental degradation were scoffed at as “low politics”. The biggest armies and the biggest economies failed against a microscopic virus — the weakest link undid decades of progress. We cannot navigate a new world order, let alone shape it, unless we are willing to shed old paradigms. For new forms of international cooperation to emerge, we have to examine changes in the international environment; changes in objectives of various actors; and changes in norms. The aftermath will be good, bad and ugly. 

The international environment is beset with traditional security concerns. But the biggest threats are no longer states; nor are they non-state terrorist groups. The gravest of concerns are about tail-end risks. These have low probabilities but can be catastrophic. The pandemic is one such; others include severe climate shocks. With growing environmental and health stress, such calamitous events are likely to occur more often and overlap with one another, overwhelming our capacity to respond. 

Some good news. We now have an opportunity to shift international conversations away from dilemmas of common interests and towards issues of common aversions. Common interests, such as trade, finance and technology, bring countries to the negotiating table. But worries about relative gains and losses, about who provides versus who free-rides, often result in inertia. Common aversions — outcomes we all wish to avoid — changes the game to one of coordination (everyone must follow the same rules to avoid a car crash). We all have an interest in avoiding pandemics, extreme weather events, or a collapse in agricultural output. When international cooperation is ebbing, renewed drive for collective action can come from how we organise multilateral institutions to respond to shocks, whether health-related, environmental, or financial. The G20 was forged in a financial crisis; it must now act to prevent environmental crises of planetary scale and significance. 

Secondly, objectives of countries and companies will undergo major shifts. Axioms of free trade, free movement of capital, or freedom of energy supplies will be questioned against a cruder metric, “What’s in it for me?” The 1944 Bretton Woods conference succeeded because in a frayed global economy, many countries were dependent on the US, whose objectives in turn aligned with financial stability, freer trade and global development. These conditions gave birth to post-war multilateralism. 

Here’s the bad news. For the time being, we have to settle for de minimis multilateralism: What is the minimum on which our interests converge? In the post-pandemic era, multilateralism has no guarantees. Many issues were already segregated by sector (energy, finance) or geography (trade). Fragmented governance structures, overlapping negotiations, limited coherence across institutions and weak accountability undermined faith in multilateral processes. There is now very limited scope for grand bargains. 

Supply chains will shrink as countries seek to reduce overreliance on single sources or markets and aim for more localised value and job creation. Stimulus packages and monetary policy easing might reduce the liquidity crunch — but on the condition that the money be spent at home. More than $83 billion have exited emerging markets during the pandemic. On energy, the latest OPEC-plus-Russia-plus-US deal to cut supplies does not imply that the US endorses producer cartels; only that its core objective now is survival of its oil industry. Rather than spend energies on reinventing the United Nations system in its 75th year or overhauling the World Health Organization, now is the time to focus on issue-specific deals that yield quick results. 

Finally, shifts in norms of international behaviour that were already underway are likely to get cemented. It was always difficult to enforce rules when powerful countries chose not to comply. But the norm of leading powers taking on additional burdens of responsibility is now critically weakened. Sovereignty is not just a mark of autonomy in international relations; it has become a shield for irresponsible action. One superpower keeps the rest of the world in the dark for weeks with ruinous consequences; another intercepts medical supplies. 

Here’s where it will get ugly. We have tended to think about international deals as successes when negotiated. By contrast, success for new multilateral arrangements would be contingent largely on transparency and enforcement. Technology will pervade not just private lives but will be used for greater surveillance of what other governments are up to. There will be lesser trust in official data. But transparency cannot work unless it affects state behaviour. In the absence of effective forms of enforcement, we are likely to see more naming and shaming. 

At breakfast yesterday, my seven-year-old daughter displayed clarity and wisdom that is in short supply. I quote her verbatim: “Why don’t we tell the world to not bother with China? In a few months, I think two months, China will come pleading. Otherwise they are not even feeling guilty. And that’s a bad thing. Not the Chinese people, only the Chinese government. Because the Chinese government told the people to keep doing things and then everyone got the coronavirus. We have got to do this. Otherwise, we can go on pretending that it’s a normal, happy world, which it is not. India should tell everyone this.” Our world has changed and with it our interests. We now need new norms. 

The writer is CEO Council on Energy, Environment and Water (https://bsmedia.business-standard.comceew.in) and a member of the UN Committee for Development Policy. @GhoshArunabha