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Resilient, Inclusive, and Free: Towards a Post-Pandemic Indo-Pacific Region


Mihir S Sharma, Ria Kasliwal, Abhijit Mukhopadhyay, Resilient, Inclusive, and Free: Towards a Post-Pandemic Indo-Pacific Region, September 2021, Observer Research Foundation.


Since the first cases were reported from the Hubei province of the People’s Republic of China in late 2019, COVID-19 has spread to almost every country in the world.[1] The pandemic has taken over 4 million lives and shattered livelihoods, and has had ramifications on political and economic structures across the globe. The massive disruptions associated with lockdowns and restrictions on movement have pushed many countries into recession, and the global economic fallout has been on par with the impact of the 2008 financial crisis.

It comes at a time of trade tensions brewing in many parts of the world, especially between the United States (US) and China. Most analysts agree that behind the strain in US-China trade relations are questions regarding the methods behind China’s emergence as a global manufacturing, technological and economic power, and its consequences.

Together, these factors have precipitated, in many major economies, a wide-ranging shift towards inward-looking economic and domestic policymaking. This turn has stalled the progress of what some have called Globalisation 5.0 – a fifth phase of globalisation, driven by new-age science and technological innovations. COVID-19 only exacerbated a process already underway. Indeed, in the two years before the pandemic, there had been a breakdown of the international rules-based system and a grave weakening of the global institutional architecture.

This report revisits the forces that drove the earlier phases of globalisation: How countries are located vis-à-vis these drivers, and how the most pivotal of these countries could respond, will define the emerging world order. Technology, energy, and trade are the three engines that spurred the earlier phases of globalisation; this report assumes that states’ attitudes to these three pillars will be key to the future of Globalisation 5.0.

The flux in trading structures and economic connections is particularly relevant for this report’s focus geography: the Indo-Pacific. The world economy is becoming increasingly structured around the Indo-Pacific region, as it was, in the 1980s, around the Trans-Atlantic. It is in the Indo-Pacific that the future of global economic arrangements will be shaped.

What is the broad pre-pandemic context in which this present analysis is located? Threats to the rules-based order, essential for the economic cooperation of liberal democracies, have been growing in the Indo-Pacific. The response to these challenges has largely taken the form of security-related collaboration. The two tracks of international engagement in the region—security and economics—have proceeded along orthogonal, and not parallel paths. Economic ties have not been affected by security considerations, and vice versa – even as the two tracks are linked by the rules-based order.

One reason for the divergence between the “security” and “economics” tracks is that security interests between the key democratic players in the Indo-Pacific have previously converged more closely than their economic interests. Threats to the liberal order, globally and regionally, motivate closer cooperation on the security track. On the economic side, however, each of these democracies has had different reasons and opportunities to benefit from dealing with illiberal regimes. This engagement, however, has sometimes come at the cost of economic security.

The pandemic has shaken liberal democracies out of this complacency by demonstrating a clear correlation between economic security and national security, as well as the limits of collaboration with illiberal players. The question is whether or not this realisation will endure, and if it does, whether institutional structures can be created to sustain it.

This report traces the national impulses underlying decisions taken by countries in the Indo-Pacific region, as revealed during the pandemic, around the three pivotal issues of technology, energy, and trade – in particular, trade in medical equipment and pharmaceuticals. The case studies are centred around these sectors because it is in these three, above all, that state behaviours give a glimpse of globalisation attitudes and convergences in the post-COVID-19 world. Conclusions drawn from the experiences of these sectors will inform a broader theory of the forces acting to shift, or otherwise retain, supply chains in the Indo-Pacific.

The report will consider the constraints on state action in reshaping these supply chains, and whether existing groupings can perform the task. Are there institutions that can be constructed that would effectively place geoeconomic considerations at the heart of their mission? Can institutional arrangements involving the democracies of the Indo-Pacific make the leap, or even a connection, between the two tracks, given the opportunity provided by the recovery from the pandemic and the restoration of growth in the region?

Read the full report here.

(This report was prepared with support from the High Commission of Australia in India. The recommendations and the views expressed herein are, however, those of the researchers and do not reflect the formal position of the High Commission.)

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Mihir Swarup Sharma

Mihir Swarup Sharma

Mihir Swarup Sharma is the Director Centre for Economy and Growth Programme at the Observer Research Foundation. He was trained as an economist and political scientist ...

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Ria Kasliwal

Ria Kasliwal

Ria Kasliwal was Junior Fellow with ORFs Economy and Growth Programme.

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Abhijit Mukhopadhyay

Abhijit Mukhopadhyay

Abhijit was Senior Fellow with ORFs Economy and Growth Programme. His main areas of research include macroeconomics and public policy with core research areas in ...

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