18 March 2020
These are strange and difficult times. I hope you’re healthy and well.
COVID-19 is disrupting global economics, politics and societal functioning. As past crises have done, it will also cause lasting changes to the international order. Each week, we will try to track these shifts at AFA Weekly. Some will take time to unfold and understand; others, – such as the stoking of tensions between democratic and authoritarian states – are already underway.
Democracy versus authoritarianism
During the peak of the global financial crisis, former US president George W. Bush told a White House gathering that “if money isn’t loosened up, this sucker could go down”. At the time, there were genuine concerns in Washington that America’s economy was about to collapse and that the global economy could follow.
In the years since the GFC ended it has become clear that the financial crisis not only damaged confidence in capitalism but in democracy, the political system that underpinned the meltdown.
In the period between the Soviet Union’s collapse and 2008, democracy had seemed to be the political condition to which all countries aspired. But after the GFC, autocrats and self-styled “illiberal democrats”, such as Russia’s Vladimir Putin or Hungary’s Viktor Orbán, were increasingly emboldened to undermine liberal democratic norms. Liberalism, Putin told the Financial Times last year, has “outlived its purpose”.
This open challenge to Western-style democracy also occurred just as a rival political system was ascending. China’s authoritarian, state-controlled capitalist model seemed to barely register the consequences of the GFC, and China’s continued economic growth was credited with fuelling the global recovery. In 2009, America’s economy contracted by 2.5 per cent; China’s grew by 9.4 per cent. In February 2011, China overtook Japan to become the world’s second-biggest economy.
Since Xi Jinping took power in 2012, he has openly touted China as a model for other nations to follow. “Socialism with Chinese characteristics”, he told Communist Party leaders in 2017, “offers a new option for other countries and nations who want to speed up their development while preserving their independence”.
The COVID-19 pandemic is unfolding against this backdrop, in which liberal democracy is under challenge from states with authoritarian characteristics. Whereas the GFC seemed to weigh the economic strengths of each system, COVID-19 is testing the resilience of the health care, political and economic systems of different states.
Initially, Western officials seemed to assume that the outbreak was a particularly Chinese problem, and that the Chinese government’s lack of transparency was hindering its response. As Bruno Maçães, a former Portuguese minister and the author of Belt and Road: A Chinese World Order, recently said, “For a month, we thought that Chinese political values were the cause of the problem, and that our values would protect us from the virus”.
But China has reduced the rate of infection in recent weeks, and it has seized on its apparent success to laud the merits of its political system. Officials, diplomats and the media have begun claiming that the virus did not originate in Wuhan and may have come from the United States.
China still has tight restrictions in place and the future course of the virus there is not yet clear. But, even if China’s approach proves successful, this may not guarantee that it can record a victory in the battle against liberal democracy. Other countries, including democracies like South Korea and Singapore, also appear to be succeeding against COVID-19. And the United States, France and Australia are quickly demonstrating that they too have the power, if needed, to deprive entire populations of individual liberties. They are taking measures to curb outbreaks – police-enforced self-isolation, crowd bans, compulsory closures of businesses – that seemed unthinkable just days ago.
Unfortunately, these are likely to be the early days of the crisis. It is already shaping up to be the most serious challenge to the standing of liberal democracy since the GFC. This time, the world’s nations face both health and economic crises. The stakes appear to be higher than in 2008, meaning that the results of this contest between political systems are likely to be more decisive.