Geo-Political risks arising from Covid-19 pandemic

By Sri Sruthi Konda and Ashutosh Vaidya, PGDRM July’21-22

Introduction to Geopolitical Risk

It’s a study of the influence of factors such as geography, economics, and demography on the politics and especially the foreign policy of a state. COVID 19 has affected almost all countries around the world, and government responses to the pandemic have been inherently Geopolitical, involving issues such as:

• National security
• Global leadership
• International cooperation and competition

Vaccine race

• Gap between the emerging and developed worlds widening in 2021.
• Vaccine penetration is at 82% in high-and upper-middle-income countries, meanwhile it is less than 1% of doses in low-income countries.
• A slow global rollout, poor production capacity and vaccine hesitancy could also increase high level of transmission.

Health care Infrastructure

• Healthcare systems are more likely to be under strain in high vaccine hesitancy regions.
• The emergence of vaccine-resistant variants really big concern.

Strategic competition

• The strategic competition between U.S. and China is driving global fragmentation.
• China takes military action to accelerate reunification with Taiwan or more forcefully assert claims in the South China Sea and air space.

Technology de-coupling

• Both the countries are focused on reducing vulnerabilities and a managed decoupling of their tech sectors.
• The U.S. Senate passed industrial policy legislation aimed at boosting U.S. competitiveness in critical technologies, and the SEC is increasing disclosure requirements for Chinese companies listing in the U.S.

Supply Chain Disruption

• The COVID-19 pandemic has exposed supply chain vulnerabilities and Countries are enforced to closure of borders which affected movement of goods and trade.
• From a business lens, supply chain disruption caused by tariffs levied between major global economies will trickle down to other nations.

Emerging Markets Political Crisis

• COVID-19 has driven significant divergence between developed economies and emerging markets.
• The gross financing needs of EM sum to $1.3 trillion, a stark reminder of rising borrowing costs.

Threats to critical infrastructure

• The IMF has now recognized cyberattacks as posing a systemic risk to the financial system.
• We see the utility, energy and defense sectors as among the most vulnerable sectors.

Threats to specific corporates

• Data has huge value in allowing companies to understand customer trends, but also burden to protect.
• The U.S. is facing an “epidemic” of ransomware.

Opportunities in cybersecurity

• It is broadly accepted that no cybersecurity provider can provide a comprehensive solution. But found preventive technologies in 4 main areas : Cloud Computing, Network Segmentation, Identity Management, Blockchain.

Climate change

• Climate change has disrupted weather patterns in many countries leads to hunger crisis.
• Food scarcity and rising commodity prices become doubly concerning when combined with ongoing effects of the COVID-19 pandemic.

Zero Carbon Emission

• Climate related risks are most likely to emerge in the form of regulatory or legislative changes aimed at fossil fuel industries, resource scarcity.
• The private sector has joined governments in making net-zero pledges and global sectors like shipping, aviation, and steel are organizing themselves to pursue net-zero emission.

The Geopolitical Recession

The Rescue Strategies

1. Digital Health Centers & Digital Assistants
2. Expansion of Remote health services, Telemedicine
3. Making more resilient Organizations.
4. Decentralization of supplier concentration.
5. More robust Data & Cyber security systems
6. De-carbonization, Net –zero Emissions.
7. Build a Renewable-Energy infrastructure
8. Effective Waste Management Systems

Disclaimer

This report has been produced by students of Global Risk Management Institute for their own research, classroom discussions and general information purposes only. While care has been taken in gathering the data and preparing the report, the student’s or GRMI does not make any representations or warranties as to its accuracy or completeness and expressly excludes to the maximum extent permitted by law all those that might otherwise be implied. References to the information collected have been given where necessary.

GRMI or it’s students accepts no responsibility or liability for any loss or damage of any nature occasioned to any person as a result of acting or refraining from acting as a result of, or in reliance on, any statement, fact, figure or expression of opinion or belief contained in this report. This report does not constitute advice of any kind.

Get the full research study here: Geo-Political Risks Arising From COVID-19 Pandemic

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