Each country will find its own toolkit to tackle ‘polycrisis’
PremiumToday’s polycrisis will force each nation to sharpen homegrown policy tools as the global handbook of rules faces uncertainty
In moments of calamity and stress, faculties tend to get sharper and senses keener. As the world’s established political and economic systems confront tectonic transformations, people have been casting around for phrases, or a single word, to describe the momentous changes they are seeing and experiencing. A new word, ‘polycrisis’, has entered the academic and policy lexicon to describe the multiple anxieties that have enveloped the world over the past 30 months.
The interesting thing about polycrisis is perhaps its dualistic structure: a set of common crises which afflicts the world today with an additional layer unique to each country or region. This presents a rare challenge for Indian strategists and planners because the existing methodology or instruments are clearly inadequate for processing and resolving this complex skein of inter-connected problems. The world is changing, and so must the toolkit.
Imagine the extent of changes in the world since the onset of the covid pandemic in March 2020. This once-in-a-hundred-year phenomenon brought a growth-obsessed global economy to a complete halt. All the risk scenarios had never envisaged such a situation; hence, there was never a Plan B. Global lockdowns broke down all the well-established supply chains, built over the past 30-40 years across national boundaries. Knee-jerk reactions saw jurisdictions raising protectionist walls higher, putting global trade and globalization in jeopardy. Then along came the Russia-Ukraine conflict, which has created a deep geopolitical crisis, including the re-ignition of nuclear threats. The war threatens to rend the world into blocs, evocative of a not-too-distant past, but with differences this time. In the background lurks a slow-burn US-China cold war, with increased muscle flexing in the Indo-Pacific.
The Russia-Ukraine conflagration also lit a spark under nascent inflationary trends, and the attendant bushfire now has central banks rushing to increase interest rates, thereby further dampening business sentiment and economic growth prospects. The war has extracted many other costs, which includes sharply reduced supplies of energy and foodgrains. This has exacerbated the indebtedness of poor nations. Add climate change, and it not only aggravates all the problems mentioned above, but elevates it to a different order of magnitude.
Economic historian and Columbia University professor Adam Tooze has been popularizing the term ‘polycrisis’, first used by former European Commission president Jean-Claude Juncker to describe Europe’s combustible situation in 2016 which combined indebtedness with Brexit, climate change and a refugee crisis. A social sciences research organization based in New York, the Jain Family Institute, now has a new publication called Polycrisis. The University of Bath has introduced a new lecture series on navigating the polycrisis. Numerous papers have been trying to define and parse polycrisis over the past few months. Tooze uses the current multi-layered crisis to sharpen the definition: “A polycrisis is not just a situation where you face multiple crises. It is a situation… where the whole is even more dangerous than the sum of the parts."
True, except when the whole varies with geography.
Take the EU, for example. Apart from everything else remaining the same, the region faces an urgent energy crisis. Dependent substantially on Russia all these years for its energy supplies, the EU must now figure out ways to, first, meet the winter heating demand from households (which involves higher fuel subsidies), and then, cater to industrial demand for economic activity to hold up. This will, of necessity, mean renewing investments in fossil-fuel capacity to meet the sudden demand-supply gap. This then distorts its climate policies and fiscal balances. Undergirding this are incipient, subterranean political fault-lines developing between extant liberal-democratic regimes and radical right-wing political formations arising in Austria, Italy, Germany, France, Hungary, Sweden and elsewhere on the continent.
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Even the US, for example, is struggling with its own set of distinctive political, social and economic challenges; or consider the UK, which is staring down a deep economic and political precipice. And in South America, pushed by inequality and plutocracy, country after country is electing a leftist government. All things remaining equal, each country brings something unique to the polycrisis party.
Ditto for India. Apart from the global factors that have adversely affected inflation, interest rates and currency values, India will have to address a unique set of challenges in the domestic economy (growing joblessness, a relatively stagnant economy and heightened sectarian tensions) and from the recent geopolitical choices made by New Delhi. An ongoing strategic re-ordering of the world—with Russia, China and Iran pitted against the rest of the world—is a little too neat for India; its unresolved border problems with an aggressive China skews the equation. India will clearly have to leverage its new-found non-alignment, or strategic autonomy, to not only source mineral oils and semiconductor chips, but to also navigate a unique set of challenges on security, climate change, trade and economic ties.
In the end, as each country sharpens its custom-built tools, it is worth asking what happens to the global handbook of rules.
Rajrishi Singhal is a policy consultant and a senior journalist. His Twitter handle is @rajrishisinghal.
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