Why the world is mulling to reverse the ‘double-edged sword’ of globalization?
As a result, trade and travel have been highlighted as key drivers in the spread of disease, thereby disrupting the normal businesses at a larger scale
We are living in the times of globalization, which has radically transformed our lives. What decision will the American Federal Bank take on interest rates matters for India; If China attacks Taiwan, Americans and Indians be concerned; If a mutant of a virus of COVID-19 was found in South Africa, the whole world will be upset. Why?
This is simply because these things matter, not just for the place these decisions are meant for but also places which thousands of kilometres away.
In other words, change in interest rate in the US will impact the Foreign Direct Investment (FDI) coming to India; China’s attack on Taiwan could adversely impact Semiconductor supplies around the world and mutant virus found in South Africa can spread all over the world so fast that everyone’s life will be in danger.
The main reason for all this is globalization, which is such a phenomenon which has connected the whole world in a way that a patient’s life in a government hospital in India may depend on the policies of the Chinese government. If this sounds surprising, digest this: The basic paracetamol medicine’s Active Pharmaceutical Ingredients (API) also come from China.
Globalization has brought in far reaching social transformations
Globalization has brought in far reaching social transformations in the Indian society. It is this phenomenon which has made unimaginable things possible, like McDonald’s Chains in India or Indian origin engineers proving their capabilities in America’s Silicon Valley.
It has also helped Indian and Chinese economies to grow, wherein people were facing impoverishment due to colonialism and imperialism. The lives of lakhs of people changed and living standards also improved, as a consequence.
Globalization has helped the countries to grow their economies, but it has played a very vital role in integrating with the global supply chain.
However, globalization is perhaps a double-edged sword with many disadvantages. The ‘economy-damaging’ disadvantages have increased so much in the present times that the world is mulling to reverse the same, by adopting policies against the very idea of free trade.
There is growing anger around the world towards globalization and free trade.
The impact of COVID-19 on globalization
The way we live and earn a living has changed as a result of globalization. As a result, trade and travel have been identified as important factors of disease dissemination.
Furthermore, global connection has been helped by the development in urbanization and the tighter integration of the world economy. As a result, globalization has emerged as a critical disease transmission mechanism.
Threat from rising nationalism
Globalization was already under threat from rising nationalism before to COVID-19, prompting governments and companies to establish new frameworks and objectives.
The term “slowbalisation“, coined by The Economist to characterize falls in trade, multinational profits, and foreign investment, therefore lead to the claims that the world has reached “peak globalization.”
The COVID-19 pandemic appears to have increased population anxiety and uncertainty, leading in new behaviors and beliefs. People are becoming increasingly skeptical of foreign products and less accepting of them, all of this taking place against a backdrop of growing anarchy in global politics.
Although it may be premature to argue that the globalization age is ended, or at least on the decline, the economic effects of the pandemic are shaking the very basic assumptions, with little clear sign of what might follow in its diminishing wake.