GLOBALIZATION - BIGGEST VICTIM OF CORONA?

about 2 months ago
No image

Borders closed. Tourists banned. No international travel.

As the pandemic spreads, every country is getting more and more cocooned within itself. The sense of nationalism was never so high and propagators of protectionism, who had been saying that globalization needed to come down, might be having the last laugh. Many have that smug, “I told you so” look on their face. There are many who believe that this “imported” virus, which has pushed the entire world on its knees, pushing down growth trajectories into the earth, could not have come if we had become so “flat” or allowed globalization to become a way of life.

Well, they couldn’t be more wrong. In that logic, when the flu pandemic hit the world in 1918, there was no globalization, at least not to the extent we are today; yet it spread, didn’t it? Yes, it is infuriating to know that the Chinese, from whose country the virus emerged are now ready, waiting for the rest of the world to emerge out of it so that they can produce, once again retain their place as the ‘factory of the world.’ In fact there is a report from the Carnegie Endowment which states that the Chinese leaders plan to increase investments abroad in a world which will be hungry for capital after the devastating virus.

But at the same time, what we need to know is that because we live in this interconnected world, we all could take advantage of China’s knowledge on the virus – its genetic makeup, its study on the spread of the virus, usage of masks and gloves – all this came from them and they are now supplying medical equipments and supplies and even doctors to Italy and other EU countries.

Even before this, certain factions in USA were looking at decoupling from China on account of the tariff war between the two. But American firms did not all jump onto that nationalism and return to USA, instead many started scouting around to establish connections in other parts of the world. Apple itself, firstly due to the tariff war and now due to supply disruptions is looking at its over dependence on China; its not shifting into USA but looking at diversifying to other countries in East Asia.

And its not different for UK.  study from the London School of Economics shows that Brexit in fact spurred more British investment in Europe, with an increase of 12% between the 2016 referendum and the end of 2018.

Why just the virus? The supply chain for micro chips, where Japan is the world leader was disrupted badly when the earthquake and tsunami devastated the country. At that time, many companies that depended on Japan, realized the risk of concentrating all sourcing in one country and they shifted part of it to Taiwan.

The point is that globalization is here to stay. We all are too interconnected to now break apart. We simply cannot do it any more.

Yes, the pandemic though has taught us a very important lesson – health care needs to be world class and as self reliant as possible. For a country like maybe South Korea or Sweden, that might be possible but for India, that might be tough. But we most certainly need to work on that so that in such critical times, we have with us what we need to protect the citizens and maybe even those in other countries. India exporting anti-malarial drugs is a great example of the same.

No doubt, corona is the negative side of globalization but can we deny all that we have gained because of globalization? The virus has changed the world for all us forever, or at least till there is a cure or vaccine but the lurking fear that there could be another pandemic is now deeply etched.

But as we look around, we realise that even in the current crisis, it is globalization which will help us all become safer. Agreed that each country has its own selfish economic and political interests but yet, in some way all national economies are fused together, trying to find that “spot” which fits our needs.

We are in a global crisis and not looking at the end of globalization. Corona does not mean we need to double down on nationalism; living in an isolated world is tough as we all experiencing that first hand!

Popular Comments