Sinking Globalization Amid COVID-19 – OpEd
For decades globalization has been a cornerstone in shaping up a world order that is characterized by the interconnectivity of the world. At the time when the notion of Neoliberalism pulled through, the globalization paved its way towards eclipsing the protectionism. The end of the era of bipolarity is marked with the advance in globalization. Following the collapse of the Soviet Union, the world became much interconnected. As a result, investment and trade witnessed a boom, and barriers to trade, migration, and cultural diffusion dipped. Since the late 1970s, advances in technology and trade liberalization sliced up and witnessed growth across continents.
In the last few years, the globalization, however, on the accounts of some drivers, underwent setbacks. Accelerating trends in populism and protectionism have already undermined the drifts of globalization. The appearance of notable populist leaders, like Donald Trump, Jair Bolsonaro, Narendra Modi, and Boris Johnson have empowered deglobalized norms. Events such as the US trade war against China and Brexit run counter to the spirit of globalization. The global spread of lethal nationalism has also contributed to plunging globalization. Where such incidents were making every effort to undermine globalization, another forceful factor in the style of COVID-19 has emerged to hit globalization.
The novel strain of the COVID-19, in addition to its worrying effects on health, has the potential to strike globalization. It brings profound repercussions for individuals, communities, and counties. The outbreak of Coronavirus not only shoulders the responsibility for illness and deaths. Its omnipresence has also influenced the behaviors and beliefs of masses. The contagious action of COVID-19 has led the people to avoid physical connectivity, manifesting their unwillingness to engage with others. Social-distancing and isolation, being the preventive measures against the Coronavirus, have stirred the concerns about sociability and the connectivity of people.
Interconnectivity brings us multiple benefits and it is the lifeline for globalization. The COVID-19, however, has hit this (interconnectivity) sphere terribly. After the outbreak of Coronavirus, travel bans came into effect immediately. Travel banning actuated the limitation in the connectivity of people. The transnational mobilization of people has largely taken the edge off. According to the International Air Transport (IATA), in the wake of travel restrictions, the industry passenger revenues could plummet to $252 billion. Trade, business, and capital flows are principal actors in glorifying the globalization. The pandemic holds devastating implications for trade, corporations, and businesses. Global businesses have taken a higher hit as lockdown effects have reverberated over the last two months. Some countries restrained their exports to hoard supplies that disturbed chain supplies and exacerbated shortages. Moreover, the shutdown of factories domestically or internationally, to contain the contagious virus, has brought about shortages in automobile, textile, tech, agriculture, and pharmaceutical industries. Taking these determinants into account, global trade is all set to witness slumping trends. The World Trade Organization (WTO) economists believe that the decline will exceed the trade slump brought on by the global financial crisis of 2009. “Never in the history of the IMF have we witnessed the world economy coming to stand still”, said Kristalina Georgieva, Managing Director of IMF. “It is a way worse than the global financial crisis.”
The pre-pandemic wave of protectionism springs up as the COVID-19 has engulfed the nearly entire planet. Though the pandemic was recognized in China, the US has become its epicenter, with more than 2 million confirm Coronavirus cases to date. The worse state of the pandemic is likely to empower Trump’s nationalistic posture. Trade war with China by imposing punitive tariffs on Chinese exports to the US, prioritizing domestic production, and offering incentives to companies to invest domestically, dominated Donald Trump’s plan to undermine globalization. The pandemic, however, worked in favor of Trump and paves its way to stick to its anti-globalization mantra. Lately, Donald Trump demanded the 3M Company stop selling its masks to Latin America and Canada. The US ordered its federal pension fund to stop buying Chinese Share. Besides, Donald Trump also threatened the World Health Organization (WHO) to freeze the funding for it. Yet protectionism is not limited to the US, several countries appear to indulge in it. The Global Trade Alert team in the Switzerland’s University of St Gallen says 75 countries (include most EU countries, India, China, Brazil, and Russia) have introduced export restraints on medical supplies, equipment, or medicines. Japan’s COVID-19 relief involves subsidies for those firms who repatriate factories. Indian Prime Minister Narendra Modi indicated that the age of economic self-reliance has commenced. The British government also expects protectionism to increase, supply chains to be brought back under national control, and nation-states to be strengthened.
The COVID-19 outburst has ruined the tourism industry too. Its losses are on par with the other spheres that are hard hit by the pandemic. The tourism industry accounts for 10 percent of the global GDP and 10 percent for global employment. According to the World Travel and Tourism Council (WTTC), the pandemic could cut 50 million jobs in the tourism and travel industry. The WTTC fears that in the event of pandemic’s escalation, it could have a damaging impact on the tourism sector.
Given these facts, it is likely that globalization is all set to experience some significant impediments. As a result, global trade, the interconnectivity of people, tourism, and liberal norms are going to sink that doesn’t bear glad tidings for the world. The pandemic, however, holds silver lining, if countries’ leaders demonstrate their spirit to combat the pandemic, keeping intact those norms that underpin globalization. The danger of the second wave of COVID-19 infection looms large. If current trends predominate, the world may suffer a lot from what is expected.
*Muhammad Usman Ghani, Electronic Engineer