Globalization deals with the ideas moving around the world, movement of the people to different parts of the world and commodities being traded globally. The significant component “global interconnectedness” that is made and supported as a result of these flows. The emergence of information technology, easy access to global products, and reduced barriers to trade and travel have intensified globalization at the massive scale.
Nevertheless, the drums of new order and the end of globalization are beaten around the world, further accelerated by the outbreak of coronavirus pandemic. The rise of nationalism, protectionism, trade wars, anti-immigration laws, disharmony over foreign investment, unsettling supply chains and recently focus on self-reliance by various countries due to rapid spread of pandemic have worsen the fate of globalization.
The ability of multilateral institutions to establish and enforce shared rules seems to be weakening. Bilateral agreements based on national interest are outweighing multilateralism. Such a crystal and clear apparent situation in ongoing pandemic is demanding to revitalize the international organizations.
The growing protectionism have also wrecked the process of globalization severely. The number of trade barriers have been launched recently. As a result, the global export is on blink and even started to decrease slightly. This expansion in protectionism has trailed the global growth, which severely affected in trade flows, supply chains and import costs in a negative way.
Globally, the United States – the power that impelled the world to its most elevated level of globalization ever – is backing away from its role in the world order. The emergence of China backed Asian Infrastructure Bank has deflated the multilateral financial institutions, dominated by the Western Powers.
The coronavirus pandemic has negatively affected the process of globalization. The global trade volume and foreign direct investment has declined. The dearth of trade and investment not only affects global growth collectively but disproportionately affects the developing nations dependent on their exports.
Similarly, the destabilisation caused by the pandemic has opened up a debate for countries – should countries and companies look for greater well-being and safety globally or should they try to foster self-sufficiency? The prompt consequence of the pandemic is constraining the states to move towards the later.
The collapse of international travel, during the pandemic, hinders a critical facet of globalization – flow of people across national boundaries. Such a drop in international travelers, has a miserable impact on a few parts of global economy like airline industry and tourism sector.
As the global economy debilitates, and job opportunities decrease, the public opinion may begin moving towards regionalism. This can possibly shift national policies towards import substitution leading to de-globalisation of global economy. Increased regionalism could melt away the global institutions like World Trade Organization which may further lead to deteriorate global financial system.
