Globalization Unraveling?
Globalization is the process by which different societies, economies, and cultures become more interconnected through the increasing flows of trade, communication, and information. This process has been ongoing for centuries from the times of Magellan to the early 1990s, but it has accelerated in recent decades due to advances in transportation, communication, energy, and information technology. In recent years, there has been a growing debate about the future of globalization.
Benefits of globalization
As the noted French economist, Frédéric Bastiat said, “When goods don’t cross borders, soldiers will”. Globalization has brought peace to the world. The promotion of free trade and investment supervised by the WTO has led to a decline in the rates of poverty, hunger, and illiteracy in developing countries. In fact, from 2001 to 2017, the number of undernourished people around the world plummeted by 170 million. As barriers to trade fell and incomes rose the global North-South divide became increasingly blurry. People spent less proportionally on food, enabling them to allocate more money towards goods and services that enriched their lives.
Rise of globalization
Since the 1990s, following the collapse of the Soviet Union, trade deals, innovation in communications technology, and shipping improvements lowered the hurdles for global commerce. The benefits of this shift were so unequivocal that it became a political imperative to support international cooperation. By 2040, Asia could account for more than half of global GDP and about 40 percent of global consumption. In addition, the emergence of innovative technologies, such as advancement in 5G telecommunications, driverless cars, artificial intelligence, can further drive globalization in the future.
Threats to globalization
The COVID-19 pandemic has had a major impact on the global economy. The widespread disruption to supply chains during Covid highlighted the vulnerabilities of a globalized world and led to calls for increased self-sufficiency and resilience. Ongoing geopolitical Middle East conflicts in Syria, Yemen, and Iraq have led to large-scale displacement of populations and created significant challenges for international organizations and humanitarian aid efforts. In Europe, the ongoing conflict between Russia and Ukraine has disrupted trade and investment in the region and has also raised concerns about the potential for further military conflict. The rise of protectionism, conflict and instability, and authoritarianism are all contributing to a decrease in international cooperation and an increase in autarky.
In conclusion, while globalization has faced some significant challenges in recent years, it is not unraveling. Instead, it is changing and evolving in response to a complex world. The overall trend is still towards greater integration, but there are also new obstacles that need to be overcome. As such, it is important for governments, businesses, and individuals to adapt and respond to these changes to ensure that globalization continues to benefit us all. Former United Nations Secretary-General Ban Ki-Moon has aptly emphasized the fait accompli of the dynamic and evolving nature of globalization: “Globalization is not a one-way street, and its benefits cannot be guaranteed. It is a process that requires our constant attention, adaptation and action.”
