Does pandemic signify a new era of globalization?

“Travel halted”, “Border shut”, “people lockdown”. These are common words shown in the news since the pandemic. The isolation situation caused by the epidemic made more and more people think about the impact of the pandemic on globalization. Some people argue that the pandemic brought the second era of globalization to a decisive end. Others argue that pandemics will result in an acceleration of change to form a new, different, and limited form of globalization. Everyone needs to consider the relationship between pandemics and globalization because as human beings live in the 21 century, pandemics and globalization are closely related to everyone. For me, I agree that pandemic signifies a new era of globalization because the sharp changes caused by pandemics since 2019 cannot offset the benefit brought by the complex globalization systems with the integration of supply chains builts in the last several decades. Although the epidemic brought obstacles to the development of globalization, it should only slow down the process of globalization. The obstacles which challenge the current systems will ultimately lead to a globalization system with more mature and complex supply chains.

Admittedly, there are some factors brought by the pandemic that stop the world from functioning in a globalized way. Take covid vaccine as an example, having enough vaccinated people is a fundamental requirement for the world to return to normal operations. As of February 21, 2022, only 12 percent of the population from lower-income countries received at least one shot of the vaccine. And Only 16.1 percent of the world population has received a booster.[1] Here from the statistics, we can see that whether for having basic vaccination to have basic immunity or for having a booster to get better protection, the percentage of people vaccinated are both small. It is still a long way to have enough people vaccinated around the world to allow human society to function with no restriction. In this case, countries may focus on researching ongoing booster vaccines instead of pursuing their next business goal. Moreover, with the unclear pandemic situation, developed countries may tend to hoard the vaccine within their own countries, which will slow down the global vaccination process consequently. Hence, with no support of enough vaccinated population, the sudden halt in the global supply chain by the outbreak won’t recover overnight. During the first fewer years of the pandemic, we may see a more nationalized industry.

However, the idea that the epidemic is the end of globalization is too absolute. Globalization will continue as long as a country gets involved in the global supply chain. Regardless of whether the companies and countries have the ideas to exist from the global supply chain system or not, the actions to change the entire supply chain of all the industries back to a single country are almost impossible. Take raw materials as an example, countries that lack a certain raw material cannot carry out the corresponding business if the country lacks that certain kind of raw material.

Considering the risk of globalization, what countries should do is to avoid becoming overly dependent on the global supply chain, which may result in an unsustainable and unstable situation. Make great use of geographic diversity if suppliers may help decrease the risk of the supply chain. For instance, firms can give most of the orders to the most advantageous supplier but divide small parts to other regions as well as within their own country to get rid of the risk of an unstable supply chain.

Moreover, it is true that issues like having not enough vaccinated people have slowed down globalization in a short period. But given the attractiveness of the integration of the supply chain, which will bring a larger total benefit to countries, the appeared nationalized situation around the globe is temporary and possible to solve. In other words, countries have earned a large number of benefits from the global supply chain over the past few decades, though the epidemic has caused governments around the world to rethink and measure the risks of globalization, the integration of the global supply chain will not change. Richard Fontaie, the chief executive officer of the Center for a New American Security, discussed in his article “Globalization Will Look Very Different After the Coronavirus Pandemic” that, “The new watchword is likely to be risk reduction rather than cost reduction”. To clarify, “risk reduction” refers to decreasing risk for promising the security of country development. Here Richard explains that considering national interest and the further development of the country, the security of the country needs to be considered more than the economic cost. The focus of future globalization will be more on reducing risks rather than reducing costs. However, it should not be surprising that the benefit from the global supply chain is strong enough for countries to consider making a balance between deducting risk and gaining the benefit from the global supply chain. The economic benefit gained from engaging in the integration of the global supply chain is still one of the most important factors for courtiers and companies to take into account. Hence, when the risk is under control, the benefit gained from the global supply chain is undeniable.

Several of our real-life examples can help support how attractive the global supply chain is. To be specific, vaccines can also be involved in the global supply chain and bring profits to countries. For example, as discussed in Zachary Karabell’s article “Will the Coronavirus Bring the End of Globalization? Don’t Count on It”, China “has delivered medical supplies, equipment, and doctors to Italy and other EU countries” in 2020. “China appears committed to more engagement with the outside world, not less.” In other words, though China itself is still suffering from the coronavirus at that time, it tends to increase investment abroad and become involved in the global vaccine supply chain. With more experience of coexisting with pandemics and more research on the virus itself, there will be a mature supply chain of vaccines appearing in our world, through which most of the countries can benefit from the complex and complete system.

In conclusion, the pandemic is not the cause of the end of globalization, though some situations may slow down the path of globalization in the first few years, the problems are highly possible to be solved and will contribute to a more complex globalization system. In the future, companies will consider risks as well while diversifying internationally.