WP2: Will the Pandemic End the Trend Toward Increasing Globalization?
There has never been a constantly increasing trend for globalisation. May it be the Spanish Flu, 2008 financial crisis or the Covid-19 Pandemic, steps have been taken to hamper globalisation, whether they were short-lived or with long terms impacts. While particularly looking at this Pandemic, several countries have taken steps towards ending this globalisation trend. Some may say that this is a transitional phase in the never-ending trend of globalisation, however, Considering the several travel bans, self-reliance of countries on home-grown products, and “island” economies, I see the pandemic setting the demise of globalisation because of the national, localised integration of economies. Whether we see complete shutdown of countries or prevent further globalisation from the existent state, that’s a question to ponder over!
To provide a broader context, I clearly remember- March 15th, 2020. It was a regular school day, with activities ongoing as usual, but suddenly, the State Government of Maharashtra (India) declared a completely lockdown for a period of 2 weeks. The 2 weeks turned into 4 months- with businesses disrupted, supply chains weary, and large scale economic losses. Unemployment rates skyrocketed to levels as high as during the Great Depression. The world practically came to a standstill. Flight bans extended across the world, which primarily instilled the concept of “island” economies. These travel bans sowed the initial seeds of the degradation of globalisation. Mr. Robin Hayes, CEO of JetBlue, claims, “If the reopening is delayed, we are going to face consequences across the industry- affecting several sectors” (Tim Hepler, Reuters). The airline industry is one of the most globalised industries (if not the most) in the world. The 500 billion dollar industry faced its worse years in decades. Several airlines had large scale job cuts, reduction in daily flights, deterioration of services and soaring airfares. This had repercussions on other industries as well, particularly those of primary consumption sectors, trading, tourism etc.
As a result of that, countries are adopting what is known as an “island” economy. In essence, this occurs when countries cut the outside world, and solely rely on self-produced goods and services for consumption. Several countries undertook this initiative, including Australia, New Zealand, and China. These countries practically blocked out any form on association with the rest of the world, keeping the Coronavirus away from its borders, while simultaneously pushing towards a self-reliant nation. In fact, while examining the situation in India, the “Make In India” initiative that was founded in 2013, but failed miserably during its initial years, spurted during the pandemic. The government provided several incentives to MNC’s to produce their products within the country, rather than importing it. In fact, to back that, the several Indian Politian’s tweeted to Elon Musk, concerning the 100% import duty on his vehicles and provided methods of producing the Tesla vehicles within the country for local demand solely (Afp, The News International). Further, under the “Make in India” initiative, the country has also completely closed off its trade with China, its leading supplier of endless products, including essentials such as electronic devices. Both the countries have disintegrated from their roles of economic cooperation, showcasing the dire consequences it may have on the world economy and globalisation when super-powers behave in this fashion!
Delving on the issue expressed above, the pandemic has also increased an Anti-Asian Propaganda, which favoured several countries’ policies of self-reliance. There was a huge outcry concerning China’s role in the origination and spread of the pandemic, that led to great resentment during the pandemic. Several countries imposed higher tariffs on goods from China, introduced trade embargoes and implemented other restrictions to cut off their reliance on China. From a practical standpoint, these actions had only one conclusion- large scale shortage of commodities across the world. 95% of United States’ pharmaceuticals are produced in Asia (particularly China), which were heavily impacted when the Trump Administration introduced these reforms. There was a severe N95/surgical mask, Remdesvir (a drug used for COVID treatment), and CREAM CHEESE shortage as well! Despite these consequences, the restrictions are still in play (even with the Biden Administration taking over). Countries such as the US provided several incentives for pharmaceuticals to shift operations on-shore, to the extent of giving pre-purchase advances, and promises of surplus purchasing.
Some may say that despite of the pandemic, the world’s globalisation trend is strongly increasing with innovations in technology. The Work From Home (WFH) phase was thoroughly welcomed by several industries. It provided opportunities for people to work from distant countries, while still working efficiently and productively. But as the pandemic progressed, everything eased back to its initial phase. Countries like the UK have completely lifted restrictions. Offices reopened, schools welcomed international students, but government officials refused to budge from their stance. Nearly 2 years into the pandemic, the above mentioned economic changes are still existent, with no scope of change in the near future. The United Nations also maintained their stance of countries cooperating in terms of research of the virus, providing financial aid to lesser developed countries, and ensuring a smooth distribution of resources. But, did it work out as planned? Wealthier, developed nations began hoarding of vaccines (in fact, the surplus of vaccines in the US could have sufficed the population of western and southern Africa). The hunger crisis intensified during the pandemic, with several countries stranded due to higher freight charges by shipping companies and higher export costs for producers in manufacturing countries. Supply chain disruptions continue to persist, with countries having to adopt the concept of “island” economies as the only solution.
I strongly believe this trend will persist in the long run. “Nationalism” seems to take priority of “Globalisation”. The pandemic induced lockdown brought immediate communities together, strengthening the bond between countrymen, and ultimately benefitting countries succeed in their goal of self-reliance. But despite this trend, there is never going to be a completely isolated country. Economies are heavily linked these days, with oil production in the Middle-East, cheap hardware production in China, food from India, etc. Reliance on existing demand would not dwindle away, but further integration of countries will surely come to a demise. Alternative forms of in-house production will be met, which in the long run be lead to sustainable impacts on climate change, and ultimately, hinder any further increase in globalisation trends!
Citations:
Tim Hepher, Rajesh Kumar Singh. “Airlines Warn Erratic Global Covid-19 Rules Could Delay Recovery.” Reuters, Thomson Reuters, 6 Oct. 2021, https://www.reuters.com/business/aerospace-defense/airlines-warn-erratic-global-covid-19-rules-could-delay-recovery-2021-10-05/.
Afp. “Elon Musk Ignores Indian Politicians Seeking Attention on Twitter.” Thenews, The News International, 17 Jan. 2022, https://www.thenews.com.pk/latest/925942-elon-musk-gives-cold-shoulder-to-indian-politicians-seeking-attention.
