Today we all are connected, connected through trade, culture, politics, global issues and what not. Obviously we live in a globalized world. But is globalization good or are we better off on our own. Well, today let's talk about this interesting subject, that has been getting a lot of attention lately.
Globalization has played a very important role in the global economic development. Interconnectivity has made it possible to produce many products cheaply, and making it easily available to any part of the world. Many people think that globalization is a very modern world thing. But no, it is not a new concept. In ancient times, traders went great distances to purchase items that were uncommon and expensive in their own countries. However, the actual globalization started after the industrial revolution. The Industrial Revolution brought advancements in transportation and communication in the 19th century. Steamships reduced the cost of international transport significantly and railroads made inland transportation cheaper, which eased trade across borders. After world war 2 we saw a big jump in efforts toward things like globalization and international trade. Then in the 1980s, modern globalization started spreading rapidly through the expansion of capitalism, with the help of global institutions like World Trade Organization.
The term globalization is not just limited to the economy and trade, but it also applies to cultural and political globalization. The mass migration of labor and the use of television and internet are some of the reasons behind that.
One of the big advantages of globalization is, it allows developing countries to catch up with the industrialized nations through increased manufacturing and diversification in the economy. Companies in developed countries bring jobs and technology to developing countries, which help them to grow their economies and improve the standard of living in developing nations. Besides economic development, Globalization has also helped in social justice on an international scale.
Now no matter how good things seems, they always have a dark side. Similarly, globalization has its own disadvantages. With the relocation of entire industries to new locations abroad, globalization has become a divisive issue in many developed countries. It has been a major contributor to the economic squeeze on the middle class who are losing their jobs. The reason being, it is cheaper to produce in China rather than in their own country. Another obvious consequence of globalization is, an economic downturn in one country can have a domino effect on its trading partners. For example, the 2008 financial crisis had a severe impact on many developed as well as developing countries. Many of them lost the momentum of their economic growth and it took them several years to come out of the crisis.
But one of the worst crisis that globalization has faced was the recent pandemic. Many countries were too dependent on global supply chains for their medical and other necessary supplies. During the pandemic countries imposed bans on medical exports to other countries, which resulted in a shortage of even basic medicine and medical equipment worldwide. This event is forcing many countries to become more self-reliant, than depending on global supply chains.
Another thing that is threatening globalization is rising nationalism. In the United States, this nationalism took place under the name of America first. Under this, the US imposed tariffs on many imported products, and it is tightening the norms for foreign companies who are selling their product to the US. Britain's Brexit and India's self-reliant campaign are a few of the other examples of rising nationalism.
Now even with all these challenges, globalization has shown some resilience in the past few years. For example, Global collaboration in climate change research and vaccine development programs are getting preferences much more than before. In 2018 50 countries in Africa joined the African Continental Free Trade Area. And in Asia 15 countries signed the RCEP free trade agreement.
So by looking at this we can say that globalization is changing its form to more regionalization. But does that mean we are going toward de-globalization? Well, it's too early to say that. But it is seen that the world is moving toward diversification of its supply chains and preferring regional trade rather than global. After the recent supply chain lessons learned in the pandemic, we could see a rise in domestic manufacturing of some critical products, but to get things faster and cheaper, the world has to stick to globalization. So probably we will not see a complete de-globalization but the growth that we have seen in globalization in the past couple decades could be affected in the coming years.


#globalization #deglobalization

свернуть