Question

How can COVID-19 crisis affect in the future of globalization?

Answer 1

The pandemic has sparked a new wave of globalization obituaries, but the latest data and predictions suggest that leaders will plan and form a world in which both globalization and anti-globalization forces remain ongoing business environment characteristics.
The crisis and the requisite response to public health are triggering the biggest and fastest fall in international flows in modern history. Current estimates, though at this point undoubtedly rough, call for a 13-32% decline in retail trade, a 30-40% fall in foreign direct investment and a 44-80% decline in international airline passengers by 2020

Pandemics are not only sickness-and-death tragedies. The omnipresence of these mass attacks, and the confusion and apprehension that surrounds them, contribute to new behaviors and creeds. People are becoming both more cynical and credulous. Above all, they get less likely to interact with something that appears unusual or unfamiliar.

In any case, closures at factories and suspensions to production are already disrupting global supply chains. Producers are taking steps to reduce their exposure to vulnerabilities on a long run. To date, at least, financial analysts have concentrated on cost estimates for specific sectors: automakers concerned about parts shortages; clothing factories deprived of fabric; luxury-goods retailers desperate for customers; and the tourism industry, where cruise ships, in particular, have become contagion hotbeds.

Yet very little consideration has been given about what the current atmosphere of uncertainty means more generally for the global economy. Thinking through the long-term consequences of the COVID-19 crisis will try to shield individuals , businesses, and perhaps even governments through complex contingent contracts. In the event that the virus reaches a certain level of lethality, it is easy to imagine new financial products being structured to pay out to automobile producers. The demand for new contracts can even fuel new bubbles, as the possibilities for making money increase.

No surprise, the COVID-19 outbreak already plays into the nationalist narratives of today. The Chinese source of the disease will merely reaffirm, to some Americans, the idea that China poses a threat to the world and can not be trusted to act responsibly. At the same time, many Chinese will probably see some US action to combat the virus as being racially motivated and intended to block the rise of China. Conspiracy theories are already circulating about the US Central Intelligence Agency that is creating the virus. COVID-19 promises to deliver even more in a world overflooded with misinformation.