Question

why do you think COVID-19 DOES NOT reverse globalization? Give 4 reasons

Answer 1

The COVID-19 is a infectious disease caused by a newly discovered virus called as  severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The disease has been declared Pandemic by WHO. It has infected millions in the world and world economy is constantly falling. There are shutdowns which have stopped or reduced manufacturing, services sector etc.

Globalization means increasing interconnectednes amongst the nations. It is stimulated by free movement of capital, labor and technology. It has caused vast increase in world trade and standards of living of many economies post 1980s.The COVID-19 which originated from the China has put the world on stake. Many countries are alleging role of china and had demanded the withdrawal of capital and manufacturing sites from the China. This causes us to think whether COVID-19 will reverse globalization or not. We analyse by using following points:

Globalization will reverse: (Wrote to give background)

• The process of reversing globalization started way before COVID-19. The COVID-19 has just increased the pace of reversal. We can support this by many incidents such as USA-CHINA Trade war, diminishing role of WTO, Fall of  Trans-Pacific Partnership (TPP), etc. Even, the world trade had declined since 2008 global financial crisis.
• Nations are reconfiguring their economies as shortfall in medicine supplies and overdependence on foreign nations has affected them. They must be reconfiguring import substitution which is sign of globalization reversal.
• Increasing automation have rendered the low cost-high cost nation theory redundant for the production.
• Nationalist in USA, EU and other nations are voicing for closure of borders and withdrawal of factories to the domestic.

However, above points depicts that Covid-19 will fasten globalization reversal, but it wouldnot:

• Post pandemics, Multilateral institutions will arise or formed to redefine geographical markets. Heavy dependence on one or few nation has cost many economies. For example, today China control 16% of world trade. It has in appropriately had put nations in jeopardy. Thus, the nations will try to relocate global value supply chains. In this process, other nations such as India, Vietnam, etc on which US and EU trust will carve new chains. The distrust created in the system will reduce, not eliminated. The COVID-19 may cause diversification of the globalization.
• Demographic profile: Many countries are dependent on the labor of the other country. For example, demographic in the developed country is changing. For example, USA requires skill labor for its service sector. They mostly comes from developing nation. Moreover, as EU is aging, the need for labor in the hospitals, factories, etc will arise. Look at Italy, it is totally devastated and its economy is dependent on Tourism. Any reversal will put economy into freefall.
• The new phase of Globalization i.e. Work from home or Telemigration have boosted with the pandemics. Now companies are asking their employees to work from their home without any actual migration. This is actually good. It will make strides in the service sector.
• Lastly, Globalization can't be reversed so easily. It has been built over many decades. The COVID-19 may force countries to take harsh steps early, but they would cause them more harm than gains. Any reversal will cause decline in standards of living, rising inequalities and poverty. There are profound evidences that globalization has helped reduce poverty in the world. Even, globalization can help in achieving climate change challenges.

The COVID-19 wont reverse the globalization. However, it will force nations to look into the inconsistencies and build new trust with humanitarian and ethical norms.