Coronavirus Consequence: Will Globalization Survive?
Will the process of globalization and world integration survive as a consequence of Coronavirus pandemic?
Coronavirus is affecting not only our health, finances, relationships buteven how we think. It is also forcing governments to rethink their strategies. Countries are beginning to reduce their dependence on supply chains out of China. Will this result in countries reverting to local manufacturing or finding alternate supply sources?
Even before Coronavirus happened most countries around the globe elected right wing nationalist leaders who take great pride in putting their nations interests first. It started with Trumps America first policy. He has got America into trade war with China and negated most international treaties.
Other nationalist leaders followed the example set by Trump. These include Putin, President Xi of China, prime minister Modi of India, PM Benjamin Netanyahu to name just a few. Brexit followed as a result of nationalistic fervor in United Kingdom.
Nationalist forces are driven by people who have been left behind financially as a result of globalization, technology driven changes and a rising sentiment against immigrants who they perceive as taking their jobs as a result of globalization.
Globalization that had brought great prosperity to the world in in last five decades was under great strain when coronavirus happened.
Now the big question is: Will globalization survive as a consequence of coronavirus? Most countries are shut down and looking inward. The response so far has been nationalistic with politicians and nations blaming one another. There are hundreds of conspiracy theories floating around resulting in hate spread that is dividing the world.
Let us examine this very important issue in detail.
Major Reason Behind the Spread of Coronavirus so Quickly Around the Globe
One might be curious to understand why and how the virus was able to spread so fast in this millennial era. The major reason why the virus spread so quickly is “Air travel”. Most countries imported the virus that could have easily been contained locally in Wuhan. The question is as to why governments did not stop air flights and allow the virus to spread?
The global air travel industry is worth around 800 billion USD! With thousands of flights taking off, and reaching destinations on a daily basis – the capacity of air travel has grown by 30% in the past two years. Even with COVID-19 declared as a pandemic by the WHO and most countries having raised travel advisories, air travel continued virtually without check so as not to have adverse impact on airline finances.
Secondly, most nations take great pride in rescuing their citizens caught in natural calamity disaster areas, war zones and places of political unrest. These evacuations are praised in news media and are a matter of great national pride. To save lives of fellow countrymen is indeed a noble purpose in most cases. However, is this response correct when it comes to pandemics. This resulted in import of a highly contagious disease much to the detriment of other citizens.
Thirdly, misguided national pride kept China from informing rest of the world about the contagious and dangerous nature of coronavirus. This resulted in spread of the virus that has now caused a major health and financial crisis.
Reasons Behind Slow Global Response
A disease that could have easily been contained in Wuhan; China has turned into a global crisis with the world economy virtually shut down resulting in loss of millions of job and livelihood around the globe.
According to surveys, “Trade” was one of the major reasons behind delay in imposing travel bans. The supply chains in an inter connected world would have been disrupted. China has turned into a manufacturing hub for various brands and supply of important components even for local manufacturing. No one was willing to disrupt these supply chains even when the pandemic happened in China in order not to impact their economies.
Will there be Change in Supply Chains post Coronavirus?
Most countries will definitely review their over dependence on supply chains from China. There will be a definite shift towards local manufacturing and nations will look for alternate sources of cheap manufacture and supply.
Finding alternate supply sources will not be as simple as it looks. It will be a very complex process and cannot be done overnight. Process will be expensive and slow especially at a time when the economies will be struggling to get back on their feet.
The After Effects of Coronavirus
Coronavirus has resulted in countries shutting their borders for health reasons and even after health issues related to virus recede there is going to be suspicion amongst travelers, It will take time and effort to resume movement of people and trade.
Many writers and thinkers believe that the process of globalization has reversed irrevocably due to the nationalistic fervor, blame game by political leadership to pass responsibility for their confused and delayed response and nations looking inwards to become more self-reliant.
Some of the arguments are valid but let us put them in perspective.
Globalization is not only about manufacturing but also about exchange of ideas, movement of people, issues affecting whole of planet like health and environment, world trade etc.
Supply chains world over will change not so because of coronavirus but because of advances in technology. Artificial intelligence and robots will replace cheap labor so there will be no need to go to third world countries in search of cheap labor either for manufacturing or services. The shift was visible even before Corvid 19 took hold of our lives.
It will however be very difficult to stop movement of people and trade. Advanced countries have shrinking and aging populations. There will be continued requirement of importing people from poorer countries to run basic services like electricity, water, health services, public transport so that advanced nations can sustain. Rich people do not want to do certain jobs that only poor can do.
To run high-tech companies, you need well qualified people. India and China are power houses when it comes to churning out engineers and doctors. The advanced countries will need them and welcome their entry.
Greying nations will also need younger people sustain the ever growing pension and health care bills by paying taxes.
Human rights awareness, political rights, environmental and global health issues have taken center stage in human consciousness and simply cannot be wished away. These issues will continue uniting the world.
We could have fought the coronavirus pandemic much better if there was a global response rather than a jingoistic nationalistic one. Disease could have been easily isolated in Wuhan, China if there was global confidence and dialogue.
Rich countries need global markets to sell their products.Developingnations is where majority of the young population reside. The demand for products will only happen if there is purchasing power in these countries. Rich countries simply cannot live and thrive in isolation. They will need to support the economies and growth world over through enlightened policies. In other words, strengthening forces of globalization.
Nothing in the world can reverse exchange of ideas due to internet connectivity or flow of capital to any place in the world where profits are to be made.
Doomsayers can keep predicting the worst but the process of globalization is irreversible. There can be Trumps or minor road blocks but the march of the world civilization will continue towards globalization.
The only solution for the people who feel threatened by globalization is to go back to the drawing board, learn new skills and re-invent themselves to face the challenges in this fast changing technologically driven world presents.
Countries and people who fail to adapt to the new reality will become an extinct species like the dinosaurs.