Even before the economic impact of coronavirus globalization took a big hit as consequence of Trumps America first policy. He has got America into trade war with China and negated most international treaties.
Most countries around the globe have elected right wing nationalist leaders who take great pride putting their nations interests first. These include Putin, President Xi of China, Modi in India, PM Benjamin Natanyahu to name just a few.
This trend continued with Brexit ending speculation of 3 years. Nationalist forces are driven by people who have been left behind financially as a result of globalization and a rising sentiment against immigrants who they perceive as taking their jobs as a result of globalization.
Coronavirus has resulted in countries shutting their border for health reasons and even after health issues related to virus recede there is going to be lot of suspicion amongst travelers further isolating nations.
As a result of economic impact of coronavirus, most nations and businesses have realized over reliance on China for supply of even basic items only increases vulnerability and unreliability in times of crises. Businesses will look for alternate supply chains and make nations look inward. This will make the world economy more political and nationalistic.
Most countries will review their over dependence on supply chains from China for basic goods. There will definitely be shift towards local manufacturing.
The disruption caused might appear to be temporary but will have far reaching consequences. It is mainly because the virus is capable of reinforcing newer trends, which can result in undermine the already impacted globalization. In coming months, political foddering will happen, where nationalists who favor immigration controls and greater protectionism become successful.
Western companies often rely on china-centric global supply chains. These chains will now be put to a major risk. The benefits in producing products from China has eroded, as the country became richer. Consequently, wages have soared. This was when President Trump imposed the first every punitive tariff on imports from China, between the years 2018 and 2019. As a result, businesses were already looking for other alternatives.
The issues discussed so far have made many writers and thinkers believe that the process of globalization has reversed irrevocably. 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.
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 developing countries to run the basic services electricity, water, health services, public transport. Rich people do not want to do certain jobs that only poor people can do.
To run high-tech companies, there will be requirement of qualified people. India and China are power houses when comes to churning out engineers and doctors. The advanced countries will need them and welcome their entry.
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.
World trade has to be global for rich countries to sell their products to third world countries were 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 the 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.
Economic impact of coronavirus not withstanding globalization is irreversible. There can be Trumps or minor road blocks along the way but the march of the world will continue towards globalization.
The only solution for the people who feel threatened by globalization is to go back to the drawing board, get re-educated and re-invent themselves to face the challenges in this technologically driven fast changing world.
If they fail to do this then they will be an extinct species like the dinosaurs.