Covid-19 and Globalization

With COVID-19 crisis, humanity is facing one of the most serious and uncertain crises in recent history. We are here to understand the need of globalize solidarity.

Humanity is facing one of the most serious and uncertain crises in recent history. The current globalization of the COVID-19 pandemic has allowed it to spread to all countries. Even remote populations are at risk, as are populations in war zones and those living in cramped conditions with poor hygiene such refugee camps, putting the lives of human beings at risk in an increasingly globalized world. Many overcrowded slums in mega cities around the world, as well as many other people in a situation of day to day subsistence have no access to running water or food stores, social distancing is an impossibility, and interrupting their activities is a luxury they can not afford.

Climate change is also a result of current globalization and has been one of the precipitating factors of its crisis; it affects all countries and endangers living conditions all over the world, with even more severe impacts on already vulnerable populations. We need to rapidly mitigate and adapt our responses to climate change in order to save our planet’s biosphere for future generations, biodiversity and ecosystems.

These crises are now deepened by an aggravated looming economic crisis that is linked to our neoliberal profit-driven system based on global supply chains. The search for continuous growth, limitless extraction, industrialization of food systems and privatization of healthcare are all root causes of these crises that are deeply intertwined, since the flow of wealth to the 1% of the population and concentration in private financial and multinational organisations reduces funds for public health services in most countries. It diminishes the role the States and of State obligations to ensure basic human rights, such as that of healthcare and food, as well as funds needed for research to prevent future epidemics.

We must also be aware that the political leadership in most countries emphasizes that the COVID-19 pandemic is a temporary situation; that once a vaccine has been rolled out, life will return to normal, and that current globalization will bring prosperity to all. We all know that this is false. And we do not want to return to “normal”, with ever-growing social and economic injustice and inequalities. The time has come to collectively build a new normal, based on social justice, solidarity and equality.

The challenge we face is how to build an alternative model of development, driven by the needs of all peoples and communities around the world, and the protection of our planet. The window of opportunity is now open to accelerate the process, capitalise on the thousands of ingenious solutions being created within communities and make positive change permanent and global in all its diversity. - ripess)

In another words: Globalization envisages a border-less world or seeks world as a global village. It may be attributed by accelerated flow of goods, people, capital, information, and energy across borders, often enabled by technological developments. Over the past three decades (from 1990-2020), globalization has dominated the world’s economic order. Trade without tariffs, international travel with easy or no visas, capital flows with few impediments, cross-border pipelines and energy grids, and seamless global communication in real-time appeared to be the goals towards which the world was moving. However, on the negative side, globalization has been criticized on account of exacerbating global disparities, spread of international terrorism and cross-border organised crime, and allow for the rapid spread of disease. These trends pave way for an anti-globalization or protectionism sentiment, which may further amplify due to the spread of the Covid-19 pandemic.

The globalization had already begun to plateau or stagnate since the 2008-09 global financial crisis (GFC). This can be seen in many dimensions:

Slowing Globalization of Trade: Trade as a percentage of global GDP rose from 39% in 1991 to 61% in 2008 but has stagnated over the past decade. Similarly, personal remittance flows, previously on the rise, flattened to around 0.75% of global GDP. There are several causes for the great stagnation in the globalization of goods and capital.

It became increasingly apparent that not all countries, societies, and people were benefiting equally from globalization, and that soon began to be reflected in national and international politics. This is reflected in Brexit and USA’s America First Policy.

Further, trade wars and the halting of WTO talks is another recognition of the retreat of globalization. The globalization of information may confront a paradox. On the one hand, information is more available, important, and shareable than ever. On the other hand, there is greater monitoring of individual information.

The globalization of people accelerated, although in a manner that was partial and subordinate to national interests. The stock of global migrants grew steadily from 190 million in 2005 to 243 million a decade later. The number of international tourist arrivals rose from 900 million in 2009 to 1.4 billion in 2018.

Net international energy trade, which stood at 1.5 billion tonnes of oil equivalent in 1990, swelled to 2.5 billion by 2008 but then grew only moderately to 2.8 billion by 2018.

Effect of Covid-19 on Globalization:

The ongoing phase of globalization hasn’t fully recovered from systemic shocks given by GFC. However, the spread of Covid-19 pandemic presents a challenge of a different magnitude.

Global Economic Crisis: United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) in its annual Economic and Social Survey, held that the Covid-19 crisis is a challenge never seen before and it is going to be a bigger shock for the world economy than the GFC. This may act as severe blow tp liberal world order dominated by globalization.

Problem faced by Emerging and Developing Economies: The United Nations Conference on Trade and Development held that emerging and developing economies which rely on export-led growth, will now be severely impacted as the global economy contracts and the world opts protectionism policies. From a risk analysis perspective, we could at the very least see a rapid trend towards moving from globally dispersed production bases back in favor of domestic facilities. Countries will reconfigure their economies to look at import substitution with a greater clarity now, as the perils and pitfalls of over-dependence on foreign supplies become clear.

Restriction on People to People Movement:

National governments will have to weigh the risks of contagious diseases against the benefits of ease of travel or may have to consider stronger safeguards. In the short run, the World’s Tourism industry will get affected even after the crisis gets over. Also, mobilization of finance will be indirectly affected as less migration and business travel coupled with incentives to invest at home will hinder transnational capital flows.

Way to move forward:

The US has announced a $2 trillion economic package (nearly 10% of USA’s GDP) for post crisis reconstruction. However, other countries may not replicate this as it may blow up the fiscal deficit. In this scenario, full use must be made of the International Monetary Fund’s Special Drawing Rights (SDR).

The idea is that, because all countries will obviously want to protect their own citizens and economies during crises, the international community should have a tool for assisting the neediest countries without requiring national budgets to take a hit. Advanced economies like the United States should consider donating or lenting (on concessionary terms) their SDRs to a trust fund dedicated to helping poorer countries.

At the same time, there is a need to work towards eliminating problems such as social and economic disparities caused by globalization.

(Globalization has brought more good than harm. Therefore, nations must work together for a better future through globalization, as climate change, pollution and global warming issues can only be tackled through collective action. In this context, world can take inspiration from India, as India is exporting Hydroxychloroquine in response to demand by other countries for treatment of Covid-19. - drishti)

As a proud citizen of #India, Would love to say that "India’s civilization sees the whole world as one family. As we care for our own citizens, we are also extending help to other countries....India is regarded as a pharmacy of the world, especially for affordable medicines,"