Even before COVID-19 hit, there was evidence that globalization was unravelling. Please describe the scenario——and how the pandemic has affected it.
In the aftermath of the 2008 financial crisis and before COVID-19, slowing growth and declining economic standards led governments around the world onto a path of deglobalization. Facing growing populist pressure, many adopted protectionist policies they hoped would shield their industries and workers. Growth in trade stalled or declined for some countries and we started to see more regionalization and balkanization. Some even broke away from global trading blocs. Brexit is one example, and President Trump’s ‘America First’ campaign is another
Today, the world is even more ‘every nation for itself’ than before the pandemic. As global growth remains weak, countries are focused on making sure that their own economies and people get access not only to economic growth, but also to vaccines, and this mindset does not bode well for globalization. Even if the U.S. is back on its feet economically and health-wise by the end of this year, the estimates are that countries like India will only reach herd immunity in 2023. This suggests that aspects of trade and the movement of people through global travel will remain stalled for years to come.
Against this backdrop, there is evidence that the five pillars of globalization are under threat: trade in goods and services; capital flows that drive, fund and fuel cross-border foreign direct investment (FDI); immigration; a commitment to global rules and standards; and the stature of multilateral institutions such as the and the . It is reasonable to assume that the post-pandemic era will be characterized by further steps towards deglobalization, as
