Is this pandemic fuelling De-globalisation?

More relevant now than ever, in this time of social isolation, consider your mobile phone, a gadget that promises you connectivity, and in that, update after update, model after model, becomes more and more complex, adding layer upon layer to this social connectivity- pulling you into a nexus of social media, a virtual connectivity that promises to ease your daily life. Now upon this chain of thought that is a nexus, connectivity, consider globalisation, and de-globalisation. A Dutch Historian Johan Huizinga showed, the period that followed the Black Death in Europe actually represented the ‘turn of the Middle Ages’, and for him, the real story was not one of the economic aftermath of the pandemic, but the lack of knowledge about what this was, where it had come from, the irrationalism and xenophobia that came along with it, and eventually brought an end to what was then known as the universalist culture. Against this backdrop, it could be possible for the novel Coronavirus pandemic to seal the fate of the already withering globalisation. 

We have been talking about de-globalisation for a while, finding its roots in the financial crisis of 2008, as an attempt to prevent a shock of that magnitude on the global stage, but slowly making its way to trade barriers, the most popular example being that of the US-China Trade War. But with the voracity with which the Coronavirus has consumed the world markets, We are faced with the question, is this where deglobalisation begins? And as an extension, Fukuyama’s age old question finds a new platform- Is this the end of History? 

With the current trends of the extreme right of keeping migrants out, and the minorities down, it is evident that deglobalisation was already on an upward climb. The term- deglobalisation, that this article seems so wary about, is essentially to do with making the domestic market the sun around which our domestic economies would revolve; meanwhile, also reducing the dependence on the global markets. Realist political thinkers have often argued that greater inter connectivity between nations as a product of globalisation also leads to greater dependence and larger collateral damage. For a country like India, which has thrived under this interconnectedness, with a flow of information,technology, money and jobs, this reversal means better and more creative policy decisions for the future. For a minute, let us think beyond the financial markets and think about the economic activity trends prior to the pandemic. Manufacturing activities, which are popularly considered old and strong economic activities, have been on the downturn, and amidst this downturn, it is the consumption and service sector that has propelled the world economy upwards. But now, the Coronavirus has attacked the epicentre of consumption in Asia, and thereby bringing global value chains to a standstill, and the fear of associating with these value chains in the future after watching the collateral damage of globalisation may just be the propellant towards strengthening the voices of deglobalisation. 

The new climate of uncertainty is bound to make the general public, along with firms and institutions and also perhaps the governments wary, and with a desire to shield themselves with contracts that have more contingencies in them. As history has taught us, such large scale events are bound to be accompanied by new behaviours, making people more suspicious, and less willing to engage with anything that seems foreign. Take for example, the plague in Europe, that was accompanied by conspiracy theories of outsiders and malicious figures going door to door spreading the contagion. Another lesson for today, as the most literate among us delve into conspiracy theories stemming from China’s malicious intentions. The less obvious that the origin of the disease is, the more one leans towards assigning it to a maligned force-its human nature!

In 2009, after the recession, the carbon emissions that had decelerated during the crisis, were beginning their upward trend, and air cargo was showing large percentage increases- taking one step back but five jumps forward. This connectivity that I spoke about earlier, becomes an even more important force, in the context of air transport. Apart from speeding up the flow of commodities globally, for value chains, air transport was also fuelled by the desire to cash in on Chinese tourism. This same industry is responsible for transmitting the virus at the speed that it did, and is bound to take a hit, not only because of the lockdowns and closing of international borders as a precaution against further transmission, but also as a result of the fear that ensues.

One of the many outcomes of this growing connectivity is what may be called the “Butterfly Defect”- which is a concept coined by Ian Goldin, explaining how reducing uncertainty and systemic risk on a global platform, in this interconnected world is what is actually important for the future. Increased inter connectivity, and population density was bound to bring with it the threat of a global pandemic. In areas that represent the shortfall of a globalised world, the butterfly defect makes preexisting systemic risks worse. These risks, that find their root in global is, are also most threatening to globalisation. There are exciting possibilities for a new system that may take the place of globalisation, but the greatest challenge of these systems is to move beyond a concept, and towards building a base that may sustain it. 

Globalisation brings with it, a lot of benefits. With the reduced trade barriers, come emerging economies, jobs and better living standards. It gives us a “newer, broader sense of we”. It survived the recession at the start of this century, and will probably survive this, emerging weaker than before. The most effective policy actions always lie in cooperation and not in withdrawal.