DEGLOBALISATION

Globalisation refers to the economic, social and political integration of nations. Economic globalisation can be seen in the exchange of goods. It can also be seen in the rising movement of people and capital around the world. However globalisation is under attack these days from all quarters. Also the fundamental challenge posed by the increasing reach of global markets is that global markets are inherently dis- equalising, making rising inequality in developing countries more rather than less likely. In developing countries inequality is economically destructive; it interacts with underdeveloped markets and ineffective government programs to slow growth – which in turn slow progresses in reducing poverty.

Due to this, trend has started to reverse to deglobalisation. Several prominent countries including the UK resisted globalisation by reducing tariffs. Far- fight parties in Europe gained popularity in this atmosphere of financial weakness and supporting deglobalisation.

Deglobalisation is the process of diminishing interdependence and integration between certain units around the world typically nation states. It stands in contrast to globalisation in which units become increasingly integrated over time and generally spans the time between periods of globalisation. It questions the integration process dominated by the logic of capital and supposed rationality of the economy that erodes the decision- making capacity of people and states. Deglobalising means starting to think and build an integration process on the needs of people, nations, communities and ecosystems. It does not oppose trade nor the exchange of products and services, but proposes that trade is not done at the expense of the communities, the local and national economies and diversity of its products whether agricultural or industrial.

There are several reasons behind this trend-

• Unequal distribution of benefits of globalisation, rising inequalities, job loss especially in developed countries.
• Global slowdown exacerbated the above mentioned situation and has led to the increase in demand for protectionist measures across the globe.
• Rise of ISIS, increased instances of terrorist attacks and emerging security threats across globe. Immigration crisis has further accentuated the security situation and as it is happening at the time of economic slowdown thus leading to the anti- immigration trend.

At the global level only two longer periods of globalisation have occurred namely in the 1930 s during the Great Depression and 2010s when following the Great trade collapse the period of World trade slowdown set in.

While as with globalisation, Deglobalisation can refer to economic, trade, social, technological, cultural and political dimensions, much of the work that has been conducted in the study of Deglobalisation refers to the field of international economics. These movements of Deglobalisation can be seen as the example of how developed nations react to the financial crises.

The COVID -19 pandemic is driving the world economy to retreat from global economic integration. In response to the current health and economic crisis, policy makers appear poised to take deliberate steps to reinforce the movement toward Deglobalisation. Export bans have been imposed over concerns about inadequate domestic production of medical equipment, personal protective equipment, and pharmaceuticals.

The Sino’ US trade war has been a landmark event for Deglobalisation forces in the realm of trade. In fact global trade has seen declining since 2018 both in value and volume and there have been relevant disruptions of the global supply chain. In response to the heightened geopolitical risk in China and Asia massive reshoring away from China and possibly Asia are taking place. This trend is going to significantly distort global trade and capital flows, pushing the global economy further towards the trend of deglobalisation.

Following the path of the US, other countries are leveraging protectionism and trade as weapons to achieve unilateral trade benefits. Japan recently tightened its export controls on South Korean imports from Japan. Also the US has opened a number of cases against European exports into the US and has even threatened to expand those tariffs to much more relevant sectors, such as the European automobile industry.

The WTO had become increasingly dysfunctional during the last few years and in particular since the arrival of President Trump to power. It has become increasingly clear that the existing rules governing the WTO cannot adequately control the use of non – market measures designed to favour a specific trading partner over others. Several proposals have been made to reform the WTO including the European Union but none of them can really accommodate both China and US under the same umbrella.

After decades of increasing globalisation both in trade, capital flows but even people to people movements, the trend has turned towards deglobalisation. The strategic competition between the Us and China has further fostered the trend of deglobalisation. This is true for trade even beyond in the tech and finance space. The demise of the WTO could be one of the most relevant points towards deglobalisation especially as far as trade is concerned. It is bringing downward pressure to growth globally.

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

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