Why Covid Did Not Spell the End of GlobalisationBy Maarten Boudry and Nick Brown
19/04/2022
Probably the most common prediction about the world during the Covid pandemic was that this was the end of the era of globalization. The world as we knew it before 2020, with its daily merry-go-round of people and goods and services, would be gone forever. While some commentators deplored this, fearing a retrograde move towards greater nationalism and protectionism, many others eagerly welcomed the development. In February 2020, when Ewald Engelen and Marianne Thieme wrote in the leading Dutch newspaper NRC that the novel coronavirus “heralds the end of globalization,” they didn’t disguise their enthusiasm: globalization, after all, “is what turns an epidemic into a pandemic.” By travelling across the globe by the millions every single day, as well as hauling huge amounts of stuff back and forth (including both live and dead animals), humanity had been tempting fate for decades. As the French political scientist Romain Lecler put it in March 2020, “The spread of Covid-19 points to another global disease: our collective addiction to international mobility.” It was a wake-up call to start thinking about deglobalization.
These critics argue that the forces of globalization (or “neoliberalism”—which many seem to regard as an exact synonym) made our societies more vulnerable to disasters such as Covid. Suddenly, supply chains across the world were disrupted, and many western countries scrambled to find enough essential medical equipment to weather the storm. Long, complex production processes based on just-in-time delivery of components proved to be extremely vulnerable to factory closures in distant countries, and to international border restrictions. Having outsourced the production of face masks and other low-value medical supplies to China, we suddenly faced acute shortages. Moreover, because of the interconnected nature of global financial markets, the economic shock waves spread around the world even faster than Covid itself did, causing a global spike in extreme poverty. To many, the solution was obvious: less travel, less hauling back and forth of stuff, shorter and simpler supply chains, and more self-sufficiency and reshoring (bringing production or service provision back to a company’s home country), especially for essential products like medical supplies and food.
Now that the dust is settling, we can see how the post-Covid world is starting to look (at least, up until the Russian invasion of Ukraine, see below). Even though the virus has still not been completely defeated, especially in developing countries, it’s already clear that rumours of the demise of globalization have been greatly exaggerated. Researchers at Oxford Economics, after examining the impact of the pandemic on the economies of Europe and the US, found little or no evidence of any slowing down—let alone reversal—of globalization. Nor did they detect any significant reshoring, or reduction in the trade of components and subassemblies of finished products. In fact, the trade in intermediate goods has bounced back even faster than overall trade. After a few months of disruption and temporary reversals, most global supply chains are as dizzyingly complex as they were before. And most consumers seem eager to forget about lockdowns and go back to normal: as soon as restrictions were lifted, people could be found booking the same cheap flights to Venice and Mallorca, going on shopping sprees at Ikea and H&M and buying electronics (manufactured in China) at the Apple store.
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Source:
https://areomagazine.com/2022/04/19/why-covid-did-not-spell-the-end-of-globalisation/
