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Rise of Globalization

Globalization refers to the increasing interconnectedness and interdependence of countries worldwide through the accelerated flow of goods, capital, ideas, and people across international borders. However, the COVID-19 pandemic has paused the growth of globalization through forced isolationism. Rising unemployment, inequality, and slow growth after the 2008 global financial crisis have also increased protectionist sentiments globally. While globalization has increased access to goods and services and the spread of technology and cultural values, the financial crisis challenged the neo-liberal economic model and free market ideology underpinning globalization. The pandemic has further exposed the fragility of international supply chains and their threat to national security, contributing to the decline of globalization. Overall, globalization still holds potential

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Anantya Singh Manhas
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28 views2 pages

Rise of Globalization

Globalization refers to the increasing interconnectedness and interdependence of countries worldwide through the accelerated flow of goods, capital, ideas, and people across international borders. However, the COVID-19 pandemic has paused the growth of globalization through forced isolationism. Rising unemployment, inequality, and slow growth after the 2008 global financial crisis have also increased protectionist sentiments globally. While globalization has increased access to goods and services and the spread of technology and cultural values, the financial crisis challenged the neo-liberal economic model and free market ideology underpinning globalization. The pandemic has further exposed the fragility of international supply chains and their threat to national security, contributing to the decline of globalization. Overall, globalization still holds potential

Uploaded by

Anantya Singh Manhas
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Globalization

Globalization envisages a borderless world or seeks the world as a global


village. It may be attributed by the accelerated flow of goods, people, capital,
information, and energy across borders, often enabled by technological
developments.
However, isolationism forced by Covid-19 pandemic has paused the growth
of globalization in the world. Though the pandemic has hastened
globalization’s decline, protectionism has been increasing since the global
financial crisis 2008.
The increased unemployment, growing inequality and anemic growth in the
aftermath of the global financial crisis, particularly in the developed world,
are the main reasons for the rise of protectionism all across the globe.

Rise of Globalization

Origin of Modern Globalization: What today is referred to as globalization,


started with the end of the cold war and the disintegration of the Soviet
Union in 1991.
Driving Factors: Globalization was the offshoot of two systems —
democracy and capitalism — that emerged victorious at the end of the Cold
War. These ideas were transmitted across the world through free trade and
increased inter-country movement of capital and labor. The idea that all
countries should unequivocally move towards democracy underpinned with
capitalism was packaged in policies commonly referred to as the
Washington Consensus or neo-liberalism.
Politics of Globalization: Politically, it refers to increasing global
governance via international institutions or growing alignment of national
policies. It involves both benefits (such as coordinated crisis strategies) and
costs (such as less national self-determination), too. A liberal democracy
combined with free-market capitalism was the best way to organize society.
Developing-Developed Countries Collaboration: The partnership
between the developed and the developing countries based on three planks.
First was off shoring of manufacturing and low-end services jobs to
developing countries. Second, developed countries run large trade deficits
by acting as the market for the increased output of developing countries.
Third, developing countries financing the trade deficit of the developed
countries by accumulating large foreign exchange reserves.
Pros of Globalization
Access to Goods and Services
Globalization results in increased trade and standard of living. It heightens
competition within the domestic product, capital, and labor markets, as well
as among countries adopting different trade and investment strategies. It has
also resulted in national capital markets becoming increasingly integrated.
Increases Cultural Awareness
By reducing cross-border distances, globalization has increased cross-
cultural understanding and sharing. A neutral globalized society boosts up
the rate at which people are exposed to the culture, attitudes and values of
people in other countries.
Sharing Technology and Values
It also provides poor countries, through infusions of foreign capital and
technology, with the chance to develop economically and by spreading
prosperity.

Decline of Globalization
The global financial crisis was a turning point, as it struck at the twin
foundations of liberal democracy and free-market capitalism.
Suppression of liberal democracy: The malaise of slow economic growth,
wealth inequality and rising unemployment provided a perfect breeding
ground for political leaders to appeal for nationalism as the solution to
political and economic
Perils of neo-liberal doctrine: While the free-market ideology has been
fighting a battle of credibility since it took the maximum blame for the 2008
crisis, free trade policies have now been severely impacted due to Covid-19.
The pandemic has not only exposed the fragility of highly optimised supply
chains that spread across countries but has also shown such inter-country
supply chains to be a threat to national security.

Conclusion
Given its enormous potential for economic gains, it would be a waste to
categorically repudiate the phenomena of Globalisation. Instead, there is a
need for better understanding of Globalization's effects and the interplay of
its economics with other issue areas.

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