Will The Coronavirus Kill Globalisation?
The coronavirus has spread around the world with tremendous speed to affect millions of people. Given its rapid pace and ability to infect the population of most countries it is now identified as a pandemic.
Immediate impact
The immediate economic impact of the disease is seen in the airline and other industries as flights and events are postponed and cancelled. The interconnectedness of the world as a result of decades of globalisation is now seen as a critical flaw, as people travel with ease while carrying the virus. Even at this early stage it has jumped from cities around the world to local towns, as the extent of the global network is visible in the travel patterns of people throughout all aspects of society. Many businesses are taking action before governments announce policies by restricting staff and sending them home to work remotely in an attempt to stay healthy and productive. The immediate effect of such a widespread virus is already apparent but what is less certain is the long-term impact on trade as people focus more locally in the future.
For the first time in decades those at the heart of the economy are questioning the benefits of globalisation. The belief that supply-chains spread around the world like a spider’s web lead to lower costs is under review. And the benefits of globalisation such as falling levels of poverty and rising levels of longevity are no longer enough to ignore the challenge of too much interdependency. Other disadvantages are highlighted too as automation, lower wages and a relocation of millions of jobs from one country to another are used to increase competitiveness and profit. But globalisation has created a world of winners and losers and the rapidly widening gap between rich and poor is not sustainable. Not least because the majority of people struggle to make a living that doesn’t properly reward them for the labour they provide.
Shine a light
The emergence of the coronavirus has highlighted the consequences of porous borders after decades of a drive to find cheaper cost locations. The effect of the current outbreak will translate into fewer jobs, lower wages and uncertainty about what happens next. The problems created by the coronavirus mirror the problems of globalisation. And as we suffer from the former we pull back from the latter. But when it is finally brought under control we will have to ensure the risks of a well-developed global network are better managed to avoid future pandemics.
So, the coronavirus and globalisation are strange partners but they are each changing the world in ways we never expected or predicted.
