Will COVID Affect Globalization?


The Covid-19 pandemic has indeed exercised an adverse impact on globalization. This is chiefly due to the major lockdown, stay-at-home or ‘shelter in place’ of almost all the important economic zones of the World. Issues such as management of supply chains and where and how to carry out sales are posing serious challenges to businesses. 

These are some ways in which the global economy has been impacted due to the circumstances attributable to coronavirus.

  • There is a substantial drop in the volume of merchandise trade.
  • Likewise, even the foreign direct investment registered a big decline.
  • In the same way, the number of passengers of international airlines has also reduced to a great extent.
  • The pandemic has seriously disturbed the global value chains linking manufacturers spread over several countries.
  • As it is, the worldwide economy was rather weak even at the beginning of the present year. And, the present crisis just went on to aggravate things; several crucial trade deals could not get executed.
  • Well before the advent of the pandemic, the trade war involving China and the US was in progress. The present set of circumstances has just made this conflict more severe and, this shall show its effects on several economies.

Over-reliance on global supply chains
Globalization has successfully combined the capabilities, resources, and capital of different geographic zones. But, that has made various countries more susceptible, in terms of excessively relying on the global supply chain. It is this very susceptibility that got exposed during these situations: Many countries are finding it extremely tough even to provide masks, sanitizers, and important medical equipment.

Effects on globalization- A temporary phase
But several market experts are optimistic about globalization. They maintain that what the World is now witnessing is just a slowdown of globalization and not its reversal. Once the pandemic is brought under control and normalcy is restored, things will improve.

  • Unlike the past, it’s projected that there won’t be arguments about the advantages and disadvantages of globalization, soon after the virus is brought under control.
  • The overall perspective towards globalization is set to change. This is in the sense that there is going to be greater cooperation between varied entities of the global economy; the humane approach will be the dominant element.
  • Globalization is anticipated to become more significant for the whole world, in a positive sense.
  • For a major chunk of organizations, globalization could be seen more in some avenues and not that much in other realms. It is highly unlikely that there would be a single, standardized approach.
  • The anti-globalization section of the market would continue throwing new challenges. Companies are entailed not just to face them, but also to come out with novel solutions.
  • The business conglomerates of the World have to take several initiatives to ensure that normal economic activities are restored at the earliest. Rather than waiting for things to happen, these business giants need to involve themselves in situations and take proactive measures.
  • The Corona crisis has taught a valuable lesson to many countries. They have realized the importance of manufacturing their medical supplies and not depending on imports, for this purpose.
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