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Coronavirus and Globalization Moving Forward

· Coronavirus,Economics

Coronavirus and Globalization Moving Forward

The notorious COVID-19 has launched the globe into uncharted territory.

As the number of the confirmed cases reaches into the millions, the already astonishing death toll will keep rising before strong measures like social-distancing take effect. However, even if the final cases were dismissed from the hospital today, the global impact from this virus will last a long time.

Similarly to the AIDS pandemic of the 1980s that significantly changed the rhetoric and attitude of sexual health, or the 9/11 attacks that vastly changed American’s view of the middle east and domestic safety, the Coronavirus pandemic will have its own extreme effect on society beyond the virus itself. One of the aspects is globalization, which for the first time is shown in a fragile light .

As the vast majority of Americans fear to leave their homes because of the dreaded virus that originated halfway across the globe in China, the pandemic shows many of the flaws that come with operating within such a globalized system.

The Coronavirus will surely slow the rapidly-progressing trend of globalization, both economically and socially.

“One lesson that Americans could take from this is that other countries are the source of dangerous diseases and are a potential threat… But I think, to me, the better lesson to draw is that the world is vulnerable because of globalization “, writes The Atlantic's Ed Yong.

Within the last year, a record of 93 million Americans had left the country, with over half of that number traveling overseas.

However, considering the current and most comprehensive travel restrictions since World War II, the shift away from travel and cultural exchange is quite possible.

Given the dangers of Coronavirus, the desire for travel will plummet, and fewer Americans will be eager to leave the country.

The pandemic has also put a serious strain on international relations, creating tension between world leaders and prompting some to take steps to move away from globalization.

As many of the EU countries close their borders, countries will probably operate more independently in the future.

This could be a very dangerous trend for the world.

If international relations continue to break down with less communications across the globe, the possibility of war and international conflict skyrockets.

After the end of World War II, the United Nations was created with the intention of making a globalized community, giving countries allies and protecting each other from the possibility of war. If the relationships between world leaders continue to deteriorate as now, the world becomes much more vulnerable to a possible large-scale conflict.

Economically, the Coronavirus will have a lasting impact.

The pandemic has already taken a massive toll on the stock market, with Dow Jones dropping over 35% from its high in a month and compelling Congress to approve an unprecedented $2 Trillion dollar stimulus package.

In long-term effects with respect to globalization, the global supply chains will likely start to become more domesticated.

“The Coronavirus pandemic will create more pressure on corporations to weigh the efficiency and costs/benefits of a globalized supply chain system against the robustness of a domestic-based supply chain”, says Economist Dambisa Moyo.

While it is more efficient and cost-effective for most of the large companies to outsource labor to countries like China, the extreme economic suffering they are currently facing might prompt corporations to domesticate some of the labor process.

While this would be more expensive for companies, it would create a huge demand for manufacturing and blue collar jobs.

Global trade and specialization within countries increases economic capacity and is extremely beneficial. Globalization has undoubtedly been good for the American economy.

However, a globalized economy does create a very interconnected and dependent network that, if broken, is susceptible to very disruptive effects.

In addition to creating jobs, having more domestic supply chains would mean a greater sense of self reliance and being better prepared for situations like a pandemic.

While a transition to more American based supply chains seems possible, another possibility is moving supply chains to Mexico or other close allies.

Toyota and BMW recently built massive manufacturing plants in Mexico, and the Coronavirus will only add fuel to the fire in Mexico becoming a hub of supply chains for American goods. Many American allies will have to take responsibility for manufacturing if these large supply chains move away from Asia, and it will undoubtedly be much more expensive.

Globalization is an extremely valuable asset for the world, and the Coronavirus is proving to be a very challenging test for the globalized system. It is becoming obvious that the globalized world we live in will change as a result of this pandemic.

The virus will undo some of globalizations effects, and countries will have to figure out how to adapt to a world that will likely be less connected and efficient.

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Written by James Rhinelander & Edited by Alexander Fleiss


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