🌍 The End of Globalisation?
The first World War led to an end of globalisation. Will the current situation also lead to a similar fate? (Reading Time: 2 mins)
What comes to your mind when you hear the word "pizza"?
Domino's Pizza, right?
What about mobile phones?
Apple or Samsung, no?
But what if these companies had never entered India? How different would our world be?
And what if such foreign companies never get to enter India in the future?
The Benefits of Globalisation
Globalisation served India well. When India finally embraced it in 1991, our GDP improved massively.
Our exports also grew by 20%.
But the current scenario is threatening to overturn it.
The End of Globalisation?
US’ favourite weapon of war: trade sanctions, is the most common move that is there in the playbook. And it’s not a new one.
During the first World War major countries were fighting each other and the best way to win was to limit supplies.
And globalisation gave countries the power to do that.
The UK where most major businesses were located could simply stop companies from supplying goods to enemy nations.
And something similar is happening right now. Major US and UK-based companies are boycotting Russia over its invasion of Ukraine.
But this is not the only thing threatening globalisation.
World trade has been impacted majorly since the 2007 US housing crisis (which deserves a piece of its own). Since the world economy was so interconnected, the whole world felt financial shockwaves from the crisis.
The Covid-19 pandemic and the various trade wars (like that between US and China) have just highlighted the problems of globalisation.
So, many countries like Russia and China have worked hard to become self-reliant. And now India is also moving towards the same path of "aatmanirbharta."
Though this concept has never been at odds with globalisation, it could help safeguard our national interests in case of future wars and pandemics.
But is self-reliance the ultimate solution?
Well, no. If it was, countries would never have agreed to forget all their differences and come together to trade.
Self-reliance comes with its own set of problems- the most alarming being stagnation of development.
Globalisation leads to exchange of innovation and ideas. The world as we know it today, wouldn’t be so without globalisation.
So, what is the solution?
Well, one solution could be that companies separate business and politics at least when it comes to international matters. But this is becoming increasingly more difficult for businesses as customers and stakeholders only want to support companies that are involved in social matters.
A second solution could be building better supply chains so that countries don't have to opt for self-reliance just out of the fear of another pandemic.
However, these solutions are weak and depend a lot on countries' mutual cooperation. Something that doesn't seem to be on the cards right now.
Do you think globalisation will survive this era of wars and sanctions? Or will world trade continue declining?
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