By Antony Mutunga
It took more than 50 years for the world to globalize. Now, as a result of several technologies, the whole process seems to be going back in reverse. People are no longer socializing at events like they used to. Today, everything is done online – from getting the latest news to communicating with family and friends, whether they be close by or far away.
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Furthering de-globalization or self-sufficiency, even more, has been President Donald Trump, whose mission from before he was elected, was to make America great again by any means possible. The means ended up being a tug of war with China and other countries over trade policies. In the case of China, President Trump started a trade; despite signing the first phase of a trade deal in January, it is far from over.
And now we have the coronavirus pandemic that has caused different economies to rethink their stance on the idea of a global village. With diverse lock-downs and curfews, many governments especially, those in developing countries, have struggled to combat the virus. Some of them, however, have been able to handle the situation thanks to help from global institutions such as the World Bank and the International Monetary Fund (IMF), which have offered financial aid. Kenya nests here.
The pandemic has resulted in some businesses closing while others reduce their operations due to curfews and disrupted travel. This, in turn, has seen demand reduce all over the world and supply also disrupted as products are not able to be transported to the customers. The pandemic has highlighted flaws in the blueprints of most countries and demonstrated how ill-prepared they are to tackle problems; inadvertently, the view of globalization as the ‘big answer’ is unraveling.
Even before the pandemic, the signs of de-globalization were already in place. For instance, global trade growth has continued to go down. In February 2020, the global trade volume had lowered by 2.6 percent as compared to February 2019, according to the World Trade Monitor by the Netherlands Bureau for Economic Policy Analysis.
Trade tensions had a part to play before a partial agreement was reached. But, adding to the flames of de-globalization, both America and China had started integrating protectionism. In the west, Trump was declaring war on immigration in an attempt to restrict opportunities to those in the country and raising trade tariffs to give locals an advantage in the market. Also, the country recently withdrew from the Trans-Pacific Partnership.
On the other hand, President Xi Jinping of China has been focusing on leading sectors within his country. The country has an industrial policy that seeks to make China dominant in global high-tech manufacturing through the use of government subsidies, mobilized state-owned enterprises, and pursuing intellectual property acquisition to develop it further. The country aims to protect its local sector from foreign competitors.
As the two major powers continue to shift towards self-sufficiency, other countries will follow suit. Trump’s ideas will be taken up by other governments, causing a significant drop in immigration, to create opportunities for native citizens. To follow closely will be the increase in trade tariffs as every country looks to increase its revenue. If a cure for COVID-19 is not soon produced and flights remain on the ground, the circumstances promoting de-globalization will take place more rapidly.
Despite this growing traction of de-globalization, some regions such as Sub-Sahara Africa are moving ahead with globalization by establishing the African Continental Free Trade Agreement (AfCFTA), which entered into force on 30 May 2019. The agreement aims to bring together all 55 member states of the African Union covering a market of more than 1.2 billion people to create a single continental demand for goods and services, with free movement of business persons and investments.
It is set to accelerate intra-African trade and boost Africa’s trading position in the global market. This will be possible through a reduction of trade tariffs and opening up borders. Despite encouraging globalization, the agreement, although already in force, is yet to be implemented. It is further challenged by the coronavirus pandemic that has seen countries close their borders to curb the spread.
Globalization, which dates as far as the late 1970s, seems to have run its course. De-globalization may not happen in a day or year, but it will happen. With the coronavirus, globalization had a part to play as the open borders and skies that came from it helped the virus spread. Now different economies around the world have identified their fears; that they are much dependent on others. The case is especially true for developing and emerging economies. As every country looks out for itself, the question arises: when it is all over, will de-globalization be the new norm? (