Crisis of Globalisation: Today’s Talk on Editorials
Significance: An anti-globalisation protectionist momentum has swept through Europe and America, with far-reaching consequences. It poses a significant challenge for developing countries’ future both in how we deal with the anti-globalisation sentiment that has captured other countries and in stopping them succumbing to the same populist ideology. The latest instances of the anti-globalisation movements are seen in BREXIT, H-1 B issue etc.
Evolution of globalisation: Globalization typically refers to the process by which different economies and societies become more closely integrated. The market-radical regime of globalisation started to unfold in the 1970s. Since then, integration of financial markets and global value chains have grown to ever-increasing levels. Multinational companies and financial institutions have gained substantial power in the globalised world.
It mainly involves the following key components like :
- Economic liberalisation: the pursuit and implementation of free-market policies in the world economy.
- Westernization: the growing dominance of western forms of political, economic, and cultural life.
- Internet Revolution: the proliferation, innovation and adaptation of new information technologies in everyday life.
- Global Integration: the realization of one single unified community in which major sources of social conflict have vanished.
Arguments between pro and anti-globalisation: the people who support globalisation argue that globalization brings about increased opportunities for almost everyone in terms of employment, business opportunities, access to education etc and they support competition in the economy as a needed factor since it makes agents of production more efficient. They argue that globalization leads us ultimately to the era of converging world incomes like that of developing countries like China open up to the world and see their incomes rise, converging institutions as democracy becomes a universal norm, and cultural richness as people of different background interact more frequently.
However, the anti-globalization group argues that there are a lot of people who are deprived in terms of resources. So, as a result, they are not currently capable of functioning within the increased competitive pressure brought about by global economic integration. The fruits of globalisation, they argue have only enlarged profits for investors but offered fewer incentives to laborers’ welfare and standard of living. This, they argue is a challenge to inclusive growth and it provokes a strong backlash from civil society. Anti-globalisation supporters opine that globalisation has a significant effect on individuals traits. They argue it diminishes their personal autonomy and threatens their individual, cultural identity as well.
Why reactions against globalisation:
- Economic Crisis: The 2007-08 financial crisis affected many countries simultaneously and led to a global economic crisis unseen since the Great Depression. The crisis questioned financial globalisation which amplified risks linked to banking activities and financial markets and brought about financial imbalances among leading economic powers. Since then,s the world’s top 60 economies have adopted more than 7,000 protectionist trade measures on a net basis.
- Lack of job guarantee: Globalization has affected unemployment by moving the job patterns, wages almost everywhere have gone up and down, immigration labour from developing countries to developed countries is much easier, and import and exports have increased tremendously. For example, many western jobs have moved overseas, because even developing countries now can afford to produce what was the western supremacy some decades back.
- Lack of investment: As the job shifts from developed to developing countries, they start to grow at a faster rate compared to developed countries. This cause huge foreign investment flows in these countries. The richer developed countries experience a problem of capital formation. This result in slower economic development in developed countries and people tend to protest against globalisation.
- Nature of leadership: The political leaders of U.S., U.K. have used the discontent among people to their benefits under the H1B visa programme restrictions, BREXIT etc. They rallied a protest against globalisation and involved populist ideology in their manifestos to gain support.
- Threats become wider and global: The issues in a particular locality become more widespread around the world very fast. As a result, if the speed at which they are identified and the effectiveness of the response can change it into a global threat. For example, the rise of the Islamic State, the outbreak of Ebola are evidence to see what happens when a danger remains unidentified for too long or a coordinated response is missing or mismanaged.
Conclusion: In the wake of a rising protectionist world, the nation’s public policymakers have to formulate a national response strategy to the globalization. They have to define the challenges and opportunities in meeting 21st-century national security needs, manage an IP regulatory framework that supports innovation in a globalized environment, and build a national infrastructure to support a global role for their own respective country.