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Commentary: The Coronavirus could deepen globalization

Guest Commentary by Sreeja Kundu

by Sreeja Kundu
There is no further doubt left that the coronavirus outbreak is both an economic and a social shock that will remain imprinted on a nation’s psyche.

But the global impact of the pandemic poses a broader fundamental question: will this signal a major transition in the current neo-liberal order? Or more explicitly could the post-Covid world order witness the resurgence of the nation-state as we know it?

Genuinely watershed or pivotal moments are one of those rare episodes in history. Take your pick among- The Versailles Peace Treaty, Great Depression, Battle of the Stalingrad, or most recently the 2008 global financial crisis - all had the potential to alter the existing course of events or more significantly the status quo.

Even though, the world is yet to tide through the impact of the Covid-19 pandemic but in short term the crisis has given fuel to all various camps in the global order debate. The nationalists, anti-globalists, the China hawks and even liberal internationalists had already been experiencing a sense of urgency for their views.

The Covid-19 pandemic has changed the course of life as we know it.

Third and a crucial insight derived from the Covid-19 crisis is the upsurge of the nation states.

It has crashed economies and broken health-care systems, filled hospital and emptied public spaces and has disrupted modern society on a scale that most living people had never witnessed. Given the deep economic damage and the social collapse that has unfurled because of this crisis, it is hard to see anything other than a reinforcement of a movement towards nationalism and a great power rivalry among others.

A striking example is the statement made by Wilbur Ross, the US trade advisor who believed that the virus renders the possibility that the US can’t depend on even "close allies" for its supply of essential items. His response far from being minced actually suggests that the most plausible response would be to shut the economic drawbridge.

What is surprising and perhaps unfortunate, that not just the US administration but the virus has revealed the hidden costs and the fragility of global supply chains which have prompted many to already write obituaries on globalization.

The first phase of globalization which lasted from the end of the Cold war until recently, was about free-trade agreements, building supply chains, creating an aspirational middle class through eradication of poverty and facilitating interconnectedness through digital means and mobility.

But the second wave of globalization which defines the latter part of the 21 st century has been confronted with mounting economic problems and consequent political challenges after a smooth phase of sail. The economic problems began with the 2008 financial crisis from which the world couldn’t fully recover. While economies might have become global, politics marked by nativist and populist impulses have remained national.

Is globalization waning?

One is already aware of the political backlash in the form resurgent nationalism that has taken place in both the industrialized nations and developing countries.

In this respect the coronavirus pandemic has intensified suspicion between an authoritarian regime in China and a populist administration in the US. Besides the obvious pitfalls that open-trade and integration with the global economy brings, that would be routinely flagged by populist political parties it would automatically deepen economic decoupling.

For example, some nationalists in the US and Europe already predisposed against unfettered trade, could actually flag the virus as the ultimate reason to seal the borders and bring factories back home.

Second, besides the hypernationalist narrative and the possibility of the overt geopolitical competition lies the fragility of the global supply chains. The supply chains were already under fire- economically due to rising Chinese labor cost, the US-China tariff war and the advances in technology in form of 3D-printing and automation.

Covid-19 crisis has undermined the basic tenets of manufacturing and exposed the weaknesses of the system. In other words, companies today will now rethink and possibly shrink the multi-step, multi-country supply chains that dominate production today. As Prof Richard Portes, sums it up correctly that "once supply chains were disrupted by [the virus] , people started looking for alternative suppliers at home".

Third and a crucial insight derived from the Covid-19 crisis is the upsurge of the nation states.

Unprecedented government aid and packages intended to mitigate the social and economic fallouts caused due to the outbreak and consequently the lockdown, forces a pertinent question to our minds - Is the nation-state back?

Even so, as anti-globalist might consider that the virus in China, thanks to intricately interconnected world was able to hit both the supply chain and humans in no time. Since globalization is not about movement of goods and services, but also of people, capital, technology and ideas. So intrinsically, socialist regimes would be better positioned to respond to emergencies as opposed to states that rely on a neo-liberal model.

A natural corollary is then that the high-water mark of globalization has arrived which signals radical pragmatic shifts.

The crisis so far has exposed the deep inequalities that dot our global village and tested the endemic resilience symbolized by the presence of a lamentable healthcare infrastructure in even developed nations. But that might itself open up the path for global coordination.

While on the short run the pandemic might benefit nationalists or anti-globalists by exposing the divisions, the crisis in the long run could further assist the development of the global consciousness. The more people over the world connect with each other over the same traumas over technology, the more they will be psychologically enmeshed within the community.

On an optimistic note , the coronavirus might provide the perfect fodder for the revival and perhaps lead to a deepening of globalization which had been fractured before the crisis.

About the author:
• Sreeja Kundu is business writer at Live Mint and holds a Master of Science in International Relations and Affairs from the University of Bristol.


  1. Well written Sreeja. Perfectly pinned the thoughts.

  2. A very insightful read which makes one ponder on the potential socio-political impact of the pandemic!


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