Globalisation was an important topic discussed at the World Economic Forum meet at Davos last month. No discourse is comprehensive in present times marked by disruptions and everyday concepts demanding interdisciplinary input. Yet, such debates are important to ponder over the way ahead to tackle future challenges and opportunities they offer. Globalisation as a process marking trade and interrelationships has always had an important impact on human civilization. It has various dimensions, but the economic aspect of globalisation has had a heavy bearing on other associated issues too. It has also worked as an engine of the international political economy in the post-Cold War era.
Though there has been a debate over the nature, scale and speed of globalisation in various phases of its history, yet one cannot dispute the fact that interdependence has been a significant platform for human relations. Further, in every phase of human history when we put the notion of trade and exchange to cost–benefit analysis, one sees a contested outcome: gains certainly did exist, but one cannot overlook the flipside, losses that are integral to trade-offs.
At one point, globalization did bring in advantages like rise in trade, an increased access to markets and a relatively better flow of capital. In the same vein, inequalities of scope of operation and gains have been a thorny issue with respect to the process of globalisation. It is essential to note here that the disadvantageous consequences of economic globalisation have necessitated its critique from ecological and cultural point of view, influencing the world economic governance dynamics too. Any phenomenon when left unchecked generates outcomes which are bound to be opposed by various stakeholders. The same resistance was in the works when anti-market forces dubbed globalisation as a new facade of capitalism leading to exploitation of poor nations and wealth being concentrated in the hands of a few individuals. Interestingly, the process of globalisation and economic integration globally was criticised for bypassing the concerns of commoners while working for the benefit of the elite.
An uneasy timeline has been there in the trajectory of global markets. They have witnessed trade wars between the two super powers, using tariffs to gain supremacy, and a virus that forced countries to shut down their national borders.
Despite such vagaries, the global economic apparatus has not yet let isolation emerge as a panacea to problems the global economic orders is beset with.
The Covid pandemic is not over yet and nations are trying to deal with emerging threats through booster dosages, test mechanisms and new guidelines. Further, the fear of war escalating in Europe has also a bearing on the working of global economy and business. At the Davos World Economic Forum, the need to rework and define globalisation in a new way was heard too. The idea must be pondered over while looking at some important aspects, because a right approach towards economic management is essential for any idea to succeed.
First, an alternative paradigm of liberal model driving trade and globalisation has been that of economic nationalism. Any debate on re-globalisation must factor in that the future demands an innovative framework where the interface with the world must be based on securing national interests first. The state has been an important pillar as a rational unit of analysis in international relations, where power and national interest are guiding principles. Economics and trade too have never been immune to it. Under changed circumstances, the idea of securing domestic market interests and increasing their efficiency would be better served by working on integration of economy with a global outreach that helps add dynamism to national economies.
Second, as the world recovers from the pandemic, it is essential to not repeat the mistakes of the past. Collaboration is emerging as a buzzword in several bilateral and multilateral trade agreements. In earlier phases of globalisation, this exercise of cooperative endeavours for trade and markets excluded the percolation of gains to the grass roots level. It is essential that a new edifice must be built on the solid foundation that is rooted in countryside and villages.
Third, the idea that one cannot reverse the process of globalisation makes it essential that globalisation must be worked in the context of governance mechanism better suited to present realities. Echoes of reforms juxtaposed with structures that are disconnected with prevalent situations would not augur well.
Self-sufficiency is always a cherished desire of any endeavour. However, with time, the quest to enhance market outreach is also a rational option. Holding down doesn’t seem to be the optimistic way of dealing with the situation. It is essential to reflect on better corollary for development and economic globalisation based on encompassing rectification of past mistakes.
Lastly, the new edifice will need a better yardstick for the assessment its performance. No doubt, profits and expansion are important, yet they cannot be allowed to eclipse new security concerns like ecology, health, community, gender, etc. India has also supported the cause of reforms in global governance placing people over profits.
The Covid-19 pandemic is not over yet and nations are trying to deal with emerging threats through booster dosages, test mechanisms and new guidelines. Further, the fear of war escalating in Europe also has a bearing on the working of the global economy and business. At the Davos World Economic Forum, the need to rework and define globalisation in a new way was heard too. The idea must be pondered over while looking at some important aspects, because a right approach towards economic management is essential for any idea to succeed.