Howard Lehman: Will globalization be another casualty of COVID-19?

A container vessel moves past the port in Qingdao in eastern China's Shandong province on Tuesday, Jan. 14, 2020. China's exports rose 0.5% in 2019 despite a tariff war with Washington after growth rebounded in December on stronger demand from other markets. (Chinatopix Via AP)

The COVID-19 pandemic and attacks on globalization are dangerously related. Efforts to disengage from the world have been led by nationalist politicians in the United State, Brazil, Russia, the United Kingdom and India, the same countries leading in many COVID-19 indicators.

Trade wars and America’s withdrawal from numerous international agreements and organizations highlight this attempt to deglobalize. Detractors of globalization now point to the rapid transmission of the coronavirus as yet another harmful result of being interdependently connected to one another.

The pandemic crisis has indeed weakened globalization. Trade, tourism and consumer spending all have suffered. India has embarked on a new strategy of economic self-reliance. The Japanese government will subsidize firms that repatriate factories. And the European Union may create a fund to buy stakes in European firms. The Economist magazine noted that long-term global investment is decreasing. In the first quarter of 2020, Chinese venture-capital investment in the U.S. fell to 60% below its level two years ago. Many countries with a large share of the world’s GDP have tightened their rules on foreign investment.

Another casualty from the pandemic is a fracturing of global governance. France and Britain have disagreed over quarantine rules and China threatened Australia with tariffs for demanding an investigation into the virus’s origins. Donald Trump seeks to pull the U.S. out of the World Health Organization and he called the G-7 an “outdated group of countries.”

Globalization has always ebbed and flowed, adjusting to demographic changes, economic shifts and political ideologies. Indeed, globalization survived previous contagious viruses including HIV, the swine flu, mad cow disease, SARS, various strains of influenza and, now, COVID-19. Second, the sheer magnitude of economic globalization remains relevant. Despite recent U.S. protectionist policies which led to fewer goods traded in 2019 compared to 2018, nearly $19 trillion worth of goods still crossed national borders.

The pandemic’s primary impact on globalization is the shift from global economic integration to regional integration. Specifically, global supply chains will undergo significant change, but, as a former chief economist of the IMF noted, that change will take the form of diversification, not repatriation. Indeed, the coronavirus pandemic will spur globalization to become more regionalized and the global supply chains concentrated in China in the pharmaceutical, agriculture and energy sectors will shift towards other countries, such as Vietnam, Bangladesh and Turkey.

Unfortunately, these nationalist leaders are seeking to further withdraw from the world even during the pandemic. The COVID-19 crisis makes clear the harmful and destructive outcomes of weakened globalization.

Nearly all the countries that are suffering most from the pandemic are led by autocratic, extreme nationalist, and anti-globalist leaders. The U.S., Brazil, Russia, the United Kingdom and India have leaders who initially ignored and later downplayed the virus, sought to delegitimize scientists and public health officials, escalated racial and ethnic tensions and broke from an international effort to combat the virus.

Moreover, these anti-globalization leaders, drawing from their autocratic tendencies, seek to repress the right of people to vote, undermine democratic institutions, and weaken global institutions.

The pandemic has exposed to everyone severe and widespread socio-economic inequalities and staggering health care disparities. The leaders of those five nations dismiss the obvious conclusion that their ultra-nationalist and anti-globalization policies have not only failed to contain the pandemic, but the true burden of the pandemic is carried by low-income and politically marginalized people who lack adequate health insurance.

The COVID-19 pandemic provides valuable lessons for more equitable globalization. A revamped and reformed globalization that adheres to international cooperation (especially concerning science and health care), a more regionalized supply chain, and a greater emphasis on democratic and inclusive institutions will protect more people from the ravages of future pandemics.

While COVID-19 won’t kill globalization, the pandemic is forcing important and improved modifications of globalization.

Howard Lehman

Howard Lehman is a professor in the Department of Political Science at the University of Utah.

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