UPDATED 3:00 March 19th: one of my Blog readers pointed me to this article titled Whatever the virus kills, it won’t be globalism. Since I am a big believer that Predictions are a fools errand, this walk through the bold post-pandemic predictions of our past is instructive. This point of view says that sounding the alarm on the death of globalization may be a bit premature.
There are many questions that require answers as we look towards a new normal post the current pandemic. One such question centers on supply chains and the globalization phenomenon of the past three decades. Multiple forces were already threatening the globalist agenda. From the rise of populism and associated tariff wars, to the advancement of automation and other innovations, the move towards localization seems inevitable.
Globalization however is complicated. As described in this description of Globalization 3.0, three constraints have limited globalization in the past: the cost of moving goods, the cost of moving ideas, and the cost of moving people. The first two acts of globalization occurred when the cost of moving goods and ideas dropped. While globalization raised the standard of living in several developing economies, the third constraint limited the breadth of impact. In a book titled The Great Convergence, author Richard Baldwin explores the possibility of a third act. This act is driven by dramatic advancements in areas that address the third constraint. If the cost of moving people were to drop, developing nations like South America, Africa, and others could be the beneficiaries of this third act.
What does the current pandemic do to this potential third act? Do we see globalization reverse towards localization on some fronts, but expand on others? When viewed through the lens of human development, where should globalization go next? This CNBC International TV segment provides a point of view. Alex Capri, visiting senior fellow at NUS Business School does not see things returning to normal after coronavirus. He outlines future changes that will take place in global trade caused by the coronavirus outbreak.