Globalization is dying: Long may the phenomenon live

Context: Recently, the Western world came together to impose sanctions on Russia, decades old business arrangements with countries were terminated. All this came in the backdrop of COVID-19, exposing the vulnerability of globalization.

Among nation-states it has led to hardening of nationalistic agendas. Countries are focusing on self-reliance to reduce geopolitical risks.

Is it possible to reverse globalization trends?

From an evolutionary perspective, humans became the dominant species due to our ability to cooperate to further common objectives. From being hunter-gatherers, to establishing villages, towns and nation-states. In recent times, this is visible in arrangements such as the European Union.

That said, when events like the Russian invasion of Ukraine give rise to questions, there is a need to address these concerns in ways that will allow us to reap the benefits of globalization.

For instance, concerns regarding SWIFT. This is operated by a Belgian company which is subject to any sort of pressures that a domestic entity faces. The alacrity with which Russian banks were ejected raises concerns as to management of global financial infrastructure.

This raises demand for alternatives. Rather than have a single entity for financial messages, focus can be on setting up financial messaging infrastructure that is based on open protocols.

There is a need to evaluate all our global public infrastructure through a similar lens. Such important infrastructure should function like global commons. In cases where effective control lies with a small group of nations, we need to develop alternatives.

Source: This post is created based on the article “Globalization is dying: Long may the phenomenon live” published on 30^th March in Live Mint.