Relevance: GS-2: Important International Institutions, agencies and fora - their Structure, Mandate.

Relevance: GS-1: Effects of Globalisation on Indian Society.

Key Phrases: Protectionism; Global order; Multilateralism; Mercantilism; Reforming Multilateral Institutions; Vaccine diplomacy; International Solidarity; Our common humanity.

Context

• The world has seen a rise in protectionism. The COVID pandemic and the disruptions caused by it have further deteriorated a stable global order.
• With the Ukraine-Russia war, the position of various multilateral institutions like the UN seems to have been questioned.
  • This raises a pertinent question that what should the world do to establish order and uphold principles of multilateralism.

Key Highlights

What is Globalisation?

• Globalisation refers to the exchange of ideas, principles, and culture. It has been in existence since medieval times.
• Its pace increased during mercantilism and the age of discovery but the real spurt in growth happened in the post-1990s due to:
  • Increased usage of the Internet.
  • Faster and cheaper mobility options.
  • Network of multilateral institutions to enforce rules-based order.
    • Institutions like World Trade Organisation facilitated the trade of goods.

What is the backlash against Globalisation?

• The backlash against globalisation took two forms:
  1. Economic backlash
     • The poor and the unemployed in the developed world began to feel that they had no voice in the globalised system.
     • They demanded to know why their governments’ policies benefited people in faraway lands such as China.
       • This was due to transferring of production of manufactured goods to countries with cheap labour.
     • They wanted to reduce the growing inequality in every “developed” economy.
     • They wanted to go back to the security of older, more familiar economic ways.
  2. Cultural backlash
     • Political denunciation of global trade led to hostility towards foreigners.
     • More and more people sought the comforts of traditional identity and ways of life.
     • The “masses” rejected liberal politics, trade agreements, immigration, multiculturalism and secularism and preferred cultural rootedness, religious or ethnic identity and nationalist authenticity.

Political opportunity

• Political leaders tapped into both kinds of backlash against globalisation.
• Populist leaders such as Donald Trump rose to the presidency of the United States on slogans of “America First” and “Make America Great Again”.
• Others like that Jair Bolsonaro from Brazil and Recep Tayyip Erdoğan in Turkey to Viktor Orbán of Hungary, successfully persuaded their voters that they better represented their nations vs the rootless secular cosmopolitans who were in opposition.
• Leaders combined nationalist fervour with popular prejudices and have made nationalism the default model of national self-definition, thereby diluting Internationalism.

COVID-19 has increased ‘deglobalisation’

• It accelerated the prevailing trends of protectionism in the last two years.
  • Globalisation had earlier been threatened due to
    • The global financial crisis of 2008-09.
    • American trade war with China.
    • Britain’s withdrawal from the European Union (EU).
    • America leaving the landmark Paris Climate Agreement.
    • Former President Trump pulled the United States out of the World Health Organization (WHO).
• It confirmed that in times of crisis, people rely on their governments to shield them.
• It showcased the vulnerability of global supply chains to disruption.
• It confirmed that dependence on foreign countries for essential goods (such as pharmaceuticals) could be fatal.
  • Nations tried aggressively to acquire medicines, supplies and vaccines for their own people at the expense of each other.
• There was a rush to reset global supply chains and raise trade barriers: the demand arose for more protectionism and “self-reliance”.
• It made the world more vulnerable
  • It legitimised the fear of foreigners.
  • It mainstreamed the essentiality of having strong borders.
  • Countries started to believe that one can’t always expect the neighbours and allies to be friendly to them.
    • Italy was one of the first nations in Europe to be affected by COVID-19. But, it was denied help by fellow EU nations.

Effects of the Russian-Ukraine conflict on Globalisation

• It highlighted the limitations of state sovereignty.
• It diluted the credibility of the UN Charter.
• New disruptions in supply chains, trade and energy interdependence were highlighted.
  • Disruption in Neon and Cholobutadiene has curtailed the semiconductor industry from functioning properly.
  • Increased oil prices.
  • Shortage of wheat and sunflower oil around the globe.
  • National interests should trump international cooperation.

The recent crisis of Multilateral institutions

• Global institutions and their agencies suffer from politicisation, manipulation and a lack of representation, and independent leadership. For instance
  • Allegations of manipulation of data in Ease of Doing Business report (by World Bank).
  • WHO’s late response to the outbreak with its indulgence of the official Chinese line.
• Global governance hasn’t been working effectively.
  • Otherwise, the world would have identified the coronavirus as soon as it emerged.
  • It would have sounded a global alarm earlier about its dangers, and identified and publicised the best practices that should have been adopted by all countries to prevent or limit its spread.

Way Forward

• More governance is needed.
  • Multilateral Institutions must be reformed to make them more representative to suit the current reality.
  • Increased voices of developing nations will increase the legitimacy of such institutions.
• External forces should not be seen as threats but as opportunities that visionary leaders should seize.
  • For instance, with Vaccine diplomacy, India upheld principles of multilateralism by supporting other countries to protect themselves.
• Multilateral institutions must increase their effectiveness
  • The world is a better place when countries engage in dialogue rather than resorting to tit-for-tat responses on issues they disagree on.

Conclusion

• The only hope for the future lies in international solidarity. When the current pandemic is over, the globe must reflect on lessons learned, and how international systems and institutions can be strengthened and radically reformed in order to forestall its recurrence. The idea of our common humanity must be upheld. We must learn to live and work together again.

Source: The Hindu

Mains Question

Q. What is globalisation? How have the Covid pandemic and the recent Ukraine-Russia conflict undermined globalisation? Suggest a suitable way forward.