The Corona pandemic has now spread from an industrial town Wuhan in China to 198 countries and the number of cases is increasing day by day. According to media reports, over 460,000 cases have now been reported and about 23000 people have lost their lives due to this virus across the globe.
This is really a grave situation. The only silver lining is that not many new cases are getting reported from Wuhan in last few days and many people are showing signs of recovery while some others have recovered too. Such positive developments as regards the deceleration of corona disease in some of the cities which were badly affected by its onslaught are a matter of relief. However, the number of corona cases is increasing at an alarming rate in certain other territories particularly in Europe and America. The potential of this disease to spread almost in an exponential manner continues to haunt peoples and governments who need to make tireless efforts till it is confirmed that either there is a cure available for this disease or the chances of further transmission of the disease have mitigated.
Globalization to Coronization : A Saga of Borderless World
The very genesis of the term globalization is based on the idea of openness. It is a process that involves removal of physical and financial barriers across borders so that people can move freely as if the whole world is a single territory creating a borderless world where people, goods and services and capital could move with minimal or no restrictions. This essentially involves a process through which the people, corporates and governments of various countries of the world could interact or move across physical borders and transact deals and set up businesses in one another’s territory.
Globalization brought massive changes in the field of ICT, transportation and the structure of product and financial markets. When the reports about the advent of COVID19 broke out, there was a sudden rush among people to travel back to their hometowns or countries of origin thinking that they will make a safe return. Unfortunately, the virus too traveled with many of them back home and this is how the entire world has now been infected from COVID19. The number of the people affected by this virus has been increasing every day and we are clueless as to how and when it shall wither away.
Lack of Prescription: Factor Markets to Financial Markets
The lock down of cities in nations has further complicated the matter. What essentially was looked upon as a health issue, has even infected the financial and capital markets. After all humans are the most important factor of production. As entrepreneurs, managers and workers, they decide what, how and for whom to produce.
COVID19 is not just a new addition to the family of the corona viruses, it is different. There are no proven prescriptions for its cure. It is particularly harmful for the people who are already suffering from other ailments such as diabetes, high blood pressure or heart disease. We’re seeing this virus overwhelm the health infrastructure of many countries. It’s stressing supply of medical equipment and personnel across the globe. For example, there is paucity of Doctors, beds, ventilator etc. and that is another challenge to deal with. This all has resulted in the lock down in various cities.
From factories to service providers, from theaters to the malls work has come to a standstill and all this has hurt the investor sentiment. Markets are shattered and Stock indices bleed. Investors and brokers await relief either in financial terms or in term of relaxation about the operational procedures and compliances. But nothing seems to be working out. This crisis has no precedence and the regulators and governments also seem to be clueless about what remedial measures could revive the markets.
Moreover, prescriptions such as lowering of policy interest rates by some leading central banks, or extension of deadlines for the quarterly/ yearly filings by concerned authorities may at best be symptomatic relief, as businesses’ primary concern is how to keep their factories and offices running and maintain the income streams to meet their operational and other expenses. If factories are shut down, shops are closed and offices work from home, business and trade is disrupted, the governments will have difficulty too in maintaining fiscal balance. The Corona impact is more severe for the economies which were already suffering from multiple ailments. India, for instance was already facing slow-down in its economic growth rate for past few quarters.
What has changed in the COVID19 Era
The full realization of the gospel of globalization is already a challenge to reckon with. When some nations are seen as getting richer at the cost of other economies getting weakened, protectionism thrives and barriers to trade are created. But COVID19 may further harm globalization as countries may look for options to shift supply chains away from distant territories and look for other options back home. Many countries have suspended international flights. It may create a sense of isolation or insecurity in the minds of the non-residents of many countries. They may think about options to relocate, in cases where it is possible, back to their home countries. Man is a social animal. But he is a family member too. And when people and economies have seen the movement from globalization to isolation, i.e., from one extreme to another, it is bound to change the way people domicile and factories work.
Will the globalisation come to an end?
Certainly not! But what seems inevitable is the change in the way globalisation would work. The factories and offices may continue to operate in remote territories till there are no other viable alternatives present, and they may be compelled to hire labour or managers from the local talent pool. There will be more reliance on the ICT to improve connectivity with and control of local operations at the global level. Foreign travel for jobs, education, medical or simply tourism purpose may reduce.
Countries may pay more heed to cleaner environment and preservation of ecological balance. There may be a thrust for “Go global, be local”. This may change the political and economic equations between nations. Globalisation is a very important tool of achieving political and economic balance across nations because movement of people and economic resources across borders serves as a barrier to complete lock-down of relations even under most stressful situations between any two nations. The mutuality of economic interests in a globalized world typically brings nations across table to work out mutually beneficial solutions and so the terms like cold wars and world wars have rather become history.
Hence the greatest challenge today is to contain the Covid19 pandemic. And beyond that, whatever may happen, but the world will not be the same again!