In the midst of a pandemic and the worst economic disaster in decades. Can we really say the global economy will never recover? Is globalization dead and buried?
“The world bank made the following comment on
July 8th 2020:
The baseline forecast envisions a 5.2 percent contraction in global GDP in 2020, using market exchange rate weights—the deepest global recession in decades, despite the extraordinary efforts of governments to counter the downturn with fiscal and monetary policy support.”
Is the World economy dead?
Currently, we are sitting on almost 60 Million confirmed cases and more than 1.2 million death worldwide, and the numbers continue to elevate at an alarming rate. Even with these tragic numbers, we have seen a compression and transformation of globalization in the last eight months.
With more companies moving online, national borders are becoming less obvious. Virtual meeting places have become normal behavior. Event churches conduct weekly services online, without any negative impact. The increasing threat of Covid-19 has become an influential point for technology migrations. Even as scientists’ race to stop Covid-19. Covid-19 has proven to be the encouragement needed to adopt new technologies.
Covid-19 will also accelerate and it has become a transformation tool in the political and financial process. The recent US elections proved to be a new emergence in technology a new practice for the future. Also, as a result of Covid-19, over 100 country states have requested emergency funding, some from IMF and others from secondary groups across many cultural and political borders.
Unexpected Changes in Globalization
The pandemic has created a new wave of cross-border mergers and acquisitions, including higher rates of investment in emerging markets to and from East Asia. The pandemics have changed the way we conduct business, the way we work and interact with family and friends.
Covid-19 has sugarcoated, candied, glazed our views of globalization. Matter of fact, I would say that we will emerge for the Covid-19 pandemic with a grounded understanding of global threats and their impact on the global economy, trade, technology, and the financial system. The pandemics has identified vulnerabilities in our global process and the need for the emergence of new policies that prevent the super-spreaders effects early on. It has identified, habits that can place humanity as a whole at risk.
The facts are that in globalization the good can also lead to catastrophic effects. For example, airports are great tools to move around the globe, however, they are also great hubs to spread disease. Fiber-optics allows us to connect to the further corners of our planet, however, it can be a tool used for disinformation, propaganda and to inflict tremendous financial damage.
Only a coordinated global effort can stop, what I refer to as the “global butterfly effect” why? Because of the sensitive dependence on initial stable global conditions in which any small change can cause a catastrophic and amplified chaotic outcome. The old methods of globalization must die in order to have a rebirth of the markets. A deterministic nonlinear system will always result in large catastrophic unpredictable changes because the original state cannot be maintained. Regardless, of the country’s state, no single country can stop the threads that face humanity today and in the future. To stop the global butterfly effect, we all have to unite in a single effort, to revitalize the world economy and therefore, encourage the rebirth of a new agile global economy.
The facts are globalization is not dead, however, it has been substantially damaged and it is now in hibernation, to emerge changed. The global village is now a City and we are all citizens of Earth, we all have a part in the revitalization of the global economy. The world, in reference to us, the humans who walk on the surface; must understand a single fact; globalization is here and it’s our future. Business, as usual, is no longer a luxury we can afford to follow. We need to redouble our efforts in creating a healthier, greener, better regulated planetary initiative inclusive of globalization while respecting the diversity which is part of the human condition.