COVID-19 might have brought the world to its knees, but nations have found a way to strike back and emerge from what might have been one of the biggest crises in recent times
The world is still reeling from the effects of the COVID-19 pandemic in more ways than one. The world, as a global community, is going through a phase where communication lines are disturbed, ease of movement restricted, and the economy suffering. It might be safe to say that despite the rollout of the vaccines, the pandemic has affected globalisation itself.
Here is how
The four major components of globalisation and the effects of COVID-19 on these:
Free movement of goods and elimination of trade obstructions: Data by World Trade Organisation (WTO) for 2020 shows that there has been a 9.2% decline in world merchandise trade when compared to 2019. These alarming figures are testimony to the fact that many countries are unable to meet demand and supply. In India, there is a shortfall of trade due to COVID-19 related restrictions. Merchandise exports from India have reduced by 17.76% (April-November 2020). However, not everything is dismal; trade of medical goods has increased. With the manufacturing of COVID-19 vaccines, Indian pharma export may cross $25 billion .
Free flow of capital: The pandemic has had a profound impact on the movement of capital. Cross-border movement was halted due to the lockdown. This lack of capital movement resulted in the depreciation of the Rupee. Despite the initial hesitation about reviving the global economy, data shows that things might be looking up. With investors looking towards emerging markets the FPI and FDI in India has gone up. The Government’s reforms to attract investors seem to be working. FDI between April to September 2020, showed a 15% growth .
Transfer of technology: COVID-19 has widened the gap between nations with technological advancements and those lacking in it. Transfer of goods, particularly capital goods has been impacted. This was inherently felt in the field of modern medical equipment which is required to treat coronavirus. Nevertheless, technology such as big data and artificial intelligence, stepped in to gauge the spread of the infection in China and ways to prevent it. Data sharing facilitated the process of developing a vaccine and mapping the mutation of the virus.
Free movement of people: Pre COVID-19, mass movement used to take place in the form of business, tourism and travel. The restrictions imposed due to the contagious nature of the virus has crippled the idea of globalisation. In the first few months of the crisis the number of international travellers reduced to 56% . A single international arrival contributes in multiple ways by creating demand in the local market and local vendors sell their services resulting in an increase of foreign exchange. Countries dependent on tourism have taken a beating due to the restrictions put in place.
While the pandemic might have left some deep scars on the world economy, joint efforts by various nations has also enabled them to emerge from the crisis. Right from sharing data, to the development of a vaccine, intergovernmental cooperation has been successful.
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