The good and bad of globalisation

Globalisation describes how different world cultures, populations, and economies are interdependent on each other. It is a consequence of cross-border business. Technology, goods, investments, information, and services along with the labour market are the most popular components of such activity.

Globalisation is everything and its opposite. It can be incredibly empowering and incredibly coercive. It is perhaps the biggest threat to itself if its tendencies and traits become oppressive. Globalisation seems inevitable and irreversible, but it is a man-made product. Therefore, it is up to each of us to take responsibility for both the positive and negative outcomes of it that we can influence while being part of a globalisation process that is not progressing evenly.

For instance, if a European citizen knows how to prevent or find protection from cyberattacks on a personal computer, that user will be able to use the Internet safely while also protecting other Internet users connected to the same network when abroad. Personal engagement and multilateral cooperation are not only good, they are necessary if we do not want international relations to fall back behind the achievements that have occurred since the end of the Cold War. There are various serious threats from globalisation, including energy insecurity, military conflicts and environmental destruction.

It is up to each of us to take responsibility for both the positive and negative outcomes of globalisation.

Globalisation offers extensive opportunities for truly worldwide development, but it is not progressing evenly. Some countries are becoming integrated into the global economy more quickly than others. Countries that have been able to integrate are seeing faster growth and reduced poverty. Outward-oriented policies brought dynamism and greater prosperity to much of East Asia, transforming it from one of the poorest areas of the world 40 years ago. And as living standards rose, it became possible to make progress on democracy and economic issues such as the environment and work standards.

Globalisation has inevitably increased the transport of goods, impacting the environment in many ways, such as increased emissions, habitat destruction, and the introduction of invasive species. It has had a few adverse effects on developed countries. Some adverse consequences include terrorism, job insecurity, currency fluctuation, and price instability.

Before globalisation, skilled people got employment in government sectors and companies where they received high salaries. Job opportunities were waiting for those who completed colleges and earned a degree. People would resign from a job and quickly find another. Due to globalisation, there are many people seeking employment all over the world. Employers take advantage of cheap labour. One can get a dismissal because of a slight mistake as the employer can find a skilled worker who is ready to be paid less.

Price instability is another significant effect of globalisation on business. Some people establish industries overseas where they get cheap raw materials and labour. They can cut production costs and sell their goods at a low price. Due to competition, some high-quality products differ in prices. No matter how the World Trade Organization has tried to control price fluctuation, their efforts are not successful.

The early 20th century was also an era of globalisation and unbridled great-power rivalry, as the relative economic might of the UK fell and that of Germany, Russia and the US rose. While the rise of the US was the most significant, proximity made competition between Germany, which was determined to enjoy its place in the sun, and the UK, which saw Germany as a mortal threat to its independence, decisive. 

Rising friction between China and the US, and the weakening of globalisation, have been apparent since the global financial crisis. But COVID-19 has accelerated these trends. The pandemic is turning countries inward. The demand for self-sufficiency is rising. This is particularly true in products relevant to health. But other supply chains are also being broken. The economic collapses, stratospheric unemployment and pandemic-constrained recoveries make some leaders, especially populists and nationalists, happy to blame foreigners.

COVID-19 looks to be a hinge moment in history. This is not so much because it is changing trends, but rather because it is accelerating them. It is reasonable to bet that the world which emerges on the other side of the pandemic will be far less cooperative and open than the one that entered it. That is where current trends are taking us.

Last, but not least, globalisation is producing a widening gap between what electorates are asking of their governments and what those governments are able to deliver. The mismatch between the growing demand for good governance and its shrinking supply is one of the gravest challenges facing the Western World today.

Voters in industrialised democracies are looking to their governments to respond to the decline in living standards and the growing inequality resulting from unprecedented global flows of goods, services, and capital. They also expect their representatives to deal with surging immigration, global warming, and other knock-on effects of a globalised world.

One sincerely hopes that Malta will be able to ride the rough times ahead.

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