Saturday , July 4 2020
Home / Project Syndicate / Less Globalization, More Multilateralism

Less Globalization, More Multilateralism

Summary:
While some degree of deglobalization may be desirable today, this process also carries grave risks, from skyrocketing production costs to geopolitical conflict. The only way to mitigate those risks is through enhanced multilateral cooperation. WASHINGTON, DC – With the COVID-19 catastrophe having laid bare the vulnerabilities inherent in a hyper-connected, just-in-time global economy, a retreat from globalization increasingly seems inevitable. To some extent, this may be desirable. But achieving positive outcomes will depend on deep, inclusive, and effective multilateralism. A Sustainable Recovery Must Be More Than Green PS OnPoint Attila

Topics:
Kemal Derviş considers the following as important:

This could be interesting, too:

Emilie Openchowski writes Weekend reading: Racial and gender inequalities in the coronavirus recession edition

Scott Sumner writes What I’ve been watching

Paul Krugman writes Trump’s Virus Is Spreading, and His Economy Is Stalling

Timothy Taylor writes Religion and Life Outcomes: Looking for Causal Effects

While some degree of deglobalization may be desirable today, this process also carries grave risks, from skyrocketing production costs to geopolitical conflict. The only way to mitigate those risks is through enhanced multilateral cooperation.

WASHINGTON, DC – With the COVID-19 catastrophe having laid bare the vulnerabilities inherent in a hyper-connected, just-in-time global economy, a retreat from globalization increasingly seems inevitable. To some extent, this may be desirable. But achieving positive outcomes will depend on deep, inclusive, and effective multilateralism.

One of the most powerful drivers of support for deglobalization is the vulnerability of production models that rely on long and complex global supply chains, which have sacrificed robustness and resilience at the altar of short-term efficiency and cost reduction. With many companies and industries dependent on faraway suppliers – and lacking any alternatives – no part of such value chains can function unless all parts do. And as the COVID-19 crisis has shown, one never knows when parts will stop functioning.

This is especially true with regard to China, a global supply-chain hub. The country is central to the manufacture of a wide range of common consumer products, including mobile phones, computers, and household goods. Moreover, it is the world’s largest supplier of active pharmaceutical ingredients, so a crisis affecting production there can disrupt medical supplies worldwide.

It should not be surprising, then, that China’s COVID-19 lockdown immediately affected global production. Fortunately, China seems to have brought the coronavirus under control, and economic activity in the country is returning to normal, so the disruption has been limited. But there is no guarantee that the next disruption will not be more severe or last longer.

Such a disruption could come in the form of another public-health crisis or a natural disaster. But it may also be a political decision – what the political scientists Henry Farrell and Abraham L. Newman call “weaponized interdependence.”

This was a source of apprehension even before the pandemic, when the United States cited national security concerns to block Chinese telecommunications giant Huawei from its markets and...

Kemal Derviş
Kemal Derviş, former Minister of Economic Affairs of Turkey and former Administrator for the United Nations Development Program (UNDP), is a vice president of the Brookings Institution.

Leave a Reply

Your email address will not be published. Required fields are marked *