Wednesday, August 4

Globalization and distance in a pandemic year: Globalization, despite everything

Globalization is a process of interaction and integration of States and people in the world economy driven by technological change that affects, directly or indirectly, the way we study, work, train culturally, we eat and we even breathe (polluted air). It is not a new concept, nor does it have a unique definition. In fact, at the end of the seventeenth century the adjective “global” was already used to refer to something on a world scale. Some sociologists symbolically place the beginning of globalization in 1989, when the Berlin Wall fell and the USSR disintegrated, thus facilitating the economic hegemony of capitalism. Therefore, we can say that the start date of the globalization process is relative since it depends on the theoretical point of view from which it is studied, but what about the end date? It can slow down the globalization process?

Global risks in a globalized world

The answer seems obvious to skeptical theorists, who believe that the process is already unstoppable, but that it can and should be reoriented in a less economic and more political direction; and optimized, to protect humanity from global risks. Something that, according to the current crisis, has not been done.

Since the end of the 20th century Ulrich beck he warned us of the existence of three global risks related to the environment, health and the person or the individual, and characteristic of what he defines as “risk society”. The author defines risk as a “systematic way” of society to deal with chance, insecurity and uncertainty caused by the modernization process that took place in the late nineteenth century. These risks are accentuated by other factors such as globalization, extreme individualization, the gender revolution (restructuring of the patriarchal community) and underemployment.

One of the fundamental elements of his analysis is that Western and non-Western societies share a time and a space, and they also share the same risks. These risks are man-made and, as the current health crisis has reflected, endanger our entire civilization because they do not stop at national borders. Something that became clear on March 11 of last year when the WHO recognized the COVID-19 disease derived from the SARS-CoV-2 virus as a pandemic.

However, Beck added that unlike early modernity, in which class differences played an important role, in the risk society all people are affected equally by these risks. According to Beck, private escape routes and the chances of compensation are reduced.

That private escape routes have been reduced is a fact: we all have a chance of getting infected. However, this global health crisis calls into question Beck’s argument that “all people are equally affected by global risks.” This crisis has meant a greater risk for certain health groups and also economically. This was stated by the United Nations in the document entitled “COVID-19 and Human Rights: We are all in this together“.

Beck attributes an important weight in his analysis to democracy as an element of the risk society. The risk society is a “disaster society” in which the state of emergency threatens to become the norm. The political system is faced with the dilemma of failing because of danger or ignoring basic democratic principles through authoritarian action. This dilemma has been present throughout 2020. The Annual Democracy Index from “The Economist” magazine This year collects the worst scores since this value began to be calculated in 2006.

Despite some authors calling Beck an alarmist, in most countries we have not been able to avoid the risk of a pandemic. And what is worse, the risk, realized in the form of a catastrophe, has not affected all people in the same way. On the contrary, it has increased social inequalities both within countries and between countries, affecting the poor and the most vulnerable communities more. As stated by the Secretary General of the United Nations in a video message in April 2020 “the [corona]virus does not discriminate, but its impacts do”. In short, globalization has played a fundamental role in the spread of the virus, but how has the pandemic and the measures adopted to contain it affect globalization?

The current state of globalization: has the globalization process been affected by the situation triggered by the pandemic?

To answer this question, we are going to turn to the latest report on the 2020 DHL Global Connectivity Index which analyzes trade, capital, information and people flows through three dimensions: depth (Depth) of interactions across country borders; its directionality (inflows versus outflows); and its geographical distribution (breadth). For this, it takes into account 99% of the world GDP and 95% of the world population. The index shows an evident drop in global connectivity for 2020 compared to 2019.

That said, for space reasons, we will only look at trade flows, as they have seen an accelerated increase, partly due to the fact that cross-border discretionary e-commerce sales soared 53% year-on-year during the second quarter of 2020. Despite the drop in the level of trade at the beginning of the pandemic, this flow has undergone a rapid recovery. We cannot ignore that several free trade agreements have recently been signed. This explains why commercial exchanges have been one of the flows least affected by the pandemic. In addition, many of the worst-hit industries (and with higher unemployment rates, for example restaurants and the hospitality sector) provide local services rather than highly commercialized goods. This fact reflects that the pandemic has had a stronger impact on local commerce, mostly in the hands of small and medium-sized companies, in the Global North, and very typical of the forms of informal economy in the Global South.

For its part, trade in computer and communication services that allow remote work has expanded. Confinement has forced people to work from home whenever possible. Above all, in occupations in the quaternary sector, which is based on knowledge and information. However, teleworking requires not only a “teleworkable” occupation, but also household contributions related to basic infrastructure (Internet connection and other services in the home) and availability of time.

Economic globalization is reorienting itself towards the technology sector. On the one hand, the study predicts a decrease in international exchanges of undergraduate and graduate students due, in part, to the rise of online education. There is also a reduction in the trade of printed publications in favor of digital alternatives. In addition to the exceptional increase in demand for online entertainment, education, meetings and countless other alternatives to in-person interactions, caused by national border closures and distancing measures. On the other hand, digital industries (digital services and computer equipment manufacturing) have seen cross-border mergers and acquisitions grow. This sector is less dependent than manufacturing on companies that invest in physical assets in foreign countries.

So it seems that we are witnessing a transition from globalization to digital, technological and computerized. This moment is crucial for international governance agree to rules and regulations that serve to avoid further potential global risks. And above all, to prevent the possible implications of this new version of globalization from affecting people unequally.

Economistas sin Fronteras does not necessarily identify with the author’s opinion and the author does not commit any of the organizations with which she collaborates..

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