To harvest the benefits of globalisation, one has to manage the risks. The answer is not deglobalisation.
Ian Goldin is an economist and professor of globalisation and development at the University of Oxford. He forecast a pandemic similar to the current one in his book The Butterfly Defect: How Globalization Creates Systemic Risk, and What to Do about It. He spoke to Vibha Varshney. Edited excerpts:
Does this pandemic suggest that we must rethink globalisation?
I have felt the need to rethink globalisation for very long now. We know globalisation is very good as it lifts people out of poverty, creates opportunities, spreads vaccines and medicines, jobs and finance. That is one of the reasons India like many other developing countries have seen rapid progress.
It is sharing of ideas, technologies, skills, good and services, finance with other countries which defines the beneficial part of globalisation.
But it also very dangerous and can be very ugly. I always think globalisation as the good, the bad and the ugly. In order to harvest the benefits, one has to manage the risks.
But what we are seeing is that people are not managing the risks, and this is making globalisation dangerous. Dangers like pandemics are the spillovers of globalisation. Integration of China with the world economy, 1.4 billion tourists, business travelers around the world every year are not only spreading good things, but also spreading bad things.
Take the case of pandemics like that of the COVID19. The rapid growth of cities like Mumbai and Wuhan, which have airports means that anything that happens in these cities can go across the world in just a few days.
And this is what we are seeing in this pandemic. This spread is not only in pandemics, we saw this spread in the financial crisis in 2008 too, cyber viruses which are spread around the world are another example, and there are also existential unintended consequences of rapid growth coming from globalisation, like climate change.
The answer is not deglobalisation. The answer is not to build high walls. There is no wall high enough even for mighty countries like India, China and the United States to keep out the great threats in the future. These are the threats such as climate change, pandemics and financial crises. These high walls keep out ideas, technologies, vaccines and finance.
What is missing from globalisation is political globalisation and human globalisation. We need to recognise that the world is as strong as its weakest links. We have countries turning their backs on the United Nations. This is not fit for the 21st century. Global agencies are doing their best, but their shareholders, the governments, are not reforming and empowering them. That is the challenge.
What is more likely to happen? Globalisation or deglobalisation?
It depends on how you define globalisation and what you are talking about. If you are talking about Asia, my sense is that we would continue to see a rapid growth of Asian economies like India, China and Indonesia. They will also recover when the pandemic is over.
We will see growth in other places too, but at a slower pace. We are not entering de-globalisation, and but only entering globalisation of a different nature. We are more likely to see less of manufacturing trade, but more services trade.
Asian countries recognise that they need the benefits of globalisation, which I don’t see being reversed. If these are being reversed, it would be detrimental. Of course, we also need policies to manage the risks of globalisation.
How can we ensure infectious and zoonotic diseases prevalent in Asian countries do not cause pandemics in future?
To control pandemics, countries need the capacity to monitor and respond. When governments allocate resources, the military is given 100 or more times more than health and pandemic preparedness.
We need to reverse the trend and catch up with the world threats. We need to increase investment in surveillance and in the overall healthcare system.
It also requires investment in improving hygiene and sanitation, upgrading of slums and informal settlements, investing in health research, investment in regulation and enforcement.
It also requires changes in behavioural patterns. For example, people should not touch their faces so often, they should wash hands more often. Such measures can reduce the risk of infectious diseases.
The current pandemic has made people aware of this. I hope we can use this as an opportunity to learn, so that we do not have another pandemic and also are better able to manage other systemic risks such as climate change.
This first appeared in Down To Earth’s print edition (dated 1-15 April, 2020)
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