The globalisation in its second birth after the highly globalised world economy before the first world war has been kicking and raring to transform the world. With the technological innovation of internet and new business models like global business delivery and outsourcing in manufacturing and services, the globalisation seems to have been turning a new leaf with the possible results of being fully connected everywhere. The migration of goods across the borders was made easy and there has been spectacular increase in world trade after agreement on GATS principles. Agreements on trade policies turn the tide towards enforcement of national treatment for multi-national companies and hence flow of investment from west to east and north to south did occur. The nature of investments may be debatable but the specatacular growth of economies of south east asian countries and china does owe a lot to the world trade.
But this recession which is supposed to be as bad as great depression is going to test many governments and economists with the decisions on whether to encourage globalisation or not. Global depression of 1930s is supposed to be one of the prime reasons why globalization in the first phase reduced and finally led to an era of over-protectionism. Looking at this recession and the noises emnating from various quarters in government and society in general, the fears of the re-emergence of bottlenecks for globalization cant be ruled out. There has been demands of protecting indingenous industries both in America and European countries. To quote French president Nicolas Sarkozy "I want us to stop out-sourcing and if possible in-source. If we give money to the auto industry to restructure itself, it's not so we can hear about a new plant moving to the Czech Republic or wherever" . Euro which is " the charming example of a possible united global order" is under pressure in the new recession. In one of the articles at troymedia.com, Dr. Stephen Murgatroyd outlines the challenges faced by Euro in this recession. All the countries by adoption of Euro has lost control on their monetary policies and it is now the European Central Bank that will decide the interest rates who will need to take care of whole of Europe and not of individual countries constituting European Union. When such a challenge like a recession is present before the countries, then the real mettle of unity in a single union is rightly tested.
Demand for protectionism is the foremost reaction for any society whenever there is increase in unemployment which will definitely be one of the consequences of this recession. The bigger countries in the European Union will have to drag along the other poorer countries in Europe which aimed to take advantage of being part of European Union.
China on the other hand has decided on a large fiscal boost so as to encourage domestic demand and hence reduce its dependence on exports for growth.
Is the time coming where after 5 years from now we will see a reverse trend in globalization and see a reduction in world trade levels from now? Well that is an ominous news for the LDC countrires which were hoping to use world trade to get out of poverty...........
But this recession which is supposed to be as bad as great depression is going to test many governments and economists with the decisions on whether to encourage globalisation or not. Global depression of 1930s is supposed to be one of the prime reasons why globalization in the first phase reduced and finally led to an era of over-protectionism. Looking at this recession and the noises emnating from various quarters in government and society in general, the fears of the re-emergence of bottlenecks for globalization cant be ruled out. There has been demands of protecting indingenous industries both in America and European countries. To quote French president Nicolas Sarkozy "I want us to stop out-sourcing and if possible in-source. If we give money to the auto industry to restructure itself, it's not so we can hear about a new plant moving to the Czech Republic or wherever" . Euro which is " the charming example of a possible united global order" is under pressure in the new recession. In one of the articles at troymedia.com, Dr. Stephen Murgatroyd outlines the challenges faced by Euro in this recession. All the countries by adoption of Euro has lost control on their monetary policies and it is now the European Central Bank that will decide the interest rates who will need to take care of whole of Europe and not of individual countries constituting European Union. When such a challenge like a recession is present before the countries, then the real mettle of unity in a single union is rightly tested.
Demand for protectionism is the foremost reaction for any society whenever there is increase in unemployment which will definitely be one of the consequences of this recession. The bigger countries in the European Union will have to drag along the other poorer countries in Europe which aimed to take advantage of being part of European Union.
China on the other hand has decided on a large fiscal boost so as to encourage domestic demand and hence reduce its dependence on exports for growth.
Is the time coming where after 5 years from now we will see a reverse trend in globalization and see a reduction in world trade levels from now? Well that is an ominous news for the LDC countrires which were hoping to use world trade to get out of poverty...........
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