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Summary of 6 pages for the course Globalisation and Global Governance at School of Oriental and African Studies (Coursework material)
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Globalisation and global governance - Is globalization in crisis?“There is an old joke about a drunk who dropped his keys and searches for them under a lamppost.
Someone passes and asks - did you drop your keys here? - and he says - No, I dropped them in the alley, but
I cannot see there, so I am looking here, where there’s enough light -”. This is how Paul Krugman refers to
theories on international trade, which only look to issues on which light has already been shed upon
(Donovan, n.d.).
Similarly, the pandemic of Covid-19 is the turning point that forces us to look in the alley. Instead of limiting
our research on globalization processes to the area that finds itself under the lamppost, the global crisis
generated by Coronavirus shed light onto the weaknesses of globalization; before dismissed in favor of an
approach that stressed multilateralism and international coordination and limited itself to analyzing, if not
exclusively, at least predominantly, the benefits of increased global connections (Lamy, 2018). Now that the
pandemic has unveiled a number of socio-economic and geopolitical issues generated and aggravated by
globalization, it is worth turning to a discussion on whether this can be considered to be in crisis.
In the first section, the essay will argue that globalization, firstly theoretically described as the outcome of
cultural ‘frictions’ (Tsing, 2011) and understood as a time-space compression of an increasingly relevant
geographical dimension of globalization itself (Rosenberg, 2002), is indeed in crisis. This is argued to be the
result of numerous components: the current economic recession, the resumed national sovereignty of
states to the detriment of globalization, rising social inequalities. These issues will be illustrated further in
the second section. In the third section, the analysis will turn to an empirical evaluation on whether such
crisis can be predicted to be temporary or long-term, claiming that those factors that have contributed to
and are still contributing to the crisis are decreasing both in their epiphanies and effects, and are instead
rewinding from protectionism to multilateralism and international coordination. Ultimately, the essay will
argue that a reconfiguration of globalization processes will occur and will align itself around regional blocs,
with an increased leadership of South-Eastern Asia. In sum, the pandemic caused a global crisis, high-
lighted and aggravated an already existent globalization crisis, but it has not and will not be the death of it.
DEFINING GLOBALIZATION
A 3-dimensional analysis
Before being able to assess whether globalization is or not in crisis, a definition is required. Three main
aspects are identified. Firstly, the social character of the phenomenon is well-described by Giddens as “the
intensification of worldwide social relations” (Rosenberg,2002). Such notion of an increasing global
integration together with a growing unification of the human condition rests upon a second fundamental
character of globalization, the spatio-temporal factor (Rosenberg,2002). Distance is reduced, speed
increased. Interconnectedness through technology, and faster means of transport, render this possible.
However, the more integration proceeds, the more evident inequalities across the globe become. On this
note, the third aspect of globalization that completes our definition lies in its productive and at once
destructive powers. If the productive friction of global connections generated by global encounters across
cultural differences is considered, then an emphasis is placed on the positive productive power of
globalization as a global force for social justice and equality purposes (Tsing, 2011). This is assumed to be
positive in the following analysis as international coordination leads to burden-sharing, and when there is
burden-sharing, agreements with altruistic concessions allow for a broader basis of support. An example is
given by a US survey which reported that an increase of 101$ billion in foreign aid would be favored by a
majority, provided other donor countries made similar efforts to achieve some of the Sustainable
Development Goals, the global community is set to reach by 2030 ( Derviş, 2020).
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, On the other hand, the word “friction” has an intrinsic negative connotation that also places emphasis on
the destructive powers of globalization. For instance, these destructive powers revealed themselves in
1990s when the global force of capitalism led to the destruction of the Indonesian landscape and
biodiversity present in the country’s rainforests, as a consequence of Indonesia’s expanded economic
relations with Japan (Tsing,2011). Therefore, the possibility of weaker cultures’ subjugation under the
influence of stronger powers, defined in terms of socio-economic capabilities, clearly represents a down-
side of globalization; and brings about the perilous issue of inefficient local traditions being erased and
supplanted by what is globally considered efficient in a world that strives for a Pareto optimality condition.
THE TEMPORARY CRISIS OF GLOBALIZATION
A matter of political factors and socio-economic components
After having defined globalization as above, the essay will now move forward to a discussion on whether
this is in crisis. Firstly, the pandemic has underlined the self-interested nature of nation-states (Mommaas,
n.d). Already before the spread of coronavirus, a rise of populism and nationalist agendas took over the
international political panorama, as demonstrated by Trump’s election and Brexit (Lamy, 2018). With Covid-
19, nations have gone even more down such path of protectionist politics; closing borders, enforcing
national lockdowns, restricting mobility, favoring domestic productivity and consumption, and prioritizing
the needs of the nation and its citizens. National sovereignty started representing a dangerous point of
fracture from the multilateralist approach of globalization processes. Moreover, nation-states acquired an
enormous power over citizens, through surveillance systems, such as via tracing apps, and through
increased security controls, leading to enormous privacy issues (Aitchison and Cooper, 2020). Overall, the
movement of people declined, and global physical connections decreased. From such analysis, it is possible
to state that globalization has entered a crisis.
Secondly, the pandemic has revealed the problems of a global financial system, mainly in relations to
international trade and global supply chains, triggering a global economic recession. The IMF has proven
insufficient and the WTO has announced in May 2020 that global merchandise trade would plummet from
13% to 32% following the virus’ impact (Richter, 2020). The current economic contraction has increased
volatility and uncertainty, generating debates on the probabilities of a V-shaped economic recovery. The
drop in global demand led governments to protect themselves adopting policies to boost local employment
at the expense of imports (Toulan, 2020). Not only government interventions led to the phenomenon of
the ‘corporate undead’ and business being populated by zombie-firms, not allowed to fail, but also, despite
such dramatic domestic measures, the pandemic led nonetheless to high unemployment levels (The
Economist, 2020). In US it resulted in 40 million people losing their jobs, and in saving rates hitting a record
33%; a major issue when considered in relation to consumers’ spending accounting for 70% of the GDP
(Fitzgerald, 2020). US-China tensions add onto the pressures of global supply chains that have led firms to
ponder whether to avoid being dependent on a single-source supply chain, and whether to relocate
production closer to the main industrial base (near-shoring) to minimize risks (Altman, 2020).
Moreover, the economic crisis shed light onto the already existent inequalities of the international system.
The pandemic hit developing countries of the global South the hardest, leading 130 million people to the
brink of extreme poverty, as well as to food insecurities and intensified refugee crises (UNCTAD, 2020).
Many are fleeing violence, but many are fleeing poverty: “Covid-19 has generally clobbered west African
economies” (The Economist, 2020). Most poor nations do not have the luxury of having the possibility to
amortize the crisis through safety nets. 79.4 % of Sub-Saharan workers and 84.5% of workers in least
developed countries (LDC) have no access to social protection and labor programmes (UNCTAD, 2020).
International assistance to LDCs currently consists of debt reliefs to allow for the creation of fiscal space,
needed to address the impacts on their local economies of Covid-19. Nonetheless, global poverty is on the
rise, in 2020 it went up by 8.8% and it is expected to rise in 2021(UNCTAD, 2020). Inequalities have been
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