Friday 6 March 2020 6:16 am

The coronavirus crisis is a make-or-break moment for globalisation

The anti-globalisation movement is going viral.

A new disease — virtually unknown, fiercely contagious, at times deadly — has put every aspect of modern life at risk. 

While governments grapple with the domestic realities, urging citizens to self-isolate and wash their hands while reciting Shakespeare, a larger question is looming: is this the end for our globalised, interconnected, 21st-century system? Or, conversely, could the coronavirus outbreak be what saves it?

It was Tony Blair who, back in 2006, argued that the left-right dichotomy was over, and that the real political divide was now between “open” and “closed”. In recent years, the closed camp has been winning.

From the isolationism of Donald Trump, to the strand of Brexitism that wants to take back control of “our” politics, “our” industries, “our” fish, we have seen a revival of inward-looking political sentiment around the world. 

At the root of this shift are real concerns about the impact of globalisation on certain industries and demographic groups — farms and factories undercut by foreign rivals, or communities under pressure by a sudden influx of overseas workers.

But some of it is also driven by nostalgia for an bygone, simpler age — a time when people bought local products, when the country was more self-sufficient, and when governments could make decisions purely in the interests of their citizens, without playing complex games on the geopolitical stage.

The pleas of politicians — from David Cameron to Hillary Clinton — that the forces of globalisation and open trade have lowered prices and increased growth never quite resonated. What’s an extra percentage point of GDP growth against the closure of a beloved local shop?

Others have a different justification for their anti-globalisation backlash. As the reality of the climate threat has dawned, calls for drastic action have grown louder. 

The UK pledged to become carbon neutral by 2050, yet for some, this isn’t enough. Activists have demanded that we achieve net-zero carbon emissions now, right now, any way we can. Close the airports, ban the cars, pursue a “degrowth” agenda — no matter the cost, they argue that the crisis demands it. 

Now, with coronavirus outbreaks in 87 countries, the isolationists and the degrowthers are inadvertently getting their wish.

Already, two airlines have collapsed due to coronavirus pressures. The industry is spiralling, with share prices down on average 25 per cent  — six times more than during the SARS outbreak.

The hit to supply chains, meanwhile, continues. China is the world’s factory. Delays in production there are already hitting businesses far, far away — from tech giants like Apple and Microsoft, to small independent retailers.

Shares are falling, industry is slowing, fewer cargo ships are setting sail, and the OECD has estimated that global growth could fall to its lowest since 2009. 

The economic shock could have long-term implications far more severe than the health crisis itself. Shortages will drive up prices, closures will cost jobs, reduced spending could potentially lead to recession. Recovery will be tough.

But assuming we do recover, and that this is not humanity’s extinction event, what comes next will be critical. While the coronavirus emergency has been branded a crisis of globalisation, it could actually be its saviour if it gives the world a taste of what non-globalised life looks like.

Clearly, there are questions to answer in terms of operational resilience. Over-reliance on one exporter — China —  has been a folly. Businesses and governments alike should have had better back-up plans. But that is not the only lesson.

Two things are already becoming apparent. The first is that turning back the clock is not a viable option, whatever the nostalgists might like. Doing so may return us to a “simpler” age, but only by making us all poorer and by turning so many things we take for granted — from a world of information on our phones to the ability to visit loved ones far away — into either luxuries of the rich, or outright impossibilities. 

We could go back, yes, but we would not like what we found there. The prizes of globalisation that coronavirus is now threatening, the prosperity and connectivity that have lifted a billion people out of abject poverty and raised living standards in the western world to the highest levels in human history, are too precious.

The second is that, far from turning in on ourselves, a global crisis requires global solutions. 

The recent trend has been a pull away from multilateral institutions, towards nation-state sovereignty. When a sneeze in China gives the rest of the world a viral epidemic, that ideology is untenable.

Whether coronavirus or climate change, global governance frameworks are not robust enough to tackle a challenge which has no respect for borders. That needs to change.

Political appetite for that change so far has been limited. It has been hard to make the case to electorates that their governments should spend time and resources on challenges in China or Iran.

Coronavirus may shift perspectives. Understanding is dawning that, if nations are not going to self-isolate completely and shut off all contact with the rest of the world, their only alternative is stronger global collaboration.

It may not work. Change is hard, especially in the midst of a panic. But while the coronavirus outbreak is teaching us what we stand to lose if globalisation crumbles, it could also be what finally spurs us to properly protect it.

Main image credit: Getty

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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