Globalization vs. Protectionism:
Globalization means the movement of ideas, products, technology, and people across borders and different cultures. It is a multi-dimensional phenomenon. It has social, cultural, economic, political and legal aspects. Globalization has made the world a global village and talks about co-operation and interdependence. Protectionism, on the other hand, is the restriction of movement of goods and products across borders to protect the national industries and economy. The major goal of protectionism is to boost up national economy, but protectionist measures can also be applied for security purposes. So, we can say that protectionists are basically anti-globalists and prefer domestic strength as compared to foreign co-operation.
Protectionism and Covid-19
Globalization has made the world so interdependent and interconnected that any economic or political change in one state creates a domino effect and influence many other states. For the pandemic, most states were initially blaming China, but as it slowly healed and the pandemic caused more devastating impacts in the western states, more fingers are pointing towards globalization. Multiple narratives are building regarding globalization where protectionists finally got a chance to prove how right they were all along.
Globalization not only played a vital role in the spread of this epidemic, it also made the economic crisis go global by affecting the supply chains. An epidemic that affected a single city in Dec, 2019, grew to become a pandemic affecting almost every state in the world through movement of people and goods. States that adopted strict measures and restricted the movement of people, have relatively less cases of corona virus as compared to other states. The worst impacts of corona virus so far can be seen in USA where New York City was initially the epicenter.
New York City is definitely one of the most crowded cities in the world where daily, thousands of people move in and out for various purposes. This could be one of the reasons of such devastating impacts of corona in NYC because the free circulation of people and goods allowed the virus to spread exponentially. On the other hand, if we talk about African continent, where most states are under developed, and the movement of people in and out of the continent is very less as compared to Europe and Americas, reported cases of corona virus are very low. As of Sep 11, 2020, in the whole continent, the highest number of corona cases is in South Africa, with a count of642k as compared to USA’s count of 6.49m. This provides evidence that movement of people played a vital role in the spread of this virus and movement of people has increased a lot since the rise of globalization.
Critiques of globalization also argue that globalization is to be blamed for an epidemic that spread across borders and will soon plunge the whole world into recession. Interdependence because of globalization has made the world more vulnerable to such situations. For instance, China is one of the biggest markets in the world that exports antibiotics and telecommunications and remains an important part of most of the global supply chains. Half of the world’s surgical masks were made by China, even before pandemic. So, when the pandemic struck Wuhan, China, the supplies from China to the rest of the world affected many states that were dependent on China, and they ran out of important pharmaceutical inputs. Even the developed states like France ran out of medical masks and had to suffer because of lack of important medical equipment. This reveals the cost of such deeply interconnected global supply chains that create a domino effect.
Is Globalization ending?
Globalization has made the world a global village and undoubtedly facilitated the free movement of people, goods, ideas, cultures, information, and technology across borders. But on the other hand, it has also played a major role in the spread of diseases and has made states vulnerable to unexpected shocks. Globalists also believe that the medical or health consequences of corona would prove less destructive if states work together instead of working separately for the vaccine, as a competition. Adopting the nationalist or isolationist approach during the pandemic would crash the international economy and further increase the tensions. As the protectionists suggest, if we’d continue to protect only our national economies and keep on putting barriers on international trade, the national recession would soon turn into a global depression, as happened in 1930’s.Timely economic recovery is only possible through global cooperation.
I think that the threat of Covid-19 has created an extraordinary situation. Originating from Asia, and then causing millions of deaths all around the globe, the blame on globalization is legitimate. Most of the states in the world rely on their tourism revenue that has been affected badly due to corona virus. For instance, Saudi Authorities decided to cancel Hajj because of growing pandemic, and the impact on KSA’s economy would be dramatic. Similarly, Japan is one of the states that depend highly on tourism revenue from Chinese tourists and travel restrictions have caused severe losses. We have also seen how the supply chains are affected just because one of the major producers (China) was badly hit by the virus. Globalization seems to have conquered the world so there is no way that it can be avoided completely. However, after the pandemic, there might be a little change in the world order regarding high interdependency. States that were mostly dependent on China for their important supplies might try to produce the supplies on their own and prioritize their domestic industries over foreign industries because of the consequences they had to bear during the pandemic. Similarly, travel bans will surely be removed but people might hesitate to cross borders and move freely because there will be awareness regarding the risks related to free movement. So, I think that the pandemic has highlighted some backlashes in globalization, but it doesn’t mean that globalization has failed. We can say that it is fragile, despite or even because of its benefits.
Why International Institutions Survive: An Afterword to the G20 Summit
We, of course, are extremely critical of the very idea of global institutions and the prospects for their survival amid the emergence of a qualitatively new international order. Basic ideas about how such organisations appear and why they work, as well as the practical experience of the past decades, constantly demonstrate how unprepared such forms of interaction between states turn out to be to solve their most important hypothetical task — limiting selfish manifestations in the behaviour of their own creators. However, the institutions persist and, moreover, their number is increasing due to the formation of new specific regional platforms and global gatherings of powers, which is happening both formally and informally.
Just a few days ago, another G20 summit took place in Indonesia — a meeting of the 20 supposedly most developed powers. These economies first convened 13 years ago to discuss the fight against the global consequences of the financial crisis in Western countries. This association is not a formal international organisation, unlike the UN or the World Trade Organization, and does not have its own secretariat or specialised agencies. However, in its composition, the G20 has turned out to be one of the most promising institutional undertakings of the entire post-Cold War period.
The reason is that the G20, first, is quite objective in terms of participation criteria and, second, is completely non-democratic in terms of the formation of its membership. In the simplest terms, it was created by the leading powers of the West — the G7 countries — at a historical moment when they felt the need to make their decisions more legitimate, to gain a new way to influence growing economies, and, finally, share some of their own economic difficulties with the rest of the world not only in fact, but also organisationally.
Other countries of the world included in the G20 list compiled by the USA and Britain were glad to accept this invitation. First of all, because they saw an opportunity to limit the West’s monopoly on making the most important decisions, or, at least, to get new chances to reflect some of their interests there. Thus, both groups of participants made a very pragmatic choice amid circumstances where the West was still strong enough that no one could expect to survive without its consent.
The G20, as we can see, was created for special purposes in special circumstances, which, by the way, also applies to any international institution set up during the second half of the 20th and early 21st century. Even the United Nations (UN) was an intellectual creation of the United States and Britain, aimed to preserve and strengthen their influence on international affairs after the World War II. Another thing is that the UN still tried to live its own life, and now the presence of Russia and China in its “Areopagus”, i.e. among the permanent members of the Security Council, creates the appearance that the hypothetical pinnacle of world governance relatively adequately reflects the distribution of aggregate power capabilities. However, during the Cold War, as now, we see that all really important issues regarding war and peace are decided by the great powers among themselves.
As for the impact on the main processes in the world that emerged after the end of the Cold War, here it was the G20 that was considered a suitable palliative solution juxtaposed between the omnipotence of the West and the desire of the rest to get at least a part of the “pie” of the global distribution of goods. Moreover, 14 years ago, when the G20 began to meet, none of the major countries of the modern World Majority imagined a direct confrontation with the West and all sought to integrate into the globalisation led by it, even without a special revision of the rules and norms that existed there before. This fully applies to Russia, which quite sensibly assessed its strength. There were still five years left before the ambitious Xi Jingping came to power in China, when most observers considered the strengthening of Beijing’s economic and political proximity to be the most plausible scenario for Sino-American relations.
However, it was the financial crisis of 2008-2013 that turned out to be a turning point, from which everyone seemed to have realised that it is not necessary to count on the existing model of globalisation to solve the basic problems of development and economic growth. The cyclicality of economic development and the accumulated imbalances in trade, global finance and everything else made it clear that a return to sustainable growth in the US and Europe was unrealistic, and saving what had already been created would require a much tougher policy in relation to the distribution of benefits on a global scale. The emerging economies, of which China quickly took the lead, could expect a more sustainable position, but also doubted the West’s ability to act as a benevolent engine of the global economy. In other words, it was at the very moment when the G20 emerged as an institution that the leading states realised that it was no longer possible to save globalisation in its previous form, and economic shocks would very likely lead to violent geopolitical clashes.
Therefore, the extremely informal and, at the same time, representative G20 arose precisely as a mechanism for a “civilised divorce” of countries actively involved in globalisation on the eve of its inevitable crisis.
In this respect, it was indeed the pinnacle of the institutional approach to problem-solving that marked the entire 20th century. What follows should be either the formation of a new balance of power and the adaptation of institutions to it, or their complete disintegration with an unclear prospect for states going beyond bilateral agreements or relatively narrow regional associations and forums.
We see that the most successful multilateral projects of our time are either a continuation of those that have already taken place, like ASEAN or NATO, or completely new regional groupings with uncertain prospects and internal structures. The promising Shanghai Cooperation Organisation should be included among the latter. The latest SCO summit in Uzbekistan revealed that its participants were highly able to single out from the whole set of international problems of Eurasia and their own development issues those that make sense to discuss at the multilateral level. In addition, Sino-Russian leadership in the SCO leaves hope that other participating countries will be able to build their interests into the priorities and integrity limits of the two Eurasian giants. India only adds pluralism, allowing alternatives to the increasingly solidarity positions of Moscow and Beijing to be put forward.
However, the fact that the G20 is, in reality, a tool for the civilised dismantling of the existing order rather than their renewal does not mean its immediate death. After all, we already know examples where organisations created to “divorce” participants retain their vitality beyond solving the most important problems associated with this unpleasant process. The latest G20 summit was overshadowed by the desire of the Western countries, which, together with their satraps from the European Union institutions, make up the majority, to turn the political part of the meeting into a fight against Russia. However, at the same time, we saw that the Indonesian presidency used such intentions to increase its independence in world affairs and rejected all Western claims regarding Russian participation. In addition, an important personal meeting between the leaders of the United States and China took place on the sidelines of the summit, which allowed them to temporarily dispel the expectation of an inevitable clash, which seemed likely only three months ago.
Of course, we are far from thinking that China, India or other developing countries, not to mention Russia, see the G20 as a way to take global leadership away from the West. In Moscow, Beijing, New Delhi and other capitals, they know that those institutions that do not fully meet American interests are easily sacrificed to the current circumstances. However, first, such a radical US approach still has a chance to change under increasing pressure from outside and inside. Second, the G20 is still a platform that can survive as at least a club filled with contradictions, precisely amid the complete decline of formal global international institutions. And it looks like we won’t have to wait very long.
From our partner RIAC
Cooperation in a Changing World: A Discussion on New Regionalism and Globalisation
The two main trends that have shaped the World Economic Order are 1) multilateralism, which sets global rules for international trade without favouritism, and 2) new regionalism, which sets up several zones of regional free trade and cooperation that can apply development and economic growth more quickly and flexibly but have a limited geographic scope.
Hettne (1995) says that “new regionalism” is not a single policy but a set of policies that focus on economics or other factors. “Regionalism” refers to a complex change process involving state and non-state actors at the global, regional, and national levels. Since actors and processes interact at many different levels and their relative importance changes over time and space, it is impossible to say which level is the most important (Soderbaun, 2001).
This article highlights the discussions between the experts on regional cooperation and integration and the supporters of multilateralism and globalisation. The objective is not to extend arguments that can be endless due to rich literature, however, it is to show the major points of contention that can lead to more research and discussions.
Gilson (2002) and other scholars argue that regionalism divides the international system into different and separated competitive blocks, despite arguments to the contrary from authors and analysts like Hettne (1998, 2005), Beeson (2009), and Dent (2004). Regionalism, especially forms of closed regionalism, acts as an obstacle on the path to globalisation (Dent, 2008).
Authors in the first category argue that globalisation and regionalism are not mutually exclusive concepts. Their reasoning rests on the GATT-WTO conception of regionalism and regionalisation as integral to and predating globalisation. As of 2022, the WTO had informed about 356 Regional Trade Agreements (RTAs) in force (and its predecessor, the GATT), while several others are thought to be in effect but have yet to be reported (see: WTO, 2022 database).
Regional trade liberalisation and cooperation arrangements have been considered important intermediate measures, enabling nations to cope with the risks and opportunities of the global market and embrace new multilateral regulations (Katzenstein, 1997). The developing tensions between economic regionalism and economic multilateralism directly result from the mutually reinforcing nature of regionalism and globalisation. As seen with the end of the Uruguay Round, when integration into the EU prompted some member states to adopt the GATT deal, and with NAFTA’s significant impact on the liberalisation of investments, regional cooperation can be a good stepping stone to an accessible international economy. According to Summers (1991), regionalism affects the multilateral international trade system and will increasingly serve as a driving factor towards liberalisation. Summers contends that regional liberalisation is the best approach towards liberalisation and globalisation.
In contrast, the second category of experts’ places greater emphasis on the notion that discriminatory regional and sub-regional accords are a response to globalisation. As an example, Bhagwati (1993) argues that protectionism, mercantilism and other regionalism delay global liberalisation and threaten the multilateral trading system. Bergsten (1997) says that the European Monetary Union (EMU) shows how it sets priorities that differ from those of the world. Furthermore, regional blocs can contribute to geo-economics conflicts, which may have political implications.
Three key issues are raised by those who want complete dependence on the multilateral approach (Bhagwati and Panagariya, 1996):
- Trade is diverted by regional cooperation.
- The distraction of attention.
- The geopolitical consequences of regionalism.
First, they point out that trade is diverted by regional cooperation that provides members favourable treatment over non-members. Members may also profit from favourable policies and regulations for restricted content in addition to differential tariffs. According to opponents, the disadvantage of regional liberalisation can be more than overcome by the impact of preferences, resulting in a diversion of the trade balance.
Also, they are worried that transferring tariff revenues under a preferential arrangement could hurt the way one member’s income is split. The distraction of attention is the second point raised by critics. They say that if countries get involved in regional projects, they might lose interest in the multilateral system, which could stop its growth and possibly make it less effective.
The United States’ rapid change in trade policy since the early 1980s has drawn particular attention. The international system had previously received top attention from the United States. It declined to take part in regional economic integration. The main reasons the U.S. agreed to the creation and growth of European integration were political and security issues. The U.S. wanted to keep Europe safe and out of war.
The geopolitical consequences of regionalism are the third issue. Regional trade agreements (and economic groupings more generally) may have caused political and even military conflicts between governments in former times. While modern regionalist critics do not expect such severe results, analysts are concerned that close and intense regional links may cause aggravations and even conflicts that extend beyond economics to more generalised domains of global affairs.
Regionalism proponents hold opposing viewpoints on each of these topics (Bergsten, 1996). First, they contend that regional agreements advance free trade and multilateralism in at least two ways: first, that trade expansion has typically surpassed trade contraction, and second, that regional agreements support both domestic and global dynamics that increase rather than diminish the likelihood of global liberalisation. For developing nations, the internal dynamic is particularly crucial since regional agreements, which can be negotiated considerably more quickly than global accords, lock in domestic reforms against the possibility that succeeding governments will attempt to reverse them. Internationally, regional agreements frequently set the stage for liberalisation concepts that can then be broadly applied in the multilateral system.
Second, regionalism critics pointed out that it frequently has considerable, verifiable impacts. Regional integration will likely lead to further multilateral initiatives when officials, governments, and nations adapt to the liberalisation process.
Third, proponents of regionalism argue that it has had more positive than negative political consequences. Because of trade and closer economic cooperation, a new war between Germany and France was almost unthinkable in the European Union. Argentina and Brazil have used it to end their long-running rivalry, which has recently taken on nuclear implications.
APEC’s primary objectives include establishing the United States as a stabilising power in Asia and creating institutional ties between nations that were once adversaries, like Japan, China, and the rest of East Asia. Therefore, the potential of carrying up peace through cooperation is greater than the likelihood of generating conflicts.
Defenders of regionalism point out that regional agreements are permitted explicitly by Article 24 of the GATT and, more recently, the WTO, recognising their consistency with the global trading system. Three requirements must be met for these agreements to be effective:
- They must substantially encompass all trade between member nations;
- They must not erect new barriers for outsiders;
- They must accomplish free trade among members by a specific date (usually to be at most ten years from the starting date).
Although it is generally acknowledged that the most significant regional agreements (the EU and NAFTA) have fully or largely met these criteria, the GATT and WTO have been largely ineffective in certifying and overseeing their implementation. Because of this, the important regions have had many reasons to say that they work well with the multilateral system.
In conclusion, regionalism and globalism are linked, but only if the major countries involved in the process manage it well. History shows they can succeed if they try to improve things for both sides. The outcome in former eras shows that this is also reasonably achievable if they desire to pursue one at the expense of the other. The process’s inherent dynamics are sufficiently balanced for the participants’ policy choices to be decisive.
As the human civilization is evolving, the institutions that were once very relevant and inevitable have been becoming archaic and irrelevant and alarmingly becoming deleterious if remain enacted and rigid. Standing mass armies is one of such institutions, which is losing its relevance that it once earned through conscription of human resource and extraction natural resources. With the emergence of democracy coupled with the dilution of borders by globalization, the armies have lost their stage and much eulogized roles as the defender, protector and invaders. The yardstick to measure the strength of any nation was their military’s might which has now been replaced with other well established indicators.
To shed light upon how and why the role of armies has been dwindled, we have to dive into the modern historical account of the events and reasons that once made the army inevitable and much desirable. As the raison d’etat for establishing the armies and galvanizing their influence was to acquire the large swaths of land and the quantifiable amount of people to propel the engine of their state machine. Resultantly, the expanded territories were in dire need to be regulated and protected with the iron fist rule, which could not be done without strengthening armies.
Now the hitherto said aspirations have become obsolete and less desirable due to changing dimensions of a society as a whole thereby the military too. To give credence to these assertions it is adequate to allude towards the decline in the tendency of ragging the territorial acquisition wars specifically in the post peace era. Now there is no incentive to acquire the large latifundia or the large amount of people to be slave them as farm workers or to conscript them into armies.
As per the report of the freedom house, there were scant sixty-nine electoral democracies in 1990; today there are more than one hundred and fifteen electrical democracies, which are more than sixty percent. In recently emerged democracies, resultantly, the transition from the centrally planned economies to the economic liberalization spawned the era of entrepreneurship and innovation. Now these budding democracies have recently embarked on the journey towards more opportunities and rising incomes that remained chimera twenty years ago. To bolster this claim, the human security report is enough as it claims that state-based arm conflict has ebbed by 40 percent and which is waning the propensity of countries to wage a full-scale war.
Furthermore, well-established democratic peace theory hits the last nail in the coffin of the aspirations to reinvigorate the military might. The increasing number of democracies are less likely to wage a war with another democratic country, which in result declines the chances of war.
As initially claimed, the ab initio reasons of having standing armies have squarely been replaced; it comes naturally in mind what have replaced them. In a complex and entangled world woven with the fabric of trade, ideas, and innovations, the war-philic countries are the least fit for survival in the Darwinian sense. The countries who are doing wonders in the spheres of economy ideas, innovations inter alia services are less prone to war and aggression.
Many but naming few as the innovation, ideas, trade, and entrepreneurial tendencies have substituted the reasons, which once made the armies relevant and inevitable. Sweden, Norway, UK at the top of global innovation index 2021 and the countries deprived of bloated, mighty, and behemoth militaries, which are also circumscribed in the limited territories, are at the peak of ideas, prosperity, and innovation as compared to those who are bestowed upon with unassailable armies.
Ostensibly, after taking into account the recent shift in the reason of having large standing armies, it is now necessary to discuss about the nature of the future warfare which poses the threats, but here too while dealing with them make everyone wary of the institution of armies and militaries which are too rigid to abreast with the current dynamic nature of warfare, resultantly, they have to bear the brunt of their rigidity everywhere.
Therefore, the Character of the future warfare is dramatically changing which incorporates the novel means to materialize the desired and often mischievous aspirations. In this regard, hybrid warfare is one emerging character, which includes a diverse variety of activities and instruments to destabilize the society, which surely would be desirable for its user. These instruments are like interfering in the electoral processes in which the adversaries can influence the outcome of the electoral processes in the direction, which benefit the adversaries’ political aspirations – Putin’s interference in Trump’s election campaign and Cambridge analytica.
Other instruments are disinformation and false news, Cyber-attacks, and financial influence. Which all of them have already been employing in different dimensions and scales. In this domain, Russia is employing all of these instruments with great dexterity. To better deal with such recent emerging means and tools, it has become a need of hour to introduce the more integrated and sophisticated ways to deal with hybrid warfare and to replace the rigid, archaic and obsolete militarily solutions. In doing so, fostering democracy, inclusion of civil society investment in media literacy are few but viable solutions.
Succinctly, the justifications for raising the large armies, which were to expand the territories, to slave the people or to protect the volatile boundaries, have recently been replaced or become obsolete and irrelevant. Therefore, this institution should be abreast its pace with the dynamic and changing character of the threats posing the great dangers. Moreover, the gauge to quantify the power of any country has resultantly been changed from the strength of armies to the innovation, ideas, entrepreneurial spirit, trade, and socio economic and socio political stability. Contemporarily, it has become futile to strengthen and increase the sizes of armies, which have already lost their relevance, conversely, the changing Character of warfare or better known as hybrid warfare, demands more.
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