GLOBALIZATION TO DEGLOBALIZATION

 What is Globalization?

From military equipments to cheap FMCG goods Globalization is trending since last couple of
decades. Globalization is the interdependence of different country’s economies. It is typically
related to international trade between different countries. An example of Globalization is many
countries since cold war has formed economic partnerships. European colonization and trade
activity is considered as first ‘wave’ of Globalization. For an example East India Company
exported its cheaply produced goods using India’s resources and exported them at higher rates in
different countries.

The world is always divided on the favorability of globalization; some see it as a good thing
while others don’t. According to Amartya Sen, a Nobel-Prize winning economist, globalization
“has enriched the world scientifically and culturally, and benefited many people economically as
well”. Others disagree. Globalization has been attacked by critics of free market economics, like
the economists Joseph Stiglitz and Ha-Joon Chang, for perpetuating inequality in the world
rather than reducing it.

 Are the world economies moving towards Deglobalization?

The theory of Deglobalization is not new to us it also occurred during the year 1930 but it can be
said this phenomenon is new to the current generations. Deglobalization brings with it major
Economic breakdown that reduces world demand, increases uncertainty and recession. Recent
examples show that the world is indeed heading towards Deglobalization. Some of such
examples are:

1. Brexit Referendum: Brexit is short for Britain’s exit from the EU (European Union).
Leave won by 52% to 48%. The referendum turnout was very high at 72%, with more
than 30 million people voting - 17.4 million people opting for Brexit. The main reason
cited by the government for the Brexit bill was increasing control of the EU over the
Britain which lead to Britain’s inability to set its own destiny without the encumbrance of
myriad rules and regulations mandated by the European Union.
 2. US-CHINA TRADE WAR: It’s been more than 18 months since US-CHINA are onto
trade for by imposing tariffs on each other’s goods worth hundreds off billion dollars.
Trump has been long accusing China of unfair trade practices whereas China is accusing
The US of curbing China’s growth as super power in the world economies. Trump’s
economic policies are framed as to encourage Americans to buy more domestic made
goods by imposing tariffs worth $360bn on Chinese goods. China to retaliate has put
tariffs on $110bn worth American goods.

How will it affect world economies?

Based on above two examples it can be explained how Deglobalization is going to affect
different economies.