After centuries of technological progress and advancement in international cooperation, the world has become more dependent than ever. Globalization is a term that describes the rising bond between the political economy, and the people that are driven by the Transnational trade of services, technology, and goods as well as in investment flows, and knowledge and also the quest for increasing their export markets, infrastructure growth, desire to meet consumer has led to the formation of globalized world economic sector. For centuries people aligned with one another to facilitate this economic movement.
Role of Globalization in Converting the COVID Outbreak into a Pandemic
The coronavirus COVID-19 outbreak that was started in Wuhan (China) turned into a pandemic due to this globalization. The most common cause of the spread of the coronavirus is the movement of people affected by the virus across borders. Epidemics and deaths are not just temporary tragedies. The existence of such great threats, and the insecurity and fear that come with it, lead to new behaviors and beliefs. People are becoming more suspicious. As the interconnectedness of the world brings undeniable benefits in different areas but now during this Pandemic, the dependency risk has fully entered the public consciousness.
To reduce the coronavirus spread, the world governments have taken isolation actions that put an end to global economic activity. Many businesses have been forced to close or shut down and there is a loss of jobs. Service corporations, which are the biggest source of economic growth in many countries, have been affected by the coronavirus epidemic. Manufacturers are also affected, and world trade could drop further this year. These restrictions, which the International Monetary Fund called “great isolation,” halted much of global economic activity, harming businesses and causing job losses. This globalization has created an interdependence that now feels more like a risk than a benefit now.
Impact of the COVID-19 Pandemic on Global Political Economy
In these cases, trade has been affected, the uncertainty in the global economic system has led to states moving towards protectionism. The factory closures and production cuts are already disrupting the supply chain of the globe. Steps are being taken by the manufacturers to overcome this vulnerability over long distances. So far, the economic commentators have focused on industry-specific costs: automakers were concerned about the shortage of parts. Non-woven textile workers; Luxury traders with no clients; And then the industry of tourism, where the ships now become the sources of contagion. Even in the start, the epidemic showed supply chain fragility “prompted national responses rather than cooperative international ones, and reinforced nationalist arguments for reshoring manufacturing and more limited migration. It has also illustrated that national governments remain the primary actors the responders of last resort to a pandemic and its economic” consequences.
Many economists warn that isolation measures around the world are accelerating job losses. IN the US, which is considered the largest economy in the world, there is a decline in their job market as 26 million people lost their jobs in just five weeks. And some economists warned that the situation could get worse. Also, the service sector is also affected very hard, Including China and the US has the largest consumer market also hit hard by this pandemic. However, both of these countries show a sharp decline in retail sales. The production is more but now the consumption is less that is why the economic growth of states declining. Whereas the products related to this pandemic like a mask, sanitizers are high in demand but because of the economic conditions, states are unable to meet their demand.
On the other side, online sales become more as reported by the retailer of Amazon as many people now want to buy the stuff online as the dynamics of the world changes but then again it could not compensate for the overall decline.
The wider impact on the service sector is seen worldwide, with transport, real estate, travel, and tourism businesses facing one of the biggest contractions to date. There is a decrease in production efficiency. The Covid-19 outbreak hit manufacturers outside of China for the first time, relying on the industries of Asia’s economic giants to make materials now have to make their own products. There are 90% fewer people traveling internationally now due to international travel bans. The “World Trade Organization” said that global trade could drop by 12.9% or 31.9% this year, depending on the course of the global political economy.
After the pandemic effects on all sectors, the “Global economy shrink in 2020”. The coronavirus impacted the economic activities caused many institutes to reduce their expectations for the global political economy. The “International Monetary Fund”, whose economic forecasts have become widespread, is expected to shrink the economy of the world by 3% this year.
Due to the pandemic crisis, the total losses in global GDP in 2020 and 2021 could reach $ 9 trillion, which is more than the economy of Japan and Germany combined,” says chief economist Gopinath. No matter how strong a state’s economy is, it will be affected by any pandemic. So, Globalization will not end. Presumably, now there is a different and limited version of globalization that has been seen. Its features are hardly visible but still visible.