RISK OF DE-GLOBALIZATION.

Presented by: Pradeep Yadav

16th PPM, 23PPM05
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Structure of Presentation
• What is Globalization.
• Notable challenges in Globalization
• History of Globalization
• Phases of Globalization
• Deglobalization and its key Aspects
• Effects of Deglobalization
• Evidences that world is experiencing Deglobalization
• Factors that might be contributing to Deglobalization
• Indian govt. policies
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WHAT EXACTLY IS “GLOBALISATION”
• Globalization is used to describe the growing interdependence of the world’s economies, cultures,
and populations, brought about by cross-border trade in goods and services, technology, and flows of
investment, people, and information.
• And certainly the pillars of globalisation involve :
 Trade and capital flows, including foreign direct investment,
 International labour migration, and crucially,
 Commitment to global rules, global standards, for example, industry standards and different sectors,
and
 Key global institutions such as the World Trade Organization, the IMF, the World Bank, and also the
World Health Organization.
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 NOTABLE CHALLENGES IN GLOBALIZATION
• Economic Challenges
 Increased inequality: Led to a widening income gap between the rich and poor, as
the benefits are not shared equally. Multinational corporations often exploit cheap
labor in developing countries, paying low wages and denying basic rights.
 Job losses: In many developed countries as companies move operations to countries
with cheaper labor.
 Financial crises: Globalization has led to increasingly serious financial crises, such as
the 2008 global economic crisis.

• Political Challenges
 Reduced national sovereignty: Limiting governments' ability to pursue independent
economic policies in an interdependent global economy.
 Corporate influence on politics: The increasing influence of multinational
corporations in shaping political decisions.
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 THE HISTORY OF GLOBALIZATION
• Since ancient times, humans have sought distant places to settle, produce, and
exchange goods enabled by improvements in technology and transportation. But
not until the 19th century did global integration take off.
• Following centuries of European colonization and trade activity, that first “wave” of
globalization was propelled by steamships, railroads, the telegraph, and other
breakthroughs, and also by increasing economic cooperation among countries.
• The globalization trend eventually waned and crashed in the catastrophe of World
War I, followed by postwar protectionism, the Great Depression, and World War II.
• After World War II in the mid-1940s, the United States led efforts to revive
international trade and investment under negotiated ground rules, starting a
second wave of globalization, which remains ongoing, though buffeted by periodic
downturns and mounting political scrutiny.

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 PHASES OF GLOBALIZATION
1. Globalization 1.0 ( upto 1800): Characterized by the globalization of countries, this phase was
driven by exploration and colonialism, which established trade networks and cultural exchanges.
2. Globalization 2.0 (1800–2000): This era focused on the globalization of companies, marked by
the rise of multinational corporations and the establishment of international trade agreements.
The post-World War II period led to the creation of institutions like the International Monetary
Fund (IMF) and the World Bank, which aimed to foster global economic cooperation.
3. Globalization 3.0 (2000–2008): This phase emphasizes the globalization of individuals,
facilitated by the internet and digital technology. It has led to unprecedented connectivity and
the rise of global communication networks, impacting how people interact and conduct
business across borders.
4. Globalization 4.0 or Initiation of De-globalization (2008 onwards): This contemporary phase
focuses on the integration/dis-integration of services and the impact of emerging technologies
like artificial intelligence and blockchain on global trade and economic relations.

WHAT IS DE-GLOBALIZATION ??
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 DEGLOBALIZATION AND ITS KEY
ASPECTS
• De-globalization is characterized by aggravation of protectionist policy of states and extension of sanction
regimes. It caused the relative drop in intensity of global trade and global capital flows and at the same time
led to the crisis in regional integration in different parts of the world.
• This movement is characterized by a shift towards national solutions, increased border controls, and a
decline in global cooperation, contrasting sharply with the trends of globalization that have dominated the
global economy for decades.

CHARACTERISTICS OF DEGLOBALIZATION
1.Reduced Economic Interdependence: It involves actions such as increasing tariffs, decreasing foreign
investments, and limiting the movement of people across borders which lead to a more protectionist stance of
countries.
2. Political and Social Factors: The rise of populist politics in various regions, including the U.S.A, China, has
contributed to a growing skepticism towards globalized economies. Events such as Russia-Ukranain War, USA-
China Trade war and the response to the COVID-19 pandemic have further leading to a re-evaluation of the
benefits of globalization.
3.Impact of Global Events: Recent global challenges, including the COVID-19 pandemic and Russia-Ukraine war,
have highlighted vulnerabilities in global supply chains and prompted nations to seek more resilient, localized
solutions. 7
 EFFECTS WITH DE-GLOBALIZATION

Disruption of Global Supply Chains

Decline in International Trade and Investment

Reduced Access to Foreign Markets

Increased cost for consumer and businesses

Limitations on Technological Advancement

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 • Production delays: The interconnected
nature of global supply chains means
disruptions in one area can cascade
Disruption across the world.
• Price Increase: When supply chains are
of Global disrupted, costs rise, leading to higher
Supply prices for consumers and businesses.
• Scarcity of Goods: Disruptions can lead
Chains to shortages of essential goods and raw
materials, impacting production and
consumer access.

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 • Reduced Trade Volumes:- De-
globalization leads to fewer goods and
services crossing borders, hindering
Decline in economic growth.
• Investment Uncertainty:- Businesses
International become hesitant to invest in foreign
markets, fearing instability and
Trade and protectionist policies.
• Economic Slowdown:- Reduced trade
Investment and investment lead to decreased
economic activity, potentially causing a
global slowdown.

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 • Limited Growth Opportunities:
Businesses lose access to new markets and
customers, hindering their ability to
Reduced expand.
• Increased Competition: Domestic
Access to markets become more competitive as
businesses are forced to compete within
Foreign national boundaries.
• Loss of Expertise: Limited access to
Markets foreign expertise and technology stifles
innovation and technological
advancement.

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Increased • Higher Prices:- Reduced competition and
disrupted supply chains lead to increased
cost for prices for consumers.
• Production Costs:- Businesses face
consumer higher input costs due to limited access
to resources and global markets.
and • Reduced Choices:- Consumers have
businesses fewer options and choices, as access to
diverse products is limited.

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 • Slower Innovation:- Limited
collaboration and access to global
Limitations knowledge hinder technological
development.
on • Reduced Knowledge Sharing:- The
Technological exchange of ideas and research is
hampered, slowing down the pace of
Advancement technological advancement.

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• The globalization index highlights a slight decrease of the pace of economic globalization after 2007. And
this is considered to be a trend towards deglobalization.
• Deglobalization also means creating leeway so that each country can develop its own economic strategy in
accordance with its cultural and social values, its economic necessities and possibilities of sustainable
development.
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Contd..

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Contd..

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Contd..

• Another evidence for

Deglobalization, we see here a
decline in the annual flow of
world foreign direct
investment or FDI, Measured
again, as a percentage of GDP.
• The high mark was 2000 and
again in 2007.

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RECENT EVENTS IN WORLD THAT
SUPPORT DEGLOBALIZATION
• 2008 Financial Crisis.

• Brexit (2016)- Britain exit from the EU.

• Donald Trump protectionist policies –
Buy American, Hire American, tighten H1-B visa
• Covid 19 (2019-21)
• Russia- Ukraine War- Trade disruption, east- west

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• Fundamentally, of course, we've seen the rise of populist politics in Europe, and
obviously in the United States with the election of Trump.
• Post global financial crisis of course, we have seen a return to protectionism, including
many countries bring, again, perhaps less tariff barriers, but more non tariff barriers.
• Ongoing conflicts and competition between major powers, such as the US and China,
have prompted nations to reconsider their reliance on global trade networks, fostering a
more insular approach to economic policy.
• The push for sustainable practices and the green transition necessitates a reevaluation of
global trade dynamics, as countries seek to minimize carbon footprints associated with
long-distance transportation.
• The COVID-19 pandemic underscored vulnerabilities in global supply chains, prompting
countries to reassess their dependencies on international sources for critical goods.
• Companies and countries are increasingly focusing on local sourcing and production to
mitigate risks associated with global supply chains, such as those highlighted during the
COVID-19 pandemic and geopolitical tensions like the Ukraine war.

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 FEW INDIAN GOVT. POLICIES

• Atmanirbhar Bharat: Launched in 2020

focuses on boosting local production across
sectors to reduce imports and enhance self-
sufficiency, especially in critical areas like
pharmaceuticals and electronics.
• India Semiconductor Mission (ISM):- It is a
specialized and independent Business Division
within the Digital India Corporation that aims to
build a vibrant semiconductor and display
ecosystem to enable India’s emergence as a
global hub for electronics manufacturing and
design.
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THANK YOU

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