Future of Globalization

What is the issue?

There is a growing wave of anti-globalisation sentiments expressed across the world.
One possible explanation is that fruits of globalisation have reached its maximum.
Experts have started to caution that the current phase of globalisation is nearing its end.

How does it roll out?

Globalisation refers to the integration of markets in the global economy, leading to the increased interconnectedness of national economies.
It provides for free movement of goods, capital, services, people, technology and information.

‘Hyper-globalisation’ is used to describe the dramatic increase in international trade witnessed for about a decade and a half from the early 1990s.
It led to an unprecedented movement of capital and of people.
Capital and labour flowed across the world.

As global demand expanded countries exploited the trade route to grow their economies.
These conditions held great promise of globalisation to the developing countries in the 1990s.
Economists now claim that hyper-globalisation was a one-time event which is moving to its end.
Possibilities in terms of demand, consumption, investments, inventions, etc are less to sustain this phase of globalisation.
The demand for any inventions or possibility of them and resulting spurt in trade is very meek in the immediate future.

How could India adapt to these developments?

India had only recently started to benefit from globalisation.
However it has started to sense its decline.
It is especially reflected the most in the IT industry.
Manufacturing sector led exports could also not sustain in future. e.g Chinese economy, slowing down due to global fall in demand.
So alternative economic opportunities would have to be found.
When the global economy is sluggish, only domestic investment can move demand.
India has an intrinsic advantage of population and its vibrant domestic demand.
Problems like bad loans and lack of proper insolvency mechanism have depressed private investment.
This should be dealt with measures like IBC.
Appropriate monetary policy decisions should be made to boost investment.
It should be accompanied with public infrastructure especially the transport sectors which also increase would demand.

Source: The Hindu