Goodbye globalisation: The Economist

The Economist, published from London, is the most widely read authoritative economic weekly in the world, and a champion of neoliberal policies.

Yet against the background of the Covid-19 crisis, the cover of its issue published on May 16 is 'Goodbye globalisation', and the headline of its May 16 editorial too is goodbye to globalisation. It laments that with the outbreak of Covid-19, the globalisation that had been growing and developing for decades has come to an end.

Some parts of the editorial, quoted:

Even before the pandemic broke out, globalisation was in trouble.

For decades the world economy had been an open market and trade system.

But the financial crash and the US-China trade war put that system in crisis.

Covid-19 has been a third powerful blow. Countries closing their borders because of the lockdown has caused a collapse in commerce. The number of passengers at London's Heathrow airport has fallen by 97%. Car exports from Mexico fell by 90% in April. The world cannot be expected to return quickly to a free trade system, so the economic recovery will be very slow.

Political uncertainty in the world will grow. World trade in goods will fall by 10% to 30% this year.

Political tensions between countries are growing. The international movement of people, goods and capital has all been blocked.

The Trump administration has made immigration laws stricter, and other countries will follow. 90% of the world's people now live in countries that have closed their borders, and no one can say when they will reopen. All countries are trying to become self-sufficient and promote their own industries. The flow of capital has fallen sharply. America has already told its pension funds not to buy Chinese shares. 59% of the world economy has imposed stricter controls on foreign investment. Such a trading system will hurt poor countries most. A broken, fractured world cannot solve problems.

A fractured world order cannot find a vaccine or achieve an economic recovery.

Sadly, this logic is not fashionable today. With three blows, the financial crash, the trade dispute and the pandemic, it is a situation of saying goodbye to globalisation. All one can do is worry about what will happen.

It is very significant that The Economist itself says the globalisation that has continued until now will not continue in this crisis.

The biggest question the world faces today is: what next?