Samstag, 19.06.2021 13:57 Uhr

Quo vadis - Globalization

Verantwortlicher Autor: Dipl.-Ing. Wilfried Rühle, Erik Puhahn Berlin, 11.08.2020, 14:55 Uhr
Presse-Ressort von: Dipl.-Ing. Wilfried Rühle Bericht 7079x gelesen

Berlin [ENA] Worldwide, all socio-political processes are affected by the pandemic and, flanked by the rapid climate change, are in a dynamic of change that cannot yet be defined. This makes discussions on this matter even more important, especially with the international academic youth. Happened for example in the Swedish Jönköping International Business School with students from over 15 nations.

The modul "Globalisation of Economic Activities" at the Jönköping International Business School aimed to deliever thought-provoking answers for today and tomorrow. The goal of the course was to shed light on the different perspectives of globalisation with all its up- and downsides. The examination task was to discuss a choice of the most striking contemporary questions. One of these questions was for instance: "How might the relationship between different actors in the global economy be affected by the Covid-19 crisis?" The following text is just one way how to answer this question. It can be seen as a foundation for upcoming discussions.

For a detailed review of the interference of Covid-19 and the relationship of global actors, a definition is necessary in the first place. According to Dicken (2015), the major actors are transnational corporations, states, civil society organizations, labor, and consumers. Between those actors there is a network of relationships, embedded in “social, cultural, political and economic macro-structures of ‘rules, procedures and conventions‘” (Dicken, 2015, p. 84/85). In addition to those five actors, Dicken (2015) mentions governance institutions like the United Nations, the World Trade Organization, or the World Health Organization. Furthermore, we got regional blocs or transnational organizations like the European Union.

In other words, the global relationship between these actors is a “network that consists of many complex networks” (Monostori, L., Majstorovic V., Hu, Djurdjanovic, D., 2019). The relationships vary significantly. They can be local, regional, national, or global. Also, between states, firms, or firms and states (Dicken, 2015). This complex network is now strained by a global crisis. First of all, despite the assertion of Dicken, that transnational corporations have a high influence on the states, the current virus spread makes the governments the main players to tackle the crisis. The mechanisms of a free and liberal market cannot defeat a pandemic.

I completely agree with the statement by Fabian Zuleeg (2020, p.6) that “government and/or EU stimulus action would have the greatest effect in influencing the shape of recovery during the post-restriction phase.” This marks the first note of how the relationships might be affected. It is now up to the governments to find a way out of the crisis with as little damage as possible. All the other parts of the networks described above rely on their decisions, having nothing but uncertainty at the moment. Every government has chosen a slightly different approach to contain the outbreak. With the national measures, it is hard to tell whether the nation-state will gain back influence or if globalization continues in a pre-pandemic pattern.

A noticeably affected actor is the labor. Not only does the virus cause job losses and increased unemployment rates, it also changes the perception of work. New Zealand wants to test the four-day week, Germany wants to manifest telework in job contracts, and traveling for a business conference will be hard to convey. These are again governmental measures, affecting the way labor will be seen, which has an impact on the global production networks, especially transnational companies. These companies also become dependent on the state, as they are dependent on financial aid. In some cases, entire companies are directly nationalized, which will lead to increased state influence on economic decisions in the future.

For the state, there is the risk to safe unviable companies, or outdated business models, which could hinder the achievement of sustainability in the long-run (Fabian Zuleeg, 2020). Also, the relationship between countries organized in transnational organizations could be affected by Covid-19. Take the World Health Organization as an example. The WHO is an important actor right now, but the USA just froze their sponsoring. This could weaken the organization or make space for another main contributor. Either way, the relationships with and within this organization will change.

The last considerable actor is the consumer. Inevitably, they will consume less in the near future, mainly to keep some savings for a worse scenario. Therefore, the tax income for the state decreases while government expenditures increase rapidly, generating weak and highly indebted countries. Overall, Covid-19 does not spare any actor and will change the relationships profoundly. If you have questions, feel free to contact the following address:

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