“COVID-19 is the death certificate of globalization and international economy”.

In

fact, a new world order is in the making. Discuss the above assertion and determine its

plausibility with the current realities the world is facing today. As an expert in global

issues and international political economy, what new innovative ways would you suggest

to facilitate international trade, tourism, trade and business?

The assertion that COVID-19 is the death certificate of globalization and international

economy is valid to an alarmingly greater extent. A new world order is indeed in the making

regardless of attempts being made by various governments to maintain the status quo.

Globalization and international economy are at a colossal loss owing to the current COVID-

19 pandemic which has, in a matter of months, caused a huge paradigm shift in global

relations in all sectors including domestic and international trade, tourism and business.

However, too many uncertainties surround the present situation to accurately determine the

post COVID-19 world and how it will function. Either way, innovation in the face of the

changing times is key to the facilitation of effective and efficient trade, tourism and business

globally. Recovery of domestic economies and the international political economy is highly

dependent on this.

COVID-19 is a respiratory illness first discovered in Wuhan, China in December 2019. It is

highly infectious and spreads through droplets released from an infected person through

coughing, sneezing or talking. When a healthy person comes into contact with these droplets

either by breathing them in or by touching COVID-19 contaminated surfaces then touching

the eyes, nose or mouth, they become infected with the virus. The World Health Organization

reported that to date, more than 300 000 people have been infected and over 200 000 lives

claimed worldwide. In the absence of a cure or vaccine, social distancing has been identified

as the best way to stop the spread of COVID-19, borders were closed, flights were grounded,

travel and gatherings were restricted, schools were closed, states and countries were locked
down as containment measures, allowing people to leave their homes only for essential

purposes including essential work. At this point, stopping the spread of COVID-19 entirely

was almost impossible even with the containment measures put into place. The idea was to

flatten the curve to prevent COVID-19 cases from overwhelming hospitals through

establishment of restrictions. Progression of the pandemic can be illustrated on an exponential

curve which shows change over time. Figure 1 below shows how the concept of flattening the

curve slows down infection rate, strengthening the healthcare system capacity to handle the

pandemic.

Figure 1: Exponential Graph. Source CDC

A peaked curve which was witnessed in most parts of Europe and the USA around March

2020 was undesirable and a complete disaster in dealing with the virus. It represents a quick

spread of the virus over time not allowing enough time for an effective response from the

health system leading to thousands of deaths daily. Flattening this curve, however, delays the
peak of the outbreak and in turn allow a country’s health system to cope with the demand of

COVID-19 related and non-COVID-19 related cases efficiently. The presence of a pandemic

does not mean the absence of chronic illnesses and other acute conditions, it simply means

the amplification of demands on the health system. Travel and gathering bans, border and

school closure, locking down of countries and states for people’s safety consequently locked

down both domestic and international economies whose resuscitation is going to take

innovation, careful planning and hard work.

Advances in technology, development communication and transport can be attributed to the

creation of globalization which is defined as the interdependence of countries through the

spread of products, technology, information, free trade and jobs across national borders and

cultures. Globalization has turned the world into a global village with easy interaction among

people, governments, economies and cultures in spite of geographical distance. Social-

economic development has been credited to globalization, but it has also become a source of

spreading communicable diseases such as COVID-19 endangering millions of lives. Free

movement of people, services and goods facilitated by globalization have assisted in the fast

spread of the virus regardless of people’s different geographical locations affecting over a

million people around the world in a matter of 5 months. In medieval times prior to

globalization, it took one of the worst pandemics in human history, the Black Death, years to

spread across Europe alone. The world was not as interconnected then as it is now, increasing

mobility as people have various advanced and efficient modes of transport, disposable

income generated through free trade and many purposes for travel across continents including

leisure, business or visiting friends and relatives.

The economic consequences of the COVID-19 pandemic should not be considered as regular

problems that can easily be alleviated by macroeconomics. The world is currently witnessing

one of the most crucial paradigm shifts in history at the very core of the global economy. The
immediate crisis the COVID-19 pandemic world is facing is supply and demand.

Containment measures such as lockdowns have resulted in the closure of companies. Due to

this fact, there is also a decrease in demand as people are grounded, forced to stay at home in

the absence of goods and services they used to consume. Restaurants, airlines, bus services,

recreational parks, tourism among other businesses are currently suffering a major blow as

people cannot take up what they supply at the risk of contracting the COVID-19 virus.

Consumer behavior has also changed as people have less disposable income owing to

inability to work during the pandemic hence non-essential product demand has plummeted.

Countries worldwide are making giant strides in returning to the self-sufficient economy. The

COVID-19 outbreak planted mistrust with accusations being made about biological warfare.

Since then, it has become the survival of the fittest with each man for himself attitude, some

countries afraid they could not supply the health and economic needs of their people, let

alone get involved with other countries’ problems. This was demonstrated by the European

Union’s inability to come to Italy’s aid at the onset of the COVID-19 pandemic in the

country. Instead of assisting, only excuses were offered brushing off Italy’s financial distress

while Germany and France hoarded protective gear for themselves. Later, amends were made

and money from the European Central Bank was promised to Italy, but the initial hesitation

threatens Italy’s membership to the European Union. There have been discussions by Italian

politicians and economists on whether the EU membership is of any benefit to Italy or if it is

the best interest of the country to cancel the membership which does not seem to serve them.

The current state of affairs does not favor globalization in the very least. Countries are slowly

working on survival strategies that exclude their neighbors. Existing unions are being

threatened by the COVID-19 pandemic reaction of member countries. At this point, the UK

risks losing Scotland for various reasons including differences of opinion on Brexit. The

Scottish Government reported that Brexit though voted against by Scotland impacts the
country anyway since the majority of the UK voted to leave the European Union. The

Scottish government is of the view that staying in the EU is the best for Scotland and the UK

and has been pushing the UK government to allow for a second referendum. To leave the

UK, Scotland would have to call a vote on independence. It could then apply for EU

membership on its own. Recently, the UK and Scotland have been having conflicting views

on easing of lockdown restrictions with the Scottish First Minister Nicola Sturgeon in favor

of slower easing of restrictions than what Boris Johnson, the Prime Minister of Britain

intends as the former deems it unsafe. This may indeed push Scotland to seek freedom from

Britain so they can make independent decisions on behalf of the country.

Countries at the moment cannot afford to share the few consumers they have domestically

with international markets as they are already struggling to create demand for what they can

supply which is not much at this time and this is likely to remain post-COVID-19, if not even

more reinforced. This shift is the very contrary to the concept of globalization. Milanovic

(2020) believes that while globalization involves a division of labor among different

economies, a return to natural economy means that nations would move toward self-

sufficiency. That movement however could be curbed. If national governments can control

the COVID-19 pandemic within the next six months or a year, chances are, the world would

return to the path of globalization.

If the current predicament is prolonged, globalization is most likely to unravel. The longer

people, governments, economies get used to the absence of forces of globalization, the more

likely they are to realize they can do without it, maybe even make greater progress. Special

interests will form to sustain and maintain the status quo which will mean heavy losses to

undo hence less motivation to change back to accommodate globalization. There is also the

ongoing fear that another pandemic will strike, and governments need national self-

sufficiency in case of this unfortunate turn, lest they be caught off guard again, like what
happened with COVID-19. This will most likely result in the merging of economic interests

and health related issues as the two have been revealed to be two sides of the same coin.

Country protection measures such as including a health certificate as a requirement before

visitors are offered passage into a country for example could present an obstacle to the return

to the globalized world as we know it by limiting millions of travelers who may not qualify

under the new order.

The COVID-19 crisis has proved that one is safer alone than together. Self-sufficiency and

independence have slowed down the spread of the virus and has lowered risk of infection.

There have been disruptions in the supply chain due to containment measures and border

closures. Imports and exports are limited, and they take more time to reach their destination

because of increased security measures implemented causing major inconveniences. It has

become apparent that it is much more convenient, safer, effective and efficient to strengthen

self-sufficiency. The return to natural economy would be motivated by fear of infection and

death and protection of the welfare of citizens rather than by ordinary economic pressures

(Milanovic, 2020).

A webinar conducted by the IMF in April 2020 suggested that emotional and economic

backlash against China in the face of Covid-19 is expected. Some countries for example the

USA still consider Covid-19 a Chinese virus because it originated from the Chinese province

of Wuhan. China is being held responsible by some for the thousands of deaths worldwide

and the disruption of life as we know it. This resentment could work against the concept of

globalization as countries and companies are currently working on strategies to pivot away

from China as part of their supply chains. The IMF reports that the Japanese government has

announced packages for its companies bringing back manufacturing home.

On the other hand, there are too many uncertainties which surround the present situation to

accurately determine the post COVID-19 world and how it will function. The one certain

thing is the need for innovation in the face of the changing times to the facilitate effective and

efficient trade, tourism and business globally. Recovery of domestic economies and the

international political economy is highly dependent on this. Many businesses are currently

struggling for example airlines and every other business related such as the tourism industry.

It would be prudent for governments to aid these businesses but on the condition that they

facilitate a sustainable environment to build from once the COVID-19 pandemic is over. An

example is lowering of carbon emissions and the use of clean energy which will in turn

strengthen a country’s capacity to handle another crisis if it is to appear.

All businesses especially non-essential businesses which are not operating or operating at low

capacity should take this time to make improvements on infrastructure and service delivery.

Instead of waiting for the pandemic to end, businesses should be fixing all areas that need

fixing, infrastructure, logistics, service delivery and conduct research on how they can

improve services. They will never find a better time to rebrand and attract more consumers

once the crisis is over.

Integration of tourism onto the national agenda of a country could be especially helpful as it

fosters sustainable economic growth by making use of available attractions and resources.

Investing in the them ensure large returns. This integration entails easing of travel

requirements to attract more tourists with less obstacles. The UK was reported by BBC news

to reintroduce flights into the country but also put in place a 14-day quarantine for

passengers. This is an attempt to resuscitate the airline and tourism industries which may

prove to work.
The World Bank suggests integration tourism onto the national agenda in order to stimulate

GDP growth with the assumption that the travel and tourism sector accounts for more than

10% of global GDP and represents 7% of all international trade and 30% of the world’s

export in services. Tourism is therefore the key to increasing international trade and boosting

international investment as it is the second fastest-growing industry in terms of foreign direct

investment (World Bank, 2017). Tourism also promotes infrastructure development in

airports, roads, water supply, energy, and medical services which will improve the people’s

welfare and in turn equip a country to deal with a crisis should one appear sometime soon.

Careful comprehensive strategic planning led by national governments is a requirement to

guarantee the success of any business, tourism included, especially to maintain market share

and competitive advantage by ensuring that the industry achieves productivity growth at least

as successfully as other growth sectors. The process of developing a long-term strategy

requires the adoption of a clear vision for tourism and should be built on an open discussion

with all relevant stakeholders to achieve a comprehensive cross-government response

(OECD, 2010). Policy making is the first step in facilitating international trade, tourism, trade

and business. There is need to draft policies that create an enabling environment with the

least obstacles to ensure smooth running of businesses and attract more investment. Red tape

should be limited, and integration of all government sectors should be encouraged to ensure

maximum efficiency.

Policies and an institutional framework that create a conducive business environment that

fosters growth must include stable macroeconomic and well-designed structural policies in all

sectors. These include but are not limited to employment and education, small- and medium-

sized enterprises (SMEs) and entrepreneurship, sustainable development, transport and

infrastructure, local development, culture and creative industries, trade and investment and

safety and security. Evaluation and performance assessment of government policies and
programmes affecting tourism development should be conducted periodically (OECD, 2010).

There should also be encouragement of a culture of co-operation among all tourism actors

regardless how big or small their role is.

SMEs should be encouraged and facilitated to promote high quality standards in comfort and

services to meet and exceed the consumer’s expectation through tourism accreditations. Their

entrepreneurial capacity should receive proper support and training programmes should be

introduced and enhanced to ensure quality of services offered. Promotion of training and

skills development through education and vocational training, on-the-job training and transfer

of knowledge from research institutions to practitioners should also be encouraged on top of

promoting the attractiveness of employment in tourism. This can be achieved through

influencing developments in the tourism labour market to create attractive working places

and inspiring partnerships among enterprises to offer better career perspectives (OECD,

2010).

Preservation of local cultures and natural resources improve and promote the exclusivity of a

destination creating more authentic tourism experiences and in turn attracting more tourists.

Rebranding and advertising on international markets with discounts and other well-targeted

promotional efforts will capture the attention of tourists. This involves the stimulation of

investments in energy efficient travel and tourism facilities in order to reduce waste and

pollution and provide better management of tourism-related resources such as climate, water,

landscapes and biodiversity and services in order to minimise costs and increase profitability

while conserving the natural environment, keeping it in a pristine state for sustainability. This

also involves the mitigation of greenhouse gas impacts using technological progress and

market driven mechanism in the field of tourism related infrastructure, facilities, operations

and processes.
Reduction of obstacles in the tourism and business industries is crucial and can be done

through pursuit of reforms of air transport services to improve efficiency and reduce costs, at

the same time upholding quality of services and extending regional and international

connections. Support should also be extended to less developed areas, investing in

infrastructure such as airports, harbours, electricity, communication, technology, water,

sewage and related services to meet the needs of increasing tourist arrivals and improve on

service delivery and boost business and trade. There should also be suppression of

unnecessary regulatory and administrative hindrances to travel and tourism, business and

trade but rather ways can be found to integrate all sectors.

Travel bans and lockdowns have seen a thriving online market as opposed to the traditional

market. Trade has proved to be more successful online by saving time, money, resources and

hence being more convenient. A wider market is also available online as anyone in the world

can purchase from an online store from anywhere in the world. Online trading provides a

wider range of products to choose from and competitive prices as a consumer can compare

millions of products from countless stores at the click of a button. People have witnessed how

contact with crowds can be detrimental to their health and would rather buy and sell in the

comfort of their homes than go through the trouble of physically going shopping, risking their

health and spending a hundred times more time shopping. Online trading is the future and just

might be one of the saviours of globalization.

To promote international trade, it is important to note that policies that ensure things run as

smoothly as possible is key. Policies should also provide proper incentives for exporters to

increase exports and improve quality of goods being exported. Suitable trade policies can be

a game changer in international trade as they determine the demand for exports and

sustainability of the business. At national level, promotion of export-oriented goods should be

a priority to encourage international trade which in turn generates foreign currency. A

country should put more effort and focus on the promotion of products and services where it

has a clear competitive advantage to maximise on returns.

Development of infrastructure that facilitate international trade and business cannot be

overstated as it is crucial in the success of any form of trade. A country’s investment in

primary infrastructure such as road networks, railways, electricity generation, communication

and storage depots to improve border crossing time and transport mode switching to

minimize delays at the borders is critical (Llanes, 2018). Business and trade follow the path

of less resistance hence to ensure success, measures should be put in place which minimize

obstacles to trade wherever possible. Bad transport networks are bad for business, goods take

longer to reach their destination, trucks need more constant servicing and goods and services

increase in price because of the trouble encountered to deliver them. High prices decrease

demand.

Governments should encourage competition by major market players to promote innovation,

productivity and market growth. This can be achieved through markets and competition

policies, enhancing training and skills to encourage growth and shared prosperity by opening

and transforming markets. Better, enhanced goods and services are produced and provided as

a result, creating more demand from satisfied consumers.

Globalization as we know it dying a quick death as countries are more concerned with the

safety of their citizens rather than the neighbor. This is not a good approach as the law of

common property dictates that a country is only as safe as its neighbors. The validity of this

statement was proved by the spread of COVID-19 and lessons derived should be those of

unity to effectively combat the virus and ensure the safety of all humans worldwide.

However, this is not how things turned out, further divisions were noticed and returning to

the global village might be difficult if not impossible. Innovation is a requirement to ensure
success in tourism, domestic and international trade and business especially when faced with

such uncertainties. Governments are going to require solid strategies for economy

rejuvenation both in the time of COVID-19 and when it ends. Policies should be drafted in

favor of making businesses, trade and tourism easier. Unnecessary obstacles should be

removed, competition should be promoted to encourage innovation and creativity. It is

important to make use of the networks provided by globalization to boost businesses and

trade. Online trading is the future, trainings should be conducted to sensitize people on the

next generation of trade. This might be the rescuer of globalization.

References

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Llanes, Alfonso. 2018. What should Nepal do to develop foreign trade and to minimize trade

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Milanovic, Branko. March 19, 2020. The Real Pandemic Danger Is Social Collapse As the

Global Economy Comes Apart, Societies May, Too.

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