Contract Logistics RFQ Process
Outsourcing of core Logistics function of Warehousing is fast becoming popular not only for Multi National Companies with global operations but all organizations in medium and small sector too. Outsourcing may fall into two categories. One category would be the flow through warehouses, merging and distribution centers that are but a consolidation points in the […]
Backdrop to International Trade
Any student or professional wanting to understand more about Imports and Exports would have to understand the history and economic principles that have chartered the course of international trade to its current regime. In the backdrop of the countries economic policies and financial conditions such as its balance of payments situation, the governments formulate rules […]
The Chinese Internet Story
Chinese firms were seldom thought of being anything apart from copies of their western counterparts. The snobbish inhabitants of Silicon Valley never thought that these companies would amount to much. However, the reality has become very different. China today has about 25% of the world’s unicorns i.e. tech startups with a valuation greater than $1 […]
Symptoms of an Overheating Economy
The IMF recently asked the Philippines to take measures to rein in its overheating economy. This is not the first time the IMF has made such a statement. In fact, IMF commonly asks countries to take measures to prevent “overheating.” However, the problem is that there is no standard definition which defines the phenomenon of […]
Operational/Transactional Processes
Perhaps the most frequently used and the most important type of processes in any company are the operational processes. These are processes which define the primary activities that a company needs to perform in order to successfully execute its business. It is very important to understand the concept of value stream and map the same […]
Many experts believe that the pace of globalization had accelerated so much in the period starting from 1990 to 2007 that the global economic crisis that happened in 2008 revealed the drawbacks of too much integration, interconnection, and interdependence. This is seen by many as the inevitable consequence of globalization going too far and hence, there are a need for greater autonomy in the countries affected and a need for local and less global structure of the economy.
This has naturally drawn a backlash from those affected by foreign competition and the sudden flight of capital in the aftermath of the crisis.
Further, the fact local industries were dying as result of the skewed playing field that proved to be advantageous to foreign companies instead of local companies meant that the domestic industry and the workers employed in them were being hit.
Naturally, the backlash against globalization was severe in most Asian countries except China, which anyway has an authoritarian regime where such protests are either not allowed or reported in the media.
Further, there were many who pointed to a select few benefiting at the expense of the many and hence called for greater protection to local companies and local industry and not for foreign companies alone.
The most glaring example of the rise of protectionism is the decision of the United States government to impose tariffs on imports of Tires from China. This they believed would stop the domestic tire manufacturers from going out of business as well as provide the workers with employment opportunities that were otherwise resulting in layoffs and downsizing.
In Asia, the recent fight over FDI (Foreign Direct Investment) in key sectors of the economy including retail was an indication of the level of antagonism that globalization has engendered among key sections of the populace.
However, this is not to say that globalization would wither away as many opinion makers across the world are bullish on globalization wherein they believe that it is the best bet against declining growth and stagnating economies.
Further, despite opposition from the farmers, small businesspersons, and traders, the educated youth in many countries welcome globalization for the opportunities it provides them and for the way in which the process has benefited many skilled and educated workers over the last two decades.
Protectionism and globalization have to be balanced for economies to grow and without either driving away foreign companies or letting local companies go bust.
The ideal mix of how much foreign investment to be allowed and how much protection that the government must extend to local companies must be decided judiciously by the policymaking elite in the countries that are witnessing protests.
In conclusion, it is definitely the case that neither globalization nor protectionism is the answer and hence, there needs to be moderated and gradated approach to these phenomena.
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What the Current Wave of Protectionism and Populism mean for the Future of Globalization and Free Trade
February 12, 2025
