The Financial Crash Will Not Bring About “Globalization on Steroids”

Despite the international outlook of the leaders of the world’s two biggest economies – the US and China – Joshua Kurlantzick argues that there is a new trend of deglobalization. The precarious state of the world economy is contributing to the prominence of national boundaries in shaping economic policies. Foreign investment has dried up as national legislatures reject takeovers or funding for projects from abroad, whilst simultaneously enacting substantial import restrictions on products from even key trading partners. Similarly, financial institutions have been hamstrung by higher capital requirements and pressures to invest domestically; this has precipitated greater economic contractions worldwide. A stagnant economy has also fomented strong currents in favor of restricting migration, with anti-foreign worker sentiment at its highest levels over the last decades. Like developed countries, the emerging economies, too are skeptical of globalization, Kurlantzick notes, adding that the most telling ramification of this economic period of recession is that the accompanying deglobalization is likely to be “longer and more distinct” than similar spells in the past. – YaleGlobal