Globalization Retreat As Economies Rapidly Decline

The reverse of globalization is underway as a swift global retreat follows the decline of economies worldwide.

As the world enters a period of deglobalization world trade is in free fall and nations that depended on globalization are stunned by how quickly fortunes are being reversed.

Singapore is a good example of a city state that was built on the back of globalization and expanding world trade. Now Singapore is a window into the reversal of the forces that brought unprecedented global mobility to goods, services, investment and labor. With world trade plummeting for the first time since 1982, the long-bustling port has become a maritime parking lot. Singapore is running out of space to moor idle ships from Asia, Europe, the United States, South America, Africa and the Middle East. Miles of empty ships are waiting for cargoes that are no longer there.

Dubai is another example where the urge to build the tallest, most elaborate, and most luxurious projects in the world has brought the city state close to ruin. Dubai recently had to borrow $10 billion from the UAE in an effort to stay afloat. Expatriate workers are leaving the city in droves, as they are in Singapore, as jobs dry up across the board, from high paying jobs in finance to low paying factory work.

Globalization brought with it a better life for millions of people around the world. People in poor countries, or poor regions of developing nations, especially benefited as living standards were increased, fueled by plentiful jobs. In addition, poor nations greatly benefited by inflows of money send back home by workers who had left their native countries to find better paying jobs. Many of these workers sent money home to their extended families every month and were the primary wage earners for the family.

The loss of their jobs as the world economy contracts is a disaster of the first magnitude for their families. The loss of foreign exchange inflows is also a disaster for the poorer countries of the world as the inflow of the funds contributed to a substantiable percentage of their GDP.

The outlook for the immediate future is not good. As globalization reverses nations like France, The United States, and Indonesia have already started down the discredited but still used road of protectionism. In addition, nationalism is raising its ugly head as rough economies bring on a round of “me first” among nations. Increased protectionism and nationalism was a hallmark of the 1930′s as the world sunk into depression. That was followed by a world war.

You would think that world leaders would have some sense of history and avoid repeating the mistakes made in the 1930′s. However, judging from the actions taken so far it seems that instead of avoiding the 1930′s road map to disaster they are following it to the letter. As economies rapidly decline and the global retreat from globalization intensifies we will be lucky indeed to be able to avoid catastrophic events. The speed at which negative events are taking place is frightening. The Long Crisis seems to be global and will be with us for many years.

We indeed have met our enemy and it is us. The unwinding of globalization will be tragic.