Multilateralism still key to limit de-globalisation costs
Covid-19 has shown the vulnerabilities of a hyper-connected global economy. De-globalisation may be both inevitable and desirable, but it carries serious risks.
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Washington
WITH the Covid-19 catastrophe having laid bare the vulnerabilities inherent in a hyper-connected, just-in-time global economy, a retreat from globalisation increasingly seems inevitable. To some extent, this may be desirable. But achieving positive outcomes will depend on deep, inclusive and effective multilateralism.
One of the most powerful drivers of support for de-globalisation is the vulnerability of production models that rely on long and complex global supply chains, which have sacrificed robustness and resilience at the altar of short-term efficiency and cost reduction. With many companies and industries dependent on faraway suppliers - and lacking any alternatives - no part of such value chains can function unless all parts do. And as the Covid-19 crisis has shown, one never knows when parts will stop functioning.
