What Does the Future Hold for Globalization?

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There is a risk that this slowdown may erode the gains in living standards achieved by LMICs that embraced free trade and invested in their populations to more equitably take advantage of emerging global economic opportunities. For instance Bangladesh, as the world’s second-largest clothes exporter, has seen exports tumble as a result of the global economic slowdown, and recently had to obtain an IMF bailout. According to Yale EGC affiliate Mushfiq Mobarak, Bangladesh is just one example of how seismic shifts in the interconnected global economy will hurt poorer countries the most.



The global economy is expected to be in a downturn for the next few years, with the IMF predicting that a third of countries will enter a recession. Protectionism in the short run is likely to be a factor in how deep and long-lasting the global slowdown will be. Countries will continue to approach trade strategically to suit their best national interest. However, a developmentally sound approach would be to focus on where trade has the most gains to deliver, in terms of preventing price rises in all countries and enabling poverty reduction in low- and middle-income settings. Otherwise, there is a risk of “throwing the baby out with the bathwater,” as countries pursue self-serving responses which can do more global harm than good.

While rich countries grab the trade headlines these days, the future of global trade is very much in the hands of LMICs. Despite trade restrictions from high-income nations protecting their domestic industries, China is a leading global actor that has spent the past decade building trade-related infrastructure throughout the world. India has negotiated a host of preferential trade agreements in recent years, including 13 bilateral trade agreements and four plurilateral agreements with multiple countries. These agreements have produced modest results to date, but they provide a basis for deeper engagement despite the global turn away from multilateralism. Similarly, 54 member states of the African Union have signed the African Continental Free Trade Area Agreement, working toward australia whatsapp number data increased trade within the continent.

In her podcast interview, Goldberg cautions that national governments will need to recognize the specific local effects of trade and address them head-on as part of smart redistributive policies. This action is key to renewing and realizing the promise of globalization. This can ensure that countries benefit from the positive impacts of trade, while also helping the specific regions and populations that experience any negative effects to transition systematically to new economic opportunities over time. In this century of large movements of goods and people across borders, rapid technological change, and climate breakdowns, achieving the global goals of poverty reduction and decreased inequality will require a widespread recognition of the interdependence between high- and low-income countries. While the current prioritization of strictly national interests might appear politically attractive and expedient, we will ultimately rise or fall together.