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Amity Journal of Management Amity School Vol. VII, No. 1, January-June 2019 Amity University, Madhya Pradesh (ISSN 2347 – 1832) DE-GLOBALIZATION: A DIFFUSED JOURNEY FROM GLOBALIZATION 1.0 TO 2.0

Ms. Alpa Ghosh1

ABSTRACT

Thomas Friedman once stated, “The is flat”. Localization, Colonization, Regionalization, or Globalisation are the international phenomena which cannot be stopped at will or desisted. Globalization has gone through different flavours. Globalization started as a compulsion of the west ; De-Globalization is also being taken as the compulsion of the west, There are different phases of Globalization, The advent of order and emergence of American dominance after the end of world , America emerged as Superpower, created blocks, cartels to fulfill American Interest. During the height of American Diplomacy and Russian approach of Controlled Structure, it tried to create a new world order through blocks and military alliances. Globalization, , Regionalization, Localization with Global approach, Hyper Localization and De-globalization are the buzz word for the present Global . The world is going through metamorphic challenges due to international conflicting interest and national sovereignty changes in geo-economic, military, political, diplomatic spectrum and demographic variations. Changes which not only transforming the world dynamics but have also affected the fate of countries relying on Globalization or Localization approach. The world is affected by the process of De- Globalisation, which exhibited in three phases. The first phase initiated with . The second with increased global convergence and third associated again with de-convergence or trade dominance through Protecting measures directing towards national sovereignty. Keywords :- De- globalization, Localisation, , Colonisation , Glocalisation

INTRODUCTION economic interest and spearheading world domination objectives through geo, Every country is adopting a different economic military and political ambition. approach to Globalisation. De-globalisation Globalisation 2.0 or can be stated as a new phase of 4.0 or De-globalization 1.0 are the new Globalisation. America is creating trends of the world. Emergence of India Dollarization by using its carrot and stick and in the world stage of policy with Gun Diplomacy. On the other International diplomacy are also some of hand, China has a policy of OBOR and the factors, which can be an insight for 2nd cheque diplomacy. India started with non- Phase of Globalization. (Globalization 2.0). aligned approach aggressively taking its neutral stance in Global diplomacy in the Phases of Globalization initial years of its emergence, shifting its 1. Emergence of America stance at present, exploiting its potential 2. Emergence of Russia to the . Smaller counties are trying to protect their own 3. Creation of Diplomacy interest and national sovereignty, whereas 4. Disintegration of Russian Block Super-powers like America and Russia are 5. Emergence of China trying to create a unipolar world of their 6. Slowdown in America and own. A world which is dominated by 7. Emergence of BRIC nations western and eastern , both China 8. Emergence of Dragon and Elephant and America are trying to protect their 9. , and war 1 Assistant Professor, BSSS, Bhopal 10. De-globalization

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The recent sanctions on and the trade world dynamics but have also affected the war between America and China is one of fate of countries relying on Globalization the classic examples of De-globalization, approach. The process of De-globalization has gone BACKGROUND through different phases. First, it was a western term, after the end of the 2nd World We may live in a borderless world in the war, America emerged as Economic & age of Globalization. Virtually countries are Military super-power. The world was connected by , , divided into 2 spheres. Russia led the cold humanity, ideas, economic resource flows, war era, while America emerged as consumption and demands. De- Economic super-power. Globalisation has globalization, is the word which makes the gone through various phases, The anxious and and business phase was dominated by the houses nervous. The Timespan between ,a phenomenon of Global dominance, 1914 and 1945 was considered to be the institutions were created , and these darkest period in global history, when it institutions were responsible for creating has gone through world , depression the alliances for the next 50 years, Europe and slow down, resulting in the creation of and America with their Military might & a new world order of collaboration. technological advancement dominated and Globalisation can be defined as the free plundered the economic resources of the flow of , services, technology, world for the next 50 Years. 1990 saw the Information, Jobs, , Finance, disintegration of Russia and Russian block and the synchronization of world order. nations, slowdown in Europe and the Globalization has helped humanity by emergence of , the new emerging boosting the world economy, lifting . The economic gravity has millions of people from their extreme shifted from European nations to the east, poverty. Creating a history of economic emerging as the battleground to retain growth by reducing the manufacturing rate. cost, the convergence of and capital Globalisation can be classified into 4 but in that process also deteriorated the different cycles or phases, environment, exploited the resources and environment of countries and 1. A world dominated by European making the population of the poor world colonies most vulnerable with unequal distribution 2. A world dominated by America and of wealth, job insecurity and stagnant Russia wages. 3. A world dominated by emerging Globalisation can be classified into 3 economies different phases, the first phase of 4. A world dominated by de-globalization, Globalization was between 1850 to 1914, trade restriction, terrorism, , which was characterized by slowdown and industrialization, and new and Globalization, Glocalization, . The second phase of Regionalization, Localization with Global Globalisation was from the year 1945 till approach, Hyper Localization and 1990 which saw the world dominated by are the buzz word for the western influenced globalization, present . The world Institutions and Agreements were created is going through metamorphic challenges with the objective to create a new world due to international conflicting interest, and order with Western influence. The 1990s national sovereignty changes in geo- noticed the third phase of Hyper- economic, military, political, diplomatic globalization, marked with the collapse of spectrum and demographic variations. the Soviet Union. Closed economies Changes which not only transform the

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initiated structural changes and defined the globalization. India and China are challenges of globalization. contributing to the engine of globalization , whereas America is having a choice to According to the „Richard China will never go against India because Baldwin, the meaning of Globalization has of common globalization interest, which changed. It made the process of has created a new environment of World manufacturing much easier involving the Economic map. This is also the reason why integration of multiple stages of American and European Business manufacturing, design, , establishment are taking a serious note to process resulting in manufacturing cost shift their economic bases to China and minimization. Industries are becoming India . Recent example can be Tesla Foxcom multi-locational, World trade growth is shifting base to India and China operations. growing at a rapid phase due to the A policy shift has been noticed along with massive integration of Industrialization. own rules and hidden barriers, A wave of Financial Integration has impacted the de-globalisation is taking place in west. On whole world both during slowdown as well the other hand east is going through the as growth. Capital flow and Human capital process of globalization resulting in major migration are some of the classic examples implications for and creating the borderless world. This has also Government. resulted in a backlash and anti-immigrant laws. Many companies across the world are reshoring their manufacturing bases, due to Global trade war has resulted in different de-globalization in the west and forms of tariff barriers, anti-dumping globalization in east. But the real problem measures, creating extreme de- will lie in a global slowdown when the globalization. There are various factors majority of companies will approach for a which guard against extreme new wave of de-globalisation and global deglobalization. It is much more difficult to restrictions on trade and commerce. The control data, skills, know-how, knowledge, world is now witnessing the gradual resulting in opportunities and slowdown and de-acceleration, pre- and less protectionism. Due to emptied withdrawal of trade restriction and De- globalization resulting in slowing pace protecting national and regional interest as of and weak investment than the prime drivers for the success and failure Protectionism. of Globalization. Britain‟s decision to exit from EU, (Brexit), Over the past two decades, global trade is President Trump rhetoric towards a trade driven by pockets of countries, and the war, and pulling out of trans pacific treaty engulfing trade war between India, China are the desperate measures to protect and America. This phenomenon of American and US Imperial protecting sovereignty and national interest Globalisation. Conflicting political and is driven by developed as well as economic interest is creating the slowing developing nations irrespective of down of Globalisation leading to geographical boundaries, According to a deglobalization of the world. Slow down recent report of the slow created by the US is far compensated by the growth rate was recorded not only on deal between , Europe and to Europe and America, but it has also shown minimize the Trade losses. saturation in foreign trade and investment Despite the process of Globalisation, irrespective of Global promises to ease countries vary in terms of ease of doing Business. World Bank figures indicate that business and pace of globalization differs growth rate is having a sluggish show from depending upon their policies and level of 3 % to 1.8 % in most of the developed parts barriers created by them to protect the of the world leading to the shift of national interest. Countries have created economic growth driver in the eastern part their own mechanism for protecting of the world.

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Kristin Forbes, an esteemed economist, has globalization effectively. On the other hand, said, “It is time to stop talking about there are many examples of negative globalization and rethink the assumption impacts of globalization when it was not that global financial integration is an implemented structurally. unstoppable trend”. DISCUSSION Due to globalization, the slowdown has affected every aspect of the market, Some of the world‟s biggest economies are whether it is the , economic showing signs of growth whereas others‟ market, agricultural sector or industry, it are showing a slowdown in the projected has impacted every sphere of global future durations as shown in the following growth. The stagnant growth of France and exhibitions. Germany, the exit of Great Britain from Europe (Brexit), near collapse of the economy in Greece and Spain, recession in are some of the significant features of the same. Stagnation in the growth of Japanese economy, the collapse of Venezuela, unrest in and terrorism are some of the compounding factors of deglobalization, which has also lead to conflicting interests, raising the risk of business causing deglobalization. De-globalization is a major cause of the emerging economic trends of the world. Due to the first phase of globalization and Fig 1: GDP Growth of World’s Biggest trade liberalization, the world has noticed a Economies for 2019 and 2020 tremendous growth path but later on, it has Source: www.focus-economics.com created the trade protectionism and stagnation in the world economy. De - globalization is the result of structural inefficacy of the governments. The level of protectionist measures has increased over the years from 5% to 23 % since the year 2009 till the year 2013, especially among the developed nations, in order to gain trade surplus and competitive advantage. Europe and Japan are also recovering from 2008-2009, and integrating with the world economy which will increase trade pattern and impede de-globalization. De- globalization phenomenon is spreading across the world because of various reasons, including, disparities in , unequal distribution of wealth, rising Fig 2: Projected GDP Ranking by 2030 , job losses, and the Source: World Economic Outlook Database difference between rich and poor, which are As shown in the above figure, economies of some of the compounding factors countries like China, India, South , responsible for De-globalization. Indonesia, Turkey, Brazil, and Saudi Arabia Globalization is having a mixed impact are projected to be growing at a faster pace. across the world. Some countries are On the other hand economies of western benefitted when they implemented world are going through a slowdown.

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Countries like Germany, Japan, Russia and worst-performing 20 wealth markets, in the US which were being considered as the last decade, 8 belong to this category. economic growth engine of the world are Most of the European countries were facing responsible for de- globalization. stagnant growth, over many decades due to Fluctuations in the wealth market of the saturation or slow down in their economy, world (2008-2019): An indicator of De- especially the countries like Greece, Spain, globalization Eastern Europe are some of the classic There are a tremendous amount of examples of slowdown and recession. variations in the markets & financial Emerging Economies of Europe markets across the world. A lot has Despite the subprime crisis, slowdown and changed over the decades. The collapse of recession in some of the smaller countries of Lehman Brothers has resulted in sending Europe, there were emerging economies of the shock waves across the Globe. The Europe, which are known as bright spots collapse of BCCI, Lehman Brothers, has due to the promising growth rate. , created financial trouble across the world Malta and Monaco are some of the which was having a tailspin and catalytic countries which have achieved a growth impact on the world financial market. rate above 30% for over 10 years providing China has emerged as an economic a ray of hope for the rest of Europe. On the superpower, reaching a robust growth and other hand in countries like Venezuela, a becoming the floor of the world. nation of contradiction, the wealth of the China is creating millions of jobs across is not equally distributed causing world, significantly challenging western wealth disparity and contradiction in the institutions. A tremendous amount of . There are many nations across the transformation is taking place in the wealth world which are war torn and not being market across the globe. Wealth is included in the list which recovered due to the calculated based upon the individual spate of globalization. capacity, assets and the changes in the CONCLUSION values of individual and cash holdings. The study analyses the changing trends of BRIC economies in the context of developing economies of Asia globalization, how the world has passed through the different phases of Both China and India contributed to globalization, slowdown across the world double-digit growth, especially in terms of because of various reasons, be it production and market concept. These geopolitical, social, economic, strategic markets vary in its size, economic turbulences or it because of destabilization momentum, and the gains in the economic of the world due to war, are some of the of these nations. Both these specific reasons like economic paradox countries are having similarities in a strong which lead to de-acceleration of the cultural bond along with economic engines globalised economy. In this paper, various of the world. These two countries are being examples have been cited from across the considered as future economic engines of globe. From South American wealthiest oil- the World. rich nation Venezuela‟s fate to the Collapse in the Mediterranean World slowdown and slow recovery of European economies during after Subprime crisis, Mediterranean region was badly hit Europe redefining of the because of the recession and slowdown in and Britain‟s exit from European Union are the economy. European nations are going some of the common phenomena leading to through the slow pace of economic reforms, realigning of the world economy with bailout packages, poor use of structural emerging belts of the world. The emergence funds and lack of transparency in the of BRIC nations, as the global economic Government, which are considered some of engine of the world, the performance of the the reasons for the slowdown. Out of the wealth and financial markets across the

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world are also the indicators of economic REFERENCES trends towards de-globalization. Central Bank of Brazil, 2018. "Globalisation Fluctuations in the financial and capital and deglobalisation," chapters, in: Bank for markets are some the indicators of de- International Settlements (ed.), globalization. An economic shift has been Globalisation and deglobalisation, volume recorded from the western world to the 100, 71-82 . Globalization which was considered as the western world Gregory, N. (2016). De-Globalisation - The phenomenon has been more aggressively Cycle Is Turning. The Equity initiated at the policy and structural level in Master.Accessed the developing countries irrespective of the from https://www.equitymaster.com/outs protectionist regime of developed ideview/detail.asp?date=12/28/2016&stor countries. The changing patterns of the y=1&title=DeGlobalisation---The-Cycle-Is- markets are the indicator of the same. Turning-Nitin-Gregory Highly globalised and diversified western Mandala, R. (2017). Battling de- markets are facing saturation, across the globalisation. The Indian Express. Accessed world due to the protectionist regime of from http://indianexpress.com/article/opi their respective governments, in nion/columns/battling-de-globalisation- comparison to more open economies of donald-trump-indiaus-relations-politics- developing nations. business-science-4523344/ “World Bank. 2019. World Development Report 2019: The Changing Nature of Work. World Development

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