Did the pandemic end globalization?
The post-COVID world might be a bit more insular and less integrated than the one that came before
Wealthy countries are on the verge of a euphoric release, as COVID-19 vaccine distributions ramp up. But the rest of the world is staring at a potentially years-long effort to inoculate citizens. As such, it is not at all clear that we will ever return to the international community as it existed in February 2020. It's always risky to predict the shape of the future from the vantage point of the present, but the pandemic may eventually be seen as the event that brought the second era of globalization, which began after World War II, to a decisive close.
Tourism was an enormous economic force before the pandemic, accounting for significant percentages of the economy both in small island destinations like Aruba and in larger countries like Greece, where more than 20 percent of jobs were in travel and tourism. Thanks to COVID-19, the United Nations' World Tourism Organization reports that there were 1 billion fewer global travel entries in 2020 than 2019 — a 74 percent year-over-year decline that has cost at least $1.3 trillion in export revenue and could lead to as many as 120 million tourism job losses. Making matters worse, many industry experts don't believe there will be a sustained tourism rebound until 2023 or 2024.
Indeed, it could be years before enough people are vaccinated around the world to make travelers feel comfortable hopping on an airplane and plunging themselves into novel disease environments. Even then, the lasting trauma of the pandemic will make some formerly enthusiastic globe-trotters reluctant to spend hours traveling in close quarters with 200 sneezing and coughing strangers.
Global trade has also suffered its first serious crash in more than a decade, with merchandise trade down 5.6 percent in 2020, according to the United Nations Conference on Trade and Development (UNCTAD), and an even starker and unprecedented 15.4 percent drop in services. The World Bank predicts a $4.7 trillion decline in pre-pandemic projections of global GDP. Memories of COVID and the ever-present threat of another pandemic may dissuade investors from overseas ventures for some time.
Even prior to the pandemic, the post-WWII global trade consensus was in ruins. The Great Recession led to a permanent decline in the economic prospects of millions around the globe, and free trade agreements and immigration policies bore the brunt of popular resentment in Europe and America. In the U.K., the result was Brexit, which devoured British politics for more than half a decade and the knock-on effects of which are still unknown.
In the U.S., former President Donald Trump rode a wave of racial resentment and bitterness about economic openness to the presidency in 2016, and whatever you might say about his embarrassing mess of an administration, there is no question that he halted longstanding bipartisan momentum toward continued economic integration. The Brookings Institution's David Dollar worries that the pandemic will only exacerbate the demand for protectionism, as citizens push for critical supply chains and essential industries to be relocated back home. What trade enthusiasts have never quite grasped, though, is that people might be willing to exchange some economic efficiency for nationalist objectives like maintaining control of production cycles and propping up domestic manufacturing industries.
The understandable yearning for some semblance of normalcy after a year of hellish isolation, fear, and trauma means that few have grappled with the reality that COVID-19 will likely be with us forever in some form. You don't have to engage in "we're never going back to normal" Eeyorism or Forever Lockdown pessimism to wonder if some of the changes that swept over us in a wave of grief and madness in 2020 prove to be stickier than we expected.
Yes, you will get your life back, and soon. But the post-COVID world might be a bit more insular and less integrated than the one that came before. Kids will be back to school and people will be able to crowd together in restaurants and parties, but the days of lighting a thousand pounds of jet fuel on fire flitting halfway around the world to give an hour-long conference presentation might be over for a while.
One reason is that vaccines are not reaching global populations equally. Poorer countries in the developing world may not get their citizens vaccinated until late next year at the earliest. India, for example, is hoping to vaccinate 300 million people by July, which is slightly more than one-fifth of the population. At that pace, they won't reach full immunization until sometime in 2023. Countries in the grip of even more desperate poverty might have to wait even longer, especially if rich countries continue to hoard supply.
Meanwhile, mutations of the extraordinarily transmissible SARS-CoV-2 virus could make it an endemic disease like the flu that requires interventions like annual booster shots for all 7 billion of us. Countries will have to focus on creating the infrastructure for such a mammoth and ongoing project rather than pursuing the next shiny trade deal.
Intermittent outbreaks might also interrupt frictionless international travel of the kind that we had become blithely accustomed to in the Before Times. Countries like New Zealand and Vietnam plan to keep their borders closed to international tourists indefinitely, possibly through the end of 2021, and it would not be surprising, given how inept Western countries have been at implementing and enforcing mitigation measures, if those closures were extended well into 2022 and beyond.
Lurking beyond all of these factors is the accelerating threat of climate change. Many elements of globalization, including cheap air travel, copious exports, and the philosophy of limitless growth itself, contribute to the planet's warming and the resulting unpredictable and extreme weather like that already afflicting the United States this year. Wild weather patterns are creating new challenges for trade. Newly uninhabitable regions are turning more people into climate refugees. Populist revolts are roiling politics and upending settled economic arrangements around the world. When combined with the enduring memories of this pandemic nightmare, these ingredients create a recipe for decreased integration and perhaps a prolonged period of inward-facing politics.
The human lifespan is, paradoxically, just long enough for us to see the world change before our eyes but not quite long enough for us to experience and recognize recurrent patterns in our history. Not only is that an argument for investing in the study of history, it is a reminder that elements of our world that we take for granted can be swept away without warning.
After all, World War I brought the curtain down on a long and seemingly endless period of growing trade, prosperity, and migration driven by reduced transportation costs and technological advancements. It ultimately led to decades-long limitations on immigration, an economic cataclysm, and another world war. Trade as a share of the global economy didn't recover its pre-WWI levels until the 1960s. On the eve of the war, many thinkers believed that economic integration would make armed conflict irrational and thus unlikely. Instead, many people born around the turn of the century spent their adulthood living through two world wars and the Great Depression.
None of this is fated to be. Human beings are endlessly clever creatures, and may yet bring this pandemic to a decisive close, find innovative solutions to the climate crisis, and defeat resurgent authoritarian nationalist movements that seem to be on the march around the world. Perhaps the horror of the past year will, instead of unleashing the forces of division and insularity, offer leaders the opportunity to put differences aside, make the necessary adjustments to the global order, and finally prepare this civilization to meet the challenges ahead. We can only hope.