India in the Post Pandemic World. Globalization, Impact and Future

THE APROPOS OF GLOBALIZATION, IMPACT AND FUTURE OF INDIA IN THE POST-PANDEMIC WORLD

Globalization has grown to interpose as a medium to cinch the economic and cultural growth of people. The growth in suburbanization and the coalescence of the world economy have expedited the rise of a global connexion. The after-effects of a pandemic are at most defined not only in terms of mortality but also by their impact on our day-to-day livelihood and the economy, with globalization fast-tracking this loss and costing billions (US dollars) in expenses. The COVID-19 pandemic has also affected the economy in terms of supply and demand. The unprecedented event of COVID-19 and the implemented lockdown measures have prompted ambiguities concerning economic growth around the world. The dubiety regarding the growth of the world economy forecast in 2020 by the International Monetary Fund(IMF) is projected to fall by 3% and by 6.1% for advanced economies.

The impact of COVID-19 on health systems differs around the world. Middle and low-income countries with less advanced health structures are prone to face more significant challenges and continue to be at risk in managing the spread of COVID-19 in contrast to the high-income countries. Hence, ascertaining the vulnerability indices at the national level is vital in facilitating legislators and the World Health Organization(WHO) to efficiently manage and mitigate the brunt of the pandemic adeptly. Being a former Professor at the Harvard Business School, Prof Theodore Levitt, credited with contriving the locution of 'Globalization,' would certainly be appalled by the growth of protectionism and attitudes of parochialism progressing.¹

Their genesis can be etched back to the US-China trade war, Brexit, withdrawal of US from trade blocs including the Trans-Pacific Partnership and the North American Free Trade Agreement (NAFTA), recently, even India was seen taking an eleventh-hour decision with the Regional Comprehensive Economic Partnership (RCEP) and withdrawing from it. This ubiquitous economic state is foreboding, as it attempts to redraft business links between countries and trade blocs as a whole, with prominence on bilateral commerce instead of trade blocs. The lingering skepticism over the last couple of years has escalated into portentous geopolitical conflicts, and its impact is evident on the global market and business. Decades after Professor Levitt's death, many states around the world are on the brink of deglobalizing, abutting protectionism and implementing a 'gated globalization.'

However, going by history, India may very well re-emerge as a land of fortune. Comporting with a recent report by Jones Lang Lasalle, he said, "India has observed a 257% growth in Gross Domestic Product between 2004-05 and 2018-19, arising as the sixth major consumer market worldwide with 49% workforce participation, and being ranked among the top ten beneficiaries of foreign investments in 2019 gaining over US $ 49 billion in inflows". India, while safeguarding its state interests, has a prospect to delineate the contours of global trade. With the COVID-19 pandemic exacting a toll on trade and economy, Prime Minister Modi gave a brazen call to individuals and enterprises to glance at the present position as a prospect for a "self-reliant India (Atmanirbhar Bharat)."²

India, being bequeathed with abundant natural resources- iron, coal, copper, zinc, etc being amongst the largest in the world has offered enormous potential for excavation and other associated endeavours. With abundant manpower and young demography, it provides an ideal stage for India to emanate as an efficient production and consumption market for large-scale enterprises. With a US $265 billion (20 lakh crore rupees) economic package, the government rejiggered its precedence back to agronomy and the manufacturing centre of India. Food Production as a precinct took centre stage, driven by distinct improvements in advertising, food processing, and contract farming and thereby, placing the decision-making power back under the control of farmers.

The government has provided a US $41 billion (3 lakh crore rupees) economic package to revive micro, small and medium businesses(MSME) from the deleterious impact of the pandemic and is constantly providing supplementary measures to empower the manufacturing sector to recuperate its lost foothold in a post COVID-19 world. An additional sector for massive potential for growth is defence, where the government hopes to achieve a revenue of Rs 1.7 lakh crore by 2025 in military goods and service and with export contributions equalling Rs 35,000 crore. The pandemic has placed the spotlight on the healthcare sector, where the government expenditure over the last five years has doubled from Rs 1,000 crore to Rs 1,945 crore, and in the Fiscal Year of 2020, the total expenditure was about 1.29 % of the real GDP. This allocation although inadequate in the present situation provides prospects for government and private investments.³

The Indian government’s vision to expand the infrastructure so as to aid India's growth will require the support of global investments. The US $1.5 trillion (100 lakh crore rupees) infrastructure strategy in the new budget presents opportunities for both domestic and transnational corporations to be part of India's advancement. In the current global space where international trade and commerce is inexorable, protectionist policies of few countries will only trigger serious inequity. A middle-ground approach coupled with a gated globalization, would be the ideal alternative, with India paving the way for other countries to pursue this in the years to come.

However, the COVID-19 crisis has hastened the process of deglobalization and increased the need for strong labour-market protections, universal health insurance, and fortification of national supply chains for essential medical equipment. It has steered nations to reiterate obduracy and reliability in manufacturing over cost savings and efficacy through global outsourcing. As the economic expenditures of the lockdowns increases over time, the enormous supply shock caused by the upheaval in domestic production and international value chains creates a spiraling shift in aggregate demand. However, as COVID-19 galvanizes and ensconces these trends, it is not the principal force driving them. The three significant actions—withdrawal from hyper-globalism, preeminent government action, and reduced growth rates precede the pandemic. And while they can be observed as presenting substantial hazards to human prosperity, it is also probable that they are portents of a more balanced and all-encompassing global economy.

Conceivably the most detrimental prospect India and the world faces in the medium term is a substantial decline in economic growth, notably in developing countries. These developing countries, including India, have had a great quarter-century, with a significant decline in poverty and advancements in sectors of health, education and other growth indicators. Apart from the enormous public health burden of the pandemic, they now stand facing substantial external shocks, for example- an abrupt stop in capital flows and a sharp decline in remittances, travel, and export receipts. However, COVID-19 only accentuates an already existing conundrum of development.

The development and progress outside of East Asia were centred around demand-side dynamics, which are public investment and natural resources(mineral deposits) that were untenable. Export-oriented industrial development being the most steadfast engine for a perdurable phase of development, seems to have eroded. Developing nations will currently have to depend on new growth models as the pandemic might be the eye-opener necessary to recalibrate progress and reinvigorate the broader conception of globalization that is essential. In so far as the global economy is concerned, it was previously on a precarious yet untenable path, and the COVID-19 crisis only further elucidates the compunctions we face and the choices we must make.⁴ Although much headway has been made in both the nations and world's capability to react to a public health emergency, the healthcare facilities of several powerful countries have borne the deleterious impact of the pandemic.

Even the most precocious nations with complex infrastructures, public health and hygiene that have endured epidemiological alterations are facing obstacles in managing the pandemic. Nonetheless, less advanced countries have been overwhelmed, with many states being incompetent to effectively control the pandemic due to the lack of resources, infrastructure, tenuous administrations, and impoverished populations.⁵ The pandemic unveiled and exacerbated inequalities among low, middle and high-income countries, thereby revealing the need for globalization and cooperation among states. In each of these facets, legislators have choices to make wherein - better or worse consequences are feasible. However, the destiny of the world economy pivots not around what the virus does but on how we decide to react. Thus, deglobalization in contemporary times would do more harm than good as countries around the world should act as part of one integral chain keeping the stride of progress and innovation alive.

Name of the Author- Arnold Stanley

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¹ Opinion | The choices we make will shape the post-pandemic world, , https://www.livemint.com/ (last visited May 27, 2021).

² The impact of COVID-19 on globalization - ScienceDirect, , https://www.sciencedirect.com/science/article/pii/S2352771420302810 (last visited May 27, 2021).

³ HCL aims to inoculate 3.5 lakh India staff before June 30, investing over Rs 100 crore on vaccines, , https://www.moneycontrol.com/news/business/hcl-aims-to-inoculate-3-5-lakh-india-staff-before-june-30-investing-over-rs-100-crore-on-vaccines-6948011.html (last visited May 27, 2021).

⁴ Nistha Shrestha et al., The impact of COVID-19 on globalization, 11 One Heal. 100180 (2020).

⁵ The impact of COVID-19 on globalization - ScienceDirect, supra note 3.