The question of whether the Covid pandemic -19 and the war in Ukraine represent the death of globalization dominates the debates this week at the World Economic Forum in Davos.
Some anti-globalization movements do not hesitate to speak of “deglobalization”; in the face of conflict-related supply chain disruptions in Ukraine and lockdowns in China.
In hopes of building stronger distribution systemsSo that they are not affected by crises such as war, deglobalization would mean bringing production closer to households, thus allowing production to grow. movement of goods over shorter distances.
This debate became more acute. after the covid-19 pandemic and the problems of the port of Shanghai.
The Chinese city has become a symbol of the problems of the world supply chain< /strong>l after its factories were closed for weeks and containers piled up, while China enforced a tough “covid zero” policy.
And since the Russian invasion of Ukraine, a great producer of wheat, among others, food prices have reached an all-time high.
These problems are leading many, including large multinational companies, to consider what production should look like in the future.
“temporarily on hiatus,” said Loic Tassel, Europe president of consumer goods giant Procter & Gamble, in one of the debates in Davos.
“The price to pay or the time to wait is no longer compatible with our industry”, he assured, giving the example of Shanghai, the busiest container port in the world.
“Now we’re putting cost and supply chain resilience into the equation, something we didn’t have in mind three years ago,” she said.
Pamela Coke-Hamilton, director of the Center for International Trade, an organization based in Geneva, prefers to speak of diversification and relocation (and not of “deglobalization”),that is, a system in which, in areas where there is conflict, the supply chains would be closer. with nearby supply value chains”, he told AFP.
Dark clouds on the horizon
The most skeptical affirm that companies are looking for the cheapest options despite being aware of the risk posed by the enormous dependence on certain regions.
“We have never imported as much from China as when we said we should depend less on it,” he said. Gilles Moec, chief economist of the French insurance giant Axa.
The “identity crisis” of globalization comes at a time when pessimism reigns over the future of the world economy.
“The horizon has darkened” International Monetary Fund (IMF) Managing Director Kristalina Georgieva said in Davos on Monday.
In parallel,inflation is rising. pushing central banks, including the US Federal Reserve, to raise interest rates, which will It will make the indebtedness of companies and consumers more expensive and it will stop economic activity.
The European Central Bank announced on Monday the end of negative rates, despite the fact that the European Commission lowered the rate. last week the eurozone growth forecasts for 2022, from 4% to 2.7%.
And figures from China, the engine of world growth, revealed the consequences of Beijing’s strict “zero covid” policy , with retail sales and factory output plummeting to their lowest level in more than 20 years. s of two years, while unemployment is close to record levels.