Slowbalization, Newbalization, Not Deglobalization – Economic News, Analysis, and Discussion

IMF Managing Director Kristalina Georgieva’s message to the Davos meeting last week referred to the upside risks of “geoeconomic fragmentation” due to the war in Ukraine. Considering the ongoing rivalry between the United States and China and the alliance between the latter and Russia, the narratives about a West-East division in the global economy – with an end and reversal of globalization – have become louder.

After the 2008 global financial crisis, the belief that globalization and the transfer of manufacturing jobs to Asia would be responsible for the difficulties of progress faced by middle- and lower-income classes of some advanced countries grew among their inhabitants. That culminated in electoral victories of populist leaders like Trump, who knew how to take advantage of such sentiment. The vulnerability to shocks attributed to globalization during the pandemic, after disruptions in global supply chains began, added another argument in favor of its reversal.

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