Transformation in world economy Impact of globalization & protectionism
Globalization Vs Protectionism
In entire world the things have been transforming in an unprecedented way due to the profound impact of coronavirus spreading.
Business activities have been stalled and most of the countries going through a financial slowdown due to low demand for products and services.
The profit of most of the corporates is sharply declined. All are working hard on to keep input cost under control. The governments have been infusing a big chuck of capital worldwide through bank to rebound the world economy at the earliest.
The trade war has been started between two most powerful nations the US and China. Globalization is losing its grip and protectionism starts prevailing.
Most of the countries putting blame on China for spreading Coronavirus and cancelling their whopping trade order and looking forward to minimize their dependency on China.
China and India have also engaged in border dispute which resulted in lost in lives of 20 Indian soldiers and unknown toll of Chines soldiers.
Needless to say that China produce world’s cheapest goods and services and that’s why due to low input cost of material China is one of the biggest exporter of goods and services worldwide.
In all over world, developing or developed countries are relied heavily on China for raw material and finished goods.
It’s kind of a monopoly of China in international market. China is also exploiting this opportunity by expanding its territories worldwide.
Post India-China border conflict where 20 Indian soldiers have lost their lives. India put a stringent trade sanctions on China and planning to import minimum goods and services from China.
India has also banned around 52 Chinese apps including TikTok which was widely downloaded and used by Indian.
Indian Prime Minister Narendra Modi is being emphasized on self-reliance in terms of employment and producding goods and services in India.
It is a harsh reality that India is a developing country with insufficient financing and capital resources.
Three percent Indian pay income tax every year. The savings and investments of Indian is very low below the mark. The government collect low revenue from taxes and majority of people don’t have saving on their banks accounts.
Therefore, financing big projects for establishment of factories would be very challenging task for government. At present, in globalization mode the Indian government has option to purchase cheapest goods and services from China to meet public demand.
However, if the border conflict persists between India-China and Indian government opt for protectionism. To provide the cheapest goods to its citizens would not be viable for Indian Government.
At present, India is totally depends on China for raw material and others finished goods. Even China manufacture the Hindu God idols for India which is widely used in festivals.
As Prime Minister Narendra Modi mentioned in his speech for self-reliant India that land, labour, liquidity and laws to be involved to making India a progressive economy.
We have a huge demo-graphical divided and just need to tap the potential markets by investing and up skilling youth to gear up for vibrant economy along with stability and growth.