Today it takes only 40 hours to circumnavigate the world by plane, 40 days by boat and 346 days by foot. This is an era of unparalleled human movement and interaction. People, products and capital travel the world with unprecedented quantity and speed, as do countless disease-causing microorganisms. However, this connectivity paradoxically can help to prevent and control the severity and emergence of such diseases. In order to understand the true impact of globalisation, it is important to look back at previous pandemics, for example, the Spanish Flu of 1918.
The Spanish Flu which broke out during World War I was highly contagious and since many soldiers were confined in barracks the transmission was accelerated. However, the major reason for this disease becoming a world-wide affair was the recent invention of ‘modern’ transportation. This transportation was much slower than what we experience today. However, it was revolutionary at the time in that it made journeys quicker and easier. Although the first commercial flight took place in 1914, transport would mainly have been boats and trains, especially for the many troops returning home from war. Even at this speed the disease took only seven months to spread globally (as illustrated below).
The sheer number of people that needed transportation was an anomaly. In contrast these numbers are now recreated daily and at a much greater speed. This could lead to a similar spread, with over 10 million people flying every day. This is due to globalisation, encouraging the process of interaction and integration among people, companies and governments worldwide. Travel has become a necessity for many, with Americans alone making 405 million long-distance business trips a year leading to it becoming the epicentre of the current pandemic (Covid-19), demonstrating how this virus has spread primarily through chains created by globalisation.
It is important to acknowledge that whilst globalisation has increased the opportunity for diseases to spread globally it has also significantly increased the scope for research in order to help overcome them. In 1918 without the invention of vaccines and antivirals, and with little means to transport them globally, had there been any, the disease was fatal and consequences dire. Such consequences may be replicated if a lower income country contracts the coronavirus on a national scale, as they do not have the same quality of health care. This has not yet occurred as they do not have the same level of connectivity.
Many businesses suffered significant losses as a result of Spanish Flu, for example there was a 70% reduction in business in Little Rock, Arkansas, many making $10,000 losses daily (equivalent of $170,000 in today’s terms). Globalisation allows the best scientists from all around the world to work together to find cures and enables governments to try and minimise the impact to the global economy. As many have found out, some have the ability to work from home and be able to continue much of the work that they would be doing normally. Of course, there are sectors that do not have the same scope for virtualisation, such as manufacturing, but the development of machinery in those industries has increased the potential for businesses to carry on as usual during a pandemic. There is also increasing support from governments to try and protect businesses and this improves the chances of economic recovery after such a crisis.
Globalisation has caused some countries to become tourism dependent, such as Macau. Tourism represents 43.9% of Macau’s economy and it accounts for 51% of the employment. When a global disease breaks out, such as Covid-19, their economy is more vulnerable. Globalisation has created the opportunity for countries to make their economy centred around tourism and has therefore led to their potential downfall. There was not the same ability to travel back in the 1920s and therefore countries could not rely on tourism alone but with the constant improvement in the availability of travel the industry has been created.
Globalisation has resulted in the dependency of countries on global trade. Countries such as the US and the UK have become highly dependent on exports, with these countries having a $616.8 billion and a $176.5 billion trade deficit, respectively. This leads to countries being reliant on others for a large number of products. When something occurs, for example a pandemic, this causes a fall in production of those products and countries without the scope for facilitating the demand suffer greatly. Globalisation has also instigated the rise of “just-in-time” production. This leads to many manufacturers also suffering, as the availability and transportation of certain parts becomes limited and so their manufacturing is halted.
Whilst globalisation has created an issue for countries with huge trade deficits it is also catastrophic for those countries that rely on other countries for a lot of their income, such as Germany and Japan, with trade surpluses of $285.6 billion and $43.8 billion respectively. The issue arises as during pandemics expenditure tends to decrease due to uncertainty and a general decrease in consumer confidence. Global GDP growth as a whole will slow down (see graph below) due to this reduction in spending and an aspect of this will be trade market activity decreasing significantly.
This is also due to the difficulty regarding the transportation of these products. Growing economies will also struggle to re-emerge from the pandemic due to them being reliant on other countries to both buy from them and supply to them. This means that whilst they may not be as exposed to the virus, they feel the second-hand effects of it.
When evaluating the impact of globalisation as a whole, it is important to consider all different types of economies. Initially some will struggle selling and others buying but globalisation has given us the opportunity to get back on track quicker. Whilst on the face of it, globalisation has made us susceptible to this pandemic it will also be the reason we are able to overcome it.