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Deglobalization 2022-09-03 오후 11:20:00

Have you heard of the word 'Deglobalization'? Deglobalization is a movement toward fewer exchanges between countries. Unfortunately, many people are not aware of the consequences. However, it seriously impacts our society. I've got an example.

McDonald's has closed every market in Russia.
Not only Mcdonald's, but other global companies like Nike, Coca-Cola, and Starbucks also did.
It's no exaggeration to say that McDonald's and other international companies were the symbols of globalization. We can say this is likely a foreshadowing of deglobalization.

For the last 30 years, the world has been globalized. However, deglobalization is happening nowadays. It is even accelerated by other social problems such as the Covid-19 outbreak, the Ukraine-Russia war, and America's act of giving incentives only to American electric cars.

Let's look at the cause of globalization first. There are three main reasons.
Increase in trade, global production, and Global GDP
Trading is one of the main ways to develop countries.
Countries can import things they don't have and export goods they are good at producing.
Global production lets companies reach their target markets easily because they manufacture in which they will sell the products.

These lead to an increase in the global GDP. A person's spending is another person's income. This money cycle repeats and repeats. Economy grows.

Those three were the main reasons why globalization happened.

Now let's move on to deglobalization.
Deglobalization happens for similar reasons.
Decrease in trade, Multinational production, Global GDP

People spend a lot when they have a lot of income; however, if consumers' demand exceeds the supply, the product's price increases, leading to inflation.
Due to inflation, people cut spending, and this causes deflation and even recession.
If people cut spending, companies will lose money, and eventually, there will be a significant decrease in exchanges between countries.

As a consequence, Global trade, international production, and GDP will decrease, creating a vicious cycle. Also, the world will make a bloc economy, meaning that countries will only exchange with a few countries that are near them.

Why is that a problem?

The world developed because they were connected.
However, deglobalization separates countries.
Countries will only exchange with a few countries that are near them.

Deglobalization is a severe problem for all nations.
People are having a hard time finding out how to solve this problem. What should we do?
How can we solve this problem?

분당 국제학교 (Bundang International School)
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