8. DECENT WORK AND ECONOMIC GROWTH

Is globalization in retreat? Here is what a new study shows

Is globalization in retreat? Here is what a new study shows
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Is globalization in retreat? Here is what a new study shows  World Bank

Is globalization in retreat? Here is what a new study shows

The Globalization Debate: A New Study Shows Globalization is Alive and Well

The debate is raging: Is globalization in retreat or not? If yes, to what extent, and what are the implications for global prosperity and poverty reduction? These aren’t easy questions to answer, largely because there are different definitions of globalization, which give rise to different ways of measuring it. Recent research at the World Bank, based on a new definition, suggests that globalization is alive and well.

Context

For more than 50 years, globalization has been a catalyst for economic development, trade integration, and prosperity building. It has helped lift more than 1 billion people out of poverty. Since the 1990s, it has become a pathway for businesses in emerging economies to enter global value chains and nearly double their share of exports. Breathtaking advances in communications, transportation, and information technology have made it easier and cheaper for countries on opposite sides of the world to transact business, tap into each other’s markets, and share resources, knowhow, and technology. On the other hand, some critics in advanced economies blame globalization for the loss of manufacturing jobs, and others point to it as a source of greenhouse gas emissions.

Recently, the COVID-19 pandemic, the war in Ukraine, and China-US tensions have led countries and companies to rethink global strategies. But to what extent is globalization actually retreating?  Some studies find little systematic evidence that it is, while others conclude that “trade openness” has recently fallen in some regions, coinciding with a slower pace of trade reforms and posing a threat to growth. This isn’t just an academic exercise. Accurately measuring globalization is necessary to understand the impact of the current challenges on the world economy. Economic policy cannot risk either overestimating deglobalization or underestimating the costs of such a scenario. For this reason, we need a clear definition with precise empirical applications that can guide economic policy.

Measuring Globalization

The trade-to-GDP ratio — which calculates the relative importance of a country’s imports and exports to its economy — is one way to measure “openness” to trade . This ratio steadily rose until 2008, then suffered a sudden drop in 2009 following the global financial crisis. By 2011 it had recovered, but it lacked the same vigor as before the crisis, suggesting to some that globalization was waning.

Some economists continue to use the trade-to-GDP ratio as a measure of openness, although many others argue that it is an inadequate yardstick and doesn’t necessarily imply that high trade barriers exist. Instead, it could reflect factors such as the size or structure of the economy or its geographic proximity to trading partners.

So globalization is better understood as an extension beyond national borders of the same market forces operating at all levels of economic activity. Using this definition, we measured the intensity of globalization as the growth of international trade relative to domestic trade. For instance, automakers sell some cars in the domestic market and export the rest. SDGs, Targets, and Indicators Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

  • SDG 1: No Poverty
  • SDG 8: Decent Work and Economic Growth
  • SDG 9: Industry, Innovation, and Infrastructure
  • SDG 10: Reduced Inequalities
  • SDG 12: Responsible Consumption and Production
  • SDG 13: Climate Action

The article discusses the implications of globalization on global prosperity and poverty reduction, which aligns with SDG 1. It also mentions the impact of globalization on economic development, trade integration, and prosperity building, which relates to SDG 8. The advancements in communications, transportation, and information technology mentioned in the article are connected to SDG 9. The criticism of globalization for the loss of manufacturing jobs and greenhouse gas emissions connects to SDG 10 and SDG 12, respectively. Lastly, the mention of the global financial crisis and its impact on the trade-to-GDP ratio relates to SDG 13 and the need for climate action.

2. What specific targets under those SDGs can be identified based on the article’s content?

  • SDG 1.1: By 2030, eradicate extreme poverty for all people everywhere.
  • SDG 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 percent gross domestic product growth per annum in the least developed countries.
  • SDG 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product.
  • SDG 10.4: Adopt policies, especially fiscal, wage, and social protection policies, and progressively achieve greater equality.
  • SDG 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
  • SDG 13.2: Integrate climate change measures into national policies, strategies, and planning.

Based on the issues discussed in the article, these specific targets under the relevant SDGs can be identified.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

  • Trade-to-GDP ratio: The article mentions that the trade-to-GDP ratio is one way to measure “openness” to trade. This indicator can be used to measure progress towards SDG 8.1 (gross domestic product growth) and SDG 10.4 (greater equality).
  • Growth of international trade relative to domestic trade: The article uses this indicator to measure the intensity of globalization. It can be used to measure progress towards SDG 9.2 (industry’s share of employment and gross domestic product) and SDG 12.2 (sustainable management and efficient use of natural resources).

These indicators mentioned in the article can be used to measure progress towards the identified targets.

Table: SDGs, Targets, and Indicators

SDGs Targets Indicators
SDG 1: No Poverty Target 1.1: By 2030, eradicate extreme poverty for all people everywhere. N/A
SDG 8: Decent Work and Economic Growth Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 percent gross domestic product growth per annum in the least developed countries. Trade-to-GDP ratio
SDG 9: Industry, Innovation, and Infrastructure Target 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product. Growth of international trade relative to domestic trade
SDG 10: Reduced Inequalities Target 10.4: Adopt policies, especially fiscal, wage, and social protection policies, and progressively achieve greater equality. Trade-to-GDP ratio
SDG 12: Responsible Consumption and Production Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources. Growth of international trade relative to domestic trade
SDG 13: Climate Action Target 13.2: Integrate climate change measures into national policies, strategies, and planning. N/A

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: blogs.worldbank.org

 

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