Will globalization be the next casualty of the economic crisis?

The economic crisis has shaken people's confidence in financial institutions. The share price of Citigroup, once a leading giant in the financial sector, has plummeted from thirty dollars to less than a dollar in just a few weeks. Shockwaves of the crisis have sent banking giants and even some nations to the abyss of debt's traps. Under the premise of securing employment and financial systems from the blow of the crisis, advocacy of trade and financial protection will gain a wider support in most inflicted countries.

Some commentators speculate that globalization will come to a halt in the wake of the economic crisis. It would be true if globalization is only about international trade and finance. The above claim would be far from reality if globalization is referred to the widening, deepening and speeding up of global interconnection of contemporary social issues and not just confined to financial activities.

The upward trend of interconnection among social organizations around the globe doesn't seem to slow down in the recession years. In some domains, economic crisis even bolsters international activities. Global charity is one example. A growing number of people will seek help in the aftermath of the fiancial tsunami. The demand for charity services will soon catch up. This also applies to religious activities. A widespread hardship will heighten people's interest in religions.

It is true that private flows of credit and investment across borders have plummeted as a result of the economic crisis. For instance, by the end of 2008, the demand for imported goods in the U.S.fell drastically, shrinking the country's trade deficit by almost 30 percent. In China, the imports and exports have dropped 21 percent and 3 percent respectively. Last November, capital flows to emerging markets reached their lowest level since 1995 and issuance of international bonds came to a halt.

Despite the shrinking of private economic activities, the international flows of public funds are booming. Central banks around the world including the U.S., Mexico, Brazil, Singapore and Korea have injected 30 billion dollars to stabilize the fiancial markets. This will inevitably strengthen the international links among central banks.

Facing the economic downturn, some nations may adopt protection policies in trade and finance. Protectionism may even extend to immigration policies. Tightening immigration to keep job vacancies for locals will be most welcome by protectionists. However, any form of protectionism is costly and unstainable. In a globalized world, the ability of nation states to fence off external impact on their economy and society has largely declined. Protectionism will be unlikely a maintream in the foreseeable future.

Owing to its diverse and deepening influence in all aspects of society, globalization will continue even in the midst of the economic crisis. Like it or not, we will still live in a globalized society.