Lawrence J. Lau

Opinion | How the world can be better prepared for the next pandemic, and keep economic globalisation alive

Economic isolation is not the answer to a public health problem. Better ways must be found to manage supplies of essential goods, a public health response and cross-border travel during a pandemic

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Empty shelves at a Walmart in Sulphur Springs, Texas, on March 18, after people stocked up on toilet paper and sanitiser amid the coronavirus outbreak. Photo: EPA-EFE

Lawrence J. Lau

Published: 3:00am, 21 Mar 2020Updated: 5:03am, 21 Mar 2020

Now that Covid-19 has become a pandemic, what does it mean for economic globalisation? At first glance, the pandemic seems likely to further impede globalisation as every country tries to protect itself from imported cases by limiting the entry of foreigners.

Previously, I advocated “diversified globalisation”, with an emphasis on the second sourcing of critical supplies, as the way forward. However, diversification works when only one or two places in the world are hit by an epidemic or a natural disaster; it does not work when the entire world is engulfed in a pandemic.

Moreover, pandemics happen not infrequently. Given the massive cross-border flows of people today, a local epidemic can easily turn into a global pandemic. Thus, different countries may have a motivation for turning inward and reducing their dependence on often interruptible international trade.

However, economic globalisation has created and continues to create so much value for the whole world that we cannot afford to revert to isolationism and total self-sufficiency just to avoid the effects of pandemics.

Since the second world war, all the developing economies which achieved developed status – Japan, Hong Kong, Singapore, Taiwan and South Korea – were able to do so because of economic globalisation. We cannot and should not abandon globalisation. Instead, we need to be better prepared for epidemics and pandemics in future.