REBUILDING GLOBAL RESILIENCE: REGIONALISATION AND TRADE LIBERALISATION IN A FRAGMENTED ECONOMY

Today, the world order is undergoing fundamental change. Globalization, once driven by interdependence, cross-border investments, and consumerism, is fading under repeated shocks: the 2008–2009 financial crisis, the COVID-19 pandemic, climate change, and Russia’s military operation in Ukraine. These disruptions have forced leaders to rethink the supply chains because they proved to be unreliable during a pandemic, a war, or a financial crisis. To address this, protectionist measures have gained traction, aiming to bolster supply chains against future external shocks. In our article, we analyzed the IMF’s data about the pandemic’s impact on supply chains, considered the post-pandemic collective response of the European Union, the USA, and China, and came to the conclusion that the world is heading towards an irreversible pathway of protectionism. However, this approach can increase vulnerability by relocating production back home, isolating countries, and straining scarce resources. So, we are advocating for a more balanced way of development, like trade liberalization and striking free trade agreements with regional blocs, and promoting region-to-region cooperation. Regionalization can bolster ties between countries, increase cooperation, and rationally utilize available resources. These steps should prevent countries from supporting inefficient industries and make the world more stable and sustainable.