Industrialization that started somewhere in the 18th century in Europe made the continent prosperous and leader of trade & commerce. The reverse is happening in the same continent due to deindustrialization much to the chagrin of people living there. What is more, it tends to alter the geoeconomics landscape of the entire globe.
Simply stated deindustrialization is a process of social and economic change deliberately decided by states where they transport the entire factory or shift sensitive industrial activity elsewhere generally into developing countries. The most affected sectors are heavy duty engineering, manufacturing capacity for the turning out of parts and feeder items in a range of industries including but not limited to motor vehicles, ships, aircraft as well as heavy machinery for construction, mining and sophisticated state of art production line for computers and other technological items.
The direct impact of this deindustrialization was felt by the labour in general and semi-skilled labour in particular. Although compensational policy of sending few of the technologists and skilled workers on short/long term appointment to man production lines in the receiving country alleviated unemployment issue temporarily in the long term it has started to bite the people.
Hiding behind false economic pretence such as providing employment opportunities in small & medium sector that is labour intensive, the ruling cabals of the western nations just ended up stripping the most valuable assets of their national economy.
As evident during deindustrialization process, the declining share of employment in manufacturing appears correlated to reduction in the share of manufacturing value. Put it other way national employment ratio and national production ratio move in tangent to each other.
In Germany, the Captain of the European industry energy-intensive industrial production fell from 100 points at beginning of 2022 to 80 points at end of 2023, a steep enough statistics for a period of just 24 months. In parallel employment in manufacturing sector which is regarded as the engine of German industrial growth fell almost 30% in the corresponding period?
A sad news has reached my ears. BASF, the country’s leading chemical manufacturing company is moving out to China to establish a 10 billion Euro petro chemicals plant that could possibly involve siphoning off vital industrial parts of existing production lines within Germany. What is more devastating is the news that BASF is currently downsizing her headquarters in Ludwigshafen on the bank of Rhine River.
Who is behind this conspiracy is a million dollar question.
Understandably, the bottom line of crony capitalism demands globalization of the market be pursued without regard to domestic economic compulsions. By the same token using cheap labour in the Global South in reducing overall production cost is good for the corporates.
Is this a globalist’s agenda to give fillip to the Global South at the expense of Global North is a noble one? Or is it the globalists are focused on tarnishing to service industry from manufacturing to ensure cleaner environment for the West?
Whatever the case may be deindustrialization is definitely altering geoeconomics landscape for sure!
Cheers!
Muthu Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business Strategist
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