The end of globalisation as we knew it

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OPINION

By Mike Ibrahim Okumu

My generation has lived through the golden age of globalisation—an era marked by open borders, falling trade barriers, and a worldwide shift in production patterns. Import duties all but disappeared in advanced economies, leaving only low-income countries with inefficient tax systems to lean on them as sources of public finance.

Few books capture the spirit of that era more clearly than Thomas L. Friedman’s The World Is Flat: A Brief History of the Twenty-first Century. After completing my undergraduate degree, I read it religiously to understand the tectonic forces reshaping global commerce.

Friedman identifies two defining features of modern globalisation: offshoring—the relocation of entire factories and service centres to low-cost countries—and outsourcing—the contracting out of specific business functions like customer service or software development to cheaper labour markets. These dynamics propelled China to become the world’s factory and positioned countries like Vietnam, Ethiopia, and Cambodia as the next frontier of low-cost production.

However, the tide is turning. The rise of economic nationalism—spearheaded by events such as Brexit and the resurgence of protectionist policies under the US leadership—is challenging the very foundation of globalisation. Britain’s departure from the European Union was, in part, a response to local frustrations over job losses blamed on the bloc, even though many of those jobs were actually lost to cheaper labour abroad.

The return of Donald Trump to the US presidency in 2025 has accelerated this shift. His administration’s worldview is rooted in a bygone era when the United States accounted for nearly 50% of global manufactured goods output—a time when manufacturing jobs were proudly American and factories dotted the industrial landscape.

But the global economy has changed. Offshoring moved production to countries where labour costs are far lower. For context, while the US federal minimum wage remains at $7.25 per hour, states like California and Massachusetts have raised theirs to $16.50 and $15, respectively. In contrast, some factory workers in Uganda earn the equivalent of just $1.30 per day (sh5,000).

This vast wage differential makes low-income countries more competitive, but new US tariffs—such as the proposed 10% blanket import duty—and the dismantling of trade frameworks like the African Growth and Opportunity Act (AGOA) threaten to upend these advantages. For countries like Uganda, the implications are stark. Without preferential access to major markets, they may struggle to attract investment aimed at producing for export. Worse still, they could become dumping grounds for surplus goods redirected from markets like the US, further undermining their fragile manufacturing base.

This brings us to the fundamental question: How can countries like Uganda remain competitive in a world where tariffs and protectionism are becoming the norm? Producers face a grim choice—either absorb the cost of tariffs or pass them on to consumers. The only viable long-term strategy is to drastically reduce unit costs of production. Without such adjustments, many industries in low-income countries risk extinction.

Absent a bold rethinking of trade and industrial policy, Uganda and its peers will remain stuck in the extractive trap—exporting raw minerals, and with them, the bulk of potential value and national wealth. The world is not flat anymore; it is fragmenting. And in this new, more contested global economy, only those countries that can enhance productivity and build resilient, value-added industries will thrive.

Uganda must urgently revisit its trade and industrial strategies to adapt to a rapidly evolving global landscape. The fragmentation of globalisation, rising protectionism, and emerging uncertainties around preferential trade frameworks call for a strategic reset.

Countries such as China, Canada, Vietnam, and Singapore have demonstrated that resilience lies in agility and proactive policy reform. Uganda must follow suit by recognising that the global rules of engagement have changed.

This necessitates a fundamental shift in mindset—realigning both public and private spending priorities, fostering a results-driven culture in policymaking, and reshaping the country’s investment narrative to reflect competitiveness and value addition. A deliberate, nationwide effort to build consensus around these new priorities is essential.

Only then can Uganda mobilise the investments needed to close its development financing gaps, cushion its industries against external shocks, and remain competitive in a more contested global trading system.

The writer is Assoc. Professor and Dean Fellow of The Uganda National Academy of Sciences (FUNAS) School of Economics