For decades, the annual gathering of the World Economic Forum at Davos symbolised the high liturgy of globalization. It was a ritual reaffirmation of a particular economic faith: that ever-deeper global integration was both inevitable and desirable.
Heads of government and corporate leaders congregated to celebrate the dismantling of borders in trade, capital, and production, while reiterating that globalization was the only credible path to growth and prosperity. Developing countries, in particular, were repeatedly urged to align themselves fully with this vision by embracing the prescriptions of the Washington Consensus.
Global institutions acted as its principal evangelists. The World Trade Organization, the World Bank, the International Monetary Fund, and several United Nations agencies argued with remarkable consistency that development required open markets, unrestricted capital flows, and the reconfiguration of domestic legal systems, including intellectual property regimes, to suit global capital.
Participation in global value chains was presented as a technical necessity rather than a political choice. It was claimed that only through such integration could poorer nations manufacture competitively, access global markets, and accelerate economic development.
Yet the mood at the World Economic Forum that opened in January 2026 was strikingly different. The confidence that once animated Davos had visibly eroded. Globalization, once treated as an unquestioned virtue, was now being subjected to open scepticism. Even leaders from countries that had long championed global integration were reassessing its consequences. The most resonant voice in the Davos corridors belonged to Canadian Prime Minister Mark Carney, whose intervention captured a wider unease.
Carney argued that the costs of deep global integration over the past two decades were now impossible to ignore. The promise of stability had instead given way to recurring crises—financial, health-related, energy-driven, and geopolitical. What had once been embraced as a source of collective strength had, in practice, become a systemic vulnerability. According to Carney, globalization had ceased to function as a neutral economic framework and had instead evolved into a strategic instrument wielded by major powers.
He warned that tariffs, financial systems, and global value chains were no longer merely economic mechanisms but had been weaponised. When integration is used to discipline, coerce, or subjugate other nations, it cannot plausibly be defended as mutually beneficial. In such a world, the language of free trade masks a reality of asymmetrical power.
Carney also drew attention to the growing crisis of credibility confronting multilateral institutions. Middle powers such as Canada had traditionally placed faith in bodies like the WTO, the United Nations, and global environmental regimes as impartial platforms for dispute resolution and collective problem-solving. That faith, he suggested, is now badly shaken.
As rules are selectively enforced and routinely bypassed by powerful states, countries are increasingly compelled to pursue self-sufficiency in energy, food, finance, critical minerals, and supply chains.
The illusion that globalization would operate within a fair, rules-based order has been decisively shattered. At its height, the world was assured that open trade and investment would reduce conflict, smooth economic adjustments, and protect the interests of all participants. Instead, as Carney bluntly acknowledged, powerful countries have repeatedly bent or broken the rules to serve their own interests, while insisting on strict compliance from others. Neutrality, it turns out, was never more than a convenient myth.
Once this reality is recognised, the strategic implications become unavoidable. Nations that lack self-reliance in food, energy, and national security possess limited strategic autonomy. Dependence ceases to be a matter of choice and becomes a structural vulnerability. In such circumstances, middle powers cannot seek shelter under the shadow of major powers; they must instead derive strength from coordinated action and mutual cooperation.
It is in this context that India’s growing pursuit of bilateral and plurilateral free trade agreements beyond the WTO framework becomes significant. Canada and several other middle powers are following similar paths. These efforts reflect not a retreat from engagement, but a recalibration of it. Collective action among middle powers is no longer optional; it is essential to counterbalance concentrated power and reclaim economic sovereignty.
While Carney articulated the concerns of much of the non-dominant world—carefully avoiding explicit reference to the United States—the United States itself offered a parallel critique at the same Davos summit. US Commerce Secretary Howard Lutnick openly acknowledged that globalization had failed not only America but Europe as well. Without naming China, he pointed to the dangerous dependence of Western economies on Chinese manufacturing.
Lutnick described a globalization model built on exporting production, dispersing manufacturing across distant geographies, elongating supply chains, and relentlessly chasing the lowest-cost labour. Though celebrated as efficient and growth-enhancing, this model hollowed out domestic industrial ecosystems. In the process, it weakened national resilience and left workers economically marginalised.
Excessive reliance on foreign production, he argued, has undermined economic security and eroded manufacturing capabilities. Entire industrial clusters have migrated offshore, creating a situation in which even essential goods depend on external supply chains. Such an arrangement, Lutnick contended, is neither economically sustainable nor strategically defensible.
As an alternative, he advocated an “America First” economic framework that places domestic workers and industrial capacity at the core of policy-making. Efficiency, in his formulation, cannot be pursued at the expense of national resilience. A country that relinquishes its productive base in the name of low costs ultimately sacrifices both economic strength and strategic autonomy.
Crucially, Lutnick did not present this approach as uniquely American. He urged other nations to reassess their development models and prioritise self-reliance, domestic employment, and reduced exposure to fragile global supply chains. His call was, in effect, a rejection of blind globalization in favour of a more balanced and nationally grounded economic order.
The atmosphere at Davos, once a shrine to borderless capitalism, has unmistakably changed. Globalization is now being questioned not only by those who were compelled to accept it, but by those who once designed and defended it. Concerns over the weaponisation of currencies, payment systems, and supply chains are no longer whispered but openly debated. Calls for self-reliance, strategic autonomy, and a nation-first economic approach have entered the mainstream.
What emerged at the World Economic Forum was not merely a critique of globalization, but an implicit declaration of Swadeshi in its very heartland. The bastion of globalization has begun to echo with arguments for economic sovereignty, signalling a profound shift in the global intellectual climate.
(The author is Ex-Professor, PGDAV College, University of Delhi; Views expressed are personal)
