Eswar Prasad Reveals the Negative Impact When Globalization and Populism Reinforce Each Other

Renowned economist Eswar Prasad recently revealed an in-depth analysis of the negative impacts caused by the interaction between globalization and waves of populism around the world. Through a report shared on Bloomberg’s platform X, Prasad shows that these two phenomena are not only independent but also reinforce each other in creating global economic and social instability.

How Globalization Fuels Economic Inequality

Prasad emphasizes that although globalization has driven overall economic growth, it also brings significant negative effects for most of the world’s population. Global economic integration creates clear winners and losers, with flows of capital and jobs concentrated in certain sectors and specific geographic regions. These negative impacts include rising income inequality, job losses in traditional industries, and social unrest in communities displaced by global economic transformation.

Populism Exploits Social Dissatisfaction

When societies experience negative effects from global economic changes, populist movements find opportunities to grow. Prasad identifies that populism often exploits doubts and anger stemming from this economic dissatisfaction. These movements offer simple solutions to complex problems while simultaneously strengthening narratives that oppose existing global structures. As a result, the dissatisfaction caused by globalization fuels populist sentiments, creating what Prasad calls a “vicious cycle” that is difficult to break.

Long-term Impacts and the Need for Balanced Policies

This destructive cycle between globalization and populism presents serious challenges to global economic stability and social progress. Prasad stresses that breaking this negative cycle requires a more balanced and inclusive policy approach. The solution is not total rejection of globalization but managing its negative impacts through investments in education, stronger social protections, and more equitable economic opportunities across regions. In this way, sustainable development can be achieved while reducing the main causes of populist movements.