Tuesday, October 27, 2009

Reverse Globalization

McDonalds is abandoning Iceland, apparently as it has been getting killed by the decline in the Icelandic currency.  The local franchisee is going to keep the stores open by changing the name and using local products.  This is seen as a good thing from the standpoint of the Salon writer, but does this increase the risk of Iceland going to war?  Folks have written that countries with McDonald's franchises do not fight each other (although there have been some obvious exceptions).

More importantly, the withdrawal of Mickey D's from Iceland shows that globalization is not a steady upward trend.  Things like exchange rate fluctuations can upset the plans of multinational corporations.  Likewise, the spike in oil prices a year or so ago started to put a crimp in the outsourcing of production as shipping became more expensive.

So, we should not take for granted that globalization is a permanent trend.  It may be in the long run, but there will be ups and downs.  And that is not even counting for the existing barriers, such as those leading to my incredibly poor credit rating when I moved to Canada.

1 comment:

Bill Ayres said...

Let's see - if the Kronar tanks and McD's bails from Iceland, what happens when the US Dollar tanks..."