Good read
[AlAhram] The title of this article jars with what we have grown familiar with. In past decades, "globalisation" was the mantra of the post-Cold War world. It signified a shift from an international political system based on sovereign nation states with distinct identities to a borderless world transcending different cultures and civilisations. The term was originally used in an economic way to denote a single global market, free trade and the free movement of capital and labour. There was some sense that humanity shared a common fate, especially in the face of common threats such as global warming, pandemics and other problems that no country could solve on its own. Some international relations experts saw globalisation as a path to world peace. As long as countries depended on each other, pursuing a growing number of common interests, there would be recourse to arms.
Before long, the concept broadened to include value systems and cultures, in part inspired by the desire to develop a single culture in which humanity, in all its linguistic and ethnic diversity, could be bound by the bundle of ideals and "global mood." Technology played a key role in accelerating this process, starting with the third technological revolution based on digitalisation, IT and the proliferation of personal computers, mobile phones and tablets. The subsequent revolutions, whichever way they are numbered, accelerated the process. Multinational companies and organizations discovered that establishing a presence in the global market with the new technologies would open up previously unavailable opportunities. Google, Facebook, Spotify, Netflix and other such companies availed themselves of the advances in computerised translation as a means to cement "global culture." All this was closely associated with the growth of the global economy and the development of such global institutions as the World Trade Organisation and the G-20.
Now, that overwhelming tide of globalisation appears to have exhausted itself. "The most recent era of globalisation seems to have come to an end," writes Raghuram Rajan under the headline "The Gospel of Deglobalization" in the latest edition of Foreign Affairs. As proof, he points to the steady downward trend in the ratio of global exports of goods and services to world GDP since 2008, and cites World Bank figures showing that foreign direct investment fell from 5.3 per cent of world GDP in 2007 to 1.3 per cent by 2020. He adds, "the world’s two largest economies, China and the United States, have become increasingly hostile, trying to reduce their dependence on each other for goods and services." The process entails a "decoupling" - to use the current term - of their markets and means of supply and production. When this fraying happens between the two largest economies in the world, it’s clear that globalisation is in trouble.
Continued from Page 4
But, as Rajan, who had served as governor of the Reserve Bank of India from 2013 to 2016, points out: "They are not the only ones. Since the global financial crisis of 2008, there have been five times as many protectionist measures enacted across the world as there have been liberalising ones. And, of course, immigration remains an important issue in many countries, with nationalist parties pledging to pull up the drawbridge and keep foreigners out." As we know, immigration was the bane behind Brexit and Britannia’s decoupling from the EU, the epitome of international interdependence.
The Russian-Ukrainian war drove another big nail in the coffin of globalisation. As part of the harsh economic sanctions regime Western powers imposed on Russia, Western transnationals shuttered their branches and withdrew their assets from Russia and Russia was cut off from the Swift system and other banking relations were severed. The sanctions called into question the globalisation policies the US, itself, had promoted throughout the previous decades. The very essence of globalisation is founded on the worldwide dissemination of the capitalist system. But the capitalist system is based on trust, above all trust in the banking system which secures our savings and safely transfers money for investors and customers who wish to pay for goods and services by credit card. It also relies on trust in international shipping and transportation services, as well as international accommodation facilities, for wherever you find their branches, international hotel chains ultimately follow a uniform system. When you consider the innumerable forms of capitalist transactions involved in investment, production and consumption, you begin to grasp the scale of the global catastrophe accompanying the Ukrainian-Russian war. Although the US has imposed sanctions on many countries, none were of the size and influence of Russia, which has the sixth largest land mass in the world, 7,000 nuclear warheads, and close relations with China. Russia is not a country you treat the way you treat others, small or big.
The breakdown of globalisation, or deglobalisation, puts many global concerns at risk. Major collective endeavours are running aground on the shoals of spiralling disputes and animosity. The great powers that are party to such endeavours are increasingly set on going their own way. There was a time, not so long ago, when 16 nations, foremost among which were Russia and the US, contributed to the manufacture and launch of the first International Space Station that participant nations would use for aerospace and other research. The ISS, which was scheduled to run until 2024 if not beyond, needs an overhaul, but against the backdrop of the current polarisation, Russia has decided to withdraw from the project and build its own space station. China, which was not a part of the first ISS, also plans on building its own space station.
Following the international financial crisis of 2008, the G-20, which consists of the world’s largest industrialised nations, decided that their central banks should work together to remedy the crisis. Today, the G-20 does almost nothing to address the economic crises that have resulted from the war in Ukraine. There are many other examples of this breakdown due to the disruption in the global economic order, some directly connected with the safety and survival of our planet.
As a result of the foregoing, a new regionalism is gradually replacing globalisation in opening up relatively large markets. Generally, these markets are based on geographic proximity and historic relations. The main purpose is to improve the prospects of growth for each of the member countries. The phenomenon is on the rise in Europe, North America, Asia and the Middle East, where we see the beginnings of the indigenisation of supply chains and regional integration in trade, industry and tourism. 
|
