The term globalization encompasses a range of social, political, and economic changes.
Some disciplines including anthropology or sociology focus on cultural changes of growing interconnectedness, such as the expansion of brands like Nike and McDonalds, and the networked world through social media.
Other disciplines such as economics track the exchange of finances, goods and services through expanding global markets.
Still other disciplines such as political science examine the role of international political institutions like the United Nations and issues related to balance of power, changes in international relations and the world order.
But although we admit that globalization is a multidiscipline phenomenon, one cannot deny that some of the most visible aspects of globalization are of economic nature. The need that we measure economic globalization in this cross-section of history is of central concern both for academic circles as for the business environment, civil society activists, and policymakers.
Globalization, since the Brexit turning point and the aftermath, has been shaped by a tug of war between economic fundamentals and policy threats. Globalism based on the liberal world vision seems to lie in tatters.
The implications and the effects of the ‘ America First policy are becoming clear.
Supporters of the multilateral rules-based world order are alarmed.
Lots of populist political figures are getting elected in Europe, Asia, Latin America and elsewhere. They are changing the agenda to be more protectionist and more nationalist, and as a result they are weakening multilateral bonds. Not only will geopolitical tensions continue, but they will grow in the economic sphere in the form of tariffs, sanctions, further trade wars, investment restrictions, restrictions on the use of technology from a foreign country, etc.
In fact, what we are witnessing in this cross-section of history, is the end of Pax Americana, the end of US support for a global system created by America and her allies after the Second World War.
America First heralds the return of mercantilism.
This unravelling of globalization, free trade, and worldwide value chains, all of which will have negative economic implications for us all for years to come. There is evidence that the ripples of the recent trade wars have been felt and start affecting some international flows. Latest figures from the WTO that I reviewed depict that trade continued growing but at a slower pace while foreign direct investment (FDI) flows declined.
More seriously, Goldman Sachs has predicted a few days ago that the US economy will sink into recession as of next year. Financial conditions, policy uncertainty, business sentiment and supply chain distribution will all contribute to lower-than-expected growth as a result of the trade war.
History will remember, whatever happens in the next few years, it is already clear that the 2008-2018 decade marked an epochal shift in the balance of economic power.
Before the 2008 financial crisis North America and Europe comprised around 15% of the world’s population, but accounted for 57% of total economic activity, 61% of investment, around 50% of manufacturing, and 61% of global consumer spending.
Not anymore, the world’s economic centre of gravity has shifted since then. Whereas around 40% of production, manufacturing, trade, and investment was located outside the West in 2008, over 60% is today.
Some analysts predict that Asia will account for 50% of global economic output by 2050. True, China’s per capita income might still be less than half that of the US in 2050; but the sheer size of the Chinese economy will nonetheless raise new questions about global governance and geopolitics.
To be fair, neo liberal globalisation, has precipitated change to the global structure by enabling a number of previously underdeveloped states to experience rapid economic growth.
They were allowed to be members of the WTO.
Therefore, increased flow of trade, capital, money, direct investment, technology, people, information and ideas across national boundaries of those emerging economies has assisted in the their rapid development.
That led to the emergence of the Brics Block ( Brazil, Russia, India, China and South Africa ). This economic power house represents over 3.6bn people.
With their combined populations, the five nations’ Gross Domestic Product (GDP) constitutes 22% of the world’s GDP. Additionally, the past two decades have seen the robust growth in China and in the other Brics countries.
At the time China was accepted in the WTO in 2001, its GDP was $1.339tn.
Today it amounts to $13tn, second to the US GDP of $19tn.
India’s GDP in 2018 was $2.7tn.
The Shanghai Co-operation Organisation (SCO), is yet another economic power house. It is a Eurasian political, economic, and security grouping created in 2001 that will, most probably, be incorporated into the ongoing China BRI rooted globalization drive.
Thus, as a result of globalization, such rapidly growing economic forces from the south have demonstrably become a developing political force at the international level. This structural change has reached such a point that institutions of global governance and the process of global governance face increasing demands. Based on such a paradigm shift in the international order, predictions that globalization would collapse under a wave of economic nationalism will prove no more accurate than proclamations of a flat world that dominated the global business discourse after the 2008 financial crisis a decade ago.
It could be argued that globalization is here to stay.
There will be no defeat.
Instead, it will develop into a new form of globalization.
To support this thesis, let us agree first that the World System is larger than its parts. During the course of the coming decade,the evolving ‘New globalization will be more and more multi-polar and give new terms of reference for the G20. Moreover, it will develop at the helm a different global governance system and the existing multilateral institutions will not be prepared but gradually adapt accordingly.
The emerging global governance, as I see it, will be defined economically by its ‘multi-polar and fragmented growth as opposed to being driven by a single country operating as an economic pole as the case with the neo-liberal order that start to lose steam..
Moreover, new globalisation will increase demands on the governance of the ‘global commons, in the form of range of challenges, which cannot be addressed by a single state actor alone.
By ‘global commons I mean ‘natural assets that are outside national jurisdiction, such as the oceans, outer space, and the Antarctic.
These commons place increasing demands on global governance due to the fact the problems that they bring ‘increasingly render domestic solutions inadequate. There are two major humanity threatening commons that we can single out: the global ecology and environment and cyberspace.
For the former, Carbon dioxide levels, at 395.5 parts per million, are at historic highs, while loss of biosphere integrity is resulting in species becoming extinct at a rate more than 100 times faster than previous norms.
As for the latter, if we want to prevent a digital dark age, global governance needs to work harder to make sure the benefits and potential of the Fourth Industrial Revolution are secure and safe for societies around the world.
Politically, new globalization can be defined by its limited ‘convergence on the agendas of the world’s biggest economies. Thus, in an increasingly connected world which lacks any central actor, there develops a need for ‘ordered rule and collective action. Global governance provides this through ‘institutions and processes which seek to manage global problems.
Global implies they transcend national and regional borders and involve many countries.
Importantly, it is not a global government; it is not a single world order; there is no top-down, hierarchical structure of authority.
Instead, it involves a number of players who adhere to the ‘Rules of the Game, most notably including, Inter-Governmental Organisations and Multi-National Firms and the third sector (watchdog and societal accountability Non-Governmental Organisations that we predict will play a more effective role). Accordingly, new globalisation will be built on a high measure of political empathy or a degree of transparency and mutual understanding and reciprocal appreciation of goals and constraints.
Political empathy assumes an ability to identify with and understand the perspective, experiences and motivations of another party.
Also, to comprehend and share attitudes, expressions and views of an opposite number.
Demonizing those who hold different views is substituted by learning how to see them within a positive framework and express empathy despite the different perspective.
In this context, ‘Rules of the Game of the new globalisation can be defined as ‘basic norms of political legitimacy, war and peace, and commerce.
In other words, the process of global governance including international summits, decision making, and decision application, should adhere to these basic norms.
In the same realm, new globalism (the philosophy that serves as a frame of reference for the concept and deliverables of globalisation ) will not imply that from the intermingling of all cultures and peoples, uniformity or homogeneity would result.
Rather, the difference in ideas and ways of life are celebrated and protected as long as they do not undermine the overall unity and progress of the world.
Additionally, the rich diversity of cultures, customs, and traditions enable all people to feel open to one another and learn new ideas and ways of thought.
It is all in strong contrast with the ‘winner takes it all culture with its concentration of rewards and waste of investment of past globalization decades.