João Vale de Almeida / Sep 2015
600 years after its first steps, globalization deserves a serious discussion
In August 1415 , when the Portuguese kicked off the first wave of globalization by taking control of the north African strategic port of Ceuta, they could hardly have imagined the long-term nature and extent of the process they were launching.
A small country on the western most corner of Europe, Portugal had the merit of creating the first global network of trade routes and maritime outposts and of opening sea ways to intense exchanges of goods and people and cultures. Justified mainly by the purpose of promoting the Christian faith, Portuguese expansion was made possible, among other domestic factors, by an effective combination of forward looking planning, scientific innovation and economic rationale. Their successful breakthrough and their dominance of the global economy in most of the 15th century was followed and enhanced by further European successes at deepening and widening the economic interconnection to the rest of the world.
But we had to wait until the late 20th and early 21th centuries to live in a truly "globalized world". With the EU and the U.S. assuming their joint economic leadership position, and with the combined effect of the end of the Cold War and internal reforms in China, we witnessed a real quantum leap forward. Unprecedented technological advances, market liberalization and political reforms came together to produce the most impressive globalization phase in our Planet's history. In the last 30 years or so, the world became interconnected and interdependent as never before. And certainly well beyond Prince Henry the Navigator's wildest dreams when he returned from Ceuta in August 1415 to plan new expeditions…
In the same month of August, but 600 years later almost to the day, Shanghai's stock exchange collapsed and generated waves of turbulence and winds of concern around the World. Suddenly those who had feared the effects of a fast growing China were now wondering whether a slow growing China could be even more challenging, triggering a global recession and potentially undermining globalization.
August 1415, August 2015: this astonishing coincidence of dates is a good occasion to reflect upon globalization. Where are we and where do we want (and are able) to go?
The recent period of "hyper-globalization" is now over. The slowing down started in fact a few years ago but Shanghai's crash, and the doubts it triggered in the markets about the sustainability of the Chinese model, could be an early sign of a new stage. Has globalization peaked? If so, should we worry about it?
The facts are clear: the latest wave of globalization lifted millions of people out of poverty, created a global middle class, provided unprecedented access to information, goods and services and changed the balance among continents. It made our world a smaller place, brought people closer together, and reduced differences between countries and cultures. Can we today even imagine leaving in a world like it was in the 70's of the last century?
But at the same time, there is a perception that globalization has contributed to accentuating inequality and insecurity. Public opinion's reaction to globalization is therefore mixed. While most people actively or passively support it, some are tempted to join well-orchestrated campaigns against it and others simply feel left out or even threatened in their beliefs and traditions. Many fully enjoy the elements of their daily lives which would not have existed without the core features of globalization but still blame it for the less good (real or perceived) consequences of it.
So far, the quality of our debate about globalization has been sub-optimal. Problems begin with the actual concept, far from being consensually agreed.Then we have the performance of actors in the debate. Opponents of free trade and free societies use tools made available by the very globalization to attack its foundations; the two extremes of the political spectrum and all populists unite in condemning it for virtually all the evils in our societies. Across the aisle, supporters of globalization have been too defensive for too long and most of the time use simplistic arguments and underestimate negative perceptions.
The fact is that globalization is not as popular as it has been in the last decades. For different reasons, including a general climate of distrust towards "politics" and institutions and the impact of recession and slow growth, we could be on the verge of a sort of "global blues".
The temptation to finger point foreign trade or migration as the source of problems, the growing concern about allegedly threatened identities and the levels of income inequality within several countries, if ignored, could lead to policy options with fatal consequences for globalization.
That is why we need to engage in a serious discussion about how we can ensure that effective global governance preserves and enhances all the benefits of globalization while addressing its less desirable effects. Action in areas like foreign policy and security, climate change, sustainable development goals and trade rules come top of a to-do list. It is a task for national governments, international organizations and institutions (with a major role for the UN and the EU), multilateral, regional and bilateral fora, as much as for civil society at large.
If not, "global blues" could come at a high price.