Condivergence: Is globalisation failing?

This article first appeared in Forum, The Edge Malaysia Weekly, on October 11, 2021 - October 17, 2021.
Condivergence: Is globalisation failing?
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That is the core question addressed in a new book, New Perspectives on Globalization, by Professor Setsuya Sato, who teaches “Contemporary Global Issues and Japan” at Tokyo University. Until recently, modernisation was equated with globalisation, a trend that connects the world through economic, political, technological and cultural aspects.

In writing this book, Sato must have read every single important book on globalisation, distilled the issues succinctly, and laid the pros and cons out for the reader to judge. Although the word “globalisation” entered the English language in the 1930s, it became a buzzword after the fall of the Berlin Wall in 1989, but in terms of the number of Google searches for the word, it has declined steadily since 2004.

According to the Global Connectedness Index, published by global delivery company DHL, measured global connectivity rose steadily from 2000 to peak in 2008, dropped in 2008 because of the global financial crisis, and rose again to a new peak in 2018, before declining in 2020, owing to the pandemic.

The trend of worldwide connectivity began with ancient trade across landed continents, particularly between Eurasia and Africa. But real globalisation started with the European discovery of the Americas in 1492 and the circumnavigation of the world, because goods can be shipped faster and cheaper by sea than by land.

Subsequently, the Europeans used coal to power engines, took land and slaves from newly conquered colonies and created imperial globalisation, which eventually became dominated by the US after World War II. America prevailed through not just commanding the seas, but also air, space and cyberspace.

In essence, the world converged to American standards and rules, but with the rise of the old population centres of China, India and newly independent colonies opening up to modern technology and trade, there arose a divergence of power, culture and values, resulting in today’s multi-polar world. As Sato put it succinctly, globalisation has advantages and disadvantages as a dialectical process that can both integrate and fragment while creating winners and losers.

Who wins or loses? Well, it depends …

The height of the globalism (the ideology behind globalisation) hype came with New York Times columnist Thomas Friedman’s 2005 book The World is Flat, with the thesis that technology and the internet had flattened global hierarchies, celebrating globalisation and free trade. But with the 2008 global financial crisis primarily hitting the US and Europe, more and more rich countries became disillusioned with globalisation, so much so that it prompted a backlash in the form of Brexit and US president Donald Trump’s election in 2015/16.

Sato examined the backlash against neoliberal free markets, lack of distributive justice, rise of religious fervour and populist anti-global feelings. These populist resentments against the unequal sharing of profits from globalisation, as the rich countries’ middle class lost out to the emerging countries, suggested that growing injustices meant the world is not flat.

Brexit, Trump and rising immigration reflected the genuine insecurities of the ageing rich populations from the threats from rising powers, and the disruptive impact on their cultures and race from growing migration. Add to this toxic mix the disruptions of technology on middle-class jobs, and the US and Europe, which pushed for open, free and rules-based globalisation, began having serious second thoughts.

So, what is the next world order? Instead of powerful groups such as G7 or G20 — the latter set up in 2009 to give greater representation to newly emerging powers — geopolitical analyst Ian Bremmer has argued for G-Zero, in which no single country or alliance can meet the challenges of global leadership. But what has taken centre stage is the monumental US-China rivalry, first launched by Trump when he raised tariffs on Chinese imports in 2018.

The future of the global order, according to Sato, is not China, but Asia. In 2019, Asia as a whole accounted for 63% of global GDP growth, of which China accounted for 33%, Other Asia, such as India and Indonesia, accounted for 30%, while Japan contributed only 1%.

In comparison, the US contributed only 11% to global GDP growth and Europe 8%, while the others were from mainly emerging markets. Sato points out that while the world is focused on the US-China rivalry, they may have missed out that Asean, as a group, is already the third-largest economy in Asia and may be the world’s fourth-largest economy by 2030.

After surveying the current debate about China’s aspirations, trade war and pandemic, the real contribution of Sato’s book is looking into the critical global issues of population, ageing demographics, gender and migration.

Japan leads in the issue of ageing, with a median age of 48 years, compared with 26 in the Philippines, and 18 in Afghanistan. Gender policies determine how much women are treated equally and used in the labour force. Migration is a huge factor that affects domestic security and productivity. In short, demographics and geography shape human destiny.

After a useful survey on climate change and zero carbon emission, Sato concludes by asking: “What next for globalisation?”

The pandemic has been traumatic because it has infected more than 200 million globally and caused nearly five million deaths. Vaccination distribution has been unequal. The poor are hurt in both health and jobs, causing many to become more introspective and inward-looking after nearly two years of lockdowns.

These insecurities were reinforced by growing natural disasters such as hurricanes, volcanic eruptions and forest fires. The coming global challenge is clearly climate warming, with the United Nations signalling “code red”. We live on one planet, even though we come from different cultures, geographies and values.

I agree with Sato that literacy on global issues is important for all. This is a textbook that I recommend to everyone, written with clarity and balanced nuances on the many facets of globalisation. It shows that globalisation is not an unending story of success or failure, but how we, as individuals, make changes at the local level that have global consequences and vice versa.

Sato is right. Time to act locally to change the global narratives.

Tan Sri Andrew Sheng writes on global issues from an Asian perspective

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