1, Globalization is getting increasingly bad press in the West nowadays.

Populist movements allege that it

does not benefit the average citizen very much, if at all. Instead, they tout protectionism and
unilateralism. National policies, whether with respect to trade or financial regulation, are seen as the
surest way to restore national greatness.

But this populist agenda is based on the deeply flawed premise that international cooperation and
international trade are zero-sum games, producing only winners and losers. In fact, cooperation and
trade can deliver benefits to all countries. For many years now, they have increased global security and
certainly global prosperity, with hundreds of millions of people lifted out of poverty, both in the
developed and the developing world.

To be sure, globalization needs rules and a recognized framework to ensure that it benefits everybody,
delivering sustained and inclusive economic growth. As with national legislation, it is a framework that
requires constant adjustments. But to abandon it altogether and retreat from globalization is the wrong
answer. On the contrary, we should be seeking ways to deepen and broaden international economic
cooperation.

In my view, the G20 is the best forum for increased and inclusive cooperation. Of course, the G20 is not
perfect, but it is the best institution we now have for achieving a form of globalization that works for
everyone. Through it, the world’s main industrialized and emerging countries have worked together
toward constructing a shared global order that can deliver increasing prosperity. Indeed, the G20 is the
political backbone of the global financial architecture that secures open markets, orderly capital flows,
and a safety net for countries in difficulty.

The G20 has achieved much in recent years, including better coordination on financial regulation and
international taxation. And, as the country that holds the G20 presidency this year, Germany is
committed to continuing the important work begun under our most recent predecessors in China and
Turkey.

For example, more needs to be done to strengthen the global economy’s resilience against sudden
shocks. So one of the G20’s top priorities this year will be our work to prevent a recurrence of a global
financial and economic crisis like that of 2008-2009, which stemmed from a myopic, debt-based growth
model.
But, in order to tackle the gulf between the richest and the poorest countries, we need to go beyond the
G20. In particular, the G20 – indeed the entire world – must reach out to Africa at this critical moment in
the continent’s development.

Beyond the moral question of raising Africans’ living standards, the continent’s development is crucial to
reducing geopolitical risks. But investment in Africa is still low, depriving people in African countries of
opportunities to improve their lives.

For these reasons, the G20 during the German presidency is working to intensify its partnership with
Africa. A central pillar of this effort is the “Compact with Africa,” which provides a framework for
supporting private investment, including in infrastructure. We propose that, with the G20’s political
backing, African governments, international organizations, and bilateral partners prepare
comprehensive, country-specific investment compacts to encourage private-sector investment. Each
country is to implement a bespoke package of measures to decrease its investment risks.

Essentially, the Compact with Africa is a contribution to implementing the African Union’s Agenda 2063
blueprint for economic development. That AU agenda provides guidance for improving macroeconomic,
business, and financial frameworks across the continent.

While the Compact with Africa is open to all African countries, five have already committed to
pioneering this new approach: the finance ministers of Côte d’Ivoire, Morocco, Rwanda, Senegal, and
Tunisia want to work on compacts and have expressed this in writing. I have invited them to attend the
G20 Finance Ministers and Central Bank Governors meeting on March 17-18 in Baden-Baden.

At that meeting, my G20 peers and I will offer these countries an international platform to present their
plans. We want to discuss with them, and the heads of the African Development Bank, the World Bank,
and the International Monetary Fund, what the elements of country-specific investment compacts could
be.

Afterwards, these five countries, together with international organizations and bilateral partners, will
select the specific measures and instruments to be included in each individual investment compact. The
G20 will provide high political visibility, helping to raise investors’ awareness of these changes. I am
confident that significant progress can be achieved when all partners involved work together closely and
on an equal footing.

2, Globalization has changed the role of the state politically because of strengthened interstate
relationships and dependence on one another. States were created to be sovereign but now, due to
globalization, often give their sovereignty away to ‘pooling’ (Shaw, 2000: 185) in conventions,
contracting, coercion and imposition (Krasner, 1995/6). This has led to increasingly similar jurisdictions
across states and to power being seen as economic rather than political progress (Shaw, 2000: 186-187)
because states now make political progression and regression together, causing states to become more
developmental (Heywood, 2007: 100).

The state role has changed because most states now have high dependence on others. It is hard to
imagine Britain governing and acting as a state independently of the USA’s influence and relationship.
Since the Second World War, Britain and other Western states have become ‘structurally dependent,
militarily and financially on the USA’ (Shaw, 2000: 116). Britain, along with many other countries, relies
on the US as a guiding force because although all states supposedly have sovereignty, they naturally look
for authoritative power to lean on. Without a ruling global power, the US is a figure of authority to rely
on that has ‘generally played a leading role’ (Shaw, 2000: 241) since 1945 because it has had the
‘capacity, will and acceptance to provide leadership’ (Brown & Ainley, 2009: 143). This has resulted in a
lack of clarity by Britain and other states in acting autonomously: many of the government’s decisions for
the state are based on the judgements of the state’s friends, allies and even enemies. Thus, the state’s
role has changed from being an authoritative figure to a dependent figure relying on others making
decisions or making decisions based on other’s beliefs. However, this could be seen as positive, as a
strong state relies on strong allies.

Socially, globalization has had a problematic effect, making people and states more at risk and causing
the state’s role to change to encompass solving these issues and becoming a protector rather than a
controller. The main example of globalization’s negative state impact is the formation of terrorism. Our
world’s ‘old wars’ of armies and battles are being replaced by ‘new wars’ where nuclear weapons and
terrorism rule (Kaldor, 1999). Terrorism is a new controlling power with its own network system, showing
a decrease in the role of the state socially, as people are creating their own authorities to control their
people and take over the role of the state. The new terrorist threat has caused the state to work in areas
that were previously unnecessary, controlling the threat’s impact. After the 9/11 terrorist attacks, the US
believed that states should become more sovereign as a result of the increasing terrorist threats to our
society (US National Security Strategy, 2002). Since the Treaty of Westphalia, state sovereignty has
decreased greatly, but now terrorism is possibly having a reverse effect, making our states more like they
were originally rather than differing them further. This is a debatable move, as faced with an increasingly
powerful network, would we not be stronger if forces were united rather than states separating and
standing alone? This idea is supported in the European Security Strategy (2003: 1) released after 9/11,
which says that ‘no single country is able to tackle today’s complex problems on its own’, illustrating how
globalization problems have decreased state power and effectiveness.

The expanding epidemic of AIDs and other deadly diseases due to amplified cross-border movement is a
social problem of globalization changing the role of the state. In 1988, just seven years after AIDs was
recognised, there was 150,000 cases worldwide and more than 400,000 by 1991 (Baylis & Smith, 1999:
25). Although a global issue, in which global companies, campaigns and NGOs all work to help, the state
has also had an important role to play in combating further spreading of this disease by ‘activating their
public health systems, both individually and through regular intergovernmental consultations’ (Baylis &
Smith, 1999: 25). The state’s role in this area should be further enhanced as a vital method to stop future
spreading of AIDs through education, provided by positive relationships between developed and non-
developed states.

Our progressively clever world allows barriers between states to be broken through technological
globalization (Cable, 1999: 32). The media is a major factor: worldwide newspapers and television
stations are now commonplace, creating the impression of the world being one state and raising
awareness of events elsewhere in the world because states are no longer separated. An example of the
globalizing media is BBC Worldwide, our own state’s media system which has become a global
organization whose mission is ‘to maximise profits…by creating, acquiring, developing and exploiting
media content and media brands around the world’

3,Countless super-organisations and super-brands have singularly been an outcome of this very idea.
Most major economies today are reaping the benefits of a borderless imagining of the planet. For our
country, the context is all the more amplified as it was the opening of the Indian economy (and markets)
decades ago that triggered an era of unprecedented growth.

But as the idea of globalization has matured over the years, it has also become more nuanced and
complex.

The most important strand, perhaps, is that it is no more only an economic idea. Today, the term
globalization has socio-political interpretations as well. In that context, it is seen as a diluting agent for
nationalistic interests and identities. The unification globalization proposes and thrives on, is seen as a
cause of alarm in a socio-political arena. The unrest we are seeing across the EU and America is but a
sign of the definite discomfort with the idea – Brexit being one of the most vocal call yet for de-
globalization.

Even with the economic context, there are warning signs. The meltdown of 2008 proved how dangerous
the consequences can be if all national economies are joined at the hip. And if globalization was
supposed to level the playing field for all in an economy, it hasn’t panned out like that either. We have
not seen an equal number of world-beating companies coming out from emerging markets, and the
fruits of growth in countries have also not been distributed equally. Globalization has worked more for
export-centric economies. Broadly speaking, it has opened up the emerging economy markets for
behemoths from developed markets.

That’s why the conversation on de-globalization has gained decibels.

Economists like Ruchir Sharma have spoken about economies becoming more inward-looking. In the
earlier days, per capita GDP growth was fuelled by export growth but today countries with large
domestic markets (and low export power) like Peru and Indonesia are on their way to economic
prosperity. Even a behemoth like China, which built itself singularly on exports all these years, is looking
for ways not to escalate exports further but increase domestic consumption.

In the light of historical facts, a certain bit of protectionism isn’t a bad idea either. The 30% local sourcing
stipulation that the Indian government has for those foreign players planning to manufacture in India, is
but a way to keep the local manufacturing ecosystem robust while opening up our vast market to the
global heavyweights (That Apple, to name one company, did not buy into the argument for
manufacturing iPhones is another story but we must not abandon such ideas for indigenous growth). It is
but a marker of China’s sharp understanding of globalization’s consequences that even in the new-tech
consumer space – tech being the biggest and most borderless leveler nowadays - homegrown giants like
Alibaba, Baidu and Didi Chuxing score over Amazon, Google and Uber.

But this is not to say that it’s time to wrap-up globalization. Globalization remains, to this day, a
genuinely breakthrough idea. Its power to unlock growth remains unparalleled. The opportunity in front
of us is to look at its history and align it to current realities.
What we need are stipulations that are just as universally accepted across markets. Government
intervention will not only frame the phenomenon of globalization better but empower it further by
creating a truly level playing field. Take, for instance, a universally accepted local sourcing framework
that works across markets – then an organization like Apple should have no qualms in accepting it as it
will clearly outline a uniform pathway for growth for manufacturing brands and local OEMs in all
markets. Similarly, if we have synced guidelines for FDI in all markets and across sectors – be it retail,
consumer internet or even defense, it will infuse a lot of clarity. In my opinion, a framework like that
sharpens the idea of globalization and broad-bases economic growth. It also signifies greater
commitment from governments in making it work.