4/3/2018 ‘A false song of globalisation’ - Newspaper - DAWN.

COM

‘A false song of globalisation’

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The success that the current phase of globalisation engineered for giant banks and big
corporations perked up at the commanding height of economies under different stages of
development, led many scholars and policymakers to conclude that nationalism and
protectionism had entered the twilight zone.

The unprecedented movement of capital, goods and manpower across national boundaries, the
emergence of a huge middle class and sharp cuts in poverty worldwide were seen as the
handiwork of West-led globalisation and globalisation alone.

The dynamics of transforming developing economies and emerging markets — from agrarian to
semi-industrial— in boosting prosperity and reducing poverty was ignored. It was also forgotten

‹ (to borrow a phrase from a UK publication) that “global interests compete with national
interests.”
›
Globalisation has a future but it needs to chart a new course
to build a more balanced and equitable economic order

Chinese policies designed to build national champions have narrowed the space for foreign
companies, says American Chamber of Commerce in China.

The self-assertion by nation-states was often managed by regime changes, bringing them into
the international mainstream. The majority compromised their economic sovereignty to
leverage their traditional ties with the West to industrialise faster with the help of foreign
capital, technology and expertise. This helped developing states and emerging markets to
acquire industrial muscle and spurred their urge for self-determination; reminding many
Western thinkers of narrow nationalism and ‘a dog-eat-dog world’ whose age, they thought, is
past.

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4/3/2018 ‘A false song of globalisation’ - Newspaper - DAWN.COM

While developed economies had entered the post-industrial era decades earlier the developing
countries were still, largely grappling with an industrialising world. In this process the less
developed economies, or nation-states were dwarfed by the bulging size and reach of global
markets and giant corporations; more significantly, they developed structural imbalances. After
all globalisation had lately been driven by debts, subsidies, competing currency depreciation and
abnormally low interest rates.

The countries placed on the periphery needed space to re-balance their economies — a problem
that free markets did not address convincingly. This contributed to selective protectionism.

But advocates of globalisation were in for a shock when nationalism and protectionism emerged
from the most unexpected quarters. The West’s bastions of free markets and the most advanced
model of regional cooperation was hit by the ‘lack of confidence’ expressed by common voters in
the British referendum and the US national polls. It marked the triumph of citizen- based
democracy over market democracy. This was not about citizens choosing one political party or
another but an issue of rejecting a dominant system.

These developments mark the beginning of an era in which struggle for self-determination
between and within nations will forge a different framework for international economic
cooperation which is required to create a new economic order.

Here it may be pertinent to recall an observation by British Prime Minister Theresa May: “If you
believe you are a citizen of the world, you are a citizen of nowhere. You do not understand what
the word citizenship means.” And American President Trump says that his administration
“would no longer surrender the country or its people to a false song of globalisation.”

The views of the common citizen were shaped by a strong perception that inequality between the
rich and poor, between and within nation-states, was widening; that temporary and low paid
jobs were turning into a new norm, replacing permanent employment and lifetime careers. Even
for most talented experts, a bight career needed to be shepherded by hopping jobs.

In the wake concerns on rising immigration, Australia has announced that it will scrap
temporary visa for skilled overseas workers to give priority to to its own nationals for local jobs.

But western thinkers are now talking about ‘new nationalism’ and ‘enlightened patriotism’ while
upholding ‘civic nationalism’ demonstrated during major sport events, but rejecting ‘ethic
nationalism’. This is what the London Economist pleads in a recent editorial.

Enlightened patriotism needs to be defined and elaborated to make it work in a chaotic world
even though some of its features are already visible on the global arena. The Chinese are staunch
nationalists but they have not shunned globalisation.

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The narrow, chauvinistic Hindu nationalism with hegemonic overtones has been a barrier to
regional cooperation in South Asia but New Delhi is still strongly committed to globalisation.
This has not deterred the Indian government from erecting tariff barriers to protect its domestic
industry from outside competition wherever thought advisable. In Pakistan the import policy is
being tailored to reverse de-industrialisation.

It is a multilayered international cooperation in the community of nations that is perhaps more

suitable than the zeal for a unified single market, though key central ideas, now emerging, may
still ultimately shape world economic order.

Historical record shows that globalisation has assumed various forms and shapes over the
centuries. In medieval times, empire builders were great pioneers of globalisation. Later captive
markets provided raw materials and served as market for finished goods produced by colonial,
industrialised countries. After the demise of colonialism, international financial markets took up
the baton or the mission of West-led globalisation.

Given a different economic scenario emerging after the Great Recession of 2007-08
protectionism has become inevitable to counter the adverse affects on national economies of the
erratic and volatile global markets. Globalisation has a future but it needs to chart a new course
to build a more balanced and equitable economic order.

Published in Dawn, Business & Finance weekly, April 24th, 2017

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