Macroscope | World needs a better form of economic globalisation to avoid another crisis

Division between the leading powers has brought the world to an impasse and closer to global conflict than at any time since World War II

A new globalisation that brings the benefits of international cooperation but limits instability and inequality is essential to avert disaster

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Employees work on a truck assembly line at a factory for Jianghuai Automobile Group in Qingzhou, Shandong province, on March 15, 2021. Manufacturing activity in China hit its lowest level since February 2020 last month, according to official data. Photo: AFP

Published: 3:30pm, 1 May 2022

The very idea of globalisation seems like a hollow joke at a time when the world is splitting into rival manufacturing blocs and supply chains, economic and political nationalism is growing and the West is confronting Russia in Ukraine. Yet, Asian countries want to preserve the concept.

The reason is primarily economic. Export-oriented manufacturing economies of the kind that characterise much of East Asia have benefited greatly from open Western markets for more than half a century, and Western companies have benefited from access to relatively cheap Asian labour.

Globalisation was never more than a halfway house or staging point on the road to a united world, though, and it has developed many holes in its roof, cracks in its walls and weaknesses in its foundation. It needs a new design and rebuilding before it collapses, rather than just patching up.

I argued in a presentation 20 years ago at an Asian Development Bank 2002 annual meeting that “globalisation means different things to different people, and it has become an all-encompassing term covering a variety of internationalising trends”.

The fact that these developments were not accompanied by the advent of anything resembling a world government, a unified global culture or a universal language suggested globalisation was no more than a label for describing a set of essentially economic phenomena, I said.

It might therefore be premature to view globalisation as “a process destined to go forward under its own momentum. The borderless world of business is subject to disruption by nationalism, and there is evidence that this is producing friction.” Those remarks proved to be not far wide of the mark.

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.css-1m2rp1p{color:#34b8b5;}Macroscope | World needs a better form of economic globalisation to avoid another crisis

Macroscope | World needs a better form of economic globalisation to avoid another crisis