Glob­al­i­sa­tion in re­treat?

MTN in Iran could pro­vide the an­swer

Finweek English Edition - - Openers - BY FRIK ELS frike@fin­week.co.za

I’LL CON­CEDE THAT READ­ING The Col­lapse of Glob­al­ism on the way to a mo­bile phone con­fer­ence that at­tracts more than 50 000 in­dus­try peo­ple from around the world comes across as con­trived and con­tra­dic­tory.

The book has been praised for be­gin­ning “a new de­bate” and punc­tur­ing glob­al­i­sa­tion’s “most cher­ished myths”. The fore­most of those myths are that eco­nomics and not pol­i­tics (and armies) shape hu­man events and that na­tion states are “di­nosaurs wait­ing to die” to be re­placed by mega-sized multi­na­tional cor­po­ra­tions.

The new edi­tion of John Ral­ston Saul’s polemic ar­gues that glob­al­i­sa­tion isn’t an un­stop­pable force and has been in re­treat for the best part of a decade.

How do you square that with the Barcelona con­fer­ence? Af­ter all, the cell­phone in­dus­try is noth­ing if not global. You just have to look at the num­bers…

Since the start of the decade the num­ber of global cell­phone users has in­creased four­fold. Ex­pec­ta­tions now are that the 3bn mark will be sur­passed this year, ear­lier than pre­vi­ously fore­cast, and that by 2010 two out of ev­ery three peo­ple on the planet will own a cell­phone (more than those with ac­cess to clean wa­ter).

This year 3GSM was ush­ered in by a deal that fur­ther dis­cred­its Ral­ston Saul’s ar­gu­ment. Voda­fone, the world’s num­ber one mo­bile op­er­a­tor that added an as­ton­ish­ing 200m clients just last year, an­nounced that it out­bid sev­eral oth­ers for con­trol of In­dian op­er­a­tor Hutchi­son Es­sar, which has 23m sub­scribers on the sub-con­ti­nent. It paid US$11bn (R80bn) for the stake. (Voda­fone paid much more for each new In­dian cus­tomer than for the Vo­da­com sub­scribers it ac­quired in 2005, de­spite growth rates in Africa that are higher than in ei­ther China or In­dia; how­ever, Africa’s small div­i­dend from glob­al­i­sa­tion is an­other story.)

Is the mo­bile phone in­dus­try and the rise of mega-multi­na­tion­als the best ex­am­ple of the “in­ex­orable in­te­gra­tion of mar­kets, na­tion states and tech­nolo­gies” – as one of the cheer­lead­ers of glob­al­i­sa­tion, Thomas Fried­man, writes in his best­seller The World is Flat?

Ral­ston Saul says con­trary ev­i­dence is just as easy to come by. Ev­ery­where pol­i­tics is re­assert­ing its power over eco­nomics. Even the great­est ad­vo­cate of free trade and glob­al­i­sa­tion, the United States, has blocked big busi­ness deals for “se­cu­rity rea­sons” from com­pa­nies in Dubai and China.

Last week the EU Com­mis­sion an­nounced that it con­sid­ers Switzer­land’s lur­ing of multi­na­tion­als with lax taxes “il­le­gal”. (As much as 25% of the much touted growth in global trade is sim­ply multi­na­tion­als mov­ing around money in­ter­nally, of­ten for tax pur­poses, says Ral­ston Saul.)

Af­ter mo­bile phone sub­scribers, In­ter­net users form the largest global com­mu­nity. But even here the news isn’t good: China’s curb­ing of Google’s op­er­a­tions in the coun­try will prob­a­bly find its way into the next edi­tion of The Col­lapse of Glob­al­ism.

Mo­bile phone firms have thrived even in the most trou­bled en­vi­ron­ments and dan­ger­ous coun­tries (the Demo­cratic Repub­lic of Congo, Iraq and many oth­ers). The in­volve­ment of SA’s youngest multi­na­tional – MTN – in Iran could prove to be the ul­ti­mate test whether eco­nomics can tri­umph over pol­i­tics. But the latest signs from the Mid­dle East and the US aren’t good.

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