Globalisation in retreat?
MTN in Iran could provide the answer
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.