Let’s talk about Globalisation 2.0?

The growing backlash against globalisation has given rise to dangerous protectionism that could roll back free markets and trade. The rise of nationalist leaders like Donald Trump in the US is not helping the cause of a connected world where people and products move with ease. In Europe, far-right parties are making headway after being inspired by Trump. There is talk of rewriting the rules of the game that may have benefitted emerging markets more than the developed countries. Integration of countries, economies and industries peaked after the fall of the Soviet Union in 1991 when the socialist model collapsed. Free trade and capitalism became the buzzword as the ideological war that gripped the East and West ended. The North American Free Trade Agreement and the European Union were small steps that culminated in the formation of the World Trade Organization in 1995. Globalisation has been institutionlised since then; it’s now a way of life. Open trade has been a great enabler in pulling people out of poverty, raising standards of living, and allowed nations to develop further. American companies, for instance, have benefitted immensely as the share of GDP generated by the biggest 100 companies in the US went from 33 per cent in 1994 to 46 per cent in 2013. Only 10 per cent of the world’s public companies generate 80 per cent of profits. And that has been possible because of the wider reach these corporations enjoy because of globalisation.

However, we cannot ignore the negative fallout. As manufacturing processes shifted to low-income countries, and workers migrated to the developed countries, competition increased and subsequently led to job losses, depressed wages and contributed greatly to wage disparity and poverty. When 42 people in the world have the same wealth as the bottom 50 per cent, mass rage is a natural consequence. We are now in the new technology age where digital developments are making boundaries meaningless. The World Economic Forum has said globalisation cannot be reversed or stopped. However, these forums should address core concerns and develop a more inclusive, sustainable and job-creating model that benefits the majority and ends the exploitation of the poor. Free markets should free the spirit of innovation and spark new ideas. Perhaps it’s time for Globalisation 2.0.