Globalisation has entered a critical phase, as the on-going economic disruptions have prompted many of us to re-examine its promises. The world today is characterised by pronounced fragility and heightened uncertainty, fed by external shocks and multiple crises that are dangerously self-reinforcing. Against the backdrop of these unprecedented challenges we are witnessing an economic and geopolitical power shift from the developed to the emerging world. By 2030, most of the world’s largest economies will be non-Western and more than half of the world’s largest corporations will have their origins in emerging countries. This will directly impact the way globalisation works.
Last month, the world’s power elite gathered at the Horasis Global India Business Meeting to debate the current state of the Indian economy and the world at large. Participants coined a new buzzword: reverse globalisation. As India and other emerging economies grow in prominence and rewrite the rules of globalisation, some among the initial protagonists of globalisation — the industrialised countries of the West — are overtly advocating more protectionism, nationalism and anti-globalisation. The Global India Business Meeting offered a unique opportunity to wake up consciences and ambitions of the Old West, and to remind the international community of the dangers and sufferings that such attitudes have generated in the past.
One of the main criticisms made of globalisation by its detractors has been that it was western-driven and western-centric — in other words, that the West calls the shots and that most benefits go to the western players. Joseph Stiglitz proclaimed that the so-called Washington consensus vandalised the world.
Yet, as globalisation was gathering momentum, it assumed new and striking features, which run contrary to that western-focused characterisation.
First, non-western national players started to emerge as vital sources of energy and initiative in globalisation. India is clearly one of the new engines of globalisation, with her companies expanding globally at an unprecedented pace. And the country is increasingly turning to Africa and other newly emerging economies, often filling the void left by Western countries. In more than one respect, the world is benefitting from India’s economic growth. Other large countries like China, Brazil and Russia are among the new globalisers, while smaller players (for example, Singapore, Finland and Estonia) contribute to maintaining globalisation’s vitality through niche positioning and technological innovation.
Second, globalisation has moved from being chiefly characterised by a rapid increase in trade and international investment to combining a set of more complex mechanisms and modes of cross-border exchanges. The world is flat, as Tom Friedman holds, and Western multinationals and Asia’s new outsourcing champions combine their talents and comparative advantages to co-produce their services.
Third, some immaterial dimensions of globalisation have started to emerge, in which culture, history and spiritual values are playing an increasingly important role. In 2012, Abu Dhabi will to open a satellite of the famed Louvre museum in the United Arab Emirates — a project that led many French to believe that Europe is selling its soul. This initiative yet remains one of the most exciting examples of what true globalisation could be.
Fourth, globalisation has ceased to be the exclusive business of nation states and big business. A new group of players, which one could call global local players, is assuming increasingly important roles in shaping globalisation: cities are competing with cities, regions with regions, to attract investment and create value at the global level.
Those four trends are not contradicting the first wave of globalisation. Nor are they cancelling it. Reverse globalisation is not a reversal of globalisation — the process of globalisation is irreversible. Actually, those four trends are reinforcing globalisation by giving it the respectability — and hence the sustainability — that it once lacked. Half of mankind still lives on less than two dollars a day: if globalisation does not benefit those people, it is not only doomed to fail: it will also be remembered as a tragedy.
The fact that a country like India, with its almost two-digit growth but also with its 300 million poor people, is emerging today as both a major beneficiary of globalisation and a major driver in its future should be regarded as an opportunity. Yet, it remains a challenge, because the involvement of major players from the emerging economies in globalisation also requires a rapid discussion about their participation in the overall governance of global affairs. Entrepreneurs, investors and consumers should enter a true partnership relationship with India and other emerging economies, making reverse globalisation a win-win proposition for our global economy.
The author is founder and Chairman, Horasis
