Summary:
Gideon Rachman on risks to globalisation; globalisation was made possible by political changes at first; now political changes are threatening globalisation; modern timeline of globalisation, 1978-1991. (07/04/2008)
Notes:
- Most people, globalisation ~ economics, technology and business
- Globalisation was made possible by political changes first; underpinned by political consensus; now political changes are threatening globalisation
- political elites struggling to convince citizens that globalisation doesn't just benefit the rich; losing this argument in any of the major world economies may jeopardise political consensus
- political consensus recent creation; took place in very short period of time: 1978 to 1991, i.e. less than 15 years
- 1978: Deng Xiaoping's reforms; China turns from Maoism to market; most important development
- 1979: Thatcher takes power; abolition of foreign exchange controls; London's rise as global financial centre
- 1980: Reagan takes power; deregulation and tax cuts; huge boost to market ideology around the world
- mid 1980s: creation of single market in EU
- 1980s: discrediting of protectionist populists in Latin America
- 1989: collapse of Berlin wall; Eastern Europe and Russia join globalisation game
- 1991: India moves away from regulation and protectionism
- As a result, now feels as natural doing business in Beijing, Moscow and Delhi as in London and New York
- Could this period of globalisation end, like it did in 1914 and 1930s?
- Most obvious threat: crisis in most important political and economic relationship in the world, between US and China
- Risk in Chinese-American relations is of miscalculation, clash that escalates into something that does real damage; combination of looming recession in US, presidential election and Beijing Olympics are formula for potential trouble
- Other threats (long-term): terrorism and climate change; globalisation depends on ease of travel!
- Biggest risk: politicians losing argument for globalisation; 10 years ago, narrow majority in US in favour of globalisation, now majority against; politicians reacting to this shifts, eg. Democrats taking sceptical line on free trade, Republicans against illegal immigration, Sarkozy arguing for protectionism on EU level
- Indian government lost general election largely because poor, rural voters felt left out by boom; in China, authorities anxious about rural unemployment, environmental protests and wealth gap between rich coasts and poorer inland regions
- rising world food prices, sense that poor have lost out as a result of globalisation
