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Is this the End of Globalization?

Is this the End of Globalization?

Friday, 15 March, 2019 - 08:15
Fouad Siniora
Former Lebanese prime minister.
In recent years, the future of globalization has attracted the attention of the world’s leaders and economic experts. This issue is being discussed at the appropriate time given that the world is being bombarded with new challenges.

The truth is that globalization and modern communication make the world a more connected place, but at the same time, tensions between and among countries have become more widespread. These crises have crossed borders without a visa, as described by late UN Secretary-General Kofi Annan. They are multiplying rapidly and spreading like bird flue to create unrest and conflicts everywhere, leading to more displacement and migration. This is causing a clash of civilizations and cultures. These clashes are ultimately fueling far-right movements and radical populist trends. This in turn, stokes extremism, xenophobia and discrimination that provoke counter-reactions that fuel violence and terrorism.

The fate of globalization has been raised among modern and developing countries alike, especially as Britain is on the brink of exiting the European Union and after the US elected Donald Trump president. As globalization appears to be coming under fierce attack in the West, we are unlikely witness its demise any time soon. What we are instead witnessing is the spread of populist ideology that plays on the people’s nationalist sentiments. The predictable and inevitable outcome is more isolation and extremism, which if left unchecked, would lead to major international conflicts, launch new waves of terrorism and perhaps, even spark a destructive war.

Chinese President Xi Jinping told the 2017 World Economic Forum in Davos: “Economic globalization has created new problems, but this is no justification to write economic globalization off completely. Rather, we should adapt to and guide economic globalization, cushion its negative impact, and deliver its benefits to all countries and all nations.” It is my personal belief that an open economy falls in complete favor of the interests of modern and developing countries.

At the same forum, International Monetary Fund chief Christine Lagarde stressed the need to divide the benefits of globalization as fairly as possible if we wanted globalization to continue. She reiterated warnings made at Davos four years prior over the accumulation of the negative effects of unfairly dividing these benefits. The answer should not lie in self-sufficiency, she said. She instead declared: “There are 3.6 billion people around the world aspiring to better income, to food on the table twice a day, once a day. To turn our back on globalization, to turn our back on helping development, is exactly the wrong approach. To say that globalization is bad because it destroys jobs is a very short cut for something that needs far more analytical work and understanding.”

There is no doubt that even though the gap between rich and poor countries has been narrowed somewhat, the gap between the rich and poor inside one country keeps growing wider. This calls on us to ensure that the rich and poor enjoy equal opportunity because God created all people equal in rights.

This is the problem that we must address. If left without a solution, then we will have had a direct hand in the demise of globalization and we will be destroying the hopes of the least fortunate segments of societies in reaping the benefits of development and prosperity that they deserve.

In this regard, I would like to cite former Italian Finance Minister Pier Carlo Padoan, who said: “I don’t think we’re exiting globalization, I think we’re entering a new stage of international global relations where national policies will shape how globalization eventually develops.”

Reviewing current reform operations is one the challenges we are confronted with. Founder and Executive Chairman of the World Economic Forum Klaus Schwab said: “Reforming existing processes and institutions will not be enough. Government leaders, supported by civil society and businesses, have to collectively create a new global architecture.”

This new architecture must pave the way for cooperation that leads to expanded foundations in the economies of developing countries, which at the end of the day, are the engines that push forward development in those countries. The measures that have so far been taken are not enough. Modern countries have pledged to dedicate part of their GDP to help developing countries avoid the direct repercussions of globalization. It is unfortunate that these promises have not materialized into action.

We must work together to promote the culture of cooperation and resolution of crises, conflicts and war because at the end of the day, whether we are rich or poor, we are still sailing in the same boat. We either sail together or sink together with no one to throw us a lifeline.

While mentioning the impact of globalization on developing countries, we must ask ourselves several questions, such as: What should we do to overcome its negative consequences and bolster globalization in order to improve the lives of people all over the world? How can we transform globalization into a more comprehensive and sustainable tool? This all depends on the ability of leaders in strengthening institutions in their countries. It also depends on improving social security networks and ensuring the sustainability of economic development.

Amid all this, we must remember that the peoples of developing countries are the greatest potential consumers in the modern world. They are the engines of new growth throughout the world. As economies develop, their purchasing power improves. At the same time, as efforts are exerted to resolve internal differences and regional conflicts, their danger on the stability of the world decreases. Based on this, the modern world is better off resolving regional crises wherever they may arise, including in particular, the Middle East where the Arab-Israeli conflict continues to impede social and economic growth in the countries affected by it. This conflict is also fueling extremism and terrorism. Dedicated and intense efforts are needed to resolve this conflict and the one in Syria, as well. The powers fueling the crises must no longer enjoy impunity.

Globalization is ultimately a double-edged sword. It is blessing enjoyed by the rich, but if the necessary measures are not taken to ease its negative impact on the poor, then it could become an impossible predicament. Annan said: “Globalization is a fact of life. But I believe we have underestimated its fragility.” I am hopeful that we may all work on making globalization an element that would bring benefits to everyone.

Excerpt of a speech the former Lebanese prime minister delivered at the Global Baku Forum in Azerbaijan on Thursday.

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