Gideon Rachman has an interesting column in today’s FT on the “political threats to globalisation.” (registration required to read the whole column). His argument is quite simple, quite powerful, and quite troubling.
Globalization is not an economic phenomenon – as we’ve come to think of it – it is primarily political. As Rachman points out, it was the politics that drove the process forward – including China’s embrace of a more open economy, collapse of the Berlin wall, deregulation in the US and the UK in the 1980s, and move away from protectionism in India in the 1990s.
Yet, today, it is also politics that is driving globalisation back – and not only in developing countries, but in developed countries as well. Whether its the desire to protect domestic markets in Europe or poverty pressures in India – politicians around the world seem to be more empowered to run on the protectionist, populist, or anti-globalization agenda.
Rachman hits the nail on the head with his argument, but, perhaps, things are not as bad as they may seem. Globalization is still more about choices than rhetoric. And although its popular to run on the anti-globalization agenda I wonder if political leaders across the board can really go far in limiting competition, controlling access to resources, protecting domestic industries, restricting investment, and nationalizaing companies. If even Chavez is facing serious questions in light of his moves to isolate the economy, what can be said of others?
Although solving the politics of economics is still rarely recognized as a key development issue – it may be gaining prominence in different circles.
Published Date: April 09, 2008