Back in 2002 the former chief Economist of the World Bank Joseph Stiglitz published a book entitled Globalization and its Discontents that pinpointed the dissatisfaction of poor countries to the system that was designed to favour rich nations by protecting their interests.
And this is irrespective of the fact that globalization has been centered on interdependence and interconnectedness.
Brexit and the ongoing Sino-America trade rivalry as well as the US withdrawal from the Transatlantic Trade and Investment Partnership (TTIP) have dealt a big blow to globalization.
In fact we can simply assert that the once proclaimed benefits of openness and specialization as advocated by the “champions” of globalization have become a thorn on the flesh of even those countries that globalization was said to be benefiting more. They are now resurging into protectionism.
Brexit has already dire consequences to the British economy with companies shifting their European headquarters from Britain.
Banks have also transferred more than $1 trillion out of Britain and the confidence among investors’ over the UK markets currently lies in tatters.
On the other hand the Chinese economic miracle that has been an imminent event for the last quarter of the century has been largely spurred by globalization.
Its accession to the World Trade Organization in 2001 tells a good story on how globalization has helped forging sophisticated trade relations with every part of the world and reaped enormous benefits from them.
In the meantime China is the largest trading nation in the world as well as the second largest economy after surpassing Japan in 2009.
It has lifted more than 700 million individuals from poverty, the largest poverty reduction move than any other nation in the world for the past thirty years.
All these moves were highly prompted by globalization that is currently under siege.
The Sino-American trade rift not only reduces China’s contribution to global trade but it also disrupts global supply chains as most of the global trade currently lies in intermediate goods that for a long time has benefited from falling transport costs and related advances in logistics.
The results are slowing economic growth as well as depressed investment environment that gave a room for policy and financial uncertainty.
With all these analysts asks what has gone wrong with globalization to the extent that its major proponents are cuddling back to protectionism.
The truth is that what really changed from the 1990s to the early 2000s was the polarity of the international system. For the first time in the history of the world globalization was superimposed onto the world by a single superpower.
And despite everything, it should be known that some of the problems that were attributed to globalization were, in fact, the dark side of American predominance in the international system.
And so in a way American’s power and its side effects were lumped together with globalization.
It should be noted that when economic power increases and so is the power of a nation to procure and protect its interests.
As it possess economic interests that touch every region in the world it is also threatened by the risk of things going wrong anywhere not to mention at any sector.
With such power having reached a certain threshold as more challenges are being generated they will exceed the rate at which old problems are fixed and eventually outpacing the superpower’s capacity.
It is in this stance we can assert that currently globalization lies in tatters as it has failed to redefine itself in confronting the major challenges it is facing.
This calls for a systemic overhaul to redefine new challenges along with new mechanisms in confronting them concurrent with participation of rising superpowers, such as China, in shaping global rules and institutions.
The writer is a Dar based economist. He can be contacted by an email: email@example.com