The failure of globalization to benefit all, the growth of inequalities in international trade and the negative effects of climate change were the focus this morning of a joint meeting of the Second Committee (Economic and Financial) and Economic and Social Council.
Addressing the topic “The changing political economy of globalization: multilateral institutions and the 2030 Agenda”, speakers also emphasized the technology explosion, rising unemployment and the need for global solutions.
Opening the event, Dian Triansyah Djani (Indonesia), Chair of the Second Committee, said the notion of globalization as a prime driver of economic growth was increasingly being challenged. The financial crisis of 2008 had travelled across national borders to affect every country in the world. Inequalities had reached record levels, with less than 100 individuals controlling as much wealth as the bottom half of the world’s population.
The dramatic increase in migration and influx of refugees had also brought new problems and pressures to many Governments and communities, he said. Ever-expanding technological innovations allowed for automation of many tasks in industry and manufacturing and in services. Workers were being displaced and unemployed.
Frederick Shava (Zimbabwe), President of the Economic and Social Council, agreed that globalization had brought adverse effects, with benefits for only a few. It was necessary to change political narratives that proposed solutions based on isolationism and tribal instincts.
The challenges of climate change, poverty, terrorism and conflict called for global solutions, since no one country could deal with the issues alone, he said. A retreat from multilateralism and meaningful global cooperation would pose a significant threat to peace and prosperity.
Thomas Friedman, The New York Times columnist and author, said the world was witnessing three accelerations simultaneously, as the market (globalization), Mother Nature (climate change, population growth) and Moore’s Law (technology) raced ahead.
He used one year — 2007 — as an example of the technological explosion at its height. That year, Steve Jobs had unveiled the iPhone, Facebook and Twitter had gone global, Airbnb had come out, Amazon had introduced the Kindle and the cost of sequencing a human genome went from around $100 million down to $1. “2007 was the biggest technological inflection point since Gutenberg invented the printing press, and we missed it because of the 2008 economic collapse.”
As for globalization, trade in physical goods and financial products and services — the hallmarks of twentieth century globalization — had flattened out and even declined, he said. But the globalization of information flows meant the world had never been more interconnected. “And you haven’t seen anything yet.”
The flows of friends, renters, opinions, crowdfunding, instant messages, peer-to-peer payments, pictures, education, college courses, design tools, music, video, news, cloud-based tools, searches and raw video were exploding as the new globalization tied people together. The country that built the infrastructure and educated its people to connect up to more flows would be the one that thrived in the twenty-first century. “This is not your grandmother’s globalization.”
Mother Nature was exponentially changing too, through climate change, population growth and biodiversity loss. “You’re all familiar with this one, but Mother Nature is going through her own exponential, which we’re seeing in Florida right now,” he said.
During an ensuing question period, speakers asked Mr. Friedman about the “dehumanizing” aspect of the world he described, sharing globalization’s benefits and how Governments could join the accelerating pace.
The Inter-Parliamentary Union’s representative noted that delegates at the United Nations spoke about “people-centred development”, while Mr. Friedman referred to markets and technology as uncontrollable forces. He questioned how people could master change and bring it to a human level.
Mr. Friedman said the delegate would be surprised how much of his new book (Thank You for Being Late) was actually about community. Writing it, he had discovered that all that mattered in the end was the human to human connection. The only important things today are those you could not download, like family, parents, community and traditional values.
Guyana’s representative said his country relied on the export of a few commodities. How could countries like his be competitive in a global market and share the benefits of globalization?
Mr. Friedman responded that a country must have infrastructure that connected to the information flows. The best jobs of the future were going to be in science, technology, environment and math. In a world of smart machines, the winner would be the one who had the best questions and could translate the answers to another human being.
Canada’s representative said surviving in the world Mr. Friedman described meant being innovative and taking risks. How could Governments, generally less innovative and more cautious, beef up on those qualities?, she asked.
Mr. Friedman responded that Governments must look at innovation at the social level — lifting people up to thrive. He believed a return to pluralism and diversity in the future was going to explode. In a pluralistic society, one could forge a horizontal social contract and have a huge advantage, turning ideas into products, goods and services.
Delegates then joined in an interactive discussion moderated by Pamela Falk, Foreign Affairs Analyst, CBS News. Panellists included: Anu Madgavkar, Partner, McKinsey Global Institute; Michael G. Plummer, Director and Eni Professor of International Economics, Johns Hopkins University; Mariama Williams, Senior Programme Officer, The South Centre.
Opening the debate, Ms. Falk asked Ms. Madgavkar if inequality was considered a driver of public discontent.
Ms. Madgavkar said a much higher percentage of households had lower wages and per capita incomes than 10 years ago, unlike in previous decades. The basic assumption that circumstances would improve had come under severe challenge. People who felt their lot was worsening and would never improve were more pessimistic about globalization.
Ms. Falk then asked Mr. Plummer what could be learned from regional responses to globalization and their impact on the future of world trade.
Mr. Plummer said he had never seen trade become so unpopular, but structural changes for which trade was blamed were often in fact the result of technological advances. The effects of technology must be managed through active public policies, which required innovative thinking.
The debate on trade needed to be refocused, he continued. Globally, it was institutions that had to evolve with the 21st century, yet that had not occurred. The last successful global agreement on trade had been in 1995. The economy had radically changed since then, but no new global rules had emerged.
Turning to Ms. Williams, Ms. Falk asked how global institutions could be altered to make globalization work.
Ms. Williams said that it had been a very interesting year, with the thirtieth anniversary of the Right to Development, the implementation of the 2030 Agenda for Sustainable Development and the coming into force of the Paris Agreement. Those events had shown the enduring power of multilateralism.
Restlessness and frustration came from hyper-globalization that had been “oversold”, she said. Globalization was seen as a political project that had shifted the balance away from people-centric democracy, and Governments needed to right the ship.
The migration and refugee crisis had shown that globalization was benefiting skilled labour and finance, but many in the middle and bottom economic sectors did not feel they had benefited, she added. Globalization needed to be balanced with local decision-making and social protections.
Noting that World Trade Organization negotiations and trade deals had stalled, Ms. Falk asked what could be done. She also questioned if equality was intrinsically valuable.
Ms. Madgavkar said it was necessary to think of inequality on different levels, not just outcomes, but opportunities. Complete equality of outcomes was unachievable but equality of opportunity and freedom of choice were critical. Globalization had enabled many developing countries to increase access to opportunity.
The Inter-Parliamentary Union’s representative noted that public discourse was infected by a “free trade or nothing” approach, as opposed to managed free trade.
India’s representative asked about the 2030 Agenda and Sustainable Development Goals, and whether that agreement was the answer to the backlash against globalization.
Mr. Djani, concluding the session, asked what role the United Nations could play in spreading the benefits and counteracting the negative consequences of globalization. All elements were in place to find the collective will to make the world a better place, notably the milestone global agreements of 2015. It was now necessary to summon the political will to get things done.