Opinion | Death of globalisation is overhyped and distracts from its real problem – inequality

Trade and geopolitical conflicts are temporary setbacks

What should worry us more is the inequitable distribution of the benefits of globalisation and the emergence of new technologies that reproduce global disparities

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People wait for free food outside an eatery in Ahmedabad, India, on January 20, 2021. While globalisation has benefited a handful of countries, it has exacerbated the inequality and marginalisation of poorer regions of the world. Photo: AP

Published: 2:30pm, 18 Feb 2023

Much has been made of the threat of deglobalisation, fuelled by geopolitical tensions between major powers, Russia’s war on Ukraine, fragmentation of supply chains and macroeconomic strains. Anxieties about deglobalisation are intensifying amid tensions that are increasingly taking on a prickly tone.

Despite global fractures and growing economic risks, fears about deglobalisation are exaggerated and based on mischaracterisations of what is at play. Deglobalisation implies a sustained unravelling of global commercial flows in the form of cross-border trade and investment. This is far from the reality.

Whenever major powers tussle, international relations become strained, generating risks to global growth and prosperity. Geo-economic frictions between China and the United States over trade and technology supremacy have been most remarkable in their threat to global stability. The effects of global instability are more menacing for African countries.

The World Economic Forum’s Global Risks Report 2023 shows that the world faces multiple crises. While the economic risks are real, the world is not about to be fragmented into hermetically sealed national economic systems.

Concerns over deglobalisation often take for granted that globalisation benefits all countries equitably when, in reality, inequalities have long formed its backdrop.

According to the World Inequality Report 2022, inequalities today are about the same as in the 1980s. The report states that “the richest 10 per cent of the global population currently takes 52 per cent of global income, whereas the poorest half earns 8.5 per cent of it”.

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