Globalisation, Old And New

Context: Globalisation is morphing as new agendas come into focus. These now drive action on climate change, taxation of global companies, tackling terrorism, sharing vaccines.

Understanding how the “World is Flat”: by Thomas Friedman -

• It is believed that the world is flat in the sense that the competitive playing field between industrial and emerging market countries is levelling.
• The trigger events for this phenomenon were the collapse of communism, the dot-com bubble (resulting in overinvestment in fiber-optic telecommunications), and the subsequent outsourcing of engineers enlisted to fix the perceived Y2K problem.

New globalisation: Marked by following characteristics –

• Morphing of new agendas: These now drive action on controlling climate change, taxation of global companies, tackling terrorism, sharing vaccines and the like.
• Coming together of nations: Cross-border problems in a more integrated world are forcing countries to come together, even as elements of traditional globalisation lose traction.
• Rising protectionism: In 2019, global trade shrank in absolute terms for the first time in a decade and did so again in 2020 because of the pandemic.
• Shrinking free movement of people: Europe and North America account for over half the total of world migrants, and their number has shrunk.
  • Brexit and Donald Trump’s policies have signalled the reversal of a 70-year trend of immigration regimes getting progressively more liberal.
• Traditional elements of globalisation continued:
  • Like the cross-border movement of capital – useful for India since it is a net importer of capital.
• Impact of new technologies: That led to Thomas Friedman’s “Flat World” thesis.
  • For e.g. An accountant in Bengaluru can work out tax calculations for someone in Boston, and a radiologist in Kolkata can analyse the results of a medical scan for a patient in London.
• Growth of social media: The giant tech companies that dominate the field have had a free run but have increasingly come up against sovereign state power, including in India.

Challenges for India:

• Biased climate talks: Though India is an enthusiastic implementer of the Paris Agreement of 2015, it will get no assistance (financial or technical) to switch to new technologies and give coal-based energy.
  • At the same time, the countries responsible for much of the historical emission of carbon gases get a free pass.
• Migrants and remittances issues: India will be the loser if the movement of people is restricted. It is the world’s No. 1 source of migrants – which also makes it the No. 1 recipient of remittances.
• Restricting social media: Given the rise of powerful autocratic states, it will be a difficult challenge. All the more important therefore that it be taken on.