The end of the Cold War, with the collapse of the Berlin wall and the disintegration of the Soviet Union, heralded the dawn of a new era. Many imagined an irreversible global convergence of norms, values and aspirations.
With the free exchange of commodities and the unfettered flow of capital, accelerated by the internet, we imagined that trade, finance and technology could forge unbreakable bonds of peace, affinity and entrench globalisation.
We might have been persuaded that the contest between communism and capitalism, narrowly defined was over and nations, East and West, were economically interdependent.
Moreover, the delusion that western-style democracy was spreading was rampant. The West, led by the United States of America, was convinced that globalisation was singularly powered by the triumph of universal values of freedom, pluralism and human rights. Some Western scholars have audaciously asserted that globalisation is about convergence or integration of products and cultures.
Things are not that rosy in the global house. Confidence in globalisation seems to be waning. World trade relative to global GDP fell by five percentage points between 2008 and 2019. Moreover, global flows of long-term investment fell by half between 2016 and 2019. Foreign direct investment flows between China and America have plummeted to $5 billion from $30 billion in just five years.
It is evident that the global economy is decoupling; undergoing bifurcation. We are seeing the emergence of Western and China spheres of influence. Zero-sum great power competition, like what characterised the Cold War era, is re-emerging. The tone at the top on global disputes is becoming more impassioned, shaped by narrow-minded culture wars that characterise and reify the division between the West, Russia, China and the rest.
What we have grown accustomed to as globalisation has been under assault for nearly two decades: The attack on the World Trade Centre in September 2001, the financial crisis touched off by the US sub-prime mortgage disaster, Brexit, the election of Donald Trump as US president in 2016, the Covid-19 pandemic and Russia’s invasion of Ukraine.
We have not yet recovered from supply chain disruptions wrought by Covid-19. And now the ragging outbreak in Shanghai threatens more disruption. But Putin’s invasion of Ukraine has provoked the biggest commodity disruption.
We are witnessing the most severe disruption in global wheat supplies in generations. Shortage of wheat and bread could touch of regime-threatening civil unrest in countries such as Egypt and Indonesia where bread and noodles are important staple foods.
Russia’s invasion of Ukraine and the West’s brutal regime of sanctions are perhaps the most definitive assault on globalisation. What seemed like an inevitable, irreversible convergence of the world economy has slowed and might be in reverse mode in some cases.
The fury that buoyed Brexit and the rise of Donald Trump persists. President Biden, for example, is encrusting 'Buy American', which is essentially an attempt to rebuild America’s manufacturing.
Our collective future is in peril. Now is the time to pull together and re-write the rules of global engagement for global peace and prosperity.
The views expressed are the writer’s
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