Remember the demise of globalization?
As the COVID-19 pandemic wreaked havoc on the
global economy and US-China tensions soared, many a commentator trotted out a
“globalization is dying” narrative, claiming that the dizzying flow of goods,
services, people, capital, and ideas that define our world would soon be
confined to history.
اضافة اعلان
Russia’s invasion of Ukraine and the associated
geopolitical fracturing added to the chorus. Yet the reality is that
globalization is neither dying nor in decline. Our world is more connected than
ever and, if history is any guide, connectivity — like time — does not move
backwards. Yes, major shocks like a world war or a pandemic can slow the clock,
but eventually it begins ticking back toward the mean of relentless
connectivity.
A recent report by the UN Conference on Trade
and Development (UNCTAD) on global trade offered just one snapshot of where we
are headed. World trade hit a new record of $32 trillion in
2022, UNCTAD reported. Goods trade hit $25 trillion, a 10 percent increase from
2021, and services trade clocked in at a record $7 trillion, rising 15 percent
from the previous year.
Perhaps more importantly than the dollar figure,
the volume of trade was up 3 percent on the year. As UNCTAD noted, “positive
growth in the volume of international trade indicates resilience of global
demand.”
By now, we all have heard the stories of the
dizzying supply chains that bring us our coffee and tea in the morning, or the
fuel and the vehicles that transport us, the proteins and grains that energize
us, the medicines and vaccines that heal us, and so much more. The global
shipping revolution is why Europeans wear fast fashion shirts made in
Bangladesh, Africans and Arabs swipe for information on their smartphones, and
soybeans from Brazil nourish pigs in China.
We should still marvel at our interconnected
world of trade, but we should not use it as the only marker for globalization.
What about people flows? Before the pandemic, the air travel industry recorded
more than a billion international passengers. According to the International
Air Travel Association, we are now back at about 75 percent of the pre-pandemic peak. Airlines are on track to be profitable again in 2023. Global
wanderlust is hard to contain.
As for global migration, we have witnessed a
steady rise in numbers over the past few decades, hitting some 281 million
people classified as international migrants worldwide, according to the
International Organization for Migration (IOM). While this is still a modest
percentage of the world population, the fact of the matter is that migration
has emerged as a key option toward upward mobility in many parts of the
developing world.
Many of the “globalization is dying” narratives have emerged from Western commentators and industry leaders. Their vision is myopic. All they need to do is look around.
As for global capital flows, they remain
resilient and strong, according to research by the Brookings Institution. These include everything from public stock market purchases
to international debt issuance to foreign direct investment. Today, with the
swipe of a finger, we can buy shares in everything from a Chilean copper mine
to a Chinese electric vehicle maker. Stock markets worldwide now exceed $100
trillion in market capitalization.
Many of the “globalization is dying” narratives
have emerged from Western commentators and industry leaders. Their vision is
myopic. All they need to do is look around. The US stock market, the deepest
and most active in the world, benefits from foreign investors to the tune of
some $13.7 trillion in holdings of
US equities. Those foreign holdings account for nearly 30 percent of the entire
US stock market capitalization.
What is more, the US International Trade
Administration estimates that some 9 million jobs are supported by American
exports. Meanwhile, the US Commerce Department notes that 16 million jobs — 10
percent of total US employment — is “directly or indirectly attributable to
foreign direct investment.” If you are keeping count, that’s 25 million jobs in
the US owing to globalization.
As for the rest of the world, they never got the
memo that “globalization is dying.” In fact, by the looks of it, governments
and people across Africa, Asia, and the Middle East — home to 75 percent of the
world’s population — are busy doing trade deals that will fuel the future. The
African Continental Free Trade Area agreement represents an ambitious vision
for continent-wide trade. While many bumps remain in the road, it sets an
important marker. Meanwhile, the Regional Comprehensive Economic Partnership, a
mostly Asia-wide multilateral trade deal, brings together 15 countries
representing about 31 percent of global GDP.
The Middle East and North Africa region benefits
from strategic geography as a crossroads of trade flows between east and west,
while also serving as a major source of the world’s energy and surplus capital
that powers globalization. The UAE has been busy striking new bilateral trade
deals with India, Israel, and Indonesia, with more in the works. The UAE, in
many ways, sits at the intersection of globalization, both as a recipient of
its flows of goods, people, capital, and services, as well as a catalyst of its
growth as an investor, trader, and enabler of connectivity via its aviation and
shipping hubs.
For Egypt to achieve its true potential, it
would need to better leverage its enviable geography at the intersection of
Africa, Europe, and the Middle East. Saudi Arabia is finally leveraging its
geo-economic potential through a series of reforms that are connecting the
Kingdom to the world in ways unimaginable a few years ago. Simply put, the
countries that leverage connectivity will succeed, and those that do not will
fall behind.
In the end, the pandemic demonstrated that even
the most dramatic shock to our systems cannot dislodge the relentless flows
that make up globalization.
Afshin Molavi is a senior fellow at the Foreign
Policy Institute of the Johns Hopkins School of Advanced International Studies
and editor and founder of the Emerging World newsletter. Twitter: @AfshinMolavi
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