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AB 2000 studies

Alain Boublil Blog

 

Globalization : The ideal guilty

When we are facing such a crisis, we need to find a responsible and even a guilty. Globalization looks like the favorite and it is not going to be without effects on “the days after”. The outbreak, as we can know it, was born in China, in one of the country industrial capitals, Wuhan, frequently nicknamed as the “Chinese Detroit”, so developed is its car industry. The outbreak, as also without being sure of it, expanded in Northern Italy and in Alsace because people, coming from the contaminated area, passed on the virus. Always through the mtrips of infected persons, it expended itself into the north of France, Brittany and Spain, and, at last into the United Kingdom and the United States. It is the formidable development of travels, made possible by the transportation costs fall which gave to a local outbreak a worldwide dimension.

The outbreak has also heavily affected the Chinese economy. But as that one has become an essential element of the supply chains in the world, that has had heavy consequences on the industries outside of China. Companies then endured a double penalty. Their supplies were not guaranteed and their local markets were jeopardized by the health measures decided by public authorities to slow the development of the pandemic. The States were, in their turn, confronted with the impossibility to get an enough quantity of equipments and pharmaceutical products, necessary to contain the outbreak and to cure sick persons. Enterprises had de-localized their productions and France, as many other European countries, was dependant from suppliers located at the other end of the planet. Production costs had been reduced but the availability of these strategic products during a crisis was not anymore guaranteed.

In addition to the sanitary and economic consequences, the liberalization of international financial transactions, as another face of the globalization, has provoked an unprecedented fall of financial markets, aggravating so the traumas generated by the outbreak, deaths rapid rise, unemployment sharp increase resulting from the confinement measures decided everywhere where the outbreak was hitting. At last, populations were permanently informed by a global media system about the situation of every affected country. Each of these factors has contributed to the aggravation of the crisis and globalization has transformed a local event into a catastrophe hurting at least half of the world population. Fifty years ago, an outbreak, whatever serious it was, occurring in a Chinese province, wouldn’t definitely have provoked such a crisis.

So globalization is at the origin of the transmission of this sickness and of the economic and financial consequences of its transmission in all the affected countries. When they reacted,  the public authorities, especially in France, did not even missed the opportunity to denounce its excesses, in particular when the point was to get masks, active pharmaceutical components or breathing equipments. But globalization is an irreversible phenomenon. Who could imagine a world without internet, where inhabitants would be deprived of their mobile phones and where they couldn’t, at least once a year, go to spend their vacations where they want and where they can afford it. Who could think that an innovation occurred in an enterprise or in a country could stay inside them? Obviously, nobody. The lessons it will be necessary to draw, the day after the crisis, shouldn’t be limited to the trial of globalization. They will have to be focused on the improvement of international cooperation, where they will be a lot to do, and on the economic factor behaviors evolution inside each country.

In France, consumers must at last understand that they are themselves the main responsible of economic balances and unbalances. They are starting to recognize that regarding environment. They will easily understand it confronted with sanitary risks generated by too long supply chains, but that won’t be enough. Big retailers will have to take lesson from that crisis regarding foods whose short supply chains are more protective. That will also contribute to jobs in rural areas whose desertification has become a major society challenge. Household who are preoccupied by their jobs as by their children ones will have, at last, to admit that it is the nature of their expenditures which is determining their level. Globalization brought to them two benefits. Competition generalization has allowed to contain inflation and borders opening has increased the variety of offered choices. But these ones must show they are responsible through not abusing of these benefits. Arnaud Montebourg, when he was a minister, had made a mistake when he talked, regarding these issues, about “economic patriotism”, because the word patriotism refers to a sacrifice. But in this case, there is no sacrifice. It is everybody fully understood interest, we perceive it today, and the State mission is to make it realized.

Companies also carry a heavy responsibility. In France, they thought that the good answer to globalization was massive de-localizations and to make foreign acquisitions. The current crisis shows to which extent to be dependant of imported pieces can make them fragile. Atop of that, these foreign acquisitions, which allow their managers to increase their payrolls, can put them into difficulties and provoke, in the related countries, hostile reactions. We see it with Nissan in Japan and KLM in the Netherlands. We can also question ourself about Peugeot acquisition of Opel, if, instead of saving the company, it wouldn’t have been better to leave its productions in the U.K. and in Germany disappearing and to recover its market shares. The major groups must also be conscious about their responsibilities regarding their local suppliers and they shouldn’t try to get back on them the margins they were not able to get from their clients. In doing so, they will strengthen their supply chains in making them shorter. They will acquire a greater resilience in the case of a crisis like the one we are going through.

At last, the State cannot stay indifferent in front of economic agent behaviors. Along with a vast pedagogic job, dedicated to household and corporate, it must not anymore hesitate to intervene when issues as essential as supply security of sanitary goods and medical equipments or independence, each time it is possible, regarding essential goods and services, are at stake. It must be put an end to the “free and non biased competition” religion. The crisis is going to cost huge amounts of money to the country. Damages, both regarding people and economic activity, would have been much less heavy if a brake had been put on time to the excesses regarding de-localization, foreign acquisitions or sales to foreign companies. The State has been a bad shareholder and a poor strategist because it didn’t evaluate the nature of the changes generated by the globalization. It is the duty of its leaders to be conscious of that and to adapt their action to the today and tomorrow real world.

The crisis will not put an end to globalization. But this one will change. Countries which will have understood that will emerge stronger. These which will withdraw to themselves inside their borders or which will act as if nothing has changed will be the losers. It is the duty of France, of its household, its companies and its State to learn these lessons.

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