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AB 2000 studies

Alain Boublil Blog

 

Davos and the globalization-skeptics

Lavish meetings in a chic winter station or in the Gallery of Battles in the Versailles palace are they the best way to reconcile people with globalization? It is not sure and it would useful because the phenomenon is as irreversible as industrialization was in the 19th century. The world is currently living with a stunning paradox. The trial of globalization is generalizing at a time when, regarding economic situation, optimism prevails and growth has rebounded and is even accelerating, if we follow the conclusions of the International Monetary Fund. If this transformation of the world was as harmful as its detractors believe and are not missing any occasion to affirm it, we would not enjoy such a rebound of prosperity. But that point receives so few feedbacks that in a growing number of countries, voters give their bulletins to political movements which are skeptic regarding globalization and inspired by nationalistic and protectionist ideas.

The most stunning case is Germany. If there is a country which has taken a more significant advantage than all the others from globalization, it is this one. Yet, both major political parties, which have accepted that logic, never obtained so low scores than during the previous elections. After many ups and downs, they had to become again allies to try to constitute a government and to allow the country to emerge from the longest political crisis since the war. The United States were at the origin of that radical transformation of the world economy, with their accomplice, the United Kingdom. American people elected a protectionist president who tries to get the support of Congress to pass his program, with the building of a wall along the Mexican border and the withdrawal from most of the international negotiations and the institutions which supervise them, the Paris climate Agreement, the Transpacific partnership and even the UNESCO. The beginning of a turnaround operated by Donald Trump in Davos indicates maybe that he becomes aware of the problem but changes nothing to the point these messages have convinced a large part of the American people.

United Kingdom, which is the first platform for international financial transactions, has pronounced itself in favor of an exit from European Union. The country is starting to understand that it was a major mistake. But there was a majority of voters and the mayor of city which is the capital of the financial globalization to approve Brexit. France has not come to that extremity but during the second round of the previous presidential election, one of the two candidates had made, as a key issue in her program, the coming back behind national borders. More than 30% has approved her proposal. China looks like an exception. Without any state of mind, it launched its ambitious new Silk Roads Initiative, going even through Arctic. But is it true that there is no vote to choose national leaders in that country. 

The growing gap between the economic reality and people aspirations has several causes, notably in France. The “new prosperity” which has followed the financial crisis is poorly shared and inequalities have increased as many recent studies have shown it. Some believe that it is a necessary step before, in a second round, everybody takes advantage of it. It is the theory of the “streaming” or, in its more humanist version, the metaphor of the “first on the rope”. Unfortunately, these reasoning convince only these who will be the first beneficiaries and as they are delivered by those who are “in the same time” the most ardent defenders of globalization, they tend to think the two issues are one. Instead of explaining to everybody the profits from that change of the world and the behaviors to adopt to take advantage from it, political leaders adopt a radical message in explaining that no other policy is possible.

As a worsening point, societies have to cope with a powerful innovation trend. The gap is widening between these who have known how to follow the trend of these new technologies and have included them both in their private and their professional life and those who have missed the train. They feel they have been abandoned. Their resentment is growing and they throw themselves in the arms of political formations which explain to them that all their problems come from that hated globalization. Political leaders job is to take the appropriate measures to go through this transformation of the world period but also and mainly to have teaching skills to explain to elect, regarding the exercise of their mandate, to enterprises and to households how they must modify their habits to take advantage of these irreversible changes in order to stop to have the feeling they are the victims of them.

Of course, the State is in the front line. Inequalities are widening. Mechanisms exist to correct that trend, notably tax policy, and for instance in putting an end to that suicidal competition the European Union accepts inside itself and which is at the origin of the growing resentment of people against it. But even if it is necessary, it won’t be enough. In France, companies must stop to believe that they will take advantage of globalization through costly and debt financed foreign acquisitions. The difference between German and French firms regarding this issue is spectacular. The list is long of costly operations which, under the pretext of taking advantage of markets opening, made their management believe that was the best way to be the winners. Many industrial jewels, like Pechiney, Lafarge, Arcelor or Alcatel collapsed or had to pass under the control of their competitors and several others are confronted to a too heavy indebtedness, EDF, Engie or Orange, for instance, because they thought that the right strategy was to buy foreign market share through acquisitions.  

 At the other end of the decision-makers spectrum are local authorities and consumers. Urban policies followed by some of the first ones, in reducing the possibility to park or even to travel by car in the city-centers along with authorizations given to commercial centers to be built at the periphery of these cities, have lead to their desertification, to the general impoverishment and to the rejection of today world, wrongly assimilated to that urban policy. Regarding the second ones, they still have not understood in France that what permits to enterprises to create or even to save jobs was first and before everything to have clients. If, in their consumption choices, consumers took account, even at a small scale, of that elementary preoccupation, they would keep the possibility to have a large choice of goods and services, which is provided thanks to globalization and what they would lose without it, along with an action in favor of employment. Patriotism is always associated with the idea of a sacrifice and in that case is not the relevant reference. To adopt that new attitude is in everybody interest. Germany, of course but also Switzerland and even Italy have substantial trade surplus. Why isn’t the same in France? It is not a supply issue since the country goods exports are near 500 billion euro. It is everybody attitudes, companies included, which is the cause. Globalization generates wealth creation but it is the duty of the State and of all the participants in the economy to act to share that wealth and to have a just repartition of it.

So to fight against globalization skeptics, a government must put everybody in face of its responsibilities along with showing it has understood that globalization can generate negative effects but it has the tools to limit them and it is ready to put them into practice both in France and at the European level. And the influence of the globalization-skeptics will be reduced.    

       

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