In 2007 Outsights identified future risks which could slow the Five Flows of Globalisation (goods, capital, people, information and services). These risks suddenly seem much closer - with terms like de-globalisation and protectionism being used more frequently.

 

There are signs that globalisation is waning. In emerging markets net inflows of private capital are expected to slow to $165 billion this year from $929 billion in 2007. Furthermore, deliberate policies slowing one flow could cascade down to the others. Governments are stipulating that "nationalised" banks lend to domestic businesses, potentially inhibiting the cross-border flow of capital. Could the "Buy America" clause in the US economic stimulus package spark a trade war and slow the flow of goods? Will this then slow the other flows: of people ("British jobs for British workers"), of services and even information?

 

Lying at the heart of globalisation's prospects is the future of what the historian Niall Ferguson has described as "Chimerica" - the symbiotic economic relationship between China and the US. One view is that demographic constraints mean that the only hope for the G7 is increased consumption in the Asian region, something which protectionism would preclude.

 

Three important markers in 2009 will reflect the extent of governments' determination to support globalisation: what is agreed at the G20 Summit in London in April; whether this will lead to unresolved trade issues being addressed in the stalled Doha round; and without resolution, what hope will there be for a meaningful climate change settlement between Asia and the G7 at the Copenhagen Summit in October?

 

Photo: H. Sivonen 

 

21 Drivers for the 21st CenturyTM by Outsights is licensed under a Creative Commons Attribution-Non-Commercial-Share Alike 2.0 UK: England & Wales License.