Globalisation's winter

Every January, the global elite descends on the small Swiss town of Davos for a summit that has hitherto been a celebration of globalisation and its potential. The famous Harvard political scientist, Samuel Huntington, even coined the phrase “Davos Man” as shorthand for the attendees of the World Economic Forum (WEF) — the masters of a frontier-less world. WEF may have become a sideshow, just a talk-shop. But this year, Davos has a special significance — highlighted by the presence, for the first time, of the president of the People’s Republic of China. Xi Jinping will visit an iteration of WEF — between January 17 and January 20 — that is overshadowed by very serious questions. More than 20 years since the coming into force of the World Trade Organization (WTO) heralded the dawn of a new, interconnected age, is globalisation in retreat? How will Davos Man deal with the multiple challenges that 2016 has made manifest to the new world order that had long seemed inevitable? Can a globalised elite even begin to reasonably address these multiple popular movements that apparently share little but a disdain for precisely the idea of a globalised elite? 

As the democracies of the West, till now the biggest boosters of the global order, retreat in confusion at the upsurge of anti-globalist populism, it is clear that the People’s Republic of China sees itself as stepping into the void. This is understandable. Perhaps no country has benefitted as greatly from the great expansion in trade and interconnectedness over the past 20 years as has China. Its accession into WTO at the beginning of the 21st century set the stage for a vast expansion in its gross domestic product — and for a poverty-reduction miracle unparalleled in human history. Few leaders are in a position in 2017 to make as convincing a moral and economic case for the benefits of globalisation as can the leader of China. From being distrustful of global integration, China is now increasingly seen as seeking to become its principal pillar. Thus, one thing to look out for will, indeed, be how willing the confused West is to cede leadership to a China that is not just willing to stand up for trade but claims it will put its money where its mouth is, by investing in trade-related infrastructure. 

The larger question, though, in the third decade of WTO, is what form of trade integration China’s leader will push. Is it to be multilateral or plurilateral? As the Trans-Pacific Partnership, designed by the United States to keep China out, seems to vanish into the dustbin of history, will China replace it with other plurilateral systems, such as the Regional Comprehensive Economic Partnership, or will it seek to reinvigorate WTO? Whatever the faults of the current trading architecture, the 20 years in which WTO has been operating have revealed the enormous power of trade and connectivity to lift individuals out of poverty. India may not yet have reformed sufficiently domestically to take advantage of these processes — but they should not be shut down before India, too, sees the benefits.


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