Globalization gobbled up Davos

Gone are the glory days when half the US administration – under the inimitable Bill Clinton, globalization’s superstar – and the elite of almost every other country would gather at the World Economic Forum at Davos to pilot the planet. This year there were far fewer stars (political or otherwise) and the meeting at the Swiss resort looked more like just another economic conference than a session of globalization’s politbureau. The Forum’s main issues this year were climate change and the need to secure energy supplies. These may be the most important topics of our time but they are not waiting to be solved at Davos. They are being discussed everywhere, all the time. Naturally, media interest in the event was much less than in previous years. So, has Davos lost its shine? Seeing as the Forum was the expression of the triumph of open markets, does its apparent decline suggest that globalization has lost momentum? The opposite is probably the case: Reduced interest in the World Economic Forum signals the overwhelming victory of globalization, which is now swallowing every attempt to control it. Indicative of this is the fact that perhaps the most important development at the Forum this year was the call by Germany and the International Business Council for an end to the impasse in the talks for a global trade agreement. In other words, the country that is the current president of the European Union and some of the most influential business leaders on the planet called for an end to protectionist measures and subsidies that mostly the EU and the United States want to maintain in order to protect their farmers and businesses, at the expense of poorer countries. Here it is worth noting that the Doha Round of talks in the framework of the World Trade Organization were suspended last July because of disagreement between the EU and the US regarding protection for American farmers. (Interestingly, Greece, as the only EU member whose primary crop is cotton, finds itself allied with the US on this issue because Washington is trying to protect its own cotton industry. In this case at least, what is good for the US is good for Greece.) On Saturday, the trade ministers of 30 countries, including the USA and the EU, agreed to move forward with the trade talks in the hope of reaching a deal in a year. This is so mundane compared to the celebrity issues and historic conflicts that were the past fodder of the Forum, but it is the nuts and bolts of globalization. The Forum, in other words, played host to negotiations aimed at eradicating the protective measures against globalization that the US and EU – the rich of this world – have tried to keep in place. A nice irony. But in other sectors, too, globalization continues to shape developments without any organization seeming capable of controlling them. America has suffered a serious blow to its reputation with the fiasco in Iraq. And though the USA might appear indifferent to the rest of the international community, today it runs the danger of the rest of the world being indifferent to America’s concerns and interests – and to America’s efforts to determine developments. This, however, has not had a negative effect on the global economy. Internationally, growth was forecast at 5.2 percent last year. This is – thanks to rapid development in China and India – the increase in the price of oil, copper and other commodities which help spur growth in the countries that supply them and consume them. At the same time, this growth leads to the production of cheaper goods, which helps keep inflation down across the planet. The markets are working and money is flowing across the globe with unprecedented ease. Countries no longer have the same fear of monetary crises such as the one that rocked Asia a few years ago. They are no longer as dependant on the (US-led) International Monetary Fund as they were in the past. This is, of course, a measure of the IMF’s long-term success, but it also indicates that the IMF is no longer the arbiter of developments. All of this, along with the fact that despite regional problems we are living in an era of few frictions between the major powers, creates conditions of comparative stability and rapid economic development. But there is an overall sense that no one is at the wheel.

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