Globalisation no longer a win-win situation

business-times.asia1.com.sg :

In his four years attending the World Economic Forum in Davos, Switzerland, Nicholas Berry, director of the Foreign Policy Forum, writes that a clear, near consensus on the 'state of the world' emerged each year. In 2003, the five-day WEF produced this theme : 'You're making a big mistake, United States, if you attack Iraq.' 'We told you so' resounded in 2004. Iraq started to fade in 2005. This year, Mr Berry points out, the programme and conversations produced a clear theme: 'Energy is big, China and India are rising, and the United States is sinking.' The decline in the US role affecting the state of the world arose because China and India are on the move, with the GDPs of both giants growing at record rates.

Economist Stephen Roach, who attends Davos every year, suggests that perhaps the Internet is now posing serious problems to economic growth in the United States and the rest of the developed world. 'The win-win endorsement of globalisation - that the development of poor countries is a huge plus for rich, developed countries - was first coined in Davos,' Mr Roach recalls. 'Alternatively, there have been anti-globalisation protests associated with this event for years.' This year, the debate has moved from the outside to the inside.

'Serious challenges to globalisation are now being openly aired in the rooms and corridors of Davos's fabled Congress Centre.' And the reasons behind this shift are not hard to fathom. One of the 'wins' in the win-win of globalisation has failed to materialise. It is now commonplace for recoveries in the developed world to be either jobless, or wageless - or both. Even Mr Roach, an ardent pro-free market proponent, is not very optimistic. 'The toughest part of this story is that there may be no easy way out,' he notes.

While five years ago, the globalisation of the information function was confined to call centres and data processing, those pressures are now affecting workers in software programming, engineering, design and the medical profession, as well as professionals in the legal, accounting, actuarial, consulting and financial services industries. The old fears of the zero-sum outcome have crept back into the discussions at Davos. 'Gains in the developing world are increasingly feared to come at the expense of the developed world,' Roach said.

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