Why globalization needs a revamp

Summary

Robin Niblett reflects on the transformation of globalization, highlighting its shift from optimism to instability post-2008 financial crisis. He discusses the evolving global dynamics, emphasizing the competition between major powers like the U.S. and China for influence, particularly in Africa, Central Asia, and Latin America. Niblett stresses the importance of liberal democracies and think tanks in fostering dialogue, especially in addressing critical global challenges like climate change and sustainability. He suggests that despite increasing geopolitical friction, the diversification of globalization may ultimately offer more agency and opportunities for previously marginalized countries.

Takeaways

• 😀 Globalization is rebooting itself to address today's geopolitics and to balance the winners and losers of the past period.
• 😀 After the 2008-2009 global financial crisis, there was cooperation between the U.S. and China that helped reboot globalization, but by 2015-2016, its benefits were unevenly distributed.
• 😀 The rise of losers in developed economies from globalization highlighted the need to rethink its fairness, with some parts of society experiencing instability and lack of opportunity.
• 😀 Geopolitically, the West’s weakening position after the financial crisis allowed actors like Putin to challenge international norms, including territorial boundaries.
• 😀 Globalization today is fragmented, with regions like Southeast Asia and Africa gaining more agency in global trade networks, which may reduce the dominance of traditional powers.
• 😀 The European Union is pushing for new energy markets and considering closer links with Africa to stabilize its own future while mitigating migration pressures.
• 😀 The U.S. is exploring a 'friendshoring' model to build closer alliances with security partners across the Indo-Pacific and Europe, ensuring access to high technology while minimizing risks.
• 😀 Saudi Arabia is seeking to assert its own role in global trade by bypassing Northern Hemisphere rules, aiming to maintain strategic energy partnerships, particularly with Russia.
• 😀 The new state of globalization is marked by more competition, friction, and complexities, with countries needing to navigate multiple alliances and regional interests.
• 😀 Despite these challenges, the ongoing competition between the U.S. and China for support from emerging markets (like Africa and Latin America) can lead to these countries gaining more agency and opportunities in the global system.

Q & A

What major shift in globalization does Robin Niblett highlight in the transcript?

Robin Niblett emphasizes that globalization has been rebooted in response to changing geopolitics, particularly after the 2008 financial crisis. He discusses how globalization is no longer a top-down process, but a more fragmented and competitive system involving multiple players, including China, the EU, the US, and regions like Africa and Latin America.

How did the global financial crisis impact the trajectory of globalization?

The global financial crisis of 2008-9 initially disrupted globalization but also prompted cooperation between major powers like China and the US. This led to the formation of the G-20 summit and a brief reboot of globalization, with China providing economic stimulus when Western economies were struggling.

What role does Chatham House play in the context of the evolving globalization system?

Chatham House, under Robin Niblett’s leadership, focused on promoting global economic stability and resilience, especially around energy transitions. It played a significant role in exploring the winners and losers of globalization and supporting dialogue between different geopolitical players.

What does Niblett mean by the 'new cocktail' of globalization?

The 'new cocktail' refers to a redefined, more complex version of globalization, where different regions, like the Northern Hemisphere, China, and the EU, each pursue their own strategies to adapt to new geopolitical realities. The result is a less cohesive, more competitive global landscape.

Why does Niblett suggest that there is more 'friction' in globalization today?

Niblett argues that globalization is becoming more fragmented and competitive, leading to friction between countries. This friction arises from complex geopolitical considerations, such as 'friendshoring' and the challenge of navigating investments across countries with differing political systems.

What is the role of 'friendshoring' in the current globalization model?

'Friendshoring' refers to a new approach, where countries like the US prioritize trade and technology sharing with trusted allies, focusing on security and political alignment. This is a shift from the more open, interdependent globalization that existed before the geopolitical tensions.

How does the EU’s approach to globalization differ from that of the US and China?

The EU is focusing on energy transition and regional integration, particularly through initiatives like the Regional Comprehensive Economic Partnership (RCEP) in Asia. Additionally, it is considering partnerships with Africa to address issues like climate change and migration, highlighting a more 'north-south' pillar of globalization.

What are the key challenges in promoting liberal democracy, according to Niblett?

Niblett highlights that promoting liberal democracy is not about imposing systems on other nations but about supporting dialogue and engagement. The challenge is maintaining open conversations with both liberal and non-liberal democracies, especially in the context of global geopolitical competition.

Why does Niblett believe that non-liberal democracies must still be part of global discussions?

Niblett argues that even though liberal democracies have values that may differ from non-liberal ones, it is essential to keep communication open with all countries. Key global challenges, such as climate change and sustainability, require cooperation across diverse political systems, including those with authoritarian governments.

What is the 'net-net' view that Niblett mentions about the future of globalization?

Niblett’s 'net-net' view suggests that the competition between the US and China to gain influence over developing regions will ultimately provide these countries with more agency and opportunities. This could lead to more engaged and empowered participation in globalization in the future, rather than being passive recipients of globalization’s benefits.