Globalization, Brexit and Inequality: Is It All Bad?


I am not an economist. I have said this before, so if I am way off the mark – please correct me. But I sat up straight when a headline popped up on Twitter: “IMF urges G20 to champion globalization at China summit.”

the-lexus-and-the-olive-tree

Globalization! That was a terrifying word for many, back in the good old 1990s – almost the source of all evil and an unstoppable force, at that. Yet I confess that I was fascinated by Thomas Friedman’s 2000 book The Lexus and the Olive Tree. Or perhaps it was just the title that I liked. To me, as a non-economist, globalization seemed to present untold opportunities on one side – but on the other side, rampant “out with the old, even if it’s good stuff, and in with the new, whatever that is.” Did globalization really replace the Cold War? And sixteen years after Mr. Friedman’s best-selling book, is globalization still the same animal it once was? What does Mme. Lagarde of the International Monetary Fund mean when she talks about globalization?

Christine Lagarde, managing director of International Monetary Fund Photo: AFP
Christine Lagarde, managing director of International Monetary Fund Photo: AFP

All this reminded me of a recent forum at the University of Technology’s Faculty of Education and Liberal Studies in Kingston, entitled Brexit: Old Relations, New Perspectives. Now, Brexit has sent shudders through the Caribbean Community (CARICOM) – for whom any such change in the arrangements of the “First World” is regarded with a touch of suspicion. We must protect this and that, and preserve the status quo, seems to be the thinking. Rather amusingly, UTech’s Acting President Professor Colin Gyles likened Brexit to “a divorce…between one’s Mom and a good Step-Dad.” And divorce can’t be good – can it?

Philip Hammond, the UK chancellor, with delegates at the G20 finance ministers’ meeting in Chengdu in July. Photograph: Fred Dufour/AFP/Getty Images
Philip Hammond, the UK chancellor, with delegates at the G20 finance ministers’ meeting in Chengdu in July. Photograph: Fred Dufour/AFP/Getty Images

The lineup of panelists indicated that much of the discussion was going to be about trade agreements, treaties, remittances and aid. While important, I had been hoping for a much broader discussion. Back in June I spoke on TV and radio and wrote about Brexit in my Gleaner blog (here). I was concerned about its possible social impact both inside the UK (the “Divided Kingdom”) and attitudes among the British, facing inwards and outwards. Professor Rosalea Hamilton, Vice President for Community Service and Development at UTech, presented something quite different, on – you’ve guessed it, globalization as we in Jamaica might regard it today, in the context of Brexit.

Professor Rosalea Hamilton responds to a question at the Brexit forum. To her left is panelist Dr. Wayne Henry, Director General of the Planning Institute of Jamaica. (My photo)
Professor Rosalea Hamilton responds to a question at the Brexit forum. To her left is panelist Dr. Wayne Henry, Director General of the Planning Institute of Jamaica. (My photo)

Professor Hamilton defined globalization as “the process of socio-economic expansion across national barriers.” A fairly innocuous definition, one might say. And yet Jamaica’s first experience of globalization was nothing short of traumatic. It was the slave trade and the colonial era. It was about the exploitation of labor and raw materials. It led to deep inequality and economic, legal, political and to some extent cultural dependence.

“Globalization has winners and losers,” Professor Hamilton noted; yes, this has always been true. Globalization is really nothing new – just wider now, with the injection of industrialization and technology. Now, as then, inequality is an insidious, amorphous creature – a bit like the “Blob” in horror movies, larger now and growing. It slides into the room without anyone noticing it. Then we wake up and – hey, a CEO in the United States is earning 300 times the average worker! Thousands of jobs have gone overseas, overnight! The UK has the third highest inequality in Europe! Oxfam published a report  a year ago. It asserts (and one can’t help wondering whether the European Union has really benefited its people):

Europe is facing unacceptable levels of poverty and inequality. Instead of putting people first, policy decision making is increasingly influenced by wealthy elites who bend the rules to their advantage, worsening poverty and economic inequality, while steadily and significantly eroding democratic institutions. Austerity measures and unfair tax systems across Europe are skewed in favour of powerful vested interests. It is time to reverse the course of poverty and inequality in Europe, putting people first.

Jamaica is no better off. Professor Hamilton showed us that, according to the Gini coefficient used by the World Bank, the gap between rich and poor here is high, and growing. The UN Development Programme’s Human Development Report, released last December, pointed to increasing inequality in our society (let’s face it, we see it around us every day, unless we go around with our eyes shut). The fact that youth is considered one of our most vulnerable groups speaks volumes, doesn’t it? Something is wrong, right there. If you couple this with the high level of distrust in our political leadership and key institutions, including the justice system, the indicators are pointing in the wrong direction for a healthy democracy.

Jamaican youth are considered a vulnerable group. Isn't this sad? Yet, with unprecedented high levels of youth unemployment it is hardly surprising. (Photo: Facebook)
In today’s globalized world, Jamaican youth are considered a vulnerable group. Isn’t this sad? Yet, with high levels of youth unemployment (officially over 30 per cent and much higher in some communities) it is hardly surprising. (Photo: Facebook)

Meanwhile, it’s now certain that the UK will move towards Brexit. It’s inevitable, said British High Commissioner David Fitton at the forum. There won’t be another referendum – there was, after all, a margin of over one million votes. And yes, trade agreements will have to be renegotiated. For those worried about aid, the High Commissioner affirmed that the UK remains committed to 0.7 per cent of its GDP being earmarked for overseas assistance. The process towards Brexit may begin at the end of 2016 or early 2017.  The High Commissioner added, with an Olympic reference, that it will be “a marathon, not a sprint.”

By the way, a representative of the European Union was invited to the UTech forum, but sent an apology. It’s a pity that we did not have that perspective.

What in the world is a sprint, these days? Nothing is. Contrary to what Jamaican leaders may think, there are no short cuts and it makes no difference what lane you’re in. It’s a marathon – a hard slog, all the way. Perhaps we need to realize this, and stay the course.

British High Commissioner David Fitton laid things out as clearly as he could on the current situation re: Brexit. Certainly, he said, there is no turning back. (My photo)
British High Commissioner David Fitton laid things out as clearly as he could on the current situation re: Brexit. Certainly, he said, there is no turning back. (My photo)

Mme. Christine Lagarde of the IMF seems to be admitting that something is wrong with the current equation. In a blog ahead of the G20 Summit, she writes:

“Income growth has not only been meagre, it has bypassed low-income earners in many countries, raising anxiety about globalisation and worsening the political climate for reform.”

So, is Jamaica, and the Caribbean region on the whole, ready for a demanding marathon run? I hope it will not be a kind of blundering along and hoping for the best. In the face of this “new globalization,” I also hope it will be an internal process – one of reflection, realignment and rethinking. Professor Hamilton suggests a return to some traditional values, such as the South African concept of Ubuntu: a common bond, a reduction in hostility and division. There are several definitions of this word: I like…

I am what I am because of who we all are.”

In a sense, I see in this a kind of “positive globalization” – bringing peoples closer together, locally, regionally, globally through participation, involvement, cooperation and compassion. It has to happen.

 But then, as I said at the beginning, I am not an economist. Just hoping for a better world.

Archbishop Desmond Tutu seeks to explain Ubuntu.
Archbishop Desmond Tutu seeks to explain Ubuntu.

 

 


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