Misleading geopolitics is derailing decades of globalization :: InvestMacro

BThe Dan Steinbock

Over the past decade, global economic prospects have been affected by the collapse in global trade, investment and migration, along with the unexplained suffering of more than 100 million displaced people globally. He. She‘s Introduction to an untenable future.

The wave of globalization that followed the war mainly benefited the advanced economies. It was only after 1980 that some large developing countries, notably China, stormed the world markets for manufactured goods and services, while also attracting foreign capital. This era of globalization was overshadowed by the global recession of 2008.

As G-20 cooperation subsequently faded, so did the prospects for global growth.

Between November 2008 and 2016, global imbalances steadily worsened as a result of increased trade discrimination. It was only in 2017. Some signs of a business recovery did not appear.

However, this historic opportunity was lost with US trade wars, followed by waves of the COVID19 pandemic, the resulting global depression, and nascent cold wars.

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Global economic integration is often measured by global trade, investment, and immigration, although technology and finance can be added to the list.

The net effect of the last decade? The deterioration of trade and investment, the slowdown in migration and the explosion of global displacement.

downturn in global trade

In particular, the transient gains of the US-China trade truce were derailed by the global pandemic that caused trade in services and goods to contract by 30 percent in mid-2020. Subsequent gains have been hurt by new waves of pandemic variables and the deteriorating international economic landscape.

Last year, the World Trade Organization (WTO) predicted that the volume of global merchandise trade would grow by 10.8 percent, followed by a rise of 4.7 percent in 2022. But these predictions are unlikely to come true even before the Ukraine crisis.

The progress made since the landing in 2008 has been largely reversed. Trade as a percentage of global GDP has fallen back to the level it used to be More than 15 years ago. Geopolitics derailed the prospects for a global recovery long before the pandemic, due to protectionism and new cold wars, exacerbated by Russian sanctions.

global investment dumping

Before the global crisis of 2008, global investment jumped to nearly $2 trillion. But the hoped-for recovery has proven an elusive dream, due to tariff wars and the pandemic. High-income economies play a critical role in global investment inflows. However, even before the Ukrainian crisis, global investment had fallen to a level it had already reached in the late 1990s.

In 2020, global FDI flows fell by a third to reach $1 trillion. This is lower than the 2008 crisis low, and Half of global investment in 2007. Decades of progress have faltered in just a few years.

Globalization undermined

Sources: Al-Farq Group and A. Trade as an average of exports and imports; And the as a percentage of GDP (World Bank/OECD; B. Inward FDI inflows in billions of dollars (UNCTADSTAT). c. United Nations / International Organization for Migration, d. UNCHR

In the process, the poorest economies were hit hard. And this pain is about to start.

Migration is slower

Over the past two decades, the number of international migrants has risen to 281 million. However, global migration has slowed since 2008, particularly in advanced economies. Because of the pandemic, the number of international migrants has increased by only 2 million; A fourth lower than expected by mid-2020.

Let’s put these numbers in historical context.

Between 1870 and 1914, some 10 percent Of the world’s population emigrated in search of a better life. While the absolute number of international migrants has tripled in the last half century, their relative share remained less than 2 percent until 2010 and is today 3.6 percent of the world’s population; a third of what it was a century ago.

Global displacement explosion

And as migration flows slow or are blocked, the number of displaced people has exploded globally, multiplied by the post-9/11 wars and external interventions since the Arab Spring, which the West initially saw as a precursor to “democratization” in the Middle East. East, somewhat similar to today’s devastated Ukraine.

As a net result, the number of forcibly displaced has exceeded double in the past decade. The Ukraine crisis alone is expected to displace up to 6.7 million people internally and 4 million people displaced abroad.

Despite COVID-19’s mobility restrictions, the total number exceeded 92 million at the end of 2021 and recently rose to more than 100 million.

In other words, the number of displaced people globally will soon be over double the height As it was after two world wars, the Holocaust, and Hiroshima and Nagasaki in 1945.

If this is the result of “peace conditions”, then one shivers in horror at the impact of wartime conditions in the early twenty-first centuryStreet century.

Prelude to a darker future?

In the past half decade, opportunity costs have reached trillions of dollars. Given the constant policy errors, the worst looms.

Growth scenarios that are still possible in early 2022 will not materialize because they were expected in fall 2021, when

  • an armistice that ended the trade war between the United States and China;
  • The proxy conflict in Ukraine had not yet erupted;
  • Sanctions targeting the 11 countries of the worldThe tenthThe largest economy, largest natural gas producer and third largest oil producer, has yet to launch.
  • And the Federal Reserve has not embarked on rate hikes and quantitative tightening, which will lead to lost years in the West and lost decades in the Global South.

As long as current policies are in place in the West, sanctions will undermine US growth, destabilize the Russian economy, punish a fragile eurozone and slow Chinese growth – all of which will have a negative impact on economic prospects in South and Southeast Asia.

The Global South will pay most of the bill; In economic costs and human life.

The longer the unexplained stagnation continues, the more likely the current cold wars will turn into hot wars, at the expense of future generations, even our planet.

This is something none of us would want. But it is the end result of the short-sighted policies of the prosperous West.

About the author:

Dr. Dan Steinbock is an internationally recognized strategist for the multipolar world and Founder of Team Group. He has worked at the Institute of India, China and America (USA), Shanghai Institutes of International Studies (China) and the European Union Center (Singapore).). For more see

Copies of this comment have been published in many major daily newspapers around the world. depends on Recently published report by the Austrian National Bank (OeNB) and the Austrian Federal Economic Chamber (WKÖ). see also

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