Thematic Overview

Conference keywords: inequalities · migration · sustainability and sustainable development goals · borders and planetary boundaries · flow of ideas · finance and technology · urbanisation · resistance · education · social protection · governance · security and peace · challenging the ‘North’ · sharpening the role of development studies

A little peek at Bergen, Norway

Globalisation at the Crossroads –
Rethinking Inequalities and Boundaries

The End of Globalisation?

Globalisation has been the buzzword of the last quarter century. After the end of the cold war, capi­talism spread to countries that had been delinked from world market influence for decades. China had already changed its course in 1978 towards a market economy under one-party rule. In 1991, India turned away from four decades of import substitution and tight government controls of private enterprises to become the other giant playing an important role in the new era of globalisation unchained. At the time, historians and policy makers envisaged that global growth through peaceful competition and cooperation (e.g. within global industrial production networks), more efficient util­isation of resources and mass consumption by the global middle class, would bring peace and demo­cracy to every country (Fukuyama: ‘The end of history’). Neo-liberal economists saw their gospel of free markets, restraint of govern­ment’s intervention in the economy and inter­national trade liberal­isation vindicated by these developments, even though newly emerging economies had followed various models of guided market economy with a strong role of government (developmental state) that were not in conformity with textbook economics and the Washington Consensus. The spect­acular rise of China, India and other newly emerging economies made convergence between developing and developed countries a possibility, with the North-South divide becoming history.

However, a number of least developed countries were left behind, and income and wealth inequal­ities within countries grew stronger. Commod­ity exporters benefit­ed from the rising demand of China’s industries, but whatever industrial develop­ment had taken place in Sub-Saharan Africa was under­mined by cheap Chinese goods that conquered the lower end of world markets. Consequently, the new surge in global­isation was accomp­anied by rising criticism from developing countries, from academia and global civil society. In this view, the main beneficiaries of globalisation were trans­national corporations and the outward-looking new middle classes in China and the other newly emerging economies. In contrast, the poor in all count­ries were further marginalized by cut-throat competition, rising unemployment and the cutback of social protection that debt-ridden countries implemented through various struct­ural adjustment programmes.

When the financial crisis of 2008 brought the world economy close to a depression similar to the Great Depression of the 1930s, governments decided to bail out failing banks even though this operation invalidated the neo-liberal confidence in the automatic adjustment of private enter­prises (including banks) to market signals. Bailing out major banks without comple­mentary public works pro­grammes to ease the burden of the recession on the working classes exposed capitalist global­isation as uneven and unjust, even in the Global North. Populist movements and parties gained ground both in Europe and the USA, and challenged the intellectual and political hege­mony of the liberal establishment. Anti-globalisation sentiments are fuelled by in­creasing inequalities of income and wealth that are seen as a result of cheap imports and, in this view, of unlimited immigration, under­mining social stability and democracy. Indeed, statistics show stagnant wages and squeezed middle class incomes in the USA and Europe during recent decades, whereas incomes and wealth of the richest ten percent of the population have increased faster than GDP.

However, globalisation alone is not responsible for increasing inequalities. One further root cause is seen in the progressing financialisation of capitalist economies. Over several decades, the share of banks and other financial inter­mediaries in GDP has been increasing in the USA, UK, other European countries and Japan. Increasing financialisation is accompanied by rising public and private debts. These are becoming unbearable burdens on the recovery of these countries from the waves of recession since 2008. The impacts on private house­holds and governments have been massive across the world, with insufficient changes in policies to ensure that such systemic risks are reduced in the future. These risks are compounded by unjust taxation systems and extensive tax evasion across the world exercised by multinational companies and wealthy individuals.

Globalisation is not only contested by the rising tide of anti-globalisation movements and populist political parties. It is also challenged by old and new ‘contra­dict­ions’ of capitalist development. The lack of growth and rising inequalities in the Global North resulting from risky financialisation, in­debtedness of households, enterprises and governments is amplified by China’s de­clining growth. Both are impact­ing world markets and commodity-exporting devel­oping count­ries likewise. The impacts of new techno­logies, such as information and communication technology, new materials, and miniaturisation are ambi­valent; they are set to expand through new uses of ‘big data’; but labour-saving technologies also threaten jobs and wage levels in sectors which were previously considered secure employment.

People are taking more initiative in improving their lives across the globe. This is reflected in high levels of urbanisation, which are expected to grow in South Asia and sub-Saharan Africa in the coming decades. It is also reflected in transnational migration patterns, which are used increasingly by population groups with sufficient assets and rising expectations as a means to improve their lives. The importance of regulating such migration flows for the protection of the migrants involved and the better integration into the labour markets and the communities of host countries are all urgent issues. Of further significance is to recognise the importance of remittances for countries of origin. Thus, international migration is one of the most diverse and multifaceted themes of global develop­ment that requires inter-disciplinarity to come to grips with its diverse aspects. It is also a challenge for development cooperation and its claim to alleviate poverty in recipient countries, when millions of young Africans and Asians are willing to leave their countries and face the costs and risks of insecure paths to Europe.

These trends all imply that a new social compact is required in both high- and lower-income countries. It is needed to prevent high-income countries from being torn politically apart. Deep divides have appeared between beneficiaries of new tech­nologies and globalis­ation enjoying rising incomes and affluent life-styles, and poorer income groups with increasingly precarious employment perspectives. These disadvantaged groups either raise their voices and support populist or funda­ment­alist move­ments/political parties or withdraw from exercising meaningful forms of citizenship in their communities. Likewise, a new and more secure social contract is needed in lower-income countries. Some countries are already developing their own development models, albeit with many pitfalls and uneven successes. The combination of growth and social protection to reduce high levels of inequality as espoused by Brazil, South Africa, China, and India, has been successful in reducing widespread poverty and existing inequalities. However, these countries’ current challenges relate to new forms of mobilisation, corruption issues in their leadership, and slowdowns of their economies.

A Way Out: The Global Green New Deal for Meeting the SDGs?

Finally, the planetary boundaries to the use of our ecosystems require a fundamental rethinking of future economic development. A change of course is necessary, away from excessive consumption of raw materials and energy, environmental pollution with effluents and emissions of production and consumption, towards frugal innovations and more circular economies. Addressing the economic, social and environmental challenges reflected in poverty and inequalities in both the Global South and North, requires major rethinking. This needs to comprise of existing globalisation processes, population and urbanisation trends, forms of mobilisation and civic agency, education and training, existing ways of promoting international development, and the emerging development models being put forward by countries in the Global South.

Earlier programmes on sustainable development were propagated in 2008/9 by UN agencies under the title Global Green New Deal for climate, energy, and development. However, governments have mainly paid lip service to green economy goals rather than taking action for more fundamental transitions to sustainable development in all countries. Falling energy prices and the cutting of subsidies for clean energy research and development are currently producing long-term negative effects on the devel­opment of renewable energy technologies required for greater sustainability. The Sustainable Development Goals (SDGs) are framed as universal agenda for action in all countries, North and South, and all actors, governments, private business, civil society, the media, universities, and religious institutions. The question is whether the adoption of this agenda will help change the course of the generators of greenhouse gas emissions, so that effective adaptations to climate change and resulting disasters can be developed?

20 years after Sustainable development has been adopted by the international community at the Rio Earth Summit in 1992, the agenda was re-introduced at the 2012 Conference on Sustainable Development (Rio+20). The main outcome was a list of 17 Sustainable Development Goals (SDGs) with 169 targets that replaced the Millennium Development Goals (MDGs) for the next phase of global development until 2030. The major shift is that the SDGs are emphasised as universal in scope; all governments have to implement green economy strategies in order to meet the goals for their countries and regions and address the three dimensions of sustainability: social, economic and environmental. This fundamental disruption should be recognised as a wake-up call to finally rethink current inequalities and boundaries in innovative and inclusive ways. Although there are, inevitably, multiple challenges to peaceful, inclusive, just and sustainable global development, the moment is ripe for taking them up.

The EADI NORDIC Conference 2017, in Bergen, aims to address this series of challenges in development (policy, research, practices) in a multi-polar world.