The world's first wave of economic globalization, led by the British Empire in the 19th century, came to an end literally with a bang on a Sunday afternoon in 1914, when Gavrilo Princip killed (with two uncannily well-aimed bullets) Austria's Archduke Franz Ferdinand. The years that followed witnessed pan-European carnage, instability throughout the 1920's and the rise of fascism and communism, culminating in the death of countless millions during World War II.
Is today's globalizing era also coming to an end? If so, it may not necessarily end with a repeat of the slaughter of the last century, but with an economic retrenchment that brings economic stagnation and consigns billions of people to grinding poverty.
Various candidates have been proposed for the role of globalization's assassin. But one little noticed, yet likely, aspirant has been sneaking up on the world economy: the growing tendency to limit the free circulation of people, to "fence in" the rich world. We see the menace of this tendency constantly nowadays, but we perceive it in such a seemingly unthreatening way that we may well become accustomed to it rather than arresting it.
Globalization means free movement of capital, goods, technology, ideas and, yes, people. Any globalization that is limited to the first three or four freedoms but omits the last one is partial and not sustainable. As soon as people cannot move, there will be little to stop governments from limiting the free movement of goods or other factors of production. After all, if over-populated countries with high unemployment cannot export people, why not reach for higher tariff barriers to protect the jobs they have?
But what of the unemployed who become locked into their societies? The war on terror has shown us the dangers that can arise from the social frustrations that often result.
Nevertheless, the "fencing-in" of the rich world continues apace. The US plans to construct a veritable "Mexican Wall" to keep poor people from crossing into Texas or California. Likewise, hundreds, if not thousands, of Africans die every year trying to reach the shores of Fortress Europe.
Efforts to restrict people's movement between countries expose the soft underbelly of globalization: the deepening gap between countries' mean incomes. Rather than poor countries growing faster than the rich (as we would expect from Economics 101), mainly the reverse is true.
Between 1980 and 2002, average annual per capita income growth in the rich world (defined as the "old" OECD members) was almost 2 percent, compared to just 0.1 percent in the 42 least developed countries. Indeed, average income in Latin America is now barely above its 1980 level.
This huge gap spurs migration. People nowadays know much more about conditions in different countries than they did in the past, and if moving across a border means that their income can be multiplied several-fold, they will try to do it.
This is why today's most contentious borders separate economies where the income gaps between people on the two sides are the greatest. There are four such global hot spots: the borders between the US and Mexico, Spain and Morocco, Greece (and Italy) and the southern Balkans, and Indonesia and Singapore (or Malaysia). The income gaps range from more than seven to one in the latter case to 4.5 to one in the case of Spain and Morocco, 4.3 to one between the US and Mexico, and four to one between Greece and Albania.
Income differences were not always so huge. In 1980, average income in the US was a little more than three times that of Mexico, the gap between Singapore and Indonesia was 5.3 to one, and the difference between Spain and Morocco 3.5 to one. Even the gap between Greece and Albania, at three to one, was narrower than it is now. So income gaps between all these contiguous countries have increased significantly during the last quarter-century.
So it is little wonder that it is in these places that most illegal immigration and human trafficking occurs -- pirates in the Straits of Malacca, fast boats between Albania and Italy, and desperate human cargoes from Africa and Latin America.
If today's globalization continues to widen income gaps, the waves of migration will grow. So the rich world will, in a knee-jerk response, erect ever-higher barriers to stem the human tide.
If globalization, which has so enriched the world's wealthiest countries, is to continue, governments must find ways to increase incomes more evenly. Otherwise, today's "fencing in" of the rich world will increase the risk of a backlash against free circulation of goods and capital, as well as of political instability punctuated by terrorism. Global income redistribution by the rich countries should be viewed as a matter not of charity, but of enlightened self-interest.
Branko Milanovic is an economist at the Carnegie Endowment for International Peace.
Copyright: Project Syndicate
French firm DCI-DESCO in April won a bid to upgrade Taiwan’s Lafayette frigates, which has strained ties between China and France. In 1991, France sold Taiwan six Lafayette frigates and in 1992 sold it 60 Mirage 2000 fighter jets. To prevent arms sales between the nations, China negotiated an agreement with France and in 1994 in a joint statement, France promised that there would be no future arms sales to Taiwan. From China’s point of view, the DCI-DESCO deal constitutes a breach of the agreement, but the French stance is that it is not selling Taiwan new weapons, but instead providing a
President Tsai Ing-wen (蔡英文) in her inaugural address on May 20 firmly said: “We will not accept the Beijing authorities’ use of ‘one country, two systems’ to downgrade Taiwan and undermine the cross-strait status quo.” The Chinese government was not too happy, and later that day, an opinion piece on the Web site of China’s state broadcaster China Central Television said: “While Tsai’s first inaugural address four years ago was read by Beijing as an ‘unfinished answer sheet,’ the one she presented this time was even more below-par.” Speaking to the China Review News Agency, Shanghai Institutes for International Studies vice president
The COVID-19 pandemic continues to wreak havoc worldwide. Despite countries being under pressure economically and from the novel coronavirus, China’s National People’s Congress last month passed national security legislation for Hong Kong, a decision that has shocked the world. Let there be no doubt: This move is the beginning of the end of China’s plans for “one country, two systems” in Hong Kong and Taiwan. Proposed amendments to extradition laws last year ignited massive protests in Hong Kong, with millions of participants, shocking the world and making confrontation between government forces and those who opposed the change a permanent part of Hong
Protecting domestic workers Ms Heidi Chang’s (張姮燕) article (“Employers need protections too,” May 24, page 6) made the case that “migrant workers’” rights had improved in Taiwan, but employers’ rights had not, going so far as to complain that all employers are treated equally under the law — as though this was not how the law was supposed to work. The truth is that the rights of foreign blue-collar workers have still not caught up with the rights their employers have always enjoyed. This segment of the foreign community in Taiwan is more likely than other groups to encounter abuse. Recently, a care