The rising trade tensions and contradictions among the largest economies of the world in the past several years have been largely ascribed to factors ranging from increasing inequality within countries to cross-country asymmetries in trade balances as well as the reign of the “new normal” of lower growth rates in the world economy for longer. While all these explanations could well be valid, there may be another possible factor at play, namely the crystallization of alternative visions of economic globalization espoused by the largest economies of the Global South. The changing balance in the world economy is giving rise to new dimensions of competition and rivalry on the world scene.
Indeed, since the period of Samuel Huntington’s “Clash of civilizations” and Francis Fukuyama’s “The end of history” the unipolarity of the globalization process in the 1990s has been progressively undermined by the sizeable advances made China and some of the other heavy-weights such as India. Apart from the sheer economic weight of the largest developing economies there is also a qualitative change observed in recent periods of the Global South taking the lead in economic liberalization and the formation of trade alliances across the globe. With the US and other advanced economies experiencing bouts of de-globalization, China is positioning itself as the champion of the globalization process, while forging ahead with the largest integration mega-projects such as the connectivity-based Belt and Road Initiative (BRI) as well the FTA-based Regional Comprehensive Economic Partnership (RCEP).
The activism exhibited by the leading powers of the Global South in expanding their economic presence across the world is exceeding the scale of greater competition between leading powers per se and is starting to approach the point of the crystallization of alternative pathways to globalization. These trends are set to further shift the paradigm of international development from the convergence towards one model of globalization to that of competition among the various projects and visions of the globalization process. The emerging model of globalization that is set to compete with the incumbent model has been implemented in the rising number of integration projects forged by the developing economies – in many cases the characteristics of the emerging model of globalization in such projects as the BRICS+ or the BRI appears to differ substantially from its predecessor:
– Divergence vs convergence: the emerging paradigm of globalization is likely to be predicated on divergence in economic models rather than efforts to speed up convergence towards one sole model of economic development that is seen as standard and most efficient. The “divergence vs convergence” narrative as expounded by Roberto Unger (most notably in his book “What should legal analysis become?”) is likely to be at the very core of the difference in the approaches to globalization.
– “Technology/mechanics of globalization”: the traditional developed economy model predicated on the pre-eminence of free trade agreements is increasingly giving way to accords that place greater emphasis on connectivity and infrastructure development. The use of hybrid economic accords that include not just free trade, but also investment-related matters may soon be complemented by the emergence of “digital accords” as well as the use of “integration of integrations” (integration among regional blocks).
– Algorithm and sequencing of globalization: the developing world is likely to pursue bottom-up rather than top-down globalization – rather than the global institutions (formed with majority representation of the developed economies) being the key agents of globalization in the incumbent model the developing economies may opt for a sequential formation of a platform composed of major regional integration groupings that may become an important component in the new construct of global governance that serves as an intermediation layer between the country-level and global institutions.
– Inclusive versus exclusive globalization: rather than the core-periphery paradigm in which countries need to comply with stringent criteria to proceed with greater integration, the new emerging paradigm of integration is likely to emphasize non-discrimination and openness in the approach to globalization that is advanced across all continents – a BRICS-plus paradigm advanced by China in 2017 may be the platform for pursuing such an approach.
– Sustainable/more equitable globalization: instead of a highly unequal distribution of integration impulses that were typically concentrated in the advanced world, a greater emphasis is likely to be placed on “catch-up globalization” in the Global South with the possible use of the “integration of integrations” as a way to speed up convergence.
Some of these characteristics in the alternative approach to globalization may be inter-related, most notably the relationship between inclusivity of integration and the sustainability of the globalization process – all of these factors are well within the spirit of the 2030 UN Development Goals. A revitalized United Nations along with the new development institutions could support the advancement of the new vision of globalization coming from the Global South.
The possibility of various dimensions in the globalization process has been noted on a number of occasions in the past – most notably Kevin Gallagher in the “Clash of Globalizations” – but it is the current juncture in the global economy that appears to be the time-frame when the quantitative escalation in the intensity of economic competition among the leading powers is transformed into a qualitative rivalry in the economic visions of how the world is to be globalized. This paradigm may be termed as being unique in history – previous rivalries of such scale were either grounded in ideological differences (USSR vs the US) or were largely limited to particular regional arenas.
The emergence of alternative globalization projects, including their by-products in the form of alternative reserve currencies and payments systems, will raise the optionality of modernization pathways for developing economies and will provide greater possibilities of employing the economic development strategies that are more attuned with the idiosyncratic features of a particular country. For land-locked economies in Eurasia for example the paradigm of globalization grounded solely on the basis of free trade is problematic given the geographical barriers to foreign trade (see the Eurasian school of thought – P. Savitsky “Continent-Ocean” as well as Y. Lissovolik – “A geographical case for the One Belt-One Road initiative and the Eurasian Economic Union”, Valdai Club, May 2017). Accordingly, a “Eurasian model of globalization” is likely to prioritize regional economic integration and greater transportation infrastructure connectivity, with continental connectivity taking precedence and being followed by cross-continental alliances through free trade and investment cooperation.
The “globalization race” accompanied by the advancement of an alternative globalization model may have started in earnest in 2017 with the launching of the BRICS+ initiative and has been taken to a higher level still in 2018 with the propagation of regional integration projects undertaken by the Global South – the launching of the African Continental FTA and the discussions on the cooperation between the Pacific Alliance and MERCOSUR in Latin America complemented by further progress towards the creation of RCEP in Asia.
The rapidity of the catch-up play on the part of the Global South in forging greater economic integration may be significantly enhanced by the use of the “integration of integrations” vehicle, namely the cooperation platforms among regional trading arrangements (RTAs). The use of the “integration of integrations” may prove to be the competitive edge of the Global South, given the lower scope for such integration on the part of the well-structured and conditionality-ridden integration groupings formed by advanced economies. In line with the Gerschenkronian paradigm (A. Gerschenkron, “Economic backwardness in historical perspective”) the Global South may exploit some of the advantages in following the advanced economies that have accumulated a wealth of both positive and negative experience in the sphere of economic integration and globalization.
In the end, given the current state of affairs in the global economy rather than ideology or inter-civilizational strife, the emerging paradigm of global competition may be at least in part about the most appealing and competitive vision of the economic mechanics of globalization. Importantly, in devising the new model of globalization China and its partners in the Global South are not following the seemingly more straightforward, but likely more treacherous path of simplistic imitation of the main characteristics of the globalization model of the advanced world. Instead, the emerging model of globalization is innovative and aspires to present a more competitive and inclusive model of globalization. Admittedly, a lot of the work for Global South still lies ahead – the delineation the exact contours of the alternative globalization vision may be one of the more important developments in the intellectual debates of the next several years.