The world is changing fast and to keep up you need local knowledge with global context.
As globalisation made the world flat again, there were those who benefitted and those who didn’t. And it seemed the longer it went on for, the greater the divide between the winners and losers got. The biggest stimulus against this movement was the Global Financial Crisis, an event that to this day is still leaving its mark. And the biggest statements against globalisation have been the Brexit and Donald Trump votes, the two bastions of globalisation saw votes against the very movement they started. Both outcomes signal a retreat, an insular move whereby fear of the ‘one’ world was used with low growth, income equality and unemployment. Political analyst Daniel Silke has just returned from two weeks in the United States, he penned the below response to this growing trend of populism. Fasten your seat belts, it’s going to be a bumpy ride. – Stuart Lowman
By Daniel Silke*
The Western world is experiencing a degree of domestic political upheaval unprecedented in recent years. Both the unexpected Brexit vote and Donald Trump’s ascent to power has created a new sense of unease on both sides of the Atlantic.
Over the next year, domestic politics in Italy, France and Germany could similarly undergo substantial change as emboldened populists seek to alter the existing course thereby feeding a new and more militant nationalistic zeal.
In a world in which global co-operation and the ‘flattening’ effects of globalization were seen as positive consequences only a decade ago, deeper anxieties and resentments are creeping back into the Western discourse.
A low-growth economic environment in both Europe and the USA, rising levels of income inequality and lackluster demand for goods and services has been exacerbated by stagnant (or falling) levels of wage growth. And, in a setting still largely recovering from the post-credit crunch era, citizens are currently in a long-term spending adjustment to reprioritize their needs.
An ageing West means more spend on health-care and retirement-based services whilst younger citizens fret about rising costs of education and the implications of debt for years to come should they fail to find suitable employment. These two fears from both sides of the generational divide create tension.
Technological advancement has always been mooted as a panacea for all ills. However, at this stage of human endeavor, the rise of mechanization and robo-sourcing threatens jobs in a variety of industries.
Workers feel increasing pressure from a coming wave of automated manufacturing techniques that are set to unleash a new industrial revolution of dramatic proportions. In a world in which educational systems still largely fail to deal with re-skilling, those who fear being left behind have very genuine suspicions.
These factors now combine with the broader political shifts occurring across the planet. Growing economies in the developing world – particularly in China and India given their huge demographic advantage further create unease in the West. Large-scale poverty reduction has occurred in the last decade – but a fair proportion has been because of the revival of China after centuries of slumber.
As jobs have moved East, so the West has become uneasy. The gleaming cities of Shanghai, Chengdu or Dubai may intrigue Westerners, but it also creates a sense of apprehension. Their growth and infrastructure prowess – from ports to airports to mass transport to skyscrapers – is a very visible reminder of weakness and decline back home.
A largely liberal and democratic West have also been witness to the increasing political might of an autocratic China and rebirth of Russian nationalism. And, as the Middle East continues to be a source of global instability, the effects of the Syrian meltdown and resultant refugee crisis has only served to spur on fear in London, Paris and seemingly middle-America. Global terror and unfettered migration adds to the attractiveness of a ‘fortress’ style future for both Europe and the US as a solution.
Age is not only a determinant of changing spending priorities. It also has an unintended political consequence in the expression of greater conservative or protectionist thinking.
Western electorates are getting older – a lot older. There are already more than a million voters over the age of 90 in Italy alone. More mature voters are also likely to show a propensity towards self-preservation and more insular thinking which both Brexit and Trump confirms.
Demographic change is now beginning to have a direct bearing on policy choices and will continue to do so as the planet ages. Indeed, this is not just a Western phenomenon and will soon be felt in the China and Russia as well.
These issues combined bode ill for those who see greater co-operation between the West and rest as critical to the future of the planet.
Already, the Trump doctrine calls for an undefined reversal of trade and job-related globalization that has been a core feature of world economics in recent times. Walls, borders and protectionism in both human and trade spheres are a manifestation of these concerns.
And as the Brexiteers and Trumps of this world have shown, there is a much greater degree of legitimization of this view currently in the political mainstream.
The political center which has long been a bulwark against populism in the West is no longer holding and a rising tide of Nationalism is seen a way forward. This is an era in which Nigel Farage, Marine Le Pen, Gert Weelders and Donald Trump have become mainstream.
The problem with nationalism is that it can lead to the politics of exclusion. Multi-cultural values are eschewed as antithetical to the interests of the state. This can benefit one group over another leading to societal polarization and domestic conflict. Nationalists often prey on fear forging alliances with more extremist elements in society to gain a grip on power.
For the West, these are testing times. There can be no getting away from the fact that deep-rooted insecurities are being felt because of a confluence of factors. The shifting sands of liberalism vs populism now at play in the West makes for unchartered territory in governance. And it adds to the pressure on those countries whose own leadership and policy deficiencies have largely been instrumental in creating this level of internal dissent.
For the moment, moderate politics is under pressure. A lack of credible and convincing leadership along with an inability to tackle the systemic problems at hand have brought us to this point.
Both Europe and the US therefore face an uncertain short-term future as new political forces seek to impose a different world-view. But just as the centrists have largely been unable stave off voter concerns, it seems unlikely that the nationalists will do any better.
The experimentation with a populist and/or nationalist agenda will add to heightened political risk which in turn can have far-reaching consequences for Africa and emerging markets. As if the world was not complex enough, it is about to experience more volatility. Fasten your seatbelts.
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