What Comes After Globalization?

It is 2022, and many say that globalization is over. Others say it’s just entering a new era. Either way, it’s evident that a new world order is coming, and it will likely be in place by 2030. What it will look like is anyone’s guess. To learn more about what’s to come, GLG’s Conor Akin hosted a teleconference with Michael O’Sullivan, former Chief Information Officer of Credit Suisse International Wealth Management and author of The Levelling: What’s Next After Globalization.

How do you measure de-globalization and its trends?

Globalization is somewhat ethereal. It’s broad and affects many parts of our lives, like how we communicate, the media we consume, our finances, and more. To quantify it, we observe things like trade to GDP, the pattern intensity of financial flows, the flow of ideas, the flow of data, the way the internet is moving, and migration.

It’s also helpful to see if companies are investing abroad or just trying to get people abroad to buy their goods. There’s a difference. Economic nationalism, tariffs, and the level of collaboration between countries are all markers of an interconnected world. During globalization, collaboration was urgent and generous.

Lately, it seems like the world is becoming more regional and multipolar. China’s actions in Hong Kong, the lack of collaboration between countries around COVID, what’s happening in Ukraine, trade wars, and the move toward strategic autonomy in many countries are all examples of things that wouldn’t happen or would have transpired differently in a globalized world.

What are your thoughts on de-globalization in the U.K. since Brexit, and do you think some Western countries will see more of this trend than others?

The most globalized countries are small countries. Sweden, Switzerland, and Ireland have contained inequality by using the tax systems to redistribute the boom from globalization across society. That hasn’t happened to the same degree in the U.K., where globalization focused more on London. In the U.S., a lot of the big companies won the benefits of globalization. That mismanagement led to discontent in Anglo-Saxon countries. A repeat of Brexit is unlikely.

The E.U. should become more serious or more pointed in terms of who it feels should be a member or not. Scotland can be a member in the future. Hungary risks being excluded. Some of the countries waiting, like Serbia, may drop off that waiting list. So what’s going to happen, I think, is you’ll see a world that’s more conditioned by values. In Europe, that’s happening slowly. In Asia, there’s a sense, maybe not of Brexit, but a sense that countries will have to take sides against China. So Japan and Korea look like they want to side more with the West and Australia. For other countries like India and Vietnam, it’s much more ambiguous, and they will try to stay neutral.

Do you think in this multipolar world that there will be a country that will benefit the most from it?

It’s difficult to say who will enjoy the most positive change. Europe is in a good position. Countries like Italy that haven’t been so powerful in Europe will benefit on a relative basis. The big questions are really sort of the large, populous countries that are outside these regions, so from Bangladesh to Nigeria, etc., and how they play it and whom do they try to side with — China or the U.S. — and what kind of developmental models they decide to follow. Because the Chinese model is now a model for these countries. A lot of countries will be forced to follow the lead of the big region, which means it would be quite difficult for Britain, for example, to do its own distinctive thing in the context of Europe being a more critical and bigger economic power. A world where Europe is taken very seriously by the U.S. and by China makes it harder for the U.K. to be distinctive relative to Europe.

How do you see the development of democracy versus autocracy? And do you think some traditionally democratic countries could become subject to autocracy by 2030 or slightly beyond, perhaps due to the lack of interest and engagement in certain parts of populations in voting?

Too much of this debate is focused on the fragility of democracy. Many democracies, particularly in Europe, have shown themselves to be resilient. Look at Germany, Italy, and France; they’re all governed from the solid center. If there is more recession or more slow growth in the emerging world, autocracies will come under more pressure because they rely on a bargain between the people and the state. The autocrat keeps his people prosperous in return for their silence. Russia will be a case of that as its economy begins to shrink. It may happen in China. So, democracy should survive, and the surprise factor would be the limits of autocracy.

When it comes to agriculture, what changes would you expect to see around the world?

Access to water. Agriculture is a huge consumer of water, and in the context of climate change, water supply is becoming more contentious. We’re already seeing the effects across Africa and North Africa with food supplies, such as grain from Ukraine being cut off. I think the other big change will be ownership. Agricultural land and agricultural commodities are increasingly seen as strategic assets and will be bid out at a premium to private individuals, companies, or countries. In big parts of Latin America, even some parts of Europe, Eastern Europe, high-yielding agriculture has become a prized commodity.

Another interesting note on agriculture is the use of technology. Drones can manage huge swaths of land and help precisely decide where to put fertilizer, seeding, and all that kind of stuff. It just really scales up agriculture.

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About Michael O’Sullivan

Michael O’Sullivan is an independent consultant with 20 years’ experience in global financial markets, most recently as Chief Investment Officer in the International Wealth Management Division of Credit Suisse. In addition to working in investment management, he was the lead contributor to Credit Suisse’s think tank, the CS Research Institute. Prior to this, Michael spent 10 years as a global strategist at several sell-side institutions. He was also an independent member of Ireland’s National Economic Social Council. Michael is the author of several books and has contributed to journals such as Foreign Affairs, the Financial Times, and the Wall Street Journal in addition to being a regular guest on CNN, BBC, CNBC, and Bloomberg. His latest book, The Levelling: What’s Next After Globalization, outlines what is next in politics, economics, finance, and geopolitics in the post-globalization era.

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This global politics article is adapted from the GLG Teleconference, “The World in 2030: An Outlook on Post-Globalization.” If you would like access to the transcript for this event or would like to speak with global politics experts like Michael O’Sullivan or any of our approximately 1 million industry experts, contact us.