Challenges of work in a new era
The challenges facing the globalisation process are becoming increasingly important. In recent times, globalisation, generally defined as the free flow of goods and services, people and capital, is forced to face political, economic and social tensions and rejections in various parts of the world.
First, global trade in the first half of 2016 was at a six-year low, with year-on-year growth reaching only 80 per cent of the GDP growth rate. Progress on the TPP is not guaranteed, and the chances of a TTIP deal between the US and the EU are increasingly slim. Nafta, hitherto a symbol of trade openness, and the global regulation that has maintained the international order of trade and free trade agreements for decades, are already under pressure to change towards more protectionist positions.
On the other hand, the number of immigrants worldwide is estimated at 65 million, a third of them refugees. Nationalism is gaining strength in many countries, including Europe, where xenophobic movements are already limiting human flows. Let us recall that the main reason for the Brexit voted by the British last June was immigration. In its wake, many European parties of extreme ideology have gained strength and are insisting on closing borders and imposing barriers to immigration. In the US, President Donald Trump promised during his campaign to build a huge wall on the border with Mexico to stem the flow of migrants. And the refugee crisis in Europe is at its worst since World War II, against the backdrop of the constant threat of terror from Islamic extremism and Daesh.
Limitations are also affecting the freedom of capital flows. In response to the logical moves by multinational companies seeking to establish themselves in countries with the most significant tax advantages, measures are being adopted to control tax practices such as tax ruling. For example, in August 2016, the European Commission demanded that Ireland reclaim $15 billion from Apple for unpaid taxes, alleging that the company benefited from its tax regime in violation of competition rules. On the other hand, there are uncertainties about the continuation of free capital movements in the global economy. In the early stages of establishing the eurozone, southern European countries took advantage of the low cost of credit to obtain a large-scale and very short-term individual financing. However, the advent of the crisis has divided the eurozone between creditor and debtor countries, widening the gap and increasing tension between the two sides, and this freedom of flows is being compromised. We are also witnessing a growing tendency for some governments to pressure and persuade their local companies to concentrate domestically to improve employment levels.
It seems clear that globalisation, which has spanned 70 years after the Second World War, has been beneficial to all. Free trade and foreign investment have lifted hundreds of millions of people out of poverty. Foreign direct investment (FDI) has brought global improvements in competitiveness, know-how and technical skills, and has contributed to job creation. Mass immigration flows have benefited the migrants themselves and the economies of the countries that have taken them in.
The problem arises because globalisation is a process that inevitably generates winners and losers. Those who possess the skills and abilities to adapt to this process will be in a winning position. At the other end of the spectrum are those who have been forced to accept stagnating or declining incomes, with job losses due to increasing automation and outsourcing production processes. The imbalance between the two continues to grow. As a result, populist movements are gaining presence by exploiting fear and discontent. In response, we need to push for adequate training and improve the technical training of workers immediately. It is also necessary to extend and strengthen the social security system so that the fruits of globalisation can be enjoyed and shared by as many people as possible. It should be borne in mind that the Great Depression of the 1930s and the global recession experienced between 2007 and 2009 were caused by severe economic imbalances between individuals.
In any case, protectionism and the closing of borders can serve as an effective measure to solve the problem of globalisation. In a sense, technological advances make globalisation inevitable. Therefore, countries with liberal trade patterns, including South Korea, must work together to curb the spread of protectionism. And all this without losing sight of the need to continue to uphold and expand our values of respect for human rights, tolerance, pluralism and openness.
In the early 19th century, during the industrial revolution, the expansion of the use of spinning and weaving machines reduced the work of workers, which generated a resistance movement called Luddism. However, industrialisation allowed for the creation of new jobs, which were filled through the training and education of workers. Similarly, in this fourth industrial revolution that we are currently experiencing, we can move creatively and constructively towards creating new businesses and jobs in sectors such as ICT, services and digital commerce, in line with the technological advances that the 21st century is bringing.
In the last century, we have already experienced two humanitarian disasters in the form of world wars, which were rooted in nationalism and protectionism. We are now at a time when globalisation is facing new challenges in various parts of the world. Our mission is to maintain human peace and prosperity and take a new approach to this process of globalisation.
(Park Hee Kwon diplomat of the Republic of Korea)
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