I was struck recently by some insight offered by BHP Billiton chairperson Jacques Nasser regarding the state of globalisation and its probable future trajectory. During an address in May to an Australian mining audience, he acknowledged that “the common wisdom is that globalisation is old hat” – akin, he said, to “talking about pet rocks and lava lamps”, making it “time to move on”.
But he then went on to argue that the phenomenon is really only “just beginning”. “Exports,” he noted, “are only 20% of global gross domestic product and foreign direct investment accounts for only 9% of total fixed investment. More importantly, less than 20% of Internet traffic crosses national borders. And, on a social level, only 2% of students are at universities outside their home country, and only 7% of directors of the Standard & Poor’s 500 Index companies live outside the US.”
Nasser’s take: lower transportation costs, better communications, rapid advances in technology, together with the need to increase efficiency, will result in a further acceleration of globalisation.
While the assessment can and will be contested, it appears rooted in logic. And, if correct, it has profound implications, some of which could be quite frightening for this country.
If globalisation is poised to accelerate, South Africa, which is regarded as a relatively open economy, is unlikely to be able to close and open the door to its opportunities and threats. Instead, the country and her citizens will either become victims or victors – probably a little of both.
What is apparent for me is that South Africans (particularly policymakers, but also businesses and civil society organisations) should make a serious effort to reassess our place in the world. In doing so, we should be conscious not only that globalisation is a reality that is unlikely to recede, but also that the locus of economic power, which has been tilted westwards for more than a century, is being rebalanced.
We will have to grapple with what a further acceleration in globalisation could mean and seek to develop strategies that enable us to adapt to its risks, seize any opportunities associated with greater inter- connectedness, and deal competently with the emerging geopolitical realities.
There will be no single answer to these imperfect socioeconomic equations. But there will be constant choices. Should we embrace continued liberalisation, or should we seek to slow, or even reverse, its progress? Do we integrate further regionally and interregionally, or should we focus all our efforts on national goals and on safeguarding sovereignty? Should we place stringent conditionalities on foreign investors, or lower the barriers further? Do we want to make things that the world will use, or use our mineral and agricultural riches to enable us to consume the things others make?
These choices will also have to be made on the go. Some will help create wealth, reduce inequality and generate jobs, while others will result in the exact opposite. The trick will lie in making as few mistakes as possible, and being ready to adapt quickly when it is clear a strategy is failing.
Unfortunately, South Africa’s current political and business leadership show few signs of possessing the mental and strategic dexterity required to help us navigate the enormous changes that are already here and are certain to follow.