2017 will be an important year. Major changes are planned in the political field, but this year the G20 economic talks are also on the agenda.
Brexit continues to keep things going and the new President of the United States is also heading for a strong protectionist policy. In addition, elections are on the agenda in Germany, France and the Netherlands. Parties that argue for secession and a strong nationalist, protectionist course are on the move.
It was the solid economic work of Piketty that raised the issue of globalization. Economic growth in recent decades has become increasingly one-sided. At first the lower social groups lost the connection, but slowly the middle class also started to suffer from skewed growth.
Politicians have failed for years to properly reform their labor and financial markets so that all groups in society could benefit from globalization. The question is whether politics has learned that lesson? For the time being, this question cannot be answered in the affirmative. Measures, which are also allowed under the WTO to provide a little more protection for their own market, have been ignored. Tax avoidance measures are remarkably avoided.
Not wanting to address the real problems, the elephant remains in the room. Because citizens do see the benefits of globalization. The citizen has it in his hands every day; the smartphone. But politicians forget to say that globalization also has its negative effects. Continuing to only mention the benefits is no longer sufficient.
More and more jobs for the less educated are disappearing in developed countries. In developing countries, workers see how they produce ‘very expensive’ products for developed countries at an excessively modest wage. Both sides experience the skewed distribution.
Germany is chairing this year. Merkel has already given the first shot ahead: “shape an interconnected world”, make globalization work for all, intensify international cooperation, and oppose isolationism and any return to nationalism. It is striking that they avoid the word ‘Protectionism’. Something that Donald Trump is fully committed to with all possible consequences.
With the further emergence of automation and robotisation, this year is therefore more important. If politicians ignore the justified concerns of groups in our society that do not have a connection and benefit from globalization, then we fall into nationalism and protectionism. This will ultimately disadvantage all countries and will exacerbate political and geo-strategic tensions. Or do the politicians really jump over their shadows and take measures to distribute globalization better and fairer so that the new developments not only boost our economies but also let everyone share in them.