Wanted: Visionary leaders with a social conscience | Fin24

Wanted: Visionary leaders with a social conscience

May 03 2017 05:00

The new divide is no longer that of left and right but rather those that favour an open system versus those that favour a closed one - and the French election is the latest arena in which this is playing out. But in the high-stakes game of protectionism it is the less-developed countries that are likely to lose.

WHETHER or not French voters hand nationalist candidate Marine le Pen the keys to office on Sunday, the French election is the latest in a series of global shocks that show the pendulum swinging away from globalisation, the opening of markets and liberal values.

With the ascendancy of Donald Trump to the American presidency, Brexit, and the growing popularity of nationalist movements in industrialised countries as well as with what has been termed ‘illiberal democracies’, such as Hungary, Turkey, and Russia, it is becoming clear that the narrative of Francis Fukuyama’s ‘End of History’ is ending.

Fukuyama foresaw a linear, unidirectional evolution driven by economic progress away from the nation-state towards the universalisation of Western liberal democracy as the final form of human government.

But in fact, what we have seen in the last few years has been the rise of identity and culture politics and a new form of nationalism that is demonstrating a more complex understanding of the forces at work and that economic modernisation does not trump everything else.

Increasingly there is recognition that the new divide is no longer that of left and right, but rather of those that favour an open system versus those that favour a closed one. On the one side, globalisation is seen not only as an economic imperative but as an important social construct towards global citizenry and a new set of institutions focused on issues of global importance - be it climate change, global security, health epidemics, or the mass migration and displacement of people.

The other understanding is that globalisation threatens traditional ways of life and that global institutions undermine local processes of democracy and that its serves the elite at the expense of hard-working blue-collar workers.

The latter results in a renewed nationalism that focuses on the domestic and that desires the construction of walls, both physical and metaphorical, to protect the local from the other.

These are perilous times because the outcome of this nationalism and protectionism could be a fall in international trade and capital flows. It could also lead to an economic slowdown internationally and to zero-sum economic relations.

Both sides are partly at fault and neither narrative is correct. Globalists have underestimated the importance of national identity and often belittled it, and have not paid sufficient attention to those who are lost through globalisation. While at a macro-level, international trade may result in win-win scenarios, that is not true at a micro-level.

We need to recognise that globalisation resulted in an insider-outsider phenomenon both within regions and between regions. Within countries, it was very often the blue-collar workers in industrialised countries that saw jobs move to lower cost destinations and saw real wages stagnate at the bottom while the economy at the top prospered.

Internationally, likewise there was a process of insiders and outsiders of those who took advantage of globalisation and those who became victims of it. Governments paid too little attention to putting policies and programmes in place to create more inclusion and to provide workers with the skills required to operate in these new economies.

Unfortunately a swing in the opposite direction will not necessarily serve these constituencies any better – especially those in smaller countries. Large economies will be better positioned to handle protectionism because of their large domestic markets but it is the smaller countries, the less developed, that are more reliant on international trade and capital flows that will be the dominant losers in the closed system.

African countries have often been at the receiving end of the nasty consequences of globalisation, but at the same time it is the opportunities within the global economy that will provide them with the ability to grow into middle- and high-income status.

Without access to international trade and capital these countries are going to be the major losers in this process. In the high-stakes game of protectionism it is the big players that are going to be at the table and going to be drawing up the rules of the game while the less-developed are going to experience the consequences.

Furthermore, many of the global problems that require international responses, such as climate change, will affect developing countries disproportionately. Scientists are in agreement that African countries are going to be disproportionately negatively affected through global warming.

Many African countries in recent years have experienced positive growth through trade because of trade agreements with the European Union or the United States and a rise in protectionism threatens this and closes one avenue to prosperity.

We are increasingly moving into a world where volatility, uncertainty, complexity, and ambiguity are part and parcel of the new dispensation. In this environment, business leaders and policymakers need to be able to adapt and learn to operate successfully in such challenging times.

A new generation of leaders is required to make the case for liberalism and the values of freedom but which recognises the disparities and inequalities that globalisation has often resulted in.

Rerverting to the globalisation of old is not the solution and a new narrative is required which reinvents the liberal ideals but which acknowledges the disillusionment and addresses the marginalisation of many.

We seek visionary leaders with a social conscience who will make the case for a new liberalism that harnesses innovative solutions to societal challenges. It is time to reclaim the narrative.

* John Luiz is a professor at the Graduate School of Business, University of Cape Town; and a professor at the University of Sussex, UK. Views expressed are his own.



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