By Dele Sobowale
“In today’s global markets, you don’t have to go abroad to experience international competition. Sooner or later, the world comes to you. The global market place is information based. Knowing how to learn is the central skill that allows a company to move up the value curve. The trick is to protect the past while building the future.— Harvard Business Review. HBR, March-April 2003. VANGUARD BOOK OF QUOTATIONS, VBQ, P 75.
THE first tentative ideas about globalization of markets originated in the US at Harvard Business School, HBS, where people like Professor Theodore Levy were pushing the idea of open markets worldwide. In the beginning it was an idea promoted by the West and Japan, who were dominant in the global economy.
They had the lead on everything which could assist them in dominating world trade – computers, ICT networks and human resource development capacities, among others. But, by 1993, even believers from other nations were beginning to buy the idea of globalization.
In 1993, an Indian manager was writing in support of globalization in the same HBR, March-April 1993. In his words, “Think global and act local” goes the saying, but that is only half the truth. International managers must also think local and then apply their local insights on a local scale.” With Americans leading the universal crusade and everybody attending HBS swallowing the pill, it soon became the Holy Grail of economic policy everywhere. To make it more palatable for the world to swallow the dubious medicine, the US generously supplied the funds to nations willing or eager to accept it. And, those nations grew rapidly – especially the nations of South East Asia whose successes were then advertised as the way to go.
The same trick was tried in Africa. But, our leaders being generally unimaginative and selfish did not even realize that they would have had more money to steal by helping their nations to bake bigger cakes. They were contented to steal from the small piece of cake.
That was their tragedy and ours – because we never had a chance to experience the inflow of vast amounts of dollars on the same scale as the Asian Tigers and even tiny Singapore. Today, however, what was a tragedy in the last forty years might now be turning out to be a blessing in disguise. The US, UK and some nations of Western Europe are now getting ready to disclaim the globalization they once actively promoted. The question is: why?
One article will not sufficiently allow us to discuss all the worldwide ramifications of globalization. So readers can expect more articles as events unfold in the future because the turnaround by the West on a policy they once championed will have long term implications for the Nigerian economy. The younger the reader is, the more he is urged to follow the series as it goes on. Even Nigerian economic policy makers are asked to pay attention because failure to prepare Nigeria for a future that is rapidly unfolding will bring another series of disastrous consequences.
Only one country, in the entire world refused to be bullied into accepting totally the principles of globalization as advanced by the West. That nation was China. Its people partially closed their borders; determined their own long term goals and development plans; poured funds into education and research; selectively borrowed ideas from the world – especially the US, Germany and Japan.
Chinese local innovation
They then worked on the improvement of those ideas; mixed them with Chinese local innovation and today have emerged the second largest economy racing to be number one. It is the rise of China to economic leadership, now and in the future, which had thrown Western leaders like “Fuhrer” Donald Trump of the US,
“Mussolini” May of the UK and “Copy Cat” Pen of France of France into a frenzy. They can foresee a future in which white people no longer dominate the world and dictate to coloured races; and instead, they will be dominated. For them that future is real and scary. China had risen to global economic leadership by, first, rejecting the dictates of globalization. Then, after China had sufficiently strengthen itself, it had accepted globalization and it is forcing the West to take the poison they forced the poor nations of the world to swallow – for their own benefit.
What China saw right from the start, which escaped the rest of the world, became more apparent to the South East Asian countries later. Lee Kuan Yew, the father of Singapore, made two observations in his global best seller, FROM THIRD WORLD TO FIRST. First, he wrote, “None of the leaders [of South East Asia] realized the implications of the globalized financial market of instant communications between the main financial centres of the world – New York, London, Tokyo –and their representatives in the capitals of East Asia. The inflow of funds from the industrial countries brings not only benefits of high growth but also the risk of a sudden outflow of these funds.” [Underlining mine].
Nigeria is currently experiencing the implications of that statement by Yew. When crude oil sold for $110-145 per barrel, there was no scarcity of dollars on account of huge Foreign Direct Investment, FDI, flowing into the oil sector. As crude prices started the slide downwards the International Oil Companies, IOCs, first reduced the inflow of FDI; then they started selling their less profitable oil blocs and repatriating their funds – IN DOLLARS!! Today, the inflow of FDI into the oil sector had stopped almost completely. Outflow is increasing.
Why is Nigeria in this predicament? The answer can partly be found in the diagnosis of the problems of the South East Asian countries when they had their fianacial crisis. As Yew rightly observed, “In a globalized economy, where Americans and Europeans set the rules [underlining mine], through the WTO (World Trade Organisation) and other multilateral organizations, it is wasteful to use capital without regard to market forces.”
Until recently, the West set the rules and ensured they were in its favour; they established several global organizations as referees, confident that they will always win the game. They also encouraged wasteful spending in places like Nigeria – NNPC is example. It never occurred to them that any country outside the global “cabal” will rise up, despite the deliberate disadvantages placed in their ways by the West. But, today BRICKS – Brazil, Russia, India, China, Korea (South) and South Africa – had stepped up to challenge the West and they are winning.
The temper tantrums of Trump, May, Pen and others wanting to overturn globalization is akin to a cheater at a card game who keeps losing despite his unethical behaviour suddenly getting up and wanting to end the game prematurely or wants the rules changed once again. The West is losing badly in a game they started, and forcefully promoted worldwide.
They are poor losers. Mrs May needs to be reminded that Britain originated the beautiful game of football, but, it has only one miserable World Cup to show for it. Sportsmen/women, unlike politicians don’t change the rules of the game when they are losing. Only unethical politicians do that. Globalisation has failed because it had created a larger pool of “Have-nots” in the world compared to “Haves”. It is partly fuelling global terrorism today by increasing the number of those who have nothing to lose.
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