Globalization Without Uncle Sam
Globalization Without Uncle Sam
TORONTO: President Trump’s bellicosity towards global integration is reducing America’s already waning prominence in a world increasingly defined by interlinkages of hyper-growth developing countries. It’s ironic that thanks to Trump, an oft-repeated mantra of Iran’s former President Mahmoud Ahmadinejad – “A world without America is not only desirable, it is achievable” – now seems less delusional.
After the Second World War, the United States played a critical role in defining the international economic order and political institutions, taking reins from the British Empire which commanded 21 percent of the global economy a century ago. The US market, comprising about 25 percent of the world economy, has enticed businesses around the world. China’s opening invariably meant supply of low-cost manufactured goods to the US, and India’s liberalization allowed export of software services to American corporations. Spending more on military than the next seven countries combined, the United States leads NATO and is a protector of many allies in the world. Similarly, the US has been a magnet for research and innovation, attracting the world’s brightest from a young age.
It’s no wonder then that globalization became synonymous with Americanization – though the country’s retreat is unlikely to abate the rising tide of globalization that has made developing countries increasingly dependent upon one another for trade, defense, education and even entertainment.
As the largest single market, the US is a coveted trading partner, but rapid growth made China the shining star of international trade in recent decades. A closed economy until the economic reforms of the late 1970s, China became the world’s largest exporter of goods in 2009 and the world’s largest trading nation, importing and exporting a total of US$4 trillion in 2013.
Despite hue and cry, China exports less than 20 percent of its goods to the United States. More than 100 countries count China as their leading trade partner, from India next door to Congo in Central Africa. China’s exports to developing countries alone exceeded US$1.3 trillion last year. In fact, Janus Capital Group, a global investment firm with US$200 billion-plus in assets under management, expects “the intra-Asia trade lane to remain the fastest growing trade lane over the next decade.”
Outside of its home continent, China has expanded its relationship with Africa exponentially, increasing trade fortyfold over 20 years; ditto for Latin America where President Xi Jinping has set an ambitious goal of US$500 billion in trade by 2020. China’s trading success has come from its willingness not only to sell products, but also invest in economic capacity and growth in other countries – launching the Asia Infrastructure Investment Bank with US$250 billion lending capability is but one example.
With a determined China doling out US$1.6 trillion on its ambitious One Belt, One Road Initiative, America’s withdrawal from the Trans-Pacific Partnership or Trump’s insistence on rewriting NAFTA might decelerate growth of international trade, but cannot arrest jumping trade volumes among developing countries.
As the largest military power and a founding member of NATO, the United States has led the West in protecting freedom, peace and security around the world. However, the new government in Washington has repeatedly criticized allies for not paying their fair share for defense. "Frankly, Saudi Arabia has not treated us fairly, because we are losing a tremendous amount of money in defending Saudi Arabia,” Trump said to Reuters, in announcing his first overseas trip to Saudi Arabia, Israel, the Vatican before joining a NATO meeting in Brussels and the G20 in Sicily. While Trump was busy chastising Saudi Arabia, Raheel Sharif, former Pakistani chief of army staff, landed in Riyadh to head a 41-nation Islamic Military Alliance set up by Saudi Arabia purportedly to combat terrorism. Some has dubbed it as “Arab NATO.”
On Saudi Arabia’s part, the country went out of its way to welcome Trump, accepting US$300 billion worth of deals and putting together a last-minute summit for the president to address. The financial deal gives Trump leeway to boast recouping some of the military losses he lamented. At the summit, Trump urged the Saudi-paid Sunni alliance to lead the fight against extremism and the Islamic State, cementing Saudi Arabia’s leadership claim to the Muslim world and sidelining Shiite-denominated Iran. By backing the Islamic Military Alliance, the United States takes a sectarian stance in the region. While the United States itself would take a backseat by letting the alliance lead security affairs in the Middle East, it allows 41 nations to develop new dependencies and potential flows of money, personnel and arms.
Overall, general withdrawal or even perceptions of withdrawal by the US from overseas military commitments might lead to formation of new alliances required to combat transnational challenges, whether terrorism or nuclear threats from Iran or North Korea.
Disinterest in international affairs will erode preeminence of the US system of higher education. With perceived rising xenophobia and proposed cuts to US research funding, more scholars from developing countries – representing the bulk of more than 4 million students studying abroad – are looking elsewhere. English-speaking countries like Canada and Australia are obvious beneficiaries of America’s retreat, but so are China and Russia which have grown their share of international students from almost nil in 2001 to 17 percent in 2016, according to data collected by the Institute of International Education.
American universities, perhaps partially to counter the negative reception of international students, are accelerating development of international educational institutions in regional hubs. It’s now possible to earn a medical degree from Cornell in Qatar, an engineering degree from NYU in Abu Dhabi and a liberal arts education from YaleNUS in Singapore. If the trend continues, more international students will pursue an American education abroad rather than in the United States.
Nothing has done more to make globalization synonymous with Americanization abroad than Hollywood. From Rio de Janeiro to Jakarta, Titanic represents an American movie rather than a doomed ship. An image of unwelcoming America, combined with tit-for-tat trade restrictions, will fast erode the omnipresence of US entertainment worldwide. Manipur in India exemplifies how entertainment from a non-English ethnic and language group can fast capture the imagination of a local audience. Local authorities banned Hindi movies in the late 1990s to preserve the Manipuri culture, and soon Korean pop culture started to fill the void in entertainment options. Fast forward to today: Kimchi is the favorite dish, and youth in Manipur sport spiky haircuts, observes Al Jazeera.
Internet access and mobile penetration make it easier for consumers to enjoy movies and TV shows from around the world, eroding Hollywood’s supremacy. Language, too, has ceased to be a barrier. Translations are increasingly available: Viki, a Singapore-based global website where shows are subtitled into 200+ languages by a community of fans, was acquired by the Japanese e-commerce giant Rakuten for US$200 million. Bollywood, long enjoying a strong following in neighboring South Asia and among the diaspora in the West, is starting to crack the Chinese entertainment market. PK, a star-studded Bollywood movie released in 2015, made US$20 million at the Chinese box office, the highest single territory overseas gross ever for an Indian film. With an emerging middle class enabling bigger budgets for local entertainment industries in developing countries, it’s only a matter of time before these command a bigger share of the global entertainment industry, possibly at Hollywood’s expense.
Although the Golden Era of Globalization owes much to the openness of the US economy and society, America’s insistence on rewriting rules of engagement to its advantage won’t stop the growing interdependence among developing countries. Given that the geopolitical landscape already conforms to globalization, pursuit of “I win only if you lose” policy in international deal-making could transform “America First” into “America Alone.”
Hassan Siddiq, @hassansiddiq, studied Grand Strategy at Yale College and is a former investment banker.