The writer is professor of globalisation and development at Oxford university and the author of ‘Rescue: From Global Crisis to a Better World’
The climate emergency, Covid-19 crisis and Afghan debacle have in common the dismal failure of leading powers to work together. These crises have exacerbated underlying inequalities in health, nutrition, gender, ethnicity and income. Many of these are defined geographically. Rather than globalisation producing a world that is “flat” or leading to the “death of distance”, place matters more than ever.
Global-scale crises have particularly devastating consequences for poor people. In Africa the crops and livelihoods of those living on the most fragile land are the first to be destroyed by climate change. And whereas only 1.8 per cent of people in poor countries have received a single Covid-19 vaccine dose, the vast majority of people in rich countries have.
The pandemic is also compounding economic inequalities. While rich countries have found over $17tn to sustain their businesses, retain jobs and reinforce safety nets, poor countries have little capacity to do likewise. As a result, over 100m people have been pushed into extreme poverty and around 118m more people have faced chronic hunger, making the economic consequences of Covid-19 more deadly than the virus itself.
The failure of rich countries to live up to their commitments to assist poor countries has led to the Sustainable Development Goals and Paris commitments to contain global warming to 1.5C being derailed.
The climate, Covid and conflict crises have not only widened the gulf between rich and poor countries; they also are widening inequality within high-income countries. In the UK, people in the poorest 10 per cent of areas were almost four times as likely to die from Covid as those living in the wealthiest. A million more people are likely to swell the ranks of the unemployed when the UK government’s support for businesses is removed in the coming months.
In the rich countries, government spending might have diminished the economic pain, but after a lull caused by lockdowns, 2023 threatens to be a year of peak carbon emissions as spending on infrastructure results in soaring demand for coal, steel and cement.
Globalisation has been the source of the greatest improvement in livelihoods in the history of humanity. But the failure to manage it is leading to spiralling systemic risks, such as cyber attacks and financial crises. Rising nationalism undermines co-operation, with slower growth and recurrent crises leading to a widening of inequality. This fuels anger against an increasingly unfair system and deepens support for populist politicians who offer the false promise of cocooning citizens from global threats.
It was the anger and inequity of the financial crisis that laid the foundation for Brexit in Britain and Donald Trump’s victory in the US, as well as the rise of extremist politics across Europe. Divided societies lead to a more divided world. And a divided world is dangerous.
All may not be lost, with the forthcoming United Nations General Assembly and COP26 climate summit among the opportunities to change course. This requires overcoming the retreat to nationalism, starting with an effective commitment to the global distribution of vaccines and to a global green new deal.
We need to learn from the lessons of a century ago, when massive policy errors during the Roaring Twenties led to growing nationalism, widening inequality and global recriminations, culminating in the second world war. The determination of Winston Churchill and Franklin Roosevelt to ensure that future catastrophes would be avoided meant that in the midst of that tectonic battle a new world order was created. The UN, Bretton Woods institutions and Marshall Plan were designed to provide peace and economic reconstruction abroad, and the welfare state to address inequality at home. The result was the “golden age of capitalism”.
What is required now is not a bouncing back from the pandemic to what we had before, or a reset to the pre-Covid operating system. That is what led to the climate, conflict and Covid crises we face. Unless we reduce the growing inequalities within our countries and between them, we are heading towards a bleak future.
Change can be daunting, but it is far less scary than the alternative. Radical changes in government policy, in business behaviour and in our personal choices over the past 18 months demonstrate that previously unthinkable actions can be undertaken. This commitment now needs to inform a wider spirit of renewal if we are to overcome inequality and build the foundations of a more inclusive and sustainable world.
Source: Economy - ft.com
