Editor's note

However, the world leaders’ meeting in Davos this year produced a flock of opinions that might be interesting to remember for months and even years. In fact, it was the World business forum in Davos (2009) that for the first time publicly and at high level confronted the essence and effects of globalisation, almost provoking a u-turn in so praised an achievement. “International trade and investment is falling and protectionist barriers are on the rise. Economies are shrinking and unemployment is growing” (Rachman G. When globalisation goes into reverse. Financial Times, February 3, 2009, p. 9). 

De-globalisation rethinking

The symptoms of the new phenomenon have been seen already a couple of years ago. Presently, the derailing aspects in globalisation became obvious.

First of all, states’ interference in public affairs becomes both outraged and damaging to the initial notions of “positive globalisation”. Governments in Europe, US and other countries chaotically struggle to bail out banks, financial and credit institutions, public and even private companies and sectors of industries. Quite often, regardless of the competition rules promoted in various regions and states (for example in the European Union prohibiting state aid as a form of protectionism in a free market) the state aid to national industrial champions (e.g. in France, Germany, etc.) is seen as a partial way out of crisis.

Second, there is the growing pressure on banks and financial institutions force them to retreat from international business and concentrate more on domestic markets. Numerous countries in the world have found themselves in danger of being crowded out of international capital markets being exposed to “de-effect” - de-coupling, de-railing, de-fused and de-activated.

Third, the growing threat of financial protectionism is nothing new, in fact: it is driven both by the economic “perception” of the market and domestic political pressures. Banks that have lost capital markets abroad are subject to more stress retreating to ever greater competitive home markets. As soon as many banks have been bailed out by the national governments (often with huge support from foreign sources), they are also coming under political pressure to lend at home rather than abroad. These actions are becoming less profitable, as it seems the fact at present.

Fourth, rethinking of the initial assumptions underlying globalisation went further through calls for greater international supervision of the financial system, both nationally and internationally.

Present financial crisis demonstrated that globalisation had created an economic system more complex, sometimes even dangerous, and less understood than the economists and politicians had ever realized. Their inability to tackle the threat of protectionism can be a real threat to globalisation, turning it to the “de-process”.

For the moment, these ideas have not caught up with the mood in the real world: it still generally proceeds along the “traditional lines” of open markets and international integration. But more and more politicians pursue their national interests backed by popular support in home countries. It seems that less and less people adhere to “globalisation tunes” making them more “de-globalised” and more national oriented. 

The way to new economic-political cooperation

At least one good follow-up of the global leaders’ meeting in Davos is that the virtues of free-market principles, regional and international economic integration remain largely unchallenged. Or better to say, the balance between free trade and regulated one is becoming more questionable.  

However, the leaders generally emphasized how universal these principles and ideas are at present time and that the ideas that underpinned globalisation would remain firmly in place. So to say, let’s hope for the best!

Much closer cooperation between the policy intentions and economic guidelines are needed; at least at national level. It’s even better if these cooperation efforts are finalized in optimal and efficient legal and regulatory measures.

In the meantime, the leaders are recommended to turn global threats into new possibilities. The European Union has already done it, e.g. proclaiming 2009 the Year of Innovation and Creativity. What could be better at present time!