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AB 2000 studies

Alain Boublil Blog


The new globalization

Globalization is dead. Vive la globalization ! The economic and political crisis to which the world is confronted today with the lasting consequences of the Covid-19 pandemic and of the invasion of Ukraine by Russia shows the end of the globalization as it was known during these last decades. The occurred breaks are hurting much more heavily the economic situation of the countries than these caused by the oil shocks in the Seventies, the reforms in China during the Eighties and the Soviet Union collapse at the beginning of the Nineties. Economies had progressively been able to adapt themselves to these phenomena. Global industrial supply chains had allowed to producing at the best cost and had profited to consumers. Financial exchanges liberalization had facilitated enterprises investments where they found new markets or when they wanted to benefit from competitive costs.

The distance covered had not been quite quiet. Financial markets liberalization which had allowed States and enterprises to having access to the financing they needed had not been without risks because occurred unbalances in an economic zone had repercussions on the whole world economy, as during the Asian crisis in the Nineties, the sub-prime crisis ten years later followed very quickly by the euro crisis. The situation today is different: the States have understood the limits of the past model. A new exigence has appeared, the safety of the supply of commodities and of essential industrial products because that one has been seriously affected by much stronger political tensions than in the past due to Russia action and to the appeared worries with China ascension.

The future international economic relations model is to be invented and that in a context where a new constraint has appeared, the transformation of production and consumption modes to protect environment. France is directly concerned due to the structural unbalance of its foreign trade exchanges for twenty years and to an unemployment rate which remains high, despite its recent diminution. The country has benefited from the productivity gains and from the foreign low production costs which has allowed to it to recovering a low inflation rate, essential to keep its credibility inside the European Union. But the French economy has suffered from the excessive de-localization action of its enterprises, frequently very costly, without a real creation of value. They have also been prejudicial for employment. These de-localizations have constituted a supplementary source of vulnerability at a time when political tensions were affecting the supply chains. Globalization has then found its limits.

Every country will have to contribute to the construction of that new globalization because it is unthinkable that we come back to a general isolated era and to a closing of the borders when new technologies, which have been massively endorsed by the world population, allow a general circulation of ideas and information. But this contribution and the efforts to be done to adapt the structures will not be the same everywhere. France has special efforts to accomplish due to the weaknesses mentioned above. Its economic model will have to find a new balance.

The first one among the priorities concerns the coming back to its energy independence, which only will protect in the future against the risks of supply rupture and against the transmission of the inflationist tensions which will appear each time a political crisis will affect the fossil fuels exchanges. Their utilization is not going to disappear from one day to another, even if it must be reduced. Each crisis affecting a producing country will lead to tensions on prices and we observe today to which point the country can be hurt. The answer must be without any ambiguity: to find as soon as possible the best equilibrium between renewables and nuclear. So massive investments must be done without any delay to give back to nuclear power production a share which allows the country to be better protected at a time when the electrification of the economy is going to increase.

After, the State must recover its role as a Strategist-State and not anymore close its eyes in front of unreasonable foreign acquisitions, which generate de-localizations and most of the time later heavy losses for the company. When it is a shareholder, whatever is its level, it must make public its opposition to the board members. When it is not, it must publicly show its reserves. The abandon of this silent neutrality would certainly have allowed to avoiding disastrous decisions which have leaded to Alcatel disappearance and to Renault weakening, just to give two examples.

Time has also come to proceed to a logistic revolution. We must reduce the fossil fuels consumption, improve the transportation conditions inside the national territory, along with costs reduction and supply safety improvement. So it is important to give back to rail transportation of goods the place it has lost and to our harbors the capacities and the management which will allow to avoiding that a quarter of our imports and of our exports go through Anvers and Rotterdam. The world trade is not going to disappear, even if it takes another form according to the nature of the products and the destinations. To that also France must prepare itself.

At last, a large economic pedagogy effort is to be started regarding population, especially the “new generations” who are alarming, rightly, about the risks that climate warming is weighting on their future, but who spend every day several hours to consult their smartphones, without being aware about the power production that generates and about the volumes of raw materials, frequently rare ones, which are indispensable to produce them. Consumers behaviors must also adapt themselves to the new world where there will be less advantages, due to transports costs and to the developments of the supplying countries, to get product made at the other end of the planet. What they will lose regarding purchasing power, they will regain it with created jobs and with the improvement of the environment. So it is necessary to persuade them of that.

The new globalization will not be able to work without financial markets. Europe must include that in its efforts of adaptation and act to increase the share of the euro as both a reserve and a trading currency used in international transactions. The States must agree about common policies and renounce to their divisions between these who would be rigorous in the North and these who spend too much in the South, a debate which seems to be ridiculous when we look at global challenges and which only weaken everyone’s position. Common financings, as the one which was adopted with the rebound plan, must now be seen as progress in favor of the strengthening of the European Union and not as transfer methods to the profit of some ones and to the detriment of the others.

A new era is opening and numerous passed reasonings have become obsolete. Governments task, and not only in France, will be to define other policies. But that will not be enough. They will have to convince, because time has changed, their populations to modify their economic behaviors and the business leaders to adapt their investments and to rethink their relationship with their suppliers. That will take time and it is the reason why we must not delay.      





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