Pro-labour Left is rising in many developed nations, listing dangerously towards protectionism, says Morgan Stanley chief economist
by Stephen Roach – DNA Money
There was a dramatic moment at this year’s World Economic Forum in Davos that I will long remember.
It came during one of the sessions on the global economic outlook, when concerns were being raised about the possibility of a Washington-led political backlash against globalisation – a conclusion that I have long warned of. Montek Singh Ahluwalia, Deputy Chairman of India’s Planning Commission, was quick to respond along the lines of, “Don’t blame us. For years, you in the developed world demanded we in the developing world get our act together, open up, and reform. And now that we have and the payback is at hand, you don’t like it.”
I have had the pleasure of getting to know Ahluwalia over the years and have found him to be deep thinking and most engaging, with a razor-sharp analytical mind. His point is a very important one – it challenges one of the great contradictions of the globalization debate. Yet it begs the question of why – why the developed world is pushing back so hard against the very process of global integration it has so long espoused. Granted, motives are always open to subjective interpretation. But I suspect that “Montek’s complaint” also touches on one of the most important, but overlooked issues in the current global debate – that the rich countries of the developed world are simply unprepared for the stunning successes of an IT-enabled globalisation.