the-end-of-globalization-or-a-more-multipolar-world-report (1)

The End of Globalization or a More Multipolar World?

Research Institute Thought leadership from Credit Suisse Research (September 2015)

Contents

  • Introduction (Page 3)

  • Towards a Multipolar World? (Page 4)

  • Globalization – What Is It? (Page 11)

  • A Multipolar World (Page 14)

  • Faultlines: The End of Globalization? (Page 36)

Introduction

  • Globalization Defined: Increasing dependence and integration among economies, markets, nations, and cultures.

    • Has been a powerful economic force over the past 20 years.

    • Defines the effects seen: global cities, wealth in emerging economies, changing consumer tastes.

  • Historical Context: The current wave began in the early 1990s post-Cold War, building on the late 19th century globalization.

  • Current Challenges: Economic slowdown, debt crises, geopolitical shifts, climate change, and socio-economic inequalities are undermining globalization.

Towards a Multipolar World?

  • Current Trends: The report develops a 'Multipolarity Index' and introduces a 'Globalization Clock.'

  • Key Findings:

    • Trade patterns and economic activity are increasingly multipolar.

    • The USA remains a powerful financial force but faces challenges from emerging markets.

    • Globalization in corporate revenue patterns remains, despite decreases in cross-border investments.

Globalization – What Is It?

  • Nature of Globalization: Integration across economies characterized by increasing interdependence and trade flows.

  • Historical Waves: Two significant globalization waves - one from 1870 to 1913 and the second from the 1990s.

  • Measuring Globalization: Through trade openness, FDI, international price convergence, and socio-technological indicators.

CS Globalization Index

  • Measures based on economic, social, and technological factors to gauge how integrated countries are globally.

A Multipolar World

  • Trends Indicating Multipolarity:

    • Shift in GDP distribution eastward (China, India).

    • Emerging markets gaining global economic influence.

  • Three Scenarios regarding globalization:

    1. Globalization continues as it is.

    2. Transition towards a multipolar world.

    3. Potential end of globalization akin to 1913’s collapse.

Scenario 1: Globalization Continues

  • Uninterrupted growth in trade and stable political conditions.

Scenario 2: A Multipolar World Emerges

  • Growth is balanced across several regions with Asia at the forefront.

  • New regional institutions could emerge, challenging 20th-century institutions.

Scenario 3: End of Globalization

  • Risks include economic stagnation and heightened geopolitical tensions. Actions might include rising protectionism and anti-globalization movements.

Faultlines: The End of Globalization?

  • Current socio-political and economic environment indicates challenges to globalization:

    • Economic risks from rising debt.

    • Climbing inequality and political turbulence.

    • The risk of anti-globalization sentiment rising through civil unrest.

Observations

  • The report underscores that while globalization faces challenges, we are unlikely at its end. Rather, we are at a transitional period, simultaneously experiencing both globalization and emerging multipolar dynamics.