Trade and Investment

Globalization as we know it has failed. Africa has an alternative

Customers wait to be served inside a mobile phone care centre operated by Kenyan's telecom operator Safaricom; in the central business district of Kenya's capital Nairobi, May 11, 2016.

Image: REUTERS/Thomas Mukoya

Calestous Juma
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The last three decades have been marked by intense political activism against globalization. The opposition, however, has been driven by a narrow view that equates globalization with international trade liberalization advanced by Western countries.

But globalization is about more than that.

In his book, The Consequences of Modernity, British sociologist Anthony Giddens defines globalization as the “intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa”.

As social relations intensified, two seemingly contradictory attributes emerged. Global networks created opportunities for nations, communities and firms to operate on a much larger scale worldwide. But this very phenomenon also makes it possible for these entities to strengthen their local identities.

Viewed this way, it should not come as a surprise that nations around the world seek to strengthen their sovereign identities as they work to be part of larger transnational alliances. This systems logic involves the strengthening of nations as nodes, connections and interactions. It also allows for greater flexibility in the evolution of the overall global system.

This is what I call a “systems” approach to globalization. It incorporates the traditional emphasis on trade liberalization but focuses more on strengthening a country’s ability to operate on the global stage. It’s highly relevant for Africa – and could provide a clue of the direction globalization will take in the future.

Thinking beyond the nation-state

The first attribute is having the capability nodes and corridors needed to operate in a global system. This usually entails having the capacity at the nation-state level to take part in international transactions. Many African countries lack this, at least at the national level. However, their ability to transact globally may be located at the subsidiary level, such as in states, cities, industrial clusters, economic corridors and even universities.

Any of these capability nodes can play an important role on the global stage. Take cities and states as an example. Capital cities and leading financial centres account for a large part of the GDP of African countries. For example, if Lagos were a country, it would be the seventh largest economy in Africa, after Nigeria, South Africa, Egypt, Algeria, Angola and Morocco. In effect, it would be the fourth largest sub-Saharan economy.

     If Lagos were a country
Image: Quartz

This suggests that African countries can significantly increase their ability to participate in the global economy by granting greater autonomy to their capability nodes. South Africa’s leading knowledge centres, such as the University of Cape Town, could take the lead in educational diplomacy, following the example of the National University of Singapore, which plays an important role in global economic diplomacy, especially through its overseas colleges.

Data and connectivity

The second key feature of globalization is connectivity, as illustrated by expansion of marine and terrestrial fibre optic cables. This offers unprecedented broadband infrastructure and opportunities to master the digital revolution.

Image: Many Possibilities

The most important aspect of the digital revolution is the exponential growth in global data flows, which by far exceed capital flows. According to a recent McKinsey report, “conventional wisdom says that globalization has stalled. But although the global goods trade has flattened and cross-border capital flows have declined sharply since 2008, globalization is not heading into reverse. Rather, it is entering a new phase defined by soaring flows of data and information.”

This is important, because information is the currency of all human interactions, and the increase in data flow provides African countries with new possibilities for technological leapfrogging. The pioneering research and development that countries such as Rwanda have done on civilian drones for medical deliveries is an example of how globalization is opening new opportunities for Africa’s freedom to innovate.

The road to a global economy

The third aspect of globalization relevant to Africa is global mobility.

The revolution in mobility has enabled the rapid movement of goods around the world. But Africa’s ability to take advantage of this has been hampered by poor intra-African infrastructure and industrial production.

Road transportation accounts for the largest share of world freight. Africa’s poor road networks make it prohibitive for the continent to participate effectively in the global economy. Much of the discussion on industrial policy is futile without adequate transportation and energy infrastructure, as a recent study by the Brookings Institution notes.

Glocalization in Africa

The fourth aspect of globalization is the growing interdependence among countries. This is best illustrated by the increasing emphasis on global value chains as new sources of industrial development.

As the OECD and the World Bank pointed out in a recent report, “one important way for countries to connect to the global economy and develop is through global value chains”. But effective participation in global value chains depends on having competent capability nodes in government, industry and academia, at both the national and regional level.

For African countries, inter-dependence should start locally by strengthening regional economic integration. As I argue in a forthcoming book, Trading Power: Regional Economic Integration in Africa, countries that cannot compete regionally are unlikely to compete globally. The case of the aviation industry in Africa demonstrates how implementing regional interdependence policies can foster global competitiveness.

Unlike the European Union, which seeks to deepen a centralized governance structure, Africa’s approach to regional integration focuses on bolstering regional trade integration without threatening to usurp the sovereignty of member states. This approach is consistent with the emerging trends in globalization, where local identities and global networks are strengthened concurrently as part of a positive sum diplomatic strategy.

This view has made it possible for Africa to agree to integrate three regional economic communities into a single Tripartite Free Trade Area (TFTA) covering 26 countries with 620 million people supporting a $1.5 trillion economy. The successful negotiation of the TFTA inspired African to embark on talks to agree on a Continental Free Trade Area by 2017.

Lessons from globalization

The final attribute of globalization is the opportunity it provides for feedback and learning.

The growing connectivity makes it possible for Africa to learn from experiences around the world. Capability nodes such as cities, industrial clusters and universities serve as loci for the accumulation of lessons learned globally. The focus on learning can also help African economies transition from the historical focus on extractive industries to becoming more innovation-driven.

Why Africa should embrace this new globalization

Globalization as defined here is not without risk. For example, increased mobility is raising new challenges for Africa, especially in the area of global health. The Ebola outbreak in West Africa demonstrated the overall vulnerability of the global community to the transmission of communicable diseases. The Zika virus raises similar concerns, which are particularly critical for Africa because of its dismal health infrastructure.

But for Africa to shun holistic global engagement because of such hazards would be a missed opportunity. The future is always open to those who dare to embrace it. Africa’s chance is now.

This article is part of our globalization series. You can read more here.

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