Economic Progress

Globalization 4.0 can be a brilliant future - if we break from the injustice of the past

Impressions at the Annual Meeting 2018 of the World Economic Forum in Davos, January 20, 2018.Copyright by World Economic Forum / Mattias Nutt

World leaders will soon be gathering Davos for the World Economic Forum's 2019 summit, where the theme is 'Globalisation 4.0' Image: World Economic Forum / Mattias Nutt

Winnie Byanyima
Undersecretary-General of the United Nations; Executive Director, Joint United Nations Programme on HIV/AIDS (UNAIDS)
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on Economic Progress?
The Big Picture
Explore and monitor how Economic Progress is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Economic Progress

This article is part of: World Economic Forum Annual Meeting

Imagine a world in which women and girls have their rights respected, climate change receives the attention it so urgently requires, and poverty has been eliminated. Never before have we had the means that we have now to make this vision a reality. In Africa, for example, I am excited to see how off-grid solar energy is expanding rapidly. In Kenya, mobile banking has significantly improved financial inclusion, particularly for poor women.

These and other technologies associated with the Fourth Industrial Revolution (4IR) have the potential to boost productivity, incomes, and leisure time for workers, while also decarbonizing our economies and freeing women from the hold of unremunerated care work. But, to realize this potential, we will have to adopt an entirely new approach to globalization.

The World Economic Forum’s theme for its annual meeting in Davos next month is Globalization 4.0, which comprises many of the competing narratives now shaping our world. In the dominant narrative of the last 40 years, GDP was king, and countries pursued deregulation, loosened capital controls, cut corporate taxes, and liberalized their labor markets.

The eruption of popular anger that has roiled many countries’ politics in recent years is rooted in the failure of that neoliberal model. But there is no economic law requiring globalization to be a race to the bottom. On the contrary, for humanity to have any hope at all, Globalization 4.0 must break with neoliberalism for good.

I fear that business and government elites gathering in Davos do not seem to have grasped this fully. Until they do, globalization will continue to fuel inequality and sow discontent around the world.

Rising inequality threatens much of the progress that we have made over the past half-century. While the world’s richest 1% took home 82% of all new wealth last year, the World Bank reports that the “decline in poverty rates has slowed, raising concerns about achieving the goal of ending poverty by 2030.” Even more shocking, extreme poverty in Sub-Saharan Africa is actually increasing; and almost half of all people worldwide are one medical bill or crop failure away from destitution.

Image: World Bank

These realities will persist as long as billionaires in Silicon Valley, Africa, and elsewhere are writing the future narrative of globalization. We need new stories to challenge the status quo. Consider that of Budi, a shrimp-processing worker in Southeast Asia who must peel 950 shrimp per hour to earn a minimum wage. It would take Budi more than 5,000 years to earn what a US supermarket CEO makes in one year.

Or, consider the women farmers in my village of Ruti, Uganda, who wonder if economic growth will ever result in free, quality education for their kids. Rich countries owe much of their prosperity to universal education. But in developing countries around the world, fees charged by for-profit schools are driving families deeper into poverty.

One person whose story must be heard is Berta Cáceres, an indigenous-rights leader in Honduras who was assassinated in March 2016 for resisting a destructive hydroelectric dam project. In November, a court ruled that Cáceres’s murder was carried out with the knowledge and consent of executives from Desa, the corporation behind the dam.

When globalization has no rules or referees, the bullies will always win. Even research by the International Monetary Fund now shows that financial globalization has led to “significant increases in inequality,” as has increased trade in some developing countries. Likewise, climate change is symptomatic of a grossly unequal economy in which the rich exploit the environment for private gain.

Have you read?

Globalization 4.0 must offer a new narrative to replace the abusive, extractive, and sexist neoliberalism of the past few decades. We will need far more cooperation among governments to rewrite the rules of finance, trade, wages, and taxation. Only then can we ensure that the 4IR benefits ordinary people.

To that end, we should welcome pioneering new technologies, but we should also ask tough questions about their ownership and the interests they serve, especially as new monopolies emerge. We will need a smart mix of incentives, public ownership, and regulation to manage the changes that are upon us.

We will also need a new approach to taxation and public spending. The richest households and corporations have avoided paying their fair share for too long, while also stymieing meaningful reform. It was particularly disappointing to see business leaders at the last Davos meeting celebrating US President Donald Trump’s trillion-dollar tax cuts. If well-meaning elites are serious about ushering in a more inclusive form of globalization, they will need to back their words with deeds.

Multilateralism remains the only way to manage these policy challenges. But the framework for international cooperation must become much more democratic, feminist, and people-centered. When discussing the future trajectory of globalization, a woman smallholder farmer in Nakuru, Kenya, should be valued just as much as a corporate executive in Manhattan. We need multilateral institutions that can rein in corporate abuse and steel civil society against rising authoritarianism.

Responsive, bold leadership from national governments will also be needed to manage Globalization 4.0. Rather than simply trying to manipulate citizens’ anger, politicians need to understand and address the root causes of their discontent.

Fortunately, such leaders are not mythical creatures. South Korean President Moon Jae-in is tackling inequality with a combination of taxes on the wealthy and corporations, a higher minimum wage, and increased social spending. New Zealand Prime Minister Jacinda Ardern also has an ambitious agenda to reduce inequality, and she has made citizens’ wellbeing a central metric of her government’s success. And Canadian Prime Minister Justin Trudeau has openly embraced a feminist global-development policy.

These leaders are living proof that globalization can be managed in a way that benefits everyone. They put those beholden to toxic neoliberalism to shame, and they offer hope that a more human global economy is within reach.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Economic ProgressGlobal GovernanceBanking and Capital MarketsInequality
Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

The latest from the IMF on the global economy, and other economics stories to read

Joe Myers

April 12, 2024

About Us

Events

Media

Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum