A more sophisticated form of global integration has emerged, it is the flow of international resources associated with knowledge that have surpassed manufacturing, which were the engines of interconnection in the early years of this century. Between 2010 and 2019, international trade in services, intellectual property, and technology grew twice as fast as trade in goods.
There are signs that violate globalization, such as the decrease in capital flows, the global application of restrictive measures to trade and the impact on supply chains due to geopolitical tensions.
Covid-19 and the Russian invasion of Ukraine have determined the repatriation of economic activities to safeguard them, transferring them to less exposed countries.
The two most important players in the world economy are the United States and China. To a lesser extent Europe.
In the US, liberal democracy and the market economy are based. In China there is a market economy and politically a pragmatic vision that derives from Chinese thought and traditions. It has an interdependence with Russia, penetration in the Middle East, with alliances with Iran and Saudi Arabia and a powerful instrument of influence, 5G technology.
China is currently the first trading partner of South America.
The competition is strong. One example, among others, is that China has lent developing countries 500 billion dollars between 2008 and 2021, a high figure equal to that channeled by the World Bank to those same countries of 600 billion dollars.
There are countries that cannot pay what they owe and ask for agreements to pay less. This is an example that it is not enough to channel resources, but to recover them.
For this reason, they ask global players to establish bases of cooperation that help them solve their financial problems.
A more sophisticated form of global integration has emerged, it is about the flow of international resources associated with knowledge that have surpassed the manufacturing that were the engines of interconnection in the first years of this century. Between 2010 and 2019, international trade in services, intellectual property, and technology grew twice as fast as trade in goods.
Multinational companies are the major players in the global economic context, they have a participation in world exports of 70 percent.
Developing countries are concerned about the multilateral trade regime in which they have little participation, becoming hostages to the great powers.
These concerns are not unreasonable. The United States under the Trump presidency established sanctions against Chinese companies, increased tariffs and blocked the appeals body of the WTO. This policy continues with the Biden government. All because China is its main geopolitical, commercial and technological rival.
Says Dani Rodrik of Harvard University: “As the US and Europe try to isolate China and design policies to support their new domestic agendas, they are unlikely to have the interests of poorer economies in mind.
For small, low-income countries, multilateralism remains the only safeguard against the solipsism of great powers.
To overcome their weaknesses, developing countries need to become more linked to the regional and global economies. John Donne wrote in the 17th century: “No man is an island living only for himself.”
