Tags: Roubini | economic | globalization | immigration

Roubini: Weak Economic Rebound Sparks 'Backlash Against Globalization'

By    |   Monday, 02 June 2014 01:41 PM

The weak economic recovery since the financial crisis of 2008 and 2009 has created worldwide opposition to globalization, which may lead to a rise of authoritarianism, says New York University economist Nouriel Roubini.

"The backlash against globalization . . . has arrived," he writes in an article for Project Syndicate.

"This new nationalism takes different economic forms: trade barriers, asset protection, reaction against foreign direct investment, policies favoring domestic workers and firms, anti-immigration measures, state capitalism and resource nationalism."

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In politics, "populist, anti-globalization, anti-immigration and in some cases outright racist and anti-Semitic parties are on the rise," Roubini notes. Even the Internet is at risk, as authoritarian countries such as China and Russia limit free expression.

"The main causes of these trends are clear," he writes. "Anemic economic recovery has provided an opening for populist parties, promoting protectionist policies, to blame foreign trade and foreign workers for the prolonged malaise."

The increase of income inequality doesn't help. "Both advanced economies and emerging markets seem to be run for the few." Meanwhile, the many are stuck with "secular stagnation," enduring weak job markets and stagnant wages, Roubini explains.

Europe is particularly at risk. "If income and job growth do not pick up soon, populist parties may come closer to power at the national level in Europe, with anti-EU sentiments stalling the process of European economic and political integration," he asserts.

"Worse, the eurozone may again be at risk: some countries (the United Kingdom) may exit the EU; others (the UK, Spain, and Belgium) eventually may break up."
In Eastern Europe, Russian President Vladimir Putin hopes to recreate the former Soviet Union, Roubini contends.

Meanwhile, the United States has "a vast white underclass that feels threatened by immigration and global trade [that has led to] the rising influence of the extreme right and tea party factions of the Republican Party," he argues.

"These groups are characterized by economic nativism, anti-immigration and protectionist leanings, religious fanaticism and geopolitical isolationism."

Nationalism is on the rise in Asia too, Roubini adds. "Economic failure could fuel further nationalist, xenophobic tendencies — and even trigger military conflict" in the region.

There's a common thread here, he says. "In all of these cases, economic failure and a lack of opportunities and hope for the poor and young are fueling political and religious extremism, resentment of the West and, in some cases, outright terrorism."

All this harkens back to the 1930s when authoritarian governments in Europe and Asia arose in response to the Great Depression, and World War II ensued, Roubini professes.

"Today's backlash against trade and globalization should be viewed in the context of what, as we know from experience, could come next."

Most experts, like Roubini, support globalization.

"Interconnected, free markets generate wealth and pull people out of poverty," Stephanie Rugolo, managing editor of HumanProgress.org at the Cato Institute, writes on the think tank's website.

"This occurs as the connective technologies of globalization (like the Internet) increase competition. That benefits consumers who can buy more, increasingly inexpensive products to better their quality of life. That also creates innovation and employment."

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The weak economic recovery since the financial crisis of 2008 and 2009 has created worldwide opposition to globalization, which may lead to a rise of authoritarianism, says New York University economist Nouriel Roubini.
Roubini, economic, globalization, immigration
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2014-41-02
Monday, 02 June 2014 01:41 PM
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