The recent US elections and UK referendum showed that many amongst the middle classes in some advanced economies have a negative perception of their own progress and future, and react by blaming globalization and the elites that actively or passively let it happen. Discussions in the West and in Asia often use two different narratives about the causes, and the associated policy conclusions. One blames globalization for the loss of jobs, and for the loss of control. Their conclusion is that globalization must be stalled or at least partly unwound, to “regain control”. A different one, often heard in Asia, points to poor domestic policies and political short-termism as the cause for discontent. It calls for political leadership to effectively communicate those benefits to the polity, and pursue globalization. A variant argues that the main reason for Western citizens’ anxiety is the shift of influence to the East, something they will have to come to terms with. Both narratives have a point and both miss something important. Globalization per se can be made win-win both across and within countries if accompanied by adequate normative and institutional settings ensuring a level playing field as well as empowerment and redistribution to facilitate the adjustment it entails. The G20 leaders put forward one such model in the “Hangzhou consensus” about inclusive, innovative growth, and open markets. The revised model involves traditional structural reforms and market opening to boost growth, but also a better enforcement of a level playing field at national and global level, and sound predistributive and distributive policies. The G20, this year under German presidency, can lead both West and East to give meaning to these words in a pragmatic, cooperative, way. For that it can build on East and West examples.
About the Speaker:
Antonio de Lecea is Principal Advisor to the Director General for Economic and Financial Affairs at the European Commission, and currently also European Union Visiting Fellow at the Lee Kuan Yew School of Public Policy at the National University of Singapore. Until July 2016 he was Acting Director for Growth, Investment, and Structural Reforms, steering policies to increase productivity, investment, and growth in the EU. Between 2009 and 2015 he served as Economy and Finance Minister and Principal Advisor at the European Union Delegation to the United States, in charge of economic and financial diplomacy with the US authorities, US-based international financial institutions and financial markets. Prior to this he served as the European Commission President’s personal economic representative at the G7-G8-G20, and Economic Advisor to the President, and Director for International Economic and Financial Affairs. His career at the European Commission has also included management and advisory jobs in the Budget and Internal Control Departments. He earned a Ph.D. in Quantitative Economics and held academic positions in Spain and the US.