Globalisation. It’s become a hot topic of the past two decades, and whether it’s that heavenly golden ‘M’ that we see around every corner when we fancy a Mc Chicken Burger, or that cat video (and what I really mean to say is, the numerous cat videos*) that went viral on YouTube and Facebook; we can all agree that our world is becoming more and more interrelated.
But is this down to Globalisation? Is that where we are headed, or may we be going another way? There is a popular alternative: Regionalisation.
Definition of Globalisation: the process by which the world is becoming increasingly interconnected through trade and cultural exchange.
Definition of Regionalisation: the process by which an area of several countries become more integrated economically, socially and politically.
Although they have similar core principles: the blurring of borders, accessibility to trade, social interchanges (etc.); they paint very different pictures for our future. In its most theoretical, black and white form, a globalized future points to a future where there are few economic barriers (more trade links, movement of labour, etc.) between any countries, a recognized global market, and a highly culturally intermixed world, perhaps as a result starting to share similar political ideals. A regionalized future would indicate a future with a handful of amalgamated regions with strong economic ties, perhaps merged cultures, that will share political policies.
So who’s to say we are not becoming more Regionalized?
The IMF released data analyzing Output, Consumption and Investment both regionally and globally over the last few decades, and these were the results:
They conclude: “The recent era of globalisation has witnessed the emergence of regional business cycles”, with “sharp growth in intra-regional trade” since the mid 80’s, whilst also noting that “the importance of the global factor has declined over the same period.”
Intra-regionally, we can now see that countries are most economically integrated, examples of this with the EU now a Monetary Union, and ASEAN the world’s 3rd largest market, and predicted to become the 4th largest economy in the world by 2030, according to Prime Minister Thongloun Sisoulith.
Politically we can also see increasing interconnectedness, most clearly with the EU, with many laws passed over the political sphere of 28 countries. Countries can no longer join the EU unless the abide to similar political codes (i.e. banning the use of the death penalty).
Socially, Free movement of labour means that cultural exchange is most prominent intra-regionally. As we see in certain geographical areas such as Western Europe, America, the Middle East or Asia; there are very much collections of defining/similar cultures, ideals or religions and strong continuity between their languages. One could argue we will always be socially more regionalised due to geographical similarities of these areas such as climate, which also impact culture.
So, if we were to becoming increasingly regionalised rather than globalized, what would this mean for us?
In general, the small business man could thrive. Reduction in the power of monopolies would create more space and opportunity for regional businesses. The regional market would also be much easier to break for the small-business owner with cheaper costs of trade, smaller start-up costs and sunk costs, etc. This could result in fairer pricing and less MNCs. (NOTE: it could also result in regional monopolies, but I would argue that with a smaller market there is more potential for change).
It would mean a reduction in outer-regional trade, and therefore limit the diversity of products available to the consumer. It could also increase prices of more ‘exotic products’ not found within your region. Political and cultural ties could both strengthen between close countries and weaken with those countries that are less economically invested.
With global interaction at an all-time high through mediums such as the internet, social media, and news it is difficult to foresee a world where regionalisation would create social divides that have arguably already been broken, but there are many other possibilities or outcomes (I didn’t want to ramble on too long) that a regionalised world could create.
After the recent result of the EU Referendum, who knows where the UK will fit into this world. It is a step towards globalisation for us, and opens up opportunities to trade with countries we never have before. But, if we were to follow the trend of Regionalisation, our decision could result in us trading with ‘gated communities’, with high barriers of trade. Although I have focused primarily on our economy and specifically trade, increased regionalisation amidst the Brexit vote could increase our current feeling of detachment from Europe (a continent we are so culturally, politically, historically and still economically tied with).