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Globalisation in the age of corona Part 1

Globalization in the time of CORONA

The world is coming to terms with a new enemy that threatens lives and livelihoods. In a time when we are living on a ‘war-footing’ we need to understand how the pandemic happened and the role Globalization is playing in the disruption to supply lines and the threat to national security.  We also need to look forward to a time AFTER the pandemic is over and what this nation can do to ensure we survive and thrive in uncertain global circumstances.

In these brief discussions paper, we will cover:

PART ONE:

1:1       The wide ranging and complex effects of globalization
1:2       Globalization – objectives and outcomes
2:0       Enter the global disrupter- COVID-19
2:1       Disclosure too little, too late to avert disaster
2:2       Exposed at last!
2:3       Why is Italy heavily impacted?
2:4       Italy and China’s ‘Belt and Road’ agreement

PART TWO will cover:

3:0       Supply and demand
3:1       Have previous governments put Australia first?
3:2       China- COVID-19, duplicity or complicity?
4:0       Coronavirus – silver lining opportunities
4:1       People ARE pushing for change

 

Part Three will cover:

5:0       Looking back at the effects of Globalization in Australia
5:1       Darwin- leasing one of Australia’s most strategic assets
5:2       People who believe Globalization is the answer to the economy
5:3       Globalization should never mean selling the farm
6:0       Suggested actions post CORONA
6:1       Energy supply
6:2       Fuel security
6:3       Water security
6:4       Agriculture
6:5       Australian manufacturing
6:6       Biomedical and Pharmaceutical manufacturing
6:7       Foreign investment controls
7:0       How YOU can help

 


PART ONE

1:0  WHAT IS GLOBALIZATION?

GLOBALIZATIONGlobalization is the growing interdependence of the world’s economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people, and information.  (1)

Countries have built economic partnerships to facilitate these movements over many centuries. But the term gained popularity after the Cold War in the early 1990’s as these cooperative arrangements shaped modern everyday life and changed the very nature of ‘nationhood’.

1:1    The wide ranging and complex effects of Globalization

As with major technological advances, globalization has benefits for our standard of living as a whole, but there are many losers, predominantly in western manufacturing nations. For nations where high cost of production has been fuelled by wage & condition pressures on governments and employers from Trade Unions, many industries have been priced ‘out of the global market’.

There is no question that globalization has been a good thing for many developing countries who now have access to our markets and can export cheap goods to us.  Globalization has also been good for multi-national corporations, but it has led to the continuing deindustrialization of Western and First-World nations and a huge loss of manufacturing industries & skilled jobs.  Many of these lost manufacturing industries, jobs & skills are critical to national security during times of emergency, war or threat.

Globalization works when trade is supported by global stability – devoid of hostilities, pestilence or pandemics.

1: 2   Understanding the objectives and reality (2)

The objectives:

  1. Free trade to reduce barriers such as tariffs, VAT, and subsidies.
  2. Globalization promotes global economic growth; creates jobs, makes companies more competitive, and lowers prices for consumers.
  3. Competition between countries is supposed to drive prices down.
  4. It provides poor countries, through foreign capital and technology, with the chance to develop economically and by spreading prosperity. This then creates the conditions in which democracy and respect for human rights may flourish.
  5. There is now a worldwide market for companies and consumers who have access to products of different countries
  6. There is a world power emerging instead of compartmentalized power sectors. Politics is merging and decisions that are taken are beneficial for people all over the world
  7. There is cultural intermingling and participating nations are learning about other cultures
  8. Socially we have the opportunity to become more open and tolerant towards each other
  9. International travel, mass communications and access to information through the Internet are considered benefits of globalization
  10. People can market and move their labour expertise from country to country. While true
  11. Sharing technology with ‘developing nations’ through globalization will help them progress.
  12. Globalization has given countries the ability to sign free trade agreements like the Trans-Pacific- Partnership (TPP).

 The reality:

  1. The full benefits of free trade have not eventuated due to trade barriers still being imposed by some nations
  2. Competition between nations to drive down prices has been less effective due to currency manipulation by some nations
  3. Workers conditions have not improved thru democracy and prosperity as totalitarian regimes continue to ignore human rights
  4. Quality jobs have been lost to lower cost developing countries causing mass job losses in developed nations
  5. Workers in developed countries have had to face pay-cuts from employers who threaten to export their jobs
  6. Globalization has allowed Australia to sign ‘free trade agreements’ but often at the cost of Australian skilled jobs
  7. Globalization has given Australians access to cheap imports, but this has resulted in the majority of Australian manufacturing moving offshore
  8. Large multinationals have moved their businesses to exploit low or no tax havens for tax avoidance
  9. To increase profit margins, large multinationals have used Globalization to ignore safety standards and exploit cheap labor in developing countries
  10. The theft of Intellectual Property has been rife in developing ‘global- partner-countries’ such as China
  11. Globalization has influenced Immigration Policies and led to unrestricted free movement of people. This has been a major factor in the spread of COVID-19
  12. National social welfare budgets have been put under pressure due to job losses to developing nations, leading to higher budget deficits in developed nations
  13. During a period of rapid growth in global trade and investment, inequality worsened both internationally and within countries.
  14. Often the rich get richer, while the poor get poorer. The UN reports; the richest 20 % consume 86 % of the world’s resources while the poorest 80% consume just 14%

It is understood that globalization generally operates while global stability and supply is uninterrupted. When either one of these components are threatened, the benefits quickly turn into disadvantages.

Globalization also works best when trade is diversified and NOT concentrated in a few major countries.

1:3    Globalization has significantly changed the way Australia operates

Australia has become co-dependent on other nations, particularly, China which leaves our nation over-exposed. When China shuts-down, this nation cannot source essential supplies necessary to keep the economy functioning. Medical, technical, building and other essential supplies -or components – are predominantly sourced from China. Australia no longer has the ability to manufacture essentials items when supply is interrupted.

In many cases manufacturing has left behind job insecurity in exchange for cheaper imported goods sold to a less affluent populace. Welfare dependency increases and budgets deficits are the result creating the need for government to increase borrowing-limits to ‘run the country’.

Australia has replaced manufacturing with digging up natural resources and exporting them. Instead of growing the nations’ professional and technological abilities, we have focused on creating a nation of baristas and bar tenders.

Growing anger because of job losses and decline in standards of living may have been the catalyst that saw Donald Trump elected. His campaign; ‘Make America Great Again’, struck a chord with voters whose livelihoods had been stolen by globalization.  (3) The shock Brexit result in the UK and the rise of centre-right parties in Europe are also signs of a tsunami of discontent that will erupt at some time. France’s Marine-Le Pen and Germany’s Alternative Fer Deutschland (AfD) are evidence of the growing resentment of open-door immigration associated with Globalization. (4)

corona impact in us of cheap imports and manufacturing jobs

Statistics from the US % decrease in employment in manufacturing.

There will always be differing opinions on the real impact of globalization. Advances in mechanization and technology has contributed to some job losses, however it is fair to say the world’s populations are equally poorer, (not richer as expected) with a small number of richer elites and richer regimes.  (5)

corona where us jobs went maybe

Statistics from the US showing decrease in manufacturing export and employment

2:0  ENTER THE ‘GLOBAL DISRUPTER’ – COVID-19

How the China-Coronavirus spread

coronavirus campaign - how the virus spread in china

China 7 Feb 2020

The world has been badly shaken by the China Coronavirus pandemic. Many countries were alerted TOO LATE to adequately prepare for the overwhelming calls on their health services.

The severity of this pandemic could have been reduced if the information made available to the Chinese Government in December 2019, from one brave whistleblower Doctor Li, in Wuhan in Hubei Province, was not silenced.

Dr Li Wenliang later went on to lose his own life on the 6th February 2020, after treating affected patients, and soon after several of his colleagues, also died.  (6,7) 

coronavirus in europe

Europe 26 Mar 2020

     

                                               

coronavirus whistleblower doctorThe Chinese Communist Government tried to suppress the news about Coronavirus. Chinese police had targeted Li for “spreading rumours” in late December 2019 after he posted a warning on social media about a cluster of cases of a flu-like disease that had been treated at his hospital.

China sat on this deadly pandemic, silencing doctors and journalists alike in an effort to keep the news from the rest of the world.  People moved freely carrying the deadly virus and spreading it to every country, except Antarctica.

Questions must be asked:  Why did China not alert the world earlier? What did China have to lose – except ‘face’ – in the spread of this deadly pandemic? Are there other reasons to stay silent and weaken worldwide economies?

2:1 Disclosure too little and too late to avert disaster

After being made aware of Coronavirus in early December 2019, the Chinese Communist Government and the World Health Organization (WHO) finally acted, but without sufficient rigor and too late to halt the worldwide catastrophe that would soon follow.
20 January 2020, WHO declares coronavirus a ‘global health emergency’ (8)
28 January, countries start to close borders to travel from with China. Director General of WHO, Dr. Tedros criticizes countries like Australia for taking preemptive precautionary decisions to protect their citizens. He says: “the stigma associated with shutting doors to China, is worse than the disease itself’. (9)
1 February, the Australian PM Scott Morrison imposes a travel ban for people travelling from mainland China, from entering Australia within 14 days of leaving China
4 February, WHO advises against trade and travel restrictions against China amid the coronavirus outbreak (10,11)
5 February, WHO urges nations to ‘act in the available window of opportunity’, but by then it is too late to contain and properly prepare for what was to become the biggest global economic and biosecurity shock since the end of WWII. (12)

20 February, in order to avoid the travel-ban some Australian universities start marketing holidays to Chinese students via a third country. While this was ‘legal under the legislation’ it was morally reprehensible. (13)
27 February, Australian PM Scott Morrison preemptively declares the China Coronavirus (CCV) would become a worldwide pandemic, as it prepares a stimulus package (14)
11 March, WHO finally declares China Coronavirus a pandemic. (15)

coronavirus chinese students       

coronavirsu DG of WHO

Dr Tedros Adhanom Ghebreyesus – WHO Dir. Gen.

 The World Health Organization on Wednesday declared the rapidly spreading coronavirus outbreak a pandemic, acknowledging what has seemed clear for some time — the virus will likely spread to all countries on the globe.

Director-General Tedros Adhanom Ghebreyesus said the situation will worsen.

“We expect to see the number of cases, the number of deaths, and the number of affected countries climb even higher,” said Tedros, as the director-general is known.

The WHO Mission Statement: (16)

We are building a better, healthier future for people all over the world. Working with 194 Member States, across six regions, and from more than 150 offices, WHO staff are united in a shared commitment to achieve better health for everyone, everywhere. Together we strive to combat diseases – communicable diseases like influenza and HIV, and noncommunicable diseases like cancer and heart disease.

2:2 Exposed at last!

Eventually the virus would expose itself, despite the cover-up by the Chinese Communist Party. Viruses cannot be intimidated or silenced, and the growing number of deaths finally became worldwide news.  Coronavirus (COVID-19) had infected thousands in China in a relatively short time because of its highly infectious nature.

The world’s health experts were then left chasing the virus as it speed across borders and into communities. Our modern-civilized world was totally unprepared for the effects of COVID-19.

The lack of early disclosure by the Communist regime had put the world at risk and would go on to cripple economies and create worldwide supply shortages.  Australian supermarket shelves would be stripped bare by panic buying from some and opportunistic buying by others. In an even more alarming development, surgical face masks, gloves, hand sanitizer, paracetamol, baby formula, rice, flour and other goods would be mass purchased and some packaged up and sent overseas, most likely to China,  leaving Australian consumers with no or very low, essential supplies.

2: 3 Why is Italy so heavily impacted?

corona florenceItaly is a clear example of how the dual-effects of COVID-19, Globalization and Immigration can impact heavily.

Italy is the country in Europe worst affected by corona infections; particularly in the country‘s economic engine in the north. (17)

The answer lies in two fundamental facts:

  1. Health authorities in the northern provinces of Italy did not test early for COVID-19 and allowed the free movement of citizens. When COVID-19 was diagnosed patients were moved between hospitals further spreading the infection. When social-distancing was recommended Italian authorities went ahead with mass public events. Italy’s borders remained open.
  2. The number of infections in Italy is highest in the northern regions which is also home to the largest Chinese population in Europe, and an area of thousands of Chinese factories.

One example is the picturesque town of Prato located 20 kilometers from the gates of Florence, dominated by the textile industry. Of Pratos‘ 195,000 inhabitants, 50,000 are from mainland China. Like Prato other Italian towns and regions sociodemographics are changing.

 

corona china staking a claim in italyAvailable statistics put the number of Chinese living and working in Italy at 300,000 (compared to Australia 1.2million of a total pop. 25 million) however these figures do not take into account those in the country illegally.

These people are not on social welfare; they are resourceful entrepreneurs in a wide range of trade and service sectors, taking over old companies, refurbishing them, or opening new businesses and creating jobs (mainly for fellow compatriates). Italy, with its rapidly ageing society (apparently) benefits from this, however, a large proportion of the profits are sent back to the Chinese homeland.

Some would argue this was a ‚WIN-WIN‘ for Italy…until COVID-19 appeared!

Some 200 Italian business are now controlled by Chinese owners living in and out of Italy, according to La Repubblica, while China’s central bank holds stakes in several Italian blue chips like Fiat, Telecom Italia, Generali, and Eni, among others. Due to China’s investment in Italy, it follows that China would come to Italy’s aid.(18) 

As at 28 Mar, Italy had 86,498 cases and 9,134 deaths from COVID-19 (19)

2:4 Italy and China ‘Belt and Road Initiative’ (BRI) partners (20)

Italy signed onto China BRI in March 2013.

China’s increased economic and political footprint in Europe has finally caught the attention of policymakers on the continent. In a new European Union (EU) approach, for the first time, Beijing is mentioned as a ‘systemic rival’ of Europe. While the EU was formulating its strategy towards trade with China, China was carefully targeting countries in South and Central Europe.

Before Italy, 13 other EU member states had signed bilateral agreements with Beijing, officially becoming members of the BRI.

It all started in 2012 with the “16+1” platform that gathered 11 EU member states and five candidate countries — all in Central and Eastern Europe — for meetings with China. Since then, two other EU countries, Greece (August 2018) and Portugal (January 2019) also signed on as members of the BRI.

Ultimately, Beijing, underlining its long-term strategy, has slowly penetrated the ‘softer’ Central and Southern periphery of the EU with the aim to access the core economies of Europe, while simultaneously taking strategic control of the main shipping ports as points of entry for Chinese products.

In Australia, the Victorian Premier Daniel Andrews also has signed a BRI agreement with China in October 2019. (21)

Victoria has signed a fresh deal with the Chinese government and its global Belt and Road infrastructure project with Premier Daniel Andrews urging other Australian governments to follow suit.  The agreement, signed in Beijing on Wednesday evening, will deepen cooperation between the state and the Communist-ruled country in the key areas of infrastructure, innovation, ageing and trade development.

The deal was signed only a few hours after federal Home Affairs Minister Peter Dutton questioned whether the Premier’s trade efforts in China were in the ‘national interest’.

In PART TWO we will discuss the issues of ‘supply and demand’ and what we believe our nation can do to ensure Australia remains ‘open for business’ but able to provide essential infrastructure, goods and services – not only in peacetime – but also in times of global uncertainty and instability. 


References Part One:

  1. https://www.piie.com/microsites/globalization/what-is-globalization
  2. https://www.forbes.com/sites/mikecollins/2015/05/06/the-pros-and-cons-of-globalization/#4aff46f9ccce
  3. https://www.bbc.com/news/business-38600270
  4. https://ourworldindata.org/trade-wages-cost-living
  5. https://ftalphaville.ft.com/2016/12/06/2180771/how-many-us-manufacturing-jobs-were-lost-to-globalisation/
  6. https://www.theguardian.com/world/2020/feb/06/whistleblower-chinese-doctor-dies-from-coronavirus
  7. https://www.bbc.com/news/world-asia-china-51364382
  8. https://www.cnbc.com/2020/01/30/who-declares-china-coronavirus-a-global-health-emergency.html
  9. https://www.nytimes.com/2020/01/28/world/asia/china-travel-coronoavirus.html
  10. https://www.abc.net.au/news/2020-02-05/who-coronavirus-update-china-travel/11930752
  11. https://www.sciencemag.org/news/2020/02/mission-impossible-who-director-fights-prevent-pandemic-without-offending-china
  12. https://www.bbc.com/news/world-asia-china-51368873
  13. https://www.theaustralian.com.au/nation/politics/travel-deals-get-students-around-coronavirus-ban/news-story/298ba8d0b5c88c9851f27f0ccb2b4c80
  14. https://www.theguardian.com/world/2020/feb/27/australia-declares-coronavirus-will-become-a-pandemic-as-it-extends-china-travel-ban
  15. https://www.statnews.com/2020/03/11/who-declares-the-coronavirus-outbreak-a-pandemic/
  16. https://uncoverdc.com/2020/03/20/why-italy/
  17. https://www.vice.com/en_us/article/akwage/china-is-now-sending-doctors-masks-and-hazmat-suits-to-help-italy-with-its-coronavirus-outbreak
  18. https://qz.com/280247/china-is-buying-up-italy-one-company-at-a-time/
  19. https://www.worldometers.info/coronavirus/country/italy/
  20. https://thediplomat.com/2019/04/italy-signs-on-to-belt-and-road-initiative-eu-china-relations-at-crossroads/
  21. https://www.smh.com.au/national/andrews-signs-new-belt-and-road-deal-with-china-the-right-thing-to-do-20191023-p533kf.html

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