Brexit: Globalisation loses shine in West

Hyderabad: On Friday, it was a Lehman Brothers moment for most of the world as Britons favoured an unexpected decision to get out of the European Union — built with over decades to bring together by warring nations. For Britons, however, it was time to vent to their resentment against immigrants, who were stealing their jobs.

“It is a vote by the poor and the middle classes against globalisation. One per cent of globally mobile people are reaping benefits of globalisation and immigration, while the rest are suffering because of it. People were worried about the future of their children,” a participant in a BBC’s discussion on Brexit said.

Western countries, which led manufacturing hubs till 1990s, have been espousing the cause of free trade to sell their products and services unhindered to the entire world. However, the industrial development, mainly in China, India, Brazil,  and lower wages moved low-skilled jobs to Asia, leaving many globally immobile youths in the west jobless.

Hence, the attraction of globalisation is on the wane among the middle classes across the western world and the Brexit is the most visible manifestation of this change. Violent protests were witnessed in Germany and France in January and February this year.

Electoral rhetoric of US Republican candidate Donald Trump is also against free movement of jobs, which had formed the very basis of global village. His supporters are mostly American middle class, which faced the brunt of outsourcing of manufacturing and services.

Though shifting of jobs helped soar profits of big corporations, a report by the Federal Reserve Bank of St. Louis claimed that “middle class” living standards have declined much more drastically.

While there is strong resentment against globalisation in Western countries, India Ratings economist Devendra Pant says the chance of globalisation coming to an end is pretty low because a country cannot have two standards.

“If you are shutting doors for imports, you can expect other countries to buy your goods and services. But if every country becomes a closed economy, then the entire system of global economy will come to an end,” Mr Pant explained.