Q: We hear a lot of talk about how the coronavirus outbreak signals the end of globalization as we knew it, do you share that view?
Pascal Lamy: That is a debate limited to some circles in Europe, and of course raging in the U.S. because of [U.S. President Donald] Trump’s stance. But look at the rest of the world: Asia wants to resume the process as quickly as possible, same for Africa. For most of the world, globalization is the way to get out of poverty. That is more important for them, in many respects, than reducing inequality. I would caution that the globalization of fear is not the same as the fear of globalization.
Q: Yet many seem to think that the next global economy will be very different than the one we used to live in…
P.L.: I’m not saying it will not change, quite the contrary. What I’m saying is that it won’t amount to “de-globalization.” It will be a different globalization. Some governments want to head toward “strategic autonomy,” so you may have some re-shoring of value chains, although I think there’s a big gap between the “walk” and the “talk,” so to speak, on this topic.
But in other parts of the economy, globalization will push on. Look at areas like the exchange of data, or online services like medicine and health, or leisure…
As for the current debates, we must remember that globalization is not a value, it’s a process: it’s just the current form of the capitalist system, with its pros and cons.
Q: So we’ll go back over time to globalization as usual?
P.L. : The crisis will make the system more resilient, but less efficient. What’s happening is a massive repricing of risk, as happened for oil years ago, as should happen for the price of carbon, or happened with the increase of wages in China. This time, the price of risk has risen sharply regarding human life and health.
The consequence is that the rise of precaution everywhere, coupled with the massive intrusion of governments in the economy, will leave international trade more fragmented than it was.