HIGHLIGHTS
- read the article paying attention to focus words
- summarise the main ideas, identify the author’s message
- comment on the ideas expressed by the author
- compose 3 questions for discussion
FOCUS WORDS
| deter | удерживать, останавливать |
| apparently | по-видимому, очевидно, вероятно |
| unprecedented | беспрецедентный |
| incentive | стимул, побуждение |
| implication | смысл, значение, подтекст |
| expose | подвергать, показывать |
| embrace | включать, заключать в себе, охватывать |
| resilience | стойкость, жизнеспособность |
| robust | крепкий, сильный, устойчивый |
| shift | менять, изменять, перемещать |
PREPOSITIONS
- a reduction in
- central to
- implication for
- reaction to
- expose to
- shelter from
- at any rate
- revert to
- exemplify by
- response to
- at a pace
- critical for
- credited with
- accuse of
- at the level
What Stopped Globalization?
Sep 20, 2022 Pinelopi Koujianou Goldberg
Pinelopi Koujianou Goldberg, a former World Bank Group chief economist and editor-in-chief of the American Economic Review, is Professor of Economics at Yale University.
Globalization survived Brexit and Donald Trump, and it appeared to be thriving even after the COVID-19 pandemic. But with Russia’s invasion of Ukraine, the economic “mutual assured destruction” that was supposed to deter decoupling apparently reached its limits.
NEW HAVEN – After decades of unprecedented openness, international economic relations have entered a new era, characterized by mistrust and division. Given the potential costs of this shift, it is worth retracing how we got here.
Following the end of the Cold War, globalization brought about a drastic reduction in extreme poverty, not least by enabling East Asian countries, including China, to achieve rapid growth and development. Living standards (as measured by income per capita) also improved globally. Open trade and market-oriented policies were central to this progress. Trade with low-wage (at the time) countries – such as China, Mexico, South Korea, and Vietnam – kept goods prices and wages in advanced economies in check, benefiting both consumers in these countries and workers in the exporting economies. Economic interconnectedness arguably also contributed significantly to the long period of peace enjoyed by the Western world. In the era of so-called hyper-globalization, war meant disruption of far-flung supply chains, with severe economic consequences. In such a system, everyone has an incentive to behave.
The transition from interconnectedness to fragmentation has occurred in three distinct phases, each with its own causes and implications for the future of globalization. The first phase began in 2016, with the ascendance of inward-looking politics in two former bastions of globalization. With Brexit, the United Kingdom rejected integration with Europe. And by electing Donald Trump as president, the United States embraced an “America first” ethos that opened the way for a trade war with China. These developments were reactions, first and foremost, to rising inequality. While the average person globally was better off at the end of the 2010s than in 1980, many developed-country workers increasingly felt left behind.
It was not just a feeling. Communities that were more exposed to import competition from low-wage countries – a result of pre-existing spatial industrialization patterns – did worse than communities that were sheltered from imports (compare, for example, Hickory, North Carolina, a traditional factory town, and California’s Silicon Valley). But it was also nothing new. Trade has long been known to improve general welfare, while also generating distributional tensions. The policy response most economists recommended is nothing new, either: rather than embrace protectionism, countries should pursue some form of redistribution. At any rate, there was little reason to believe that the backlash that began in 2016 would spell doom for globalization. The world was too interconnected to revert to the old regime. Then came phase two: the COVID-19 pandemic. A pandemic is one of the greatest risks globalization raises. The more interconnected countries are, the easier it is for disease to spread among them. At the same time, it can spur an every-country-for-itself mentality, exemplified by the export restrictions and other inward-looking policies that governments implemented in response to the crisis. Shortages of essential goods like personal protective equipment and supply bottlenecks provided more fuel for the argument that global supply chains could not be trusted. Many concluded that the “dependencies” created by international trade were sources of vulnerability. Building “resilience” through shorter, more localized supply chains became the order of the day. Yet the global trading system proved remarkably robust during the past two years. According to the International Monetary Fund, global trade, as measured by the ratio of merchandise imports to world GDP, has increased since 2019. Most shortages proved to be short-lived. Several other supply-chain bottlenecks – such as the recent baby-formula shortage in the US – had domestic, not global, causes. In fact, bottlenecks would probably have been much worse without international trade. So, despite an unprecedented public-health shock, the global economy kept going – wounded and at a much slower pace than before, but still with good prospects eventually to recover. Then Russia invaded Ukraine, and phase three began. The smooth functioning of global supply chains requires peace, stability, and predictability. The war has eroded trust among countries and shifted expectations about geopolitical alliances, spurring calls for “reshoring” or “friend-shoring” in the name of “economic security.” If, for example, China invades Taiwan, what happens to a global economy that depends on chips produced by a single company, TSMC, on the island? The war in Ukraine has thus achieved what soaring domestic inequality and the COVID-19 pandemic could not. It is one thing to rely on your friends, even if this implies hardship for some workers in your domestic market; it is entirely something else to rely on your enemies. And so, the economic “mutual assured destruction” that was supposed to deter deglobalization has apparently reached its limits. Now, countries are seeking to build resilience by turning inward, embracing industrial policies for sectors that are viewed as critical for national security, such as semiconductors and energy. But whether this approach will succeed is far from certain. History teaches us that, when industrial policy works, it really works. But it is hard to know what will succeed ex ante. China is often credited with (or accused of) relying on industrial policy to promote growth. But it was also responsible for one of industrial policy’s biggest failures: the Great Leap Forward, which caused up to 55 million deaths by the time it ended in 1962. As for the policies that did succeed, careful, piecemeal implementation was vital. Reforms were tested at the local and regional levels first, and scaled up only when they had demonstrated their potential. But “crossing the river by feeling the stones,” as Deng Xiaoping put it, takes time, and time is not on Western economies’ side right now.Complicating matters further, semiconductors are characterized by “massive modularity,” meaning that each unit produced comprises several interconnected functional modules that can be broken down into more specialized modules, each with its own standards, innovation potential, and market structure. Whether such processes can be replicated domestically within a short period of time is questionable. We should remember that centrally planned systems failed because they could not keep up with the increasing complexity of modern economic systems. It seems we have crossed the Rubicon in international economic relations, leaving globalization behind. The challenge now will be to find our bearings as the consequences play out.
DISCUSSION AND APPLICATION QUESTIONS
- What are the advantages and disadvantages of globalization? What is the future for globalization? What should countries do to prevent the decline of globalization? Should they?
- How can countries balance national interests with the need for global cooperation to address common challenges?
- Can globalization be altered and transformed to promote greater equity and sustainability, or is it fundamentally flawed?
LANGUAGE REVIEW
MATCH THE WORD WITH ITS TRANSLATION
| deter | крепкий, сильный, устойчивый |
| apparently | подвергать, показывать |
| unprecedented | менять, изменять, перемещать |
| incentive | удерживать, останавливать |
| implication | беспрецедентный |
| expose | стойкость, жизнеспособность |
| embrace | смысл, значение, подтекст |
| resilience | по-видимому, очевидно, вероятно |
| robust | стимул, побуждение |
| shift | включать, заключать в себе, охватывать |
MATCH THE WORD WITH ITS DEFINITION
| deter | without previous instance; never before known/ experienced |
| apparently | inferred, deduced or entailed |
| unprecedented | the ability to adjust, recover, to respond to disruptive process |
| incentive | to discourage or restrain from acting or proceeding |
| implication | strong and healthy; hardy; vigorous |
| expose | to accept or adopt willingly; to include or contain |
| embrace | as far as can be known or supposed; obviously; clearly |
| resilience | to lay open to danger, attack, harm; to present to view; exhibit |
| robust | to put aside/ replace; exchange, to transfer |
| shift | a positive motivational influence; an additional payment |
MATCH THE WORD WITH ITS SYNONYMS
| deter | uncommon, unique , unusual, unexampled, unparalleled |
| apparently | consequence, ramification, outcome, repercussions, effects |
| unprecedented | motivation, motive, stimulus |
| incentive | sturdy, tough, dynamic, powerful |
| implication | uncover, reveal, disclose; display, exhibit |
| expose | hinder, hamper, impede, inhibit, curb, prevent, forestall |
| embrace | modify, vary, adjust, alter |
| resilience | seemingly, evidently, allegedly, supposedly, presumably |
| robust | flexibility, strength, stamina, adaptability |
| shift | adopt, follow, support, include, enclose, encompass |
MATCH THE WORD WITH ITS COLLOCATIONS
| deter | political/ to consider/ of the theory |
| apparently | to the sun/ high temperatures/ to ridicule/ criticism |
| unprecedented | trespassers/ thieves/ burglars/ speeding/ theft/ vandalism |
| incentive | method/ framework/ approach/ system/ economy |
| implication | idea/ concept/ philosophy/ change, diversity/ technology |
| expose | going to rain / an accident/ suicide/ murder |
| embrace | extreme/ of workers/ the economy/ to shocks/ boost |
| resilience | opinion/ perspective/ blame/ responsibility/ emphasis |
| robust | decision/ social event/ fall/ increase/ level/ extent/ degree |
| shift | financial/ cash/ strong/ for creating/ for people |
COMPLETE THE SENTENCES BY FILLING IN FOCUS WORDS
incentives deter embrace resilience shift exposed apparently unprecedented robust implications | 1. Smaller companies are generally more ………… to fluctuations in the U.S. economy, because larger firms generate a sizable share of revenue overseas. 2. China’s economy grew at a faster-than-expected pace in the first quarter thanks to ………… services consumption, but factory output has lagged amid weak global growth. 3. The initiative aims to create tax ………… for private investment in areas with high poverty and low job growth. 4. Netanyahu and Biden have publicly touted the durability of their friendship and their countries’ alliance, but the growing tensions carry ………… for the domestic politics of both nations. 5. A report by the human rights group concludes that Israeli forces conducted ………… disproportionate air strikes which killed Palestinian civilians. 6. While the domestic political battles hang in the balance, the election is not likely to signal a major ………… in Bangkok’s foreign policy balancing act. 7. South Africa has many reasons to ………… a speedy transition. 8. In South Korea, all able-bodied men are required to serve in uniform 18-21 months under a system meant to ………… aggression from rival North Korea. 9. Mr. Biden has struggled to find answers to the ………… levels of illegal immigration at the border as he tries to navigate between deterrence and welcome. 10.The programme is designed to support start-ups developing circular solutions in areas such as food, energy, mobilisation, construction and climate …………. |
MATCH THE COLLOCATIONS FROM THE TEXT
| 1. achieve | a) inward-looking politics |
| 2. economic | b) trust |
| 3. ascendance of | c) distributional tensions |
| 4. reject | d) deglobalization |
| 5. improve | e) rapid growth and development |
| 6. generate | f) the potential |
| 7. revert to | g) general welfare |
| 8. erode | h) interconnectedness |
| 9. deter | i) the old regime |
| 10. demonstrate | j) integration |
COMPOSE MEANINGFUL SENTENCES BASED ON FOCUS WORDS AND COLLOCATIONS FROM THE TEXT
E.g. _____________ deter mass migration _____________
→ Historically, there is no conclusive evidence that more aggressive enforcement and more punitive sanctions deter mass migration.
- _________ designed to deter _________
- _________ apparently relevant to _________
- _________ faces an unprecedented threat _________
- _________ economic incentives for _________
- _________ could have implications far beyond _________
- _________ exposed the vulnerability _________
- _________ embraced the broader idea of _________
- _________ demonstrates the job market’s resilience _________
- _________ the job market continues to be robust _________
- _________ to shift the responsibility _________
PREPOSITIONS
- a reduction ___
- central ___
- implication ___
- reaction ___
- expose ___
- shelter ___
- ___ any rate
- revert ___
- exemplify ___
- response ___
- ___ a pace
- critical ___
- credited ___
- accuse ___
- ___ the level
GRAMMAR MIX
- The EU …………… from a number of problems that ……………… for many years, but never seemed to be that urgent.
- has suffered; are widely discussed
- is suffering; were widely discussed
- is suffering; have been widely discussed
- is suffering; have widely discussed
2.By the 2000s, cases of forced migration …………….., but migrant workers from Central Asia ……….. the Russian labor market.
- had been sharply decreased; were flooding
- had sharply decreased; were flooding
- sharply decreased; were flooding
- had sharply decreased; were flooded
3. The demographic expansion …………… just as many existing jobs …………… by intelligent automation and AI.
- happens; will be substituted
- happens; will be substituting
- has happened; will be substituted
- is happening; will be substituted
4. In Washington and London, this deal to provide Australia with US-made nuclear submarines ……….. as one of the most significant strategic advances in decades, even though it …………….. France.
- is being framed; has infuriated
- is framed; is infuriated
- is being framing; has infuriated
- is being framed; has been infuriated
5. If the Kremlin ………. to take control of the country’s resources, it ………… in a confrontation with China, which it cannot afford.
- try; end up
- tries; ends up
- will try; will end up
- tries; will end up
6. The COMESA and EAC regions already have functional competition-policy regimes and institutions, which ……… serve as models for the CFTA.
- ought
- can
- is able to
- has to
7. …………. with these disruptive shifts, ASEAN must strengthen its community.
- Facing
- Having facing
- Being faced
- Faced
8. The United Arab Emirates and Saudi Arabia, for example, are India’s third— and fourth-largest trade partners, ………….
- therefore
- respectively
- in due course
- duly
9. Saudi Arabia’s move to join the SCO represents a victory for China, ……… has been seeking to boost its geopolitical influence and challenge the current United States-led international order.
- which
- who
- what
- _____
10. …………., Southeast Asia’s countries carry little weight; collectively, …………. , they represent almost a tenth of the world’s population and nearly 5% of its GDP.
- Individually; yet
- Individually; however
- Respectively; although
- Particularly; however
VOCABULARY NOTES
| deter удерживать, останавливать | definition to discourage or restrain from acting or proceeding synonyms hinder, hamper, impede, inhibit, curb, prevent, forestall collocations (to) deter [trespassers, thieves, burglars] (to) deter [speeding, theft, vandalism] |
| apparently по-видимому, очевидно, вероятно | definition as far as can be known or supposed; obviously; clearly synonyms seemingly, evidently, allegedly, supposedly, presumably collocations apparently, it is [going, supposed] to [rain, storm, snow] was apparently an [accident, suicide, murder] apparently it was an [accident] apparently, we’re not [allowed, going, supposed] to |
| unprecedented беспрецедентный | definition without previous instance; never before known/ experienced synonyms uncommon, unique , unusual, unexampled, unparalleled collocations an unprecedented decision an unprecedented [display, performance] (of) an unprecedented [social, sporting, political] event an unprecedented [rise, fall, growth, increase, decrease] (in) an unprecedented [level, extent, degree] of [CO2, lead, unemployment] unprecedented [personal, economic, financial] growth unprecedented in [modern, human, political] terms |
| incentive стимул, побуждение | definition a positive motivational influence; an additional payment (or other remuneration) to employees as a means of increasing output synonyms motivation, motive, stimulus collocations a [financial, cash, tax] incentive a [little, strong] incentive (to)[tax] incentives for [creating, employing, reducing] an incentive to [make, help, get, keep] offer their [employees, workers] an incentive (to)an investment incentive incentives for [people, companies, citizens] incentives and rewards |
| implication смысл, значение, подтекст | definition inferred, deduced or entailed synonyms consequence, result, ramification, outcome, repercussions, effects collocations political implications to consider the implications of the implications of the theory |
| expose подвергать, показывать | definition to lay open to danger, attack, or harm; to present to view;exhibit synonyms uncover, reveal, disclose; display, exhibit collocations expose your [skin, face, eyes] to the sun expose to [high, low, freezing] temperatures the [politician, student, teacher] was exposed to [ridicule, criticism] exposed to [the elements, bad language] |
| embrace включать, заключать в себе, охватывать | definition to accept or adopt willingly; to include or contain synonyms adopt, follow, support, include, enclose, encompass collocations embrace the [idea, thought, concept, words, philosophy] of embrace [change, diversity] embrace [technology, the modern world, the new way of life, their culture] |
| resilience стойкость, жизнеспособность | definition the ability of a person to adjust to or recover readily from illness, adversity, major life changes; the ability of a system or organization to respond to or recover readily from a crisis, disruptive process synonyms flexibility, strength, stamina, adaptability collocations [tough, strong, weak, no, little] resilience [extreme, great, remarkable] resiliencethe resilience of [workers, consumers, the economy, a nation] resilience to [trauma, setbacks, attacks, shocks] [build up, develop, improve, boost] resilience resilience to [high temperatures, extreme pressure] |
| robust крепкий, сильный, устойчивый | definition strong and healthy; hardy; vigorous synonyms sturdy, tough, dynamic, powerful collocations a robust [method, framework] a robust approach towardsa robust [system, program, version] a robust economy robust [growth, expansion, health] |
| shift менять, изменять, перемещать | definition to put aside/ replace; change or exchange, to transfer from one place, position, person, etc., to another synonyms modify, vary, adjust, alter collocations shift your [position, opinion] on shift sides to shift your [thinking, perspective, ideas] shifting towards [greater, higher, better] [communism, the left] shift away from the [noise, flash] shift the [burden, blame, responsibility, burden, emphasis] |