Embracing glocalisation
IN the face of the Covid 19 uncertainties and economic challenges compounded by the Ukraine crisis, the conventional wisdom continues to clasp with national priorities that are shaping against globalism with international firms becoming locally territorialized with multidimensional domino effects.
These global challenges are the biggest stress test that international development cooperation and regional integration initiatives have ever faced.
In the midst of all this, governments are exploring solutions to avoid long-term damage to the economy and facilitate the recovery that can address challenges to livelihoods, poverty alleviation, provision of global public goods, employment creation and maintain the global order.
While COVID-19 did not trigger technological, and political competition between countries, the ongoing Russia-Ukraine crisis has compounded the challenge of economic recovery and has triggered a sharp surge in inflation as well as political division across the world resulting into brewing energy and food crises.
Before all this, Globalization has been the defining feature of the unipolar world after the demise of the Soviet Union.
The global economic structure evolved on its basis for the last three to four decades.But soon the challenges of the 21st Century initiated the debate of modified economic and political structure with more opportunities in the surrounding environment.
The less competitive systems which could benefit from globalization have more chances to perform better in their local environment.
In this fractioned environment, global businesses and investment will be impacted increasingly by oppositional politics, polarization and different ways of doing things across different poles.
Tackling these global challenges requires pragmatic policy approaches away from conventional ideas about governance, organizations, leadership and innovation including the concept of glocalization developed by Roland Robertson and George Ritzer strengthened through technological changes and innovation.
Glocalization is a combination of the words “globalization” and “localization” and can be used to describe a product or service that is developed and distributed globally but is also adjusted to accommodate the user or consumer in a local market.
Through Glocalization, localities develop direct economic and cultural relationships to the global system through information technologies making the world a more connected and interdependent place.
Glocalization promotes regional trade for harnessing the potential for economic gains by expanding business, investment, and other initiatives across borders while leveraging local endowments.
Thus, while the conflicts and challenges are moving the world towards a new era of a fully multipolar world with the statements like” You are with us or against us” echoing again, China on its part maintains that a normal trade relationship with Russia is not aiding Russia’s war efforts, just as Beijing’s maintaining a normal trade relationship with Ukraine is not sabotaging Ukraine’s war efforts.
Therefore, the world must learn to adapt to the needs of the other, explore new relationship models promoting democracy in internal relations, and establish a favourable environment for mutual growth and shared prosperity.
The way China has approached the conflict and has encouraged regional peace and prosperity through negotiations, it is believed that role of China will be pivotal and peripheral position to resolve the issue.
However, whatever the outcome of the conflict, the world economic and development approach will change and will have long-term consequences.
The crises may on the other hand increase China’s reliance on BRI and its projects like the China-Pakistan Economic Corridor (CPEC), it also gives partner countries like Pakistan the opportunity to leverage the initiative and immediately work on addressing key infrastructural and connectivity bottlenecks for seamless trade.
The road and rail networks towards China and Afghanistan including CAREC initiatives need to be developed fast.
However, despite the nature and duration of a war the outcome always brings new challenges and approaches for others to learn and improve from.
Viewing the global economic and political trends, the enterprises and investment-related government agencies will be required to take a broader and long-term view for showcasing a glocalized approach to attract investment through a refined approach for achieving strategic fit by showcasing local natural endowments and leveraging regional and global connectivity.
Global enterprises need to take several steps to mitigate the effects of the crisis.Learning from China’s economy, an intertwined regional and global approach is imperative.
Countries need to craft regulations properly tailored to ensure that competition and regional integration are addressed.
Tax incentives can be geared to help workers more and global talent to work for govt and private enterprises locally.
The government may attract investment in science and technology, education and vocational training as these increase productivity which in turn can improve the economy and increased possibilities through government programs of ease of doing business.
The challenge is to make local enterprises competitive to face global competition and technological dynamism equipped with training, incentives and safety nets that will allow them to flourish.
Developing countries despite political issues and politics must stay open to the world and yet secure international investment for achieving national development agenda.
In these challenging times, they also need to modify their industrial structure and improve transport, electricity supply and other infrastructures, and the legal environment.
A strong government role will be required to closely monitor risks and initiate stimulus packages and improve productivity across sectors.
While competing for investment and business through a competitive incentives-based approach, the overall politico-economic climate and enabling environment need to be ensured.
Learning from regional countries like Vietnam and Cambodia, to attract strong regional players, especially Chinese enterprises a clusters-based approach with vocational and tech-based entrepreneur assistance programs can forge a pathway leading to higher incomes and stronger interconnected markets.
In this changing global scenario, the process will be challenging and incremental and this daunting task needs us to chart a clear and innovative path to regional and global economic success as in the words of Deng Xiaoping “It does not matter if a cat is black or white; as long as it catches mice”.
—The writer is a Projects Management specialist and is a faculty member of the Projects Management Depts at various institutes/universities and has also served as a diplomat in China and Vietnam.
He is the Honorary Director at Global Governance Institue, China.
