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BKHS: Capitalising on the “Connectivity Contest” to Reshape Globalisation

30 Nov BKHS: Capitalising on the “Connectivity Contest” to Reshape Globalisation

Globalisation connotes massive flows of people, goods, services and capital, resulting in increased integration and interdependence of economies and societies. This process has created unprecedented economic growth and development. However, the transformation has been uneven. Increased inequality has emerged, while development has often come at the expense of other socio-economic outcomes and environmental sustainability.

This “lop-sided” globalisation – where economies are increasingly intertwined and material interests have converged, but political governance, values and ideas remain contested – has become untenable. The winners of globalisation – those who have benefitted from economic integration and the increasing convergence in values, lifestyle and outlook – may want the “merry-go-round” to continue. But many societies are facing a pushback against globalisation by those who either feel left behind or believe that the gains from economic integration are not enough to compensate for the loss of their identities and sense of control over their own destiny.

After a more positive narrative about the benefits of globalisation, the tide has turned. Today, globalisation is increasingly viewed negatively, leading to policy responses that have encouraged economic nationalism and the closing of borders and minds. For policymakers who believe that globalisation has uplifted millions from poverty, it is not the right response to stop or reverse the process. Instead, “connectivity” has become their new buzzword. As the COVID-19 pandemic has accelerated digitalisation, an increasing number of people believe that connectivity is the tool needed for economic transformation.

Connectivity as the new buzzword

So how to make sense of connectivity – what does it mean and how can it be harnessed to reshape globalisation for a better outcome?

By many policymakers, connectivity is viewed in terms of the infrastructure and technologies needed to enable connections and communication that are vital for commerce and development. What matters are ports, pipelines, roads and railways and digital superhighways. Increasingly, however, connectivity has also expanded to mean institutional connections – a reference to the interoperability of standards; and even people-to-people ties. In short, connectivity can facilitate greater connections for people and institutions – primarily but not just for commercial exchanges.

Global geopolitical tensions and geoeconomic competition have led to a proliferation of connectivity strategies in the last decade – from the Chinese Belt and Road Initiative (BRI) to Japan’s Free and Open Indo-Pacific strategy, to the EU’s Strategy for Connecting Europe and Asia. As the rivalry between major powers intensifies, the desire to outdo one another has become saturated with slogans and promises. These include “Build Back Better” from the US and the EU’s “Global Gateway”. The latest connectivity strategy was unveiled at the 2023 G7 Summit in Hiroshima with the pledge to identify new opportunities for a Partnership for Global Infrastructure and Investment (PGII).

The emphasis on infrastructure investments to build connectivity across and within regions – whether in the Indo-Pacific or Africa – should be welcomed. We need to transform the strategic rivalry between the major powers – which drives the current race to present all manner of connectivity strategies – into a healthy competition of sustainable investments for broad socioeconomic development of under-connected and less-developed regions and countries. In short, how can we capitalise on the “connectivity contest” to reshape globalisation?

We need more genuine engagement – and long-term partnerships

To get it right this time, and not simply allow market forces to set the pace and direction of globalisation, the current discussions about building infrastructural connectivity require more intense engagement from the host countries and recipients of these investments. The rhetorical commitments by the major powers to invest in connectivity in regions and countries where they are vying for influence must be translated into genuine engagement with these regions and countries for their own merit – and not simply as pawns in the chess game played by the great powers. This requires building comprehensive and long-term partnerships – starting with building connections with its people and institutions.

Unfettered hyper-globalisation under the neoliberal economic model led to rising inequality, environmental degradation and increased political polarisation in many societies and economies. The new connectivity agenda needs to confront these issues head-on, while navigating the geopolitical and geoeconomic tensions. In this regard, the EU in my view has an important role to play.

The strategic rivalry between the US and China has reached all areas, including control over infrastructure and especially over technologies and supply chains. While the EU is also caught in the game, as a regulatory power and champion of a rules-based multilateral order, the EU can and should help steer the connectivity contest to one that emphasises norms and standards, transparency and accountability. While cooperation and collaboration amongst major powers to mobilise both public and private resources to invest in connectivity where it is needed would be the ideal approach, “Realpolitik” and the lack of strategic trust may mean taking a more pragmatic approach of working within a competitive framework that includes a set of minimal rules and guidelines.

The EU has been ahead in the game of “connectivity partnerships”. In addition to rolling out its own strategy embodied in the Global Gateway document, the EU signed a “Partnership on

Sustainable Connectivity and Quality Infrastructure” with Japan in 2019. In 2021, the EU and India also concluded a Connectivity Partnership agreement that called for transparent, inclusive, rules-based connectivity between the EU and India, and with third countries and regions including Africa, Central Asia and the Indo-Pacific.

Alongside these connectivity strategies and partnerships, the EU has shown that it is serious about addressing the sustainability and climate challenge of globalisation by launching the European Green Deal.

Immediate security challenges such as the Russian invasion of Ukraine and rising tensions between the US and China should not take the EU’s attention away from the longer-term challenge of reshaping globalisation for a sustainable and more just and inclusive future. The EU must work with like-minded partners to lower the temperature of geostrategic rivalry and not look at all issues through the security lens of the Russian threat. Far more is at stake. We need to engage the 80 per cent of people who live outside the “Western” world to bring about inclusive growth and sustainable development.

Yeo Lay Hwee is Director of the EU Centre in Singapore and Senior Fellow at the Singapore Institute of International Affairs.

This commentary was first published in the third edition of the Bundeskanzler Helmut-Schmidt Stiftung (BKHS) magazine on the theme of “Remaking Globalisation” in November 2023.