‘New Balance’ : Article by Roberto F. De Ocampo, OBE

In 2016, I observed that various political upheavals were reflecting a worldwide mood of protectionism, antiglobalization, and a revolt against political correctness. A pivotal issue in both Brexit and the US presidential election was open immigration, a policy regarded by liberals as humanitarian but by many others as threatening to jobs, peace and order, and the fabric of society. The same attitude was reflected toward free trade, a linchpin of globalization. While it had generated economic growth, the widening gap between the small number of unimaginably rich and the rest of society didn’t enhance the cause of globalization. All these were leading to a volatile global scenario.

Such volatility is now upon us. Already the United States has scuttled the Trans Pacific Partnership and enunciated an “America First” policy as its guiding mantra for international relations and trade. And while Brexit may be problematic for Britain, the European Union itself appears to be seriously challenged.

I will not attempt to divine the unprecedented political confusion besetting America. At best the situation raises concerned speculation, even among old friends like the Philippines, as to America’s envisioned leadership positioning on the world stage and the ramifications. At worst it presents a bizarre spectacle of the leading democracy going haywire, with its two political parties in an extended family feud with no quarter given and the temperature of mutual invective escalating, while the rest of the population appears engaged in a bitter cultural civil war.

The problem with family feuds and civil wars is that they are highly emotionally charged, reason often flies out the window, and the prospect of an extended period of reprisal and counterreprisal looms. It would seem that America is in a funk and may remain so longer than the rest of the world would wish. How long will it remain, well, funked? Who knows?

Europe, on the other hand, is buffeted by turbulent winds of its own. It continues to affirm its promotion of open societies as a basic tenet of progress while becoming increasingly bewildered by a relentless combination of terrorism, a tsunami of refugee immigrants, and an irreversible demographic decline of its core population. It appears trapped in a moral dilemma between globalized egalitarianism and the preservation of its cultural heritage, leading to seemingly curious contradictions such as simultaneously espousing diversity and banning the burka.

Perhaps Brexit was the United Kingdom’s answer to this dilemma, but it gives rise to complications for both the UK and the EU. But the inescapable fact is that the core mainly-Caucasian population of Europe is in irreversible demographic decline while the fastest population growth in the coming decades will be seen in the neighboring continent of Africa (including the Middle East) that will inevitably find its space by a reshaping of Europe as we know it. The situation lends credence to the possibility that sooner or later Europe will be minority white and possibly majority Islamic.

China appears to be taking the opportunity presented by this hiatus in Western global leadership. It is positioning itself as the leading defender of free-trade faith and accelerating initiatives designed to wean Asia from its export-to-the-West economic strategies and toward Asian self-reliance-with, of course, China as the nucleus of this effort. Through its One Belt, One Road Asian infrastructure development program, it will inevitably take the lead in transforming the economies of countries along the ancient Silk Road from Eastern China through Central Asia all the way to Moscow.

The effect on Asia could be similar to the transformation that the American economy experienced via its building of the US interstate highway system.  But it will also advance a geopolitical maneuver to expand the Chinese sphere of influence throughout Asia. The Philippines has to play its modest cards smartly to find a realistic balance amid this intensifying superpower competition involving Make America Great Again and Make China Great Again.

***

Roberto F. De Ocampo, OBE, is a former finance secretary and was Finance Minister of the Year in 1995, 1996 and 1997.