Liberalization, Privatization And Globalization Playing Havoc – OpEd

By Jayasri Priyalal*

Imagine the feelings of millions of Americans holding their pay cheques during the festive seasons and at a time getting ready to face the harsh winter, as a consequence of the partial government shutdown decision of President Donald Trump.

This single most incident can be interpreted as the culmination of the LPG strategies of the Liberal, Libertarian, and Neo-Liberal order with an ultimate objective to get rid of state intervention for market forces to reign into government.

Before the reader get confused about the LPG strategies, let me explain what it stands for. The Neo-Liberal policies that were dictated through Washington consensus team were founded on Liberalization, Privatization and Globalization to drive the free market economies to spur economic growth across the regions to uplift millions out of poverty.

End result has been the weakening of governments with huge debts resulting from pro-longed financial deficits, and strengthening of Multinational Corporations and related supply chains that amass wealth-hiding earnings in tax heavens. Libertarians believed that people are living in markets instead of societies.

Privatization of profits and socialization of problems are the end gains of the policy divergence of the past four decades. Unfortunately, the policy makers do not appear to have learnt lessons of the failures of the system. Yet, they are prescribing the same polices with a higher dosage while disrupting the rule based multilateralism.

In the absence of new alternatives, populism is being championed as a policy option as seen in many electoral triumphs in Europe and in North and South America. As we witness today, it is very clear that many democracies are fast turning into oligarchies and governed with the 1 percent beneficiaries of LPG strategies by the ‘one percent for the one percent’ widening the inequalities in income, wealth, education and basic health services for the remaining 99 percent of the sandwiched class in the economy. Thus, LPG strategies have enabled Tax heavens for 1 percent and social hell for 99 percent.

The privileged few are all out to secure eternal immortality less concerned for sustainable growth, whereas the marginalized are bewildered to fight against unjust widening inequality. Extractive economic and political systems are under control of the privileged and work in tandem.

Sincere hope of the common man and woman in the street is to enable an inclusive growth for shared pr0sperity for all. Yet, this has become a distant dream as they often rally round to change the governments with the ballot democratically. However, although they change the governments, the policies remain same without any improvements to uplift their quality of life.

Frustrations are growing as many witness who have become poorer than their parents even after having better education and acquiring new skills and competencies. In the emerging new platform economies, people find work but not jobs as their parents found to plan for a family and contributing towards social progress. Instead, race to the bottom being accelerated under the LPG strategies in a savings drying, consumption driven and debt burden economies.

These causes and effects have not been correctly understood and realized by the policy makers in the global North, worsening the situation as uncertainties pave the way for election of populist leaders instead of rallying policy makers towards viable and sustainable options for greater good.

Trade wars, and reverse globalization campaigns being initiated by the policy makers in the global North are only addressing the symptoms of the policy divergence as such. This writer is of the view that resulting uncertainties in the society may hinder the trust and confidence in the existing democratic political systems. The impact of such uncertainties will be felt by the whole global markets eroding the superficial gains made by a few at the expense and pain caused to many.

In order to address the root causes the political leadership needs to work towards policy coherence instead of policy divergence for shared prosperity for all.

To make this happen, policy makers should step into design innovative and creative action plans in line with the 4th Industrial revolution achievements. Similarly, new performance and productivity measuring indicators need to be agreed upon. It is high time that economists realize that the performance indicators of the 1st Industrial Revolution era such as Return of Equity and Returns of Investments are outdated short term indicators which are not compatible with the current digitally disrupted era of acceleration termed as the 4th Industrial Revolution by Klaus Schwab of the World Economic Forum.

First things first, in order to restore the trust and confidence in the electoral political systems it is high time the elected politicians mobilize themselves to make policies instead of allowing think tanks, non-governmental organizations dictate options on policy makers who are bankrupt with new ideas.

In the current era of acceleration flow of ideas, collective thoughts run across through social media in split seconds. In this digitally connected world very soon connectivity is to supersede national sovereignties. As such our mission needs to be realigned with “Think Locally, and Act Globally” mindset and not the other way the mantra prescribed to facilitate the failed neo liberal order.

*The writer is the Regional Director responsible for Finance Sector of UNI Global Union, Asia & Pacific Organization – Singapore.