Thursday, 27 May 2010

Regional and Global Economic Integration

In this interview, we speak to Professor Charles Wyplosz who is Professor of International Economics at the Graduate Institute of International Studies in Geneva, where he is Director of the International Centre of Money and Banking Studies and an Independent Economic Advisor to the President of the European Commission. We discuss regional and global economic integration, looking at Europe, Asia, Africa and Latin America, alongside the concepts of free trade and globalisation, and the role of economic and political integration in future of world economics.

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Vikas Shah, Thought Economics, May 2010


Humans are (by their very nature) group animals, and since the dawn of civilisation, as we have grown through informal groups, into tribes, villages, towns, and cities, the principles of 'how' our groups are structured have changed very little. If we consider the paradigms between a country and a tribe, for example, we see a structure with a leader (prime-minister) who, along with a council of elders of different disciplines (parliament) control and allocate the core resources of the group (political theory- who gets what, how, and when). The group itself (population) is very hierarchical, and comprises individuals of many disciplines who collectively form the market for (and of) labour, goods, services, skills and resources.

Human groups are also highly geared around rules and identity. Daniel Philpott, Associate Professor at the University of Notre Dame described how Ernst Kantorowicz, in his 1957 writing, "The King's Two Bodies" described, "...the emergence, in the late Middle Ages, of the concept of the king's two bodies, vivified in Shakespeare's Richard II and applicable to the early modern body politic. Whereas the king's natural, mortal body would pass away with his death, he was also thought to have an enduring, supernatural one that could not be destroyed, even by assassination, for it represented the mystical dignity and justice of the body politic. The modern polity that emerged dominant in early modern Europe manifested the qualities of the 'collectivity' that Kantorowicz described — a single, unified one, confined within territorial borders, possessing a single set of interests, ruled by an authority that was bundled into a single entity and held supremacy in advancing the interests of the polity. Though in early modern times, kings would hold this authority, later practitioners of it would include the people ruling through a constitution, nations, the Communist Party, dictators, juntas, and theocracies. The modern polity is known as the state, and the fundamental characteristic of authority within it, sovereignty. The evolution that Kantorowicz described is formative, for sovereignty is a signature feature of modern politics. Some scholars have doubted whether a stable, essential notion of sovereignty exists. But there is in fact a definition that captures what sovereignty came to mean in early modern Europe and of which most subsequent definitions are a variant: supreme authority within a territory. This is the quality that early modern states possessed, but which popes, emperors, kings, bishops, and most nobles and vassals during the Middle Ages lacked."

This concept of sovereignty itself relies on three core principles, firstly, the ability of the sovereign body to have authority which, as philosopher R.P. Wolff describes is “the right to command and correlatively the right to be obeyed.”. Secondly, a sovereign body must have Supremacy; insofar as the holder of sovereignty (for example, the United States Government) is supreme to authorities under it (for example, individual states). The third element is territoriality, which defines the membership (though not necessarily the identity) of individuals to a particular sovereign body, by residence within its borders; and it is these very borders, within which, the sovereign body has supreme authority.

As Philpott continues "....Territoriality is now deeply taken for granted. It is a feature of authority all across the globe. Even supranational and international institutions like the European Union and the United Nations are composed of states whose membership is in turn defined territorially."

As any study of human history will show, there has been a general trend for degrees of integration between sovereign bodies to make, more efficient, the exchange of capital, labour, goods and services across borders. This integration has often been borne out of resource and territorial conflict, eventually leading to a political stalemate where a bipartisan or multiparty agreement is drawn on the rules by which each body will engage in trade (invariably, giving up some tenets of their authority and supremacy, to a greater authority which will hopefully bring an increase of wealth to participating sovereign bodies).

These agreements have manifest in modern times as phenomenon including ASEAN, the North American Free Trade Agreement (NAFTA), the European Union (EU), the Union of South American Nations (USAN) and many more, along with global agreements such as the GATT and bodies including the IMF, and WTO.

As technology has accelerated, we now exist in a highly integrated global economy, which has, in the past decade, undergone severe tests and changes.

In this exclusive interview, we speak to Professor Charles Wyplosz about regional and global economic integration. We look at Europe, Asia, Africa and Latin America, alongside the concepts of free trade and globalisation, and the role of economic and political integration in the future of world economics.

Charles Wyplosz is Professor of International Economics at the Graduate Institute of International Studies in Geneva where he is Director of the International Centre of Money and Banking Studies. Previously, he has served as Associate Dean for Research and Development at INSEAD and Director of the PhD program in Economics at the Ecole des Hautes Etudes en Science Sociales in Paris. He has also been Director of the International Macroeconomics Program of CEPR, the leading European network of economists. He is the co-author of a leading textbook on Macroeconomics and of a textbook on European economic integration. He was a founding Managing Editor of the review Economic Policy. He serves on several boards of professional reviews and European research centres. He is a regular columnist in such newspapers as the Financial Times, Le Monde, Libération, Le Temps, Finanz und Wirtschaft, and Handelsblatt.

Professor Wyplosz is currently a member of the Group of Independent Economic Advisors to the President of the European Commission, of the Panel of Experts of the European Parliament's Economic and Monetary Affairs Committee and the "Bellagio Group". He is also consultant to the European Commission, the IMF, the World Bank, the United Nations, the Asian Development Bank, and the Inter-American Development Bank. He has been a member of the "Conseil d'Analyse Economique" which reports to the Prime Minister of France, of the French Finance Minister's "Commission des Comptes de la Nation" and has advised the government of the Russian Federation.

Charles Wyplosz holds degrees in Engineering and Statistics from Paris and a PhD in Economics from Harvard University.

Q: What is the rationale behind regional economic and financial integration?

[Charles Wyplosz] The general rationale is that when countries integrate themselves, they provide "favours" resulting in wider and better opportunities for all and similarly, borrowers can tap the world pool of savings and they are supposed to benefit from that. That is the theory, though empirically, there is little evidence of these effects.

On the other side, what I believe is the bigger benefit; is that it makes it much more difficult for governments to trick the domestic financial system to favour particular borrowers, to milk savers through variable interest rates and so forth. The general theory that integration is good for better allocation of resources is not the big thing, the big thing is that it makes it harder for governments to play with financial markets.

Looking at welfare and competitiveness, indirectly the theory of integration says that firms are able to borrow on better terms, access better investment opportunities, and these should eventually show as "faster growth" that is the first-principles argument, but there is little evidence this has happened to any great degree.



On Trade:

Q: What is the case for free trade to exist? And how can an integrated economic region balance the needs of individual participants and the overall system?

[Charles Wyplosz] The case for free trade is much stronger than the case for free capital movement. The case for free capital movement is weak, because financial markets suffer from very serious failures (right now is a nice example of that). Financial markets do not operate like the textbooks say they should. The case for free trade assumes that the goods market operates well, and the fact is that they do, in practice, operate like that unless governments tinker with them. The evidence that free-trade boosts growth and raises income levels around the world is very strong. In fact, every country that has managed to raise its standards of living has somehow integrated itself commercially with the rest of the world, it's probably a necessary condition.

The allocation of resources across a region depends on a financial-system. This is not only a free-trade issue. If the financial system was working well, then it would support free-trade. It does not work too badly, but it is crisis prone, and sometime stands in the way of proper resource-allocation. I don't see a big problem in this area, and in keeping resources in line with the requirements of trade.


Q: What are your views on protectionism?

[Charles Wyplosz] I have not seen a good case for this (protectionism). There are military and strategic issues that are clearly not economic, and we cannot really comment on these as when the military says "we need this" that is the end of the argument. I have never seen a good case for protectionism, but I can see a case for slowing down trade integration because it can be highly disruptive to domestic firms, markets and people's income in the short-run; and therefore we cannot do 'shock therapy' trade opening but I don't see any case for companies to act with special-needs.

I think the USA is pretty open. There is protectionism there, like anywhere else, so some industries have managed to get some protection, but by and large the US is open. China has integrated itself pretty fast in the world economy, and has been rewarded with double digit growth rates in the past two decades or so. They still have some restrictions, largely because of old-industries who would not be able to swim if dropped in the water of global competition, and these industries are tied to the military establishment, meaning there are political reasons for China to go-slow, but by and large they are on their way to becoming increasingly integrated.

It has created some anguish in the US and Europe as Chinese competition is vigorous, but that is the nature of competition. It hurts the laggards and benefits the smart ones- the smart ones will take the take the advantages and not say anything, and the laggards will complain.


Q: What is the key rationale behind the WTO and what have the key successes and failures been of the WTO as an organisation?

[Charles Wyplosz] The GATT which gave way to WTO, was set up as a way of organising world-negotiations on trade integration. There are over one hundred and eighty countries involved. The principle of trade integration is that you don't have special bilateral regional needs, but trade becomes a multi-lateral thing which, of course, means very difficult negotiations with so many countries involved!. GATT and the WTO have, though, served the world pretty well, and trade integration has increased dramatically over the past forty or fifty years, and countries that began to integrate themselves took advantage in terms of standards of living. Things do, though, have to be slow. They cannot happen overnight. Trade integration does modify the economic structures of countries so things have to happen slowly and gradually, and that's the way GATT has been working, it is a very slow and gradual process.

Looking at the Doha round. We have gone a very long way in terms of trade integration, and what has not been integrated yet are the most politically sensitive issues in every country. What Doha is now doing is getting after the very hardcore of political resistance to integration, which is exactly why it is not working- every country or group of countries has their favourite champion and pet industries, and have given up on protecting a big chunk of the rest and now we are down to the bone. It may not succeed, but I am not worried about that as trade integration is already very deep and developed, and even if we stay where we are, we are doing pretty well.

The view of the WTO is that we have to keep moving forward all the time- and we have got a big part of the way to full integration, and maybe now we have to sit back happily, and wait for these resistances to be slowly eroded.


On Regionality & Globalisation

Q: Looking at Europe as a case study. What have been the key successes and failures of Europe’s economic and financial integration and single currency? What is the future of Europe?

[Charles Wyplosz] It's hard to be upbeat about Europe, but in fact, I am, at the very least about what has been done so far. What is interesting about Europe as a case for integration is that the Europeans, at the time they began regional integration, went way ahead of GATT. There were strong political and geo-strategic regions for the Europeans to do that, so they were willing to make sacrifices to go to complete market integration- it's not one hundred percent, but close. What this meant was that pressure groups, and interest groups who were fighting for protection, lost to the overarching political objectives of Europe's integration. Once these interest groups were defeated locally, individuals had nothing to fear from GATT, from world-integration, and that is why Europe has been pro-GATT and pro-WTO. There are famous exceptions, such as farmers, but that is not a specific exception to Europe. WTO fans don't like regional integration because they see it as undermining world-integration. That is true in a small way, but when countries integrate locally they inevitably destroy some pro-protectionist lobbies, and once they have done it regionally, it is easier for them to integrate globally- so I don't see regional integration as a threat to WTO.

Europe has been an extraordinary success story. Many parts of the world (though maybe not recently), have been thinking of emulating Europe- I have in mind South East Asia and South America. These regions have, though, simply not been able to do it for various reasons such as politics and protectionism. Europe has been able to achieve an incredible degree of trade integration, less so financial integration, and has been able to create a single currency. The single currency has been an enormous success, it has achieved complete exchange rate stability across the Euro area (by removing exchange rates!) and we do take it for granted- but the European experience was one of bruising exchange rate volatility, with recurrent currency crises, and this is now gone.

The price to pay for having a common currency in Europe has been to do a half-baked job- in the sense that governments have not been, and are still not, willing to give up sovereignty in fiscal policy matters. Even before the Euro was launched, we all recognised that there were weaknesses built in the European construction, and that if these were not attended to, they could turn out to be a big problem. And here we are today! The fiscal indiscipline in a number of countries has created the current debt crisis, and we will have to draw lessons and create solutions to prevent it happen again. While I am not surprised at the debt crisis itself, I am surprised at the political reactions and policy mistakes which have been made over the past few months which have given the Euro area a bad name around the world.

Looking at the addition of more countries to the European integrated zone. Clearly, the more countries you have, the higher the probability that one of these will misbehave. There is a sense in which the expansion of the Euro area is making the whole system more fragile, if you like you may have one link in the chain which becomes weaker- and the longer the chain, the more likely this is to occur. On the other side of this, we have to consider that the wider the Euro area, the more it protects countries, and the less exchange rate volatility worries occur, and the objective therefore is to have all countries within the European union within the monetary union, because they are all part of the single market. If some countries like the UK and Sweden adamantly refuse, so be it, we are not going to start a war for them to join the Euro!

Q: Is there a case for Asian Economic Integration? Would it lead to a single Asian currency?

[Charles Wyplosz] In some ways, South-East Asia is where Europe was two-decades ago; where we were concerned about exchange rate movements within the single market. The degree of trade integration within the South-East Asian region is very deep, much more so than Europe when it was at a similar stage in development. The situation is, though, rather special because of the overwhelming size of China. Some of my Asian friends say that, "all the other Asian countries are just provinces of China" - this is, of course, an exaggeration, but nevertheless there is a very deep degree of integration. Countries in the region are, though, rocked regularly by exchange rate fluctuations and therefore they do need to find a way to stabilise their exchange rates. In that sense, Asia is a paradigm of Europe with a need for exchange rate stability. On the other side, from a political point of view, Asia is nowhere near where Europe was even in 1957 at the time of the Treaties of Rome. By then, Europe had deep consensus that it had to quiet-down national sentiments, for the better common good. We do not see similar noises in South-East Asia. Firstly China has overwhelming size and influence- but even if we put China to one side, there is not the degree of trust between countries that existed within Europe in the 1950's when we started our way. The result is that the Asian's find it very hard to make concessions to each other and to transfer tiny bits of sovereignty to a common undertaking. It is very clear in the case of exchange rates. They are trying to pool foreign exchange reserves through the "Chiang Mai" initiative, for example. It is moving, but at a snail's pace- and the reason is that anytime they come close to giving up a bit of sovereignty (for example, on foreign exchange reserves) they pull back politically- so I think that is the big difference between the region and Europe. Eventually, they will move in the right direction, but it will take time, and the more time goes, the more China will dominate- this of course makes things more complex.

I hope that Asia grows into a benign political power. We don't know for sure as observers, and even the participants themselves do not know as the regimes are, in general, not open. China is not a specific danger at the moment, at least not now, but it is impossible to do anything of substance in South-East Asia without Chinese support, and China is unwilling to take-on the role of regional leader- in the sense that it would have to give up some of its sovereignty. If China wants to be the good mother, it has to behave like a mother and make sacrifices for the kids.

As for whether Asia will have a single currency? not anytime soon. Maybe in the longer run this could happen, but given the size of China, the Renminbi just might be the de-facto Asian currency.

Q: Is there a case for economic integration for Africa?

[Charles Wyplosz] My understanding of Africa is that there is very limited regional trade integration, and that most of the trade is with developed countries. In that sense, they are not interested in regional integration. Of course, if they were, it would be a huge benefit for their own regional development.

Q: What are your views on the potential successes and failures of the Union of South American Nations (USAN)?

[Charles Wyplosz] There are definitely similarities between Africa and Latin America. Until recently, there was little trade integration, and most of their trade was with the US and Europe, and they were not, therefore, widely excited about trading with each other. There is also deep political resentment, and the rivalry between Brazil and Argentina is not helpful- and like Africa, there are many countries with a high degree of corruption, so governments are not necessarily working for the good of their people. On the other side, there are a number of countries in Latin America that have made enormous progress over the past twenty years. Chile and Brazil are the two shining examples, and may show the route for success to other nations in the region, and that might lead the Latin American's to have their own regional integration as they stand to benefit from that like anyone else.

The lessons they can learn from Europe is that if they have the political will to do things regionally, they will invariably break the protectionist interest-groups, which makes it easier for each country to integrate. That was the secret of Europe's integration, we managed to push-back resistance to integration- both trade and finance, because there was political will to do something European. For a long time, Europe was a big collective ambition, and now it is a bad word!

Q: Is there a case for global economic integration? And does regionalism work in a highly globalised business environment?

[Charles Wyplosz] I think we are a long way towards global-integration. GATT and WTO agreements have given us a very high degree of trade integration, and there has been quite a bit of movement towards financial integration, but various crises have shown that there could be a worst-case-scenario where financial turmoil would lead to a roll-back of trade integration. That hasn't happened this time round, but it was a big and real fear.

I feel we are globalised in many respects, and that is certainly for the better of the world, although it creates room for contagion when trouble appears- and so there are periods where it seems to hurt, but in the good periods (which are hopefully most of the time) there are huge benefits to globalisation which accrue to most of the people of the world.

There is this interesting comparison between trade and finance and between the WTO and the IMF. The case for trade-integration is overwhelming, and we have built the WTO with its tribunal to deal with disputes- which is the first world authority which we have- as the tribunal can make decisions which are binding on countries. In many respects, countries have given up some sovereignty to this tribunal, this is a huge and underrated achievement as it is the first and only case of total reduction of sovereignty and I think it works pretty well. In the financial markets, we have nothing of the sort. We have the IMF, who act as a "fireman" for countries in trouble, but it has no real authority unless countries sign letters of intent which give temporary authority as and when needed. If we consider a world lender of last resort, this would be nice in theory, but the fact is that a lender of last resort has to commit resources. We currently have central banks acting in this function, and when a national central bank intervenes, it is the local tax-payers who are on the line- and that is acceptable at a national level, although people are grumbling. Tax-payers, when they discovered how much the UK spent on bailing out the Royal Bank of Scotland, were understandably upset- but that is tolerable. Having a lender of last resort which would commit tax-payers from all over the world? that is simply not fathomable. There is no willingness from the average citizen in any country to allow a world lender to spend money on his or her behalf, and all this discussions which are occurring on a world lender of last resort are totally beside the point to what is really needed.

Looking at the need for a global authority to oversee financial markets. Yes there is a need, but there are lots of needs that remain unfulfilled- and that specific need will remain unfulfilled too. We were talking before about a global lender of last resort, and if we talk of banking and financial market regulation, it is exactly the same thing. Every country would have to accept the authority of a third party which is not a country, and could be just a number faceless bureaucrats- and that is just not politically possible. To go around that, we have the IMF which intervenes in emergencies, but it has limited means. In the area of regulation- we have the BASEL group on Banking supervision, and the Financial Stability Board. All of these things have no authorities delegated to them, but they have the power to make proposals- and it is then up-to governments to accept, but I think that at the current stage of our world's development, this is as far as we can go in this regard.

Q: Can economic & financial integration impact ‘macro’ topics such as climate change, conflict, resource competition and population growth?

[Charles Wyplosz] All of these things are issues where we have externalities, and then it would be much better to co-ordinate, than to let each country go it alone. Of course when there are negotiations, they often fail because countries are not willing to make compromises for the common good. The good thing about integration is that it makes us more dependent on each other- so the fate of any country of the world now, economically, depends on the economic-fate of all the other countries, and therefore it becomes easier to accept, recognise and deal with these externalities. The more we are integrated, the more we have a common destiny, and the more we have a common destiny, the more we should be able to compromise with each other, and so globalisation is making people gradually citizens of the world, and so maybe their governments will recognise that there is a need to give up nationalistic objectives for the common good.

Q: Do you see a need for de-politicisation of resources such as Oil?

[Charles Wyplosz] The problem with the oil market is that it is hugely politicised through OPEC. Here we have a cartel- one of the grossest words in economic jargon. This cartel has been trying to manipulate oil prices for the past thirty or forty years which is extremely bad- but fortunately the power of the cartel is limited- partly because they don't have all the oil producing countries in their group- and partly because of their own deep internal disagreements- meaning they rarely manage to speak with one voice. In my view, there is too much politicisation in the oil market, and if we can de-politicise oil, we can make the markets a better place.

Q: By de-politicising such issues, will we help the world's poor develop ?

[Charles Wyplosz] Life is unfair, and the distribution of wealth around the world is unfair. For decades we thought the solution for that was to channel resources from the privileged to the under-privileged, it has not been a stunning success- and that's now a big debate around the world bank, specifically, "how to channel resources in a way that really helps". We haven't found the answer yet, and I certainly don't have the answer. Like everybody else, I say that the inequalities around the world are totally unfair, and unacceptable, but I have a very humble view of what we can do- as we have now had around fifty years of development policies including aid, the world-bank's efforts, regional development banks and so forth- and I don't regard them as much of a success.

We have the exact same problem at a national level. In every country, you have the divide of rich and poor, and if you take the richest countries in the world- such as those in Europe and the USA, they still have a poverty problem. We have alleviated the problem in a very small way- and we understand now why helping people doesn't help them, so it's exactly the same problem across the world as within nations. There are some people and some countries that just can't "do it". And how to make them "do it"- by which I mean, doing what it takes to become reasonably well-off, is the key, and we have not yet found a solution, and have tried everything we have so far- which is a failure.

Q: How can integrated economies bear better resilience to recessions and global macro-events?

[Charles Wyplosz] Regional integration can help global integration when it substitutes for global integration- insofar as when it does things at a regional level, which cannot be done at a global level, for example, we can have a common currency in Europe, but we cannot have it at a world level, it would make no rational sense. When you can do more regional integration, without reducing integration at the world level, that's ok- the danger, of course, is building fortresses and undermining the global system- which would be a big step back.

When you are completely isolated, say in the example of North Korea, in many ways you are completely independent from the rest of the world- so world trade can go down the drain, and it wouldn't do much to North Korea. The problem is that the North Korean population is starving because of their lousy system, and the system is lousy because their economy is so very closed.

If North Korea were integrated in the global system, it would be as rich as South Korea. A paradigm is buying a car. When you buy a car, you can have a car accident- a pretty nasty one, and that's part of the deal. Global integration is helping people around the world, most of the time, but we have to accept that now and again we have accidents which affect all of the world- and that is part of the deal with globalisation. In the same way we decide to take our cars, with a certain degree of nervousness, while it's good to be globalised- and we should drive carefully! We have organisations like the WTO giving us driving rules for what we can and can't do, and we have the ambulance coming from the IMF when you have had a crash- so it's pretty much the same story- you can't have just pure goodness, there will always be drawbacks to everything. Each crisis is a good lesson about things which were not right, or overlooked, or unknown- and from crisis to crisis, we learn.


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We can see, therefore, that by surrendering relatively small amounts of sovereignty, the world has achieved a deep and powerful level of economic integration which, for most participants, has created a general increase in standards of living. We can also see, though, the devastating inequities created for those who are not able to participate in the process (for a variety of political reasons) and are left in conflict and poverty. Alongside this, we can also clearly see the weaknesses created within the system as a result of sovereign participants being reluctant to participate fully, only surrendering enough authority and supremacy to participate for individual gain- and not enough to bring stability to the overall system.

This weakness is a very deeply rooted and profound stumbling block to true globalisation. Until the rationale with which any sovereign nation participates in integration can be aligned with the greater need of the world economy, the system itself will be fundamentally flawed.

As Noam Chomsky pointed out, "NAFTA [as it as passed] became an 'investor rights' agreement, not a 'free trade' agreement- driving the economies of each of the three participating countries [the US, Canada and Mexico] down towards a kind of low-wage, low-growth equilibrium. They didn't say it, of course, but it would also be a high-profit equilibrium". The Labor Advisory Committee (set up by US Congress within the trade act) also observed that NAFTA would have a devastating effect (in their view) on labour markets in America and Mexico, along with destructive environmental consequences as NAFTA supersedes state and federal legislation. They also, though, observed the benefits to American investors, and the fact that in a normal functioning democracy, issues as significant as this would have been the subject of intense public consideration and debate (which they were clearly not). These may seem like extreme criticisms of a generally-applauded free-trade agreement, but if you look at how sovereign participants engaged themselves in relatively recent history- driving people by force from land, and enforcing laws giving preferences to certain markets (in the form of subsidies, tariffs and preferential prices) you can see they have basis. In a US case, for example, Whirlpool Corporation were persuaded to build a factory in Tulsa rather than Mexico, because the Taxpayers of Tulsa County were, indirectly, made to pay 25 percent of the corporation's capital costs. That is one of the realities of 'free trade' in a global theatre where market participants (actors- in the form of governments and corporations) have motives which are often not in the best interest of the theatre itself. Looking at the advent of the US Steel industry, the amount of Fortune 500 companies who benefit from state-industrial-policies, the global cotton markets and more, you can find numerous examples which counter free-trade principles.

In this sense, we see that alongside the visible global conflicts using military machinery, there are numerous severe conflicts occurring behind the scenes using economic and policy weapons.

Fundamentally, though, the case for economic integration is clear and rational. Our levels of development, technology and mobility now mean that borders have largely become a phenomenon for mapping rather than serving any functional role in our world. Our civilisation is in the pivotal point of a huge upheaval where we are moving, perhaps too quickly, towards the ultimate goal of being a unified global market, rather than a number of sovereign markets linked by complex treaties.

Globalisation in this sense becomes inevitable rather than an option. As Kofi Annan once commented, "...It has been said that arguing against globalization is like arguing against the laws of gravity, but I believe we have underestimated its fragility." and as John Sweeney observed, "In its current form, globalization cannot be sustained. Democratic societies will not support it. Authoritarian leaders will fear to impose it. From the suites of Davos to the streets of Seattle, there is a growing consensus that globalization must now be reshaped to reflect values broader than simply the freedom of capital."

For humanity though, the key is that globalisation is finally enabling the overwhelming bulk of humanity to 'join the conversation' economically, and socially. Franklin D. Roosevelt once observed that, "True individual freedom cannot exist without economic security and independence." and we now see those words have grown from being true at a national and regional level to a global space. As Mr. Wyplosz stated above, "The more we are integrated, the more we have a common destiny, and the more we have a common destiny, the more we should be able to compromise with each other, and so globalisation is making people gradually citizens of the world."

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