{"id":736,"date":"2022-05-04T07:45:44","date_gmt":"2022-05-04T07:45:44","guid":{"rendered":"https:\/\/riskrecon.co.za\/?p=736"},"modified":"2022-05-04T07:59:57","modified_gmt":"2022-05-04T07:59:57","slug":"the-day-globalisation-died-by-flying-into-economic-war-storms-iron-curtain-2-0","status":"publish","type":"post","link":"https:\/\/riskrecon.co.za\/?p=736","title":{"rendered":"The Day Globalisation Died by Flying into Economic War Storms & Iron Curtain 2.0"},"content":{"rendered":"\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\t\t\t\t
\n\t\t\t\t\t\t\t\t\t\t\"\"\t\t\t\t\t\t\t\t\t\t\t
<\/figcaption>\n\t\t\t\t\t\t\t\t\t\t<\/figure>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\t

Dr de Kock’s regular column in the LeadershipOnline Magazine, this month, tackles the dramatic and unsettling changes in the world system since the ominous date of 24 February, 2022, when the Russian Federation launched a military operation in Ukraine.\u00a0<\/p>

Most notably, it covers the announcement by Larry Fink, President of BlackRock, that globalisation as we have known it since 1990, has come to an abrupt end as a result of what has quickly become a global conflagration!\u00a0<\/p>

To navigate to Edition 436, LeaadershipOnline magazine, click on the cover image to the right->><\/p>

For the Blindspot Column, keep on reading here.\u00a0<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\"\"\t\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\t

I – A witness at the birth, apotheosis, and death of globalisation\u00a0<\/span><\/b><\/p>

If the 1990s is to be remembered for anything, it will be for \u2018Western euphoria\u2019 at seeing the demise of the Soviet Union, the public opening-up of the Internet (which has by now morphed beyond a collective networked marketplace to a fully immersive VR \u2018parallel\u2019 reality a la Meta\/Vleisboek), and ultimately the logic of \u2018unrestricted\u2019 flow of capital, goods, people, and ideas across the planet.\u00a0<\/span><\/p>

At the time Francis Fukuyama declared \u2018the End of History,\u2019 as so-called liberal-democracies (coupled with \u2018free globalised and financialised markets\u2019) entered a golden age of collective peace and prosperity.\u00a0<\/span><\/p>

As a young upstart academic in the mid-1990s, in Political Science and International Relations, one of the very first academic articles I had published, carried the title: Globalisation – investigating the concept. Since (the long ago 1990s), we have all been swept into the globalised digitoshpere, assuming that market integration (regional or global), intricate webs of global logistics and supply chains, social media, and life glued to devices wired wirelessly to the digitosphere are not just here to stay – but defining features of what magic globalisation and techno-scienctific futures might have in store for wirelessly wired humans.\u00a0<\/span><\/p>

It seems as if the grand globalisation vision of the 1990s had not just become a reality in the post Cold War world, but, is something unlikely to be rolled back, or reversed. Well, that is until Donald Trump\u2019s trade wars, Brexit, and a pandemic hit planetary shores around 2020, and lockdown induced economic collapse fractured globalised systems of production, shipping, and consumption.\u00a0<\/span><\/p>

Market mayhem induced by the pandemic, and its global fall-out, just got much more complicated, since 24 February, 2022. The day the Russian Federation engaged in a military operation in Ukraine, after eight years of conflict raging on its border, inside the self-declared independent regions of Donetsk and Luhansk.\u00a0<\/span><\/p>

But, what does all of this have to do with the birth, apotheosis, and death of globalisation? Here is the Blindspot shorthand version of the lifecycle of globalisation since 1990:<\/p>

  • The birth of globalisation in the 1990s,\u00a0<\/span><\/li>
  • Its apotheosis comes in the 2008 global financial crisis (GFC),\u00a0<\/span><\/li>
  • Then it flounders through the post GFC crisis- and Trump era trade and technology wars,\u00a0<\/span><\/li>
  • And to be declared dead, by none other than Larry Fink, President of BlackRock (one of the world\u2019s most dominant of dominant asset management firms with more than $10 trillion of assets), in his 2022 annual letter to investors.\u00a0<\/span><\/li><\/ul>

    This means that those who have lived long enough, and have memories that can stretch back to the 1990s, can honestly be classified as a \u2018generation of post Cold War humans\u2019 that were present at the birth, apotheosis, and death of globalisation.<\/p>

    II – Larry Fink, BlackRock President, declares globalisation dead on arrival in Ukraine<\/b><\/p>

    On 24 March, 2022, the Financial Times, runs with the headline: BlackRock chief Larry Fink says Ukraine war marks end of globalisation – Boss of $10tn asset manager warns about inflation as companies reconfigure supply chains<\/b>.\u00a0<\/span><\/p>

    To put this headline into perspective it is necessary for anyone not familiar with BlackRock, to jump out of this article, and do a quick search on this company, and its President – Larry Fink.\u00a0<\/span><\/p>

    You will find one of the world\u2019s most dominant conglomerates, that can surely be said to be a major engine of globalisation just by the sheer length, breadth, depth, and significance of its integration into just about every market, around just about every corner, of planet earth.\u00a0<\/span><\/p>

    For Larry Fink to announce to investors, in his official annual 2022 investment letter, that globalisation is dead, as of the date of Russia\u2019s intervention in Ukraine, can be likened to the announcement that Nelson Mandela will be set free from prison. Or, that in some parallel universe, the Queen of England had abdicated, and will without any further ado return the Cullinan diamond, and all the gold taken from South Africa since Cecil John Rhodes rode his horse across Rhodesia, will be returned to South Africa.\u00a0<\/span><\/strong><\/p>

    Larry Fink\u2019s announcement is akin to royalty going for broke, and abandoning imperial ships! It is like the moment in 1421 when imperial China decided to burn its fleet, and end its exploration of the planet<\/strong> (long before the Western Europeans woke up to a world beyond the next medieval plague-infested feudal town, or the Atlantic Ocean, for that matter).\u00a0<\/span><\/p>

    But, what is it that Larry Fink has to say about globalisation and events currently engulfing planet earth? It is worthwhile to read the full statement, but, he outlines how BlackRock stands in solidarity with Ukraine, and how it participates in the active isolation of the Russian Federation through sanctions. But, on the birth, apotheosis, and death of globalisation, Fink argues:\u00a0<\/span><\/p>

    “In the early 1990s, as the world emerged from the Cold War, Russia was welcomed into the global financial system and given access to global capital markets. In time, Russia became interconnected with the world and deeply linked to Western Europe. The world benefited from a global peace dividend and the expansion of globalization. These were powerful trends that accelerated international trade, expanded global capital markets, increased economic growth, and helped to dramatically reduce poverty in nations around the world.\u00a0<\/p>

    It was during this time that we started, 34 years ago, to build BlackRock. We saw the rise of globalization and growth of the capital markets fueling a need for the kind of technology-driven asset management that we believed we could bring to our clients. We believed the world would come closer together. And we saw that happen. I remain a long-term believer in the benefits of globalization and the power of global capital markets. Access to global capital enables companies to fund growth, countries to increase economic development, and more people to experience financial well-being.<\/p>

    But the Russian invasion of Ukraine has put an end to the globalization we have experienced over the last three decades. <\/b>We had already seen connectivity between nations, companies and even people strained by two years of the pandemic. It has left many communities and people feeling isolated and looking inward. I believe this has exacerbated the polarization and extremist behavior we are seeing across society today.\u201d\u00a0<\/p>

    III – What goes up, must come down (by flying into Iron Curtain 2.0)?\u00a0<\/span><\/b><\/p>

    We have thus far established that the economic impact of sanctions on Russia will have far more consequences than anyone could anticipate at this stage. Iron Curtain 2.0 has been erected through economic sanctions, and by removing Russia from, for example, the SWIFT system and countless other such isolationist actions.\u00a0<\/span><\/p>

    World leaders attending an emergency NATO meeting in the week of 24 March, 2022, including President Biden, and Macron, warned of significant shocks coming to the global food and energy markets. Russian and Ukrainian wheat, fertilisers, and much needed inputs into global food production has been taken off the proverbial planetary table and plate. Even the United Nations Secretary General warns of an immense shock wave that will cause significant social instability the world over due to food insecurity.\u00a0<\/span><\/p>

    In South Africa the country experienced its own unique internal shocks as a result of locking an ailing economy down in 2020, while the damage done by insurrectionist inspired looting, in July 2021, showed how fragile society and the economy is. The inquiries into these events all point to two converging factors: organised insurrectionists utilising \u2018fertile social grounds\u2019 characterised by unemployment, and socio-political fragmentation, to spark looting and rampant criminality.\u00a0<\/span><\/p>

    The main reason for raising the above recent local history is that inflation, rising global food insecurity, spiking input costs in local agriculture, are factors bound to affect an already fragile society significantly. The social stability outlook for South Africa might be much more fragile than we might imagine at this point in time. Additionally it can be said that the stability outlook for the global system just dimmed significantly due to one of the major engines of a globalised world economy, BlackRock, pronouncing globalisation dead on arrival, in a Ukrainian emergency room.\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

    Dr de Kock’s regular column in the LeadershipOnline Magazine, this month, tackles the dramatic and unsettling changes in the world system since the ominous date of 24 February, 2022, when the Russian Federation launched a military operation in Ukraine.\u00a0 Most notably, it covers the announcement by Larry Fink, President of BlackRock, that globalisation as we […]<\/p>\n","protected":false},"author":1,"featured_media":89,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[77,64,80,76,78,58,79,57],"class_list":["post-736","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-geopolitical-global-economic-trends","tag-blackrock","tag-dr-petrus-de-kock","tag-economic-war","tag-globalisation","tag-larry-fink","tag-russia","tag-sanctions","tag-ukraine","entry","has-media","owp-thumbs-layout-horizontal","owp-btn-normal","owp-tabs-layout-horizontal","has-no-thumbnails","has-product-nav"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/riskrecon.co.za\/index.php?rest_route=\/wp\/v2\/posts\/736","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskrecon.co.za\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskrecon.co.za\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskrecon.co.za\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/riskrecon.co.za\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=736"}],"version-history":[{"count":10,"href":"https:\/\/riskrecon.co.za\/index.php?rest_route=\/wp\/v2\/posts\/736\/revisions"}],"predecessor-version":[{"id":749,"href":"https:\/\/riskrecon.co.za\/index.php?rest_route=\/wp\/v2\/posts\/736\/revisions\/749"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskrecon.co.za\/index.php?rest_route=\/wp\/v2\/media\/89"}],"wp:attachment":[{"href":"https:\/\/riskrecon.co.za\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=736"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskrecon.co.za\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=736"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskrecon.co.za\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=736"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}