Replay the session and read a summary below.

A CONVERSATION ON HOW TO AVOID ECONOMIC FRAGMENTATION

• José Manuel Salazar, Executive Secretary, Economic Commission for Latin America, United Nations
• Student Speaker: Katarina Körner, International Economic Policy, PSIA
• Student Panel Presenter: Julie Biem, International Economic Policy, PSIA
• Moderator: Liz Alderman, chief European business correspondent, New York Times

Geopolitical tensions are on the rise, provoking strategic competitions between countries and entire regions. Julie Biem presented the current geopolitical landscape: economic fragmentation is a threat to peace. There have been many efforts at an international level to integrate all economies into the system, to foster economic interdependence. Yet, “data shows a growth in inequality in trade open countries. How do we go on from here?”, she said, as she launched the conversation.

A time of tectonic shifts

Liz Alderman enlisted the main challenges the world had had to face over the past years. The war against Ukraine, lockdowns due to the Covid-19 pandemic, Brexit… “The tectonic shifts require major solutions”, she said. José Manuel Salazar articulated his response by adopting a historical perspective. “The kind of globalization we were used to 30 years ago has changed. We see today that a shock to the world economy affects the environment of ideas”, he said. Katarina Körner intervened to add to that statement, indeed, “economic fragmentation is not just a matter of economic power, but also political”, she said. “For some time we have neglected political and social consequences of economic growth. Large emerging economies will start demanding their share in the global institutions”. Katarina Körner expressed her concern on how global insecurity comes as well from economic and social upheavals. “People try to protect themselves, leading to something far from cooperation”, she said.

A limit to growth

Therefore, globalization as we know it is challenged. José Manuel Salazar pointed out that globalization had two sides. Yes, it may lead to fragmentation, but also integration. “There is a geopolitical source of fragmentation. This is a different logic (from the economic system one). We need cooperation”, he said. From Katarina Körner’s perspective, “the whole globalization is man made. It is what we thought was best for our economic development. But now we face a 180 degree turn and we are excluding each other”. She believes that our current world economic system based on growth created a strong fragmentation between the Global North and the Global South. “Especially with the climate crisis: we see developing countries claiming financial aid and blaming the developed ones. This really highlights the downsides of hyper globalization”. As a consequence, as Liz Alderman redirects the conversation: “is there a limit to the growth we are talking about?”. Katarina Körner is “strongly convinced of the importance of engaging in breaking down the strong North/South economic patterns”, she said.

On the road to development

Political instability puts brackets to the development of emerging economies. José Manuel Salazar clearly stated, based on the many Latin American case studies that “development is not a destiny of economic growth. You need to have good institutions”. Trade is still approached as the way to find economic opportunities in the region. But for José Manuel Salazar, although foreign aid can help, “the main responsibility is at the national level. Democracy needs to be at the driving seat”. About the technological divide, he said that in Latin America, “the new alphabetization is digital”. In the fight against inequalities at the national level, Katarina Körner sees the need to address them at their original point. Projects promoted in developing countries must address the whole of society. “We need social protection for everyone, and to support local enterprises, often led by women in developing countries”, she said. She advocates for taking these grassroots initiatives, instead of focusing only on the international stakes.

The conversation ended with questions from the audience. Particularly on the theme of work, José Manuel Salazar expressed: “we need to highlight the dignity of work. It is not just an income issue. Work is something that you do for most of your life, it is a source of self esteem and peace for the communities”. With those keywords to keep in mind, the Youth and Leaders Summit panels were launched. “You are the future, truly”, José Manuel Salazar said.

(c) An article by Lola Lopez Lungo, a student in the Joint Master in Journalism and International Affairs.

More information about the Youth & Leaders Summit 2023.