By John A. Caslione

Globalization of the world economy and that of its businesses had been accelerating at unimaginable speeds over the past decade. Until recently, many in business and in government had begun to believe that complete globalization of the world’s economy was inevitable, that it was our destiny as humankind – our global manifest destiny.

Then came the tragedy we witnessed on the 11th of September. While these may have been isolated acts of ultra-extremists with an unacceptable and untenable political or religious agenda, the events of that dark morning have changed life forever – not only for Americans, but also for everyone in the world.

The rapidly expanding and increasingly borderless global economy experienced in the last decade has now given way to a world of increasing barriers and a new wave of protective and nationalistic measures that may severely restrict the free movement of people and goods for years to come.

Initial estimates of the added costs that new security measures are placing on the US economy tops US$110 Billion just in the first year alone. This will most certainly make doing business in the US or with the US-based companies a lot more expensive and a lot less attractive. As reported in America’s news daily, USA Today, for the first time in reported history, some European companies are now cautioning their people from traveling to and in the US. Even more disturbing, many of these companies are now rethinking whether it is prudent to even have offices in the US at all.

The immediate effects of this "reversal of fortune" on 11th September for America will create a new set of global dynamics that will have long lasting and far reaching impact on the world economy and on world politics.

On one hand, Europe will likely become much more aggressive in its relations with America. The tragedy of 9/11 created an outpouring of sympathy and support from nations all around the world. Despite this, America has been increasingly seen by many in the world, especially in Europe, as arrogant and aloof in its dealing with the rest of the world, both in its dealing with the developing world and the industrialized world. The events of 9/11 showed the world America’s vulnerability and there will be some that will seek to capitalize on it, even its long-time friends in Europe.

As a counter-balance to this, America will do more to strengthen its ties with its neighbors in North America and in South America, if for no other reason than to better protect it’s own borders, i.e., with Canada and Mexico.

And as America seeks desperately to reduce its dependency on Middle Eastern oil, especially in the wake of more trouble on the horizon with unstable governments in Saudi Arabia and Egypt, the rich oil reserves in South America will finally capture America’s long-term interest.

Russia’s Vladimir Putin and America’s George Bush share more in common than most might believe, which will motivate them to continue bringing their countries closer together than most ever believed possible.

Begin with the fact that upon their taking the reigns of power in their respective countries, the focus of attention of their presidencies almost immediately shifted back to the people vs. their self-absorbed presidents' egos that preceded both of them. With their egos solidly in check, dig deep below the surface of these two markedly different men, you will not find two more pragmatic men in power today. They need each other and they know it.

America needs the counter-balance Russia provides to a fast rising and unpredictable superpower China, plus it needs Russia’s vast oil reserves.

Russia needs America’s money and support to help dig itself out of its self-inflicted economic pyre, nothing to say of Russia’s desperate bid to regain America’s validation of Russia’s legitimate superpower status, not just militarily, but as an economic superpower. Putin is also keenly aware that to accomplish this, he needs Bush’s support for Russia’s accelerated entry to the WTO club.

As events continue to unfold, Americans will be forced to become more a part of the world as they now realize that the two oceans that have protected them for years offer little protection against a determined enemy. This should bode well for the rest of the world, as America will begin to work harder to liberalize trade in the world, especially with emerging and developing markets – the same markets that will undoubtedly suffer greatly in the short term as America focuses inward to find it’s own way out from its own deep recession.

While some are still in denial, America is deep in a recession as unemployment is the highest it’s been in twenty years. Despite the Herculean efforts of the Bush administration, the US Congress and the Federal Reserve Bank to stimulate the economy, we continue to see signs that the US economy may actually be destined for a much deeper decline before it begins to emerge into more positive territory. While most are hoping for a quick and steep "V" in this recession, it is unfortunately looking more like a wide "U" that we are up against this time.

But, unlike Japan that is plagued with many deep, internal and systemic problems in its economy – some would argue that Japan’s best days are long behind them as their economy has been stalled since 1992 – the fundamentals in the US economy remain as strong as ever, and it will be only a matter of time before the US does its fair share to pull itself and the world out from under the current worldwide recession.

Admittedly, the world economy will be a bit harder – maybe much harder – to "jump start" to get us all out of this global recession. One of the consequences, or successes, of the last decade of globalization has been the tremendous increase in the level of integration between the world’s economies, it’s financial markets and of businesses overall. Let’s face it; it takes a lot more fuel to launch one Boeing 747 than it does for a hundred small two-seater Cessnas to takeoff.

This may actually create a new spirit of cooperation and a renewed energy to inspire the world’s leaders to cooperate even more closely to find new solutions to some of our common problems – the most urgent being the worldwide recession.

The only bright spot in the world economy is China, as it grew almost 8% in the first half of 2001. As China is rapidly becoming a world superpower, America and other leading nations will be forced to take a closer, less disapproving view of China. They will need to find ways to constructively work together with China and with other emerging markets for our collective good. By any measure, this can only be good for all of us.

The events of 9/11 have changed our lives, probably changed them forever. Globalization may have slowed, and maybe it’s even in retreat in the short term. This may not be such a bad thing, as it was probably moving much faster than most of us could really understand and control. Maybe we need this time to reassess and reevaluate the benefits of globalization overall.

At the same time, there is no reason to believe that we should abandon our collective motivation and drive to continue moving closer to one another as different peoples sharing the same world. Globalization, even with its current limitations, does this for us. And despite the imperfections of globalization as we have known it, the alternative – regionalism, nationalism and even isolationism – hold little promise in pursuing the best interests of the world’s people.

A more enlightened approach is to build upon what we have today and make it better. In the end analysis, one thing is inescapable. Globalization and its progeny, the inevitable economic integration of the world’s people, continue to be our best and maybe our only hope for a true and lasting world peace.


(C) 2001, John A. Caslione

John A. Caslione is President and CEO of Andrew-Ward International, Inc., an international marketing and sales firm based in Chicago, USA, that specialises in assisting companies in developing and implementing global marketing, sales, supplier and distribution business alliance strategies. He is also a leading international speaker and expert.

His new book, written with Andrew R. Thomas, 'Global Manifest Destiny: Growing Your Business in a Borderless Economy', is published by Dearborn Publishing. Visit www.globalmanifestdestiny.com

John A. Caslione delivers 'Value-added marketing and sales strategies' at Management Centre Europe. For more information visit http://www.mce-ama.com/events/370.htm

Management Centre Europe (MCE) will be hosting an evening event with the author John Caslione, on "Growing your business in a borderless economy", on March 21st 2002 at the MCE Conference Centre in Brussels, Belgium. To find out more about this special member event call Betsy Heris on 32/2/543 2100 or email: Info@mce.be