Friday, February 08, 2013

The End Of Geography

One of the books I had to read in a seminar about globalization and democratization was "The End of History" by Francis Fukuyama. I didn't understand all the fuss being made about the argument, which you can read for yourself here:

What we may be witnessing in not just the end of the Cold War, or the passing of a particular period of post-war history, but the end of history as such: that is, the end point of mankind's ideological evolution and the universalization of Western liberal democracy as the final form of human government.

The point isn't that we are done making history. At the global scale, the conflict over paradigms of international political economy has ceased. There is only economic globalization and democratization. Maggie Thatcher. T.I.N.A. There is no alternative.

With that debate settled, the graduate seminar moved on to the existential threats to the nation-state. Kenichi Ohmae has a similarly bold title. But we students were not convinced. With apologies to Thomas Friedman, the end of geography was far from nigh.

The time has come to reconsider. I don't mean the world is flat and international borders have ceased to matter. Coming out of the last financial crisis, I see an epochal break on par with Fukuyma's End of History. The migration of talent is more important than the economic geography of nation-states. People develop, not place:

According to Hikmet Ersek, CEO of Western Union (who is himself Turkish), money is now starting to flow out of Turkey, not in. That is because Europe is ailing while the Turkish economy has boomed. So while Turks in, say, Germany used to send money to their families in Turkey, during 2012 families in the homeland often ended up helping their kin in Europe – creating outflows that are now estimated at about 30 per cent. Or, as Ersek told me on the sidelines of Davos last month, with a smile of pride and wonder, “It’s a huge change.” ...

... Four years ago, countries such as Spain were deemed to be “outflow” countries, because migrants from Mexico, north Africa and Latin America were travelling to Spain and sending cash home. Now, however, that outflow has slowed dramatically, and could soon turn into inflows, because migrants are finding it tough to get jobs in Spain – and young Spaniards are going to places such as Latin America and sending money back.

Another shift, Ersek says, can be seen in France and Germany: flows from those two countries have recently intensified to places such as Spain and Portugal, as workers from the periphery go to the core of the eurozone to hunt for jobs. However, flows around Greece have recently stabilised. And striking changes are afoot in the so-called emerging market countries such as Mexico, Korea and Indonesia: like Turkey, these are starting to be “outflow” countries, not “inflow” countries, as they attract migrant workers from elsewhere. Russia has seen a particularly remarkable turnabout: though it was an “inflow” country several years ago, it is now the third-largest “outflow” country, with 80 per cent “outflows”, because of the oil and gas boom (and, perhaps, a pattern of capital flight).

For any regular reader of my blog, none of the above should come as a surprise. I've been tracking the reconfiguration of global talent flows for a few years. Everything is upside down. People move from developed to developing countries. Remittances reverse course. The nation-state takes a backseat to the international migrant. This "remarkable turnabout" is the end of geography.

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