From optimism to fragmentation


BACKLASH: ANTI-GLOBALISATION AND ‘THE BATTLE IN SEATTLE’
The story of the modern corporate sustainability movement begins in the late 1990s. The end of the Cold War and a new generation of political leaders including Clinton, Blair, Lula and Chirac had established a sense of optimism and opportunity in the global political and economic landscape. Business was going global, international trade and investment skyrocketed, and the widely held belief was that economies all over the world would prosper as a result.

However, the optimism was soon tempered by a growing unease at the social and environmental cost of globalisation. There was a sense that as world trade expanded and prosperity grew, so did the opportunity for exploitation of human and natural resources.

A range of high-profile disasters in the 1980s and early 1990s, such as Chernobyl, Bhopal and Exxon Valdez, placed environmental and social problems firmly on the public agenda worldwide and caused a growing erosion of trust in business.

With increasing concerns over environmental pollution, human rights abuses, corruption and exploitation of people in ‘sweatshop’ factories in less developed markets, commentators were beginning to ask, “Is globalisation out of control?”

Trade unions, environmental and human rights groups began rallying against global corporations and organisations governing markets like the World Trade Organisation (WTO). Despite the growth and success of globalisation, social, environmental and ethical issues were being neglected. A tipping point was reached with the protests at the WTO conference in 1999, dubbed ‘the Battle in Seattle’.

TURNING POINT: 9/11 AND THE WAR ON TERROR CHANGES THE MOOD
On 11 September 2001, the terrorist attack on the Twin Towers of the World Trade Centre in New York changed the geo-political landscape in an instant. Confidence in the vision of global openness and cooperation, and the optimism which had characterised the 1990s, crumbled. Political support and belief in multilateralism started to deteriorate.

After the 9/11 attacks, and the 2003 invasion of Iraq, a new language of division emerged, symbolised by expressions such as ‘axis of evil’ and ‘clash of civilisations’. A growing view was that the world was entering into a new period of polarisation and conflict, this time, not only based on political ideologies and economic competition as in previous decades, but on culture and religion.


GLOBAL FINANCIAL CRISIS: DISTRUST IN THE ECONOMIC SYSTEM
The global financial crisis that swept across the globe from 2007 highlighted excessive risk-taking within an inadequate regulatory framework and destroyed the fragile reputation of the financial sector. It also revealed the precarious state of the
global economic system. Macroeconomic imbalances, fiscal crises in developed economies, weak financial markets, and massive unfunded social liabilities were all in the spotlight.

Initially causing only a handful of high-profile casualties, the immediate aftermath of the crisis was characterised by corporate bailouts and huge economic stimulus packages. The longer-term fallout however, saw economic stagnation, pushing
millions of particularly young people into unemployment, and a wide range of public austerity measures being introduced to tackle sovereign debt crises. There was, and still is, a widely held perception that the main culprits of the crisis were not
being punished, while ordinary people suffered.

Yet, as the crisis grew, ‘greed remained good’ on Wall Street - there was very little sense of the need for ethical integrity in the financial sector, and as a result public trust reached an all-time low. Although short-termism within the financial model
has been challenged, and the repercussions from the crisis can still be felt, the question of whether real change has taken place calls for future discussion.

“During the cold war, very few people had
power but you knew who was in charge.
Today, many have power but you do
not know who is in charge.”
THOMAS FRIEDMAN

FRAGMENTED WORLD: SHIFTING ECONOMIC POWER
In the brave new world after the Cold War, economic and political power shifted from an East-West axis to a more complex, multi-polar order. Starting with the rise of the BRICS, followedby other frontier markets like Nigeria, Indonesia, Mexico and
Turkey, shows that economic power and influence are diffusing and increasingly migrating to the South and the East. This is perhaps most notably illustrated by China’s rise to superpower status, joining the WTO in 2001.

The failure to reach an international deal at the Copenhagen climate negotiations in 2009 was another turning point causing a massive loss of faith in the ability of governments to address global issues. Today, fragmentation remains a dominant
theme, undermining a multilateral approach to solving world problems.

In the face of economic recession and competition from emerging economies, power has diffused and is now nowhere and everywhere. The pendulum in many countries has swung back towards an unnegotiable prioritisation of national aspirations over global challenges and opportunities. Allied with this is a rising support for old political ideologies. More inward-looking, extreme right and left wing views have gained traction tilting towards extremist, nationalist or xenophobic political narrative.

Within countries, a vertical fragmentation has been happening. Power is shifting away from traditional actors, to a more diffused system. A growing, empowered middle-class with access to new sources of information, is questioning the
legitimacy of traditional institutions of power, and demanding more accountability and transparency, and trust in government is eroding.

At the same time, the world has also witnessed an alarming acceleration in religious radicalisation and extremism, as terrorist organisations like ISIS, Boko Haram and Al Shabaab attract large numbers of alienated, frustrated and unemployedyouth, fuelling terror and conflict across the globe.

Fragmentation is also happening in civil society, and the ideal of ‘the global citizen’ is being replaced with a new search for identity that is more rooted in nationality, religion, cultural, ethnic or other affinities. The byword is starting to shift from
“think global, act local”, to “think local, act local”.

THE BATTLE IN SEATTLE

In November 1999, massive anti-globalisation and anti-capitalist protests erupted in Seattle. The target was the World Trade Organisation conference where a new round of trade negotiations was taking place. With an estimated 40,000 people on the streets, a demonstration of this scale against any organisation involved with economic globalisation was unprecedented. The protestors wanted to raise
awareness of labour issues, environmental and consumer protection concerns, and the negative effects of globalisation on poor and ‘third world’ countries. Despite being marred by rioting and violence, the battle in Seattle marked a milestone in the rise of the backlash against globalisation and its visibility to a global audience for the first time.