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The international economy between globalism and nationalism. A new image for Italy

Digital format, 15/07/2020, Conference

No real global strategy or collective response against the pandemic crisis has yet emerged. Even for those who in the past have led effective coordinated responses to crises –e.g. international terrorism (2001) and the 2008-2009 financial downturn (in other words the United States) – have for the first time ever gone “missing in action”. Thus, at least at the start, it has been everyone for themselves.

Until Europe stepped up the pace and formulated a detailed action plan. Not as yet a historic turning point, but certainly a step forward that could give the EU what thus far has only been potential: significant standing. There will be concrete and radical change, however, when all European members cede an additional portion of sovereignty. Certainly, at this stage, Europe has chosen to stand on the right side of history.

The isolationist choices of President Donald Trump have distinguished the United States in the context of global equilibria. However, the poor management of the pandemic could cost the president a second term in the White House. If Joe Biden were to win in November, the multilateral approach would resume and transatlantic relations would gain a new role in guiding American foreign policy.

The President has criticized, abandoned and removed from the table of international relations multilateral organizations and agreements such as the WTO, the Paris Climate Agreement and the WHO. There have even been proposals for new multilateral areas without dismantling those of the past. Relations with China will remain pivotal: even in the case of a Joe Biden President, after years of confrontation, the China factor will remain divisive, even in transatlantic relations where the European position has not always been aligned with the US. Finally, there is Russia: Vladimir Putin’s rapprochement with the West is not at all to be ruled out, precisely from an anti-China perspective.

If it is true that Covid-19 – the Black Swan of 2020 – has accelerated some globalization crises, it is also true that the time is not yet ripe to announce the end of the phenomenon that has changed the world over recent years. As President Barak Obama said the day after Donald Trump’s arrival in the White House: “It’s not the end of the world, it’s the end of a world”. In other words, the end of an ideological vision of globalization – of a vision of the positive and progressive destiny of a humanity that, nevertheless, did not take notice of increasingly obvious imbalances, and strong identity factors associated with the homogenization of the culture and steadily growing social inequality.

Moreover, the pandemic has also accelerated some aspects of the crisis of globalization such as, for instance, damage to the global value chains and the consequent trend towards an accelerated regionalization – even though, as some participants maintained, economies will probably continue to expand as a result of being so interconnected that they cannot be radically changed by a phenomenon as deep and widespread as this pandemic.

Much will depend on the time factor: whether or not a vaccine is found, the social and economic effects of Covid-19 will continue globally. The greatest concern is over the dramatically uneven distribution of wealth in both developed countries and, above all, in the world’s poorest regions, where health threats – due to healthcare facilities unable to weather the impact of the pandemic – could trigger humanitarian and social catastrophes.

Thus, necessary now more than ever is qualified leadership and a leap in quality in governance. That goes for Italy too, where the pandemic risks radically changing future political, scientific and societal relations.  As policy decisions have been made in the name of scientific criteria while, Covid-19 has proved an asymmetrical shock to the economic and social fabric. The country’s capacity for resilience, which in many cases has been surprising, has been fundamental to say the least, but we need new rules and a clear and transparent regulatory and operational framework that for companies – e.g. for that 80% of the membership in Assolombarda that have reopened – becomes an essential and strategic element.

Only a joint effort and a shared institutional and economic platform will make it possible to relaunch the country’s image. For that same reason an ICE-funded communications campaign has been designed to jumpstart Italian exports. If the Made in Italy label is the third largest global brand after Coca Cola and Visa, then its multifaceted image is no less than a structural factor in the country’s competitive capacity. Thus, the Dubai Expo will offer a unique opportunity for uniting the efforts of the various ministries, Regions, business associations, firms, universities and research centers. “Beauty unites people” is the claim that has been chosen to represent the Italian development model and that becomes an expression of the historic challenge that this unpredictable 2020 has posed to both the country and its citizens.