Relocalization in the time of Coronavirus: Building Sustainable Social and Economic Systems

Christophe Aguiton, Geneviève Azam, Maxime Combes, Thomas Coutrot and Jean Gadrey

In less than two months, the coronavirus pandemic has already been reshuffling the cards of economic globalization. The continuous lengthening of supply chains and the international division of labour for more than thirty years, as well as their just-in-time operation, are now perceived as sources of danger that are difficult to bear and justify.

The pharmaceutical industry, which has relocated entire sections of its production apparatus to the extent that 80% of the active ingredients of medicines are now imported from China and India, compared with 20% thirty years ago, is cited as an example of sector that need to be relocalized. The term “relocalization” is now used in all speeches, including by those who have been working continuously, for years, to deepen neo-liberal globalization in the name of lowering costs.

They all speak about “relocalization” but without questioning the very content of investment and production choices. Should we add to the cost competitiveness criterion, which has guided the choices of investors for years, only the sole criterion of “risk competitiveness”, as is now evoked? Or should we question the very content of these productions, the financing process, the ecological impacts and the quality of the jobs they provide ?

Instead of stopping the continuing unsustainable exploitation of nature, the neoliberal agenda projects an even higher rate of natural resource extraction in the next 50 years.

Calls for relocalization and economic recovery cannot, in fact, hide the intrinsic unsustainability of the global production system : in the report “Global Resources Outlook to 2060”, the Organisation for Economic Co-operation and Development (OECD) estimates that natural resource extraction will have to increase by 111% (150% for metals and 135% for minerals) to fuel a global annual growth rate of 2.8% by 2060. Even relocalized and re-boosted to fit with a new revisited form of protectionism, such an economic model is nonetheless unsustainable and undesirable.

The coronavirus crisis appears to be a symptom of an ill-organized world, which can only encourage the proliferation of uncontrollable events with a systemic destabilising dimension. Without being the root cause – which lies in the soaring inequalities and a financial bubble inflated by the central banks over the last ten years – the coronavirus is setting a dramatically unstable world economy on fire. What will happen when the climate disruption and ecological collapse documented by scientists produces its full effect, i.e. as early as tomorrow, and the day after tomorrow, at the latest?

The fact that most of the economy and its financing is entrusted to the financial markets and multinational companies alone, making short-term financial profitability alone the main decision criterion, is a factor that deepens and worsens unfavourable situations such as a health crisis. In addition to increased financial fragility, social, ecological and fiscal dumping, as organised by three decades of neoliberalism, has clearly reduced the resistance and resilience capacities of our economic, social and, as we can see, health systems.

In the same way as the responses to climate change should be, health, economic and social measures to deal with the coronavirus pandemic should be based on mandatory international solidarity. On the contrary, there is a proliferation of national, not to say nationalistic, measures, often contradictory to each other, consisting of organising competition for access to medical equipment (masks, screening tests, breathing machines) and pointing to the danger posed by neighbouring China or Italy or the responses provided by other countries.

Relocalization is essential for reducing the world’s ecological footprint and for establishing sustainable social and economic systems.

The need to relocalize activities in order to reduce our ecological footprint and generate sustainable and quality jobs, through international cooperation and solidarity, should guide the structural choices to be made in the coming weeks. Relocalizing is no longer an option but a condition for sustainable social and economic systems, as well as of people. It is time to reduce the flow of capital and goods and to shrink the impact of economic sectors that are toxic to the biosphere (fossil fuels, chemicals and agro-industry, electronics, etc.).

Forgetting one of the terms of the equation would be tantamount to aggravating one or the other of the sources of global destabilization currently at work: ecological emergency, migration, wars and geopolitical tensions, the rise of authoritarianism, the slowing down of world trade, uncontrolled debt and financial markets, health crises, are all interdependent dimensions of globalization which we must try to address jointly.

Fire-fighting forces know this: when fire breaks out, it is necessary both to fight relentlessly to limit its spread and, at the same time, to ensure that it cannot rekindle, fuelled by secondary sources and adverse external causes. While the banking lobbies have continued to erode the already inadequate prudential measures put in place after the 2008 crisis, they are taking advantage of the current crisis to resume their undermining work. Yet it is the public regulations that allow them to navigate in bad weather that should be strengthened.

History is not written. It is full of moments when unforeseen events, wars, political shocks or social movements have accelerated ongoing processes or allowed unpredictable shifts. It is our collective responsibility to shift the world towards solidarity, sustainability, reduction of inequalities, in a nutshell, towards a liveable and desirable world. This will require our societies to take power out of the hands of the business barons, the techno-scientists and their political representatives.

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Christophe Aguiton, Geneviève Azam, Maxime Combes, Thomas Coutrot and Jean Gadrey are members of Attac (Association for the Taxation of Financial Transactions and for Citizens’ Action) France.

This article was first published in Le Monde, Paris on the 22nd of March/2020.

https://www.lemonde.fr/idees/article/2020/03/22/relocaliser-n-est-plus-une-option-mais-une-condition-de-survie-de-nos-systemes-economiques-et-sociaux_6034010_3232.html

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One thought on “Relocalization in the time of Coronavirus: Building Sustainable Social and Economic Systems

  • April 24, 2020 at 1:53 am
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    Thats what the Upnisads mention “Vasudaiva Kutumbakam” which means “the world is one family”. Without having a common motto to achieve this status by individual Govts, We are sure to land into irrecoverable destruction in a short time. Business has to be remodelled to take care of environmental aspects. We cannot have individual tragets, all targets has to be global that should have environment conservation as the top most priority.

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