UK to reverse globalisation

THE UK and US will be the only major economies to see the globalisation process reverse this year as the process continues despite a faltering world economy.

A report released today by accountancy firm Ernst & Young says globalisation is still increasing among a majority of the world’s 60 leading economies as they so far avoid descent into protectionism.

However, 90 per cent of business executives questioned expect to see an increase in protectionist measures if the global economy slides into a double-dip recession.

James Turley, chairman and chief executive of Ernst & Young, said: “While globalisation continues apace regardless of weaker growth around the world, the spectre of protectionism remains a threat.

“Businesses and governments have to continue to make the case for globalisation as a positive force for economic and social good and avoid any descent into protectionism.”

While Ernst & Young forecasts that global GDP growth will be just 3.4 per cent in 2012, powered mostly by emerging economies, the index continues to predict that globalisation will continue to advance this year and up to 2015.

The only year in the past two decades when the trend paused globally was in 2009 at the height of the financial crisis.

The process will be most pronounced for medium-sized emerging markets such as Vietnam, Malaysia, Mexico and Colombia, and smaller European countries such as Belgium, Denmark, Slovakia and Austria.

The UK and the United States are the only major markets where the index forecasts a modestly declining globalisation score in the next three years due to both countries introducing immigration rules that will impact on hiring foreign nationals.