FirstFT: Three decade-era of globalisation is ending, warn business leaders


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The three-decade era of globalisation risks going into reverse, according to company executives and investors, as world leaders prepare to meet in the Swiss town of Davos for the first time since the coronavirus pandemic began.

The geopolitical fallout from Russia’s war in Ukraine, combined with the disruption to global supply chains caused by the virus, recent market turmoil and the rapidly worsening economic outlook leave corporate leaders and investors grappling with vital strategic decisions, several told the Financial Times in interviews.

“Tension between the US and China was accelerated by the pandemic and now this invasion of Ukraine by Russia — all these trends are raising serious concerns about a decoupling world,” said José Manuel Barroso, chair of Goldman Sachs International and a former president of the European Commission.

Onshoring, renationalisation and regionalisation had become the latest trends for companies, slowing the pace of globalisation, he added: “[Globalisation faces] friction from nationalism, protectionism, nativism, chauvinism if you wish, or even sometimes xenophobia, and for me, it is not clear who is going to win.”

“Pretty much no one has seen” these conditions “during the arc of their investing career”, according to the head of one of the world’s largest private equity groups. Charles “Chip” Kaye, chief executive of Warburg Pincus, said geopolitics had been “on the fringe of the way we thought” since the fall of the Berlin Wall and that this had “provided a certain oxygen to global growth”.

However, he said, geopolitics was now “front and centre” of investment decisions just as the “pretty powerful tailwind to asset prices” provided by years of falling inflation and low interest rates comes to an end. “You’re not optimising the economic outcome, you’re creating friction in the system,” he said of rising geopolitical tensions.

Happy Monday. Thanks for reading FirstFT Asia. Here’s the rest of today’s news — Sophia

1. ‘Millions’ at risk of death as Ukraine war hits food supplies Egypt, which sourced most of its wheat from Russia and Ukraine before the war, is the world’s biggest wheat importer and subsidises a bread programme for 70mn people. Finance minister Mohamed Maait warns that “millions” could die as the global wheat shortage intensifies and triggers a food price crisis.

2. ‘Quad’ security group plans to track China’s illegal fishing The US, Japan, Australia and India will unveil a maritime initiative tomorrow aimed at curbing illegal fishing in the Indo-Pacific. China is allegedly responsible for 95 per cent of illegal fishing in the region, which has “drastically depleted global fish stocks and undermined traditional livelihoods of many countries,” said Charles Edel, Australia chair at CSIS.

3. Biden and Yoon agree to step up deterrence against North Korea During president Joe Biden’s visit to Asia, he and South Korean president Yoon Suk-yeol have discussed the “timely deployment” of US strategic assets — including fighters, bombers, and missiles — to reinforce deterrence as Pyongyang continues to develop nuclear weapons.

4. Lukoil’s ex-chief warns the EU against banning Russian oil Vagit Alekperov, the former head of Russia’s second-biggest oil group, has warned that a European ban on the country’s “impossible to replace” crude would be “the most negative scenario” for all parties as EU discussions on an embargo intensify.

5. Saudi Arabia signals support for Russia as Opec+ partner As Russian output falls and the oil group’s production quotas are set to expire in three months, energy minister Prince Abdulaziz bin Salman said Riyadh will stand by Russia despite tightening western sanctions on Moscow and a potential EU ban on Russian oil imports.

The day ahead

Results Zoom releases their Q1 results today, and Kingfisher gives a Q1 trading update.

European Union The EU General Affairs Council meets in Brussels today. Plus, the eurogroup of 19 finance ministers from member states that adopted the single currency also meet in Brussels.

Middle East Turkish foreign minister Mevlüt Çavuşoğlu visits Israel and the Palestinian Authority to discuss the appointment of ambassadors with his Israeli counterpart as part of improving relations between the countries.

Biden in Asia US president Joe Biden will present his Indo-Pacific Economic Framework in Tokyo today.

What else we’re reading

Is the global economy heading for recession? Four different problems are stalking the global economy as it recovers from the pandemic: strict Covid-19 lockdowns, tightening monetary policy, a soaring cost of living crisis, and food crises. Chris Giles lays out the deteriorating outlook in The Big Read.

Line chart of Indices rebased ($ terms) showing Markets have been falling on recession and inflation fears

How Elon Musk and Jack Dorsey aligned behind Twitter deal The billionaire “bromance” relationship between Musk and Dorsey has already shaken up the future of Twitter. The alliance has angered staffers — and fuelled speculation about the scope of Dorsey’s role in the deal and the company’s future.

London lawyers helping Russia’s super-rich Top London law firms have made fat profits helping Russian oligarchs with issues such as alleged libel or data protection — but the equation has changed in the wake of the Ukraine war, bringing these legal arrangements under increasing scrutiny.

The truckers who keep our world moving The history of humanity — from Bronze Age trade in the Indus valley to lorries carrying aid to Ukrainian refugee children — is the story of supply chains. Horatio Clare hitches a long-distance lift with a truckie to see the world from a startling new angle.

Graphic showing the lorry driver's route across Europe

Death notices for the city are premature It’s not just the cost or duration of travel that is preventing urban dwellers from spending five days a week in the office, John Burn-Murdoch writes. It’s that standing nose-to-armpit on a packed commuter train is not fun, but sitting on an airy train to a pub full of friends is.


The Andy Warhol silkscreen “Shot Sage Blue Marilyn” — which sold for a record $195mn at a New York auction — deserves the cliché “iconic”, but Tim Harford argues there is a much more obscure portrait that has a claim to being Warhol’s most interesting and definitive work.

The 1964 painting “Shot Sage Blue Marilyn,” by Andy Warhol
The 1964 painting “Shot Sage Blue Marilyn,” by Andy Warhol © AP

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