The End of Globalization
Urban Crossroads #105

                                                        Large vegetable garden in Sana'a (courtesy of the Aga Khan Trust for Culture).

I recently have been coming across a few writings arguing that the current era of globalization will not last much longer. This conclusion is partly attributed to increasing protectionist policies that various countries are, or will be, imposing as the world continues to undergo a period of challenging economic conditions. Once countries with sizable economies place restrictions on trade across their borders, international trade more or less comes to a halt. Another opinion, however, bases this conclusion on a much simpler anticipated development: increasing oil prices.

Today’s globalization depends to a great extent on countries producing the items for which they have the highest comparative advantage. These items may consist of agricultural products, raw materials, industrial products, or services. Assessing comparative advantage depends on a range of factors such as climate, soil, and an adequate supply of water (for agricultural production), as well as the availability of raw materials, the cost of labor, or the skill level of the working population. No country can produce everything. Each therefore identifies what it can produce at a comparative advantage and sells it to the outside world. In turn, it buys from the outside world what it cannot produce as inexpensively as others.

Such an arrangement clearly depends on limiting regulations that restrict the movement of capital, goods, and people across borders. There also are technical / technological considerations. The movement of capital, for example, is greatly facilitated by advanced information technology and telecommunication systems. In fact, this is one aspect of today’s global era that most probably will stay with us in the long term. The movement of goods and people greatly depends on the availability of relatively efficient, reliable, and affordable transportation systems, whether by land, sea, or air. As the latest volcanic eruption in Iceland has shown, transportation can be easily, suddenly, and significantly disrupted. A long-term negative impact on transportation, however, very well may result from the expected gradual increase in oil prices. With this, transportation costs will soar, making it far less cost-effective to produce items in one location and to ship them to far-away markets. It also will become less cost-effective for people, ranging from professional consultants or tourists, to travel too frequently, thus negatively impacting international economic activity.

This column is not on economics, but on the world we build. The built world, however, is greatly defined by prevailing socio-cultural, political, economic, and technological conditions. The developments I discussed above can have a very strong impact on our built world and on how human settlements function. As transportation costs increase, not only countries, but also neighborhoods, cities, and regions will have to obtain more of the products and services they need locally. This means that people will want to minimize the distances that they as well as the products they buy and sell need to cross. Among other things, this means that building densities will become higher, and cities more compact. Also, further developing energy-efficient transportation systems such as rail and urban public transportation will become more important than ever. Mixed-use zoning will become more prevalent so that people would be able to “live, work, and play” in the same areas, rather than constantly cross large distances between different parts of the city. Also, agricultural land in and around cities will need to be preserved. This way, food items are produced close to centers of population, and distances between areas of production and centers of consumption are kept to a minimum. Cities simply will not be able to keep on spreading and eating up agricultural land around them.

Under such circumstances, historical examples can serve as very useful prototypes. After all, they were built before the advent of modern transportation systems. One example is the traditional cities of Yemen, where buildings were constructed as high as possible so as to take up as little space as possible and to preserve valuable agricultural land. Cities such as Sana'a also have sizable orchards inside their urban boundaries. These produce fruits and vegetables that are sold to the public.

We therefore might need to completely rethink the physical composition of the modern city along the lines provided by traditional urban centers such as Sana'a. The result will not only be denser cities and cities that preserve agricultural land around them, but also cities that make the best use of open spaces inside them for agricultural production. Among other things, this will mean that urban agriculture will become increasingly common. More empty spaces in the city will need to be dedicated to growing food items. These spaces will not only include ground-level areas, but also rooftops. Rooftops are underused spaces and are suitable for agricultural production, assuming that structural support for the soil as well as water insulation for the roofs are addressed.

Of course, it also is possible that alternative energy solutions suitable for our transportation needs will be developed, and the fears about rising transportation costs may not materialize. Electricity-powered vehicles may eventually become widespread and take the place of oil-dependent vehicles with internal combustion engines. The electricity powering these vehicles would be generated not by oil or gas, but by coal or nuclear energy (as is common today), or by renewable energy sources such as wind, solar, and hydroelectric power (the last is also common today). A main challenge preventing the widespread use of electricity-powered vehicles is developing batteries that have large electricity storage capacities but do not take up too much space. If such challenges affecting new transportation technologies are resolved, the prediction about the end of globalization brought about by increased oil prices may not materialize. Still, we need to continuously examine possible future scenarios that affect our basic needs and to be as prepared as possible if any of them becomes a reality.

Mohammad al-Asad

June 03, 2010