GLOBALISATION is at risk from increasing political intervention provoked by the global recession, a senior global economist said yesterday.
“The forces of protectionism are probably enough to halt the recent acceleration of global trade,” said UBS’s chief worldwide economist, Paul Donovan.
Global trade soared from a 12.5 per cent share of GDP in 1987 to a 24 per cent in 2007.
“But 2007 may well mark the peak of globalisation,” Donovan warned, claiming that trade has dropped as a percentage of GDP for the first time since the 1930s. In 2009, world trade fell by 12 per cent, UBS said.
“Since pledging there would be no return to 1930s policy, G20 governments have introduced an average of one new trade barrier every day,” Donovan said.