Richard Baldwin: The nature of economic growth is changing

Former CEPR Leader and VOXEU Founding Editor-in-Chief Richard Baldwin evaluated the Davos agenda and the side of globalization to Bloomberg HT. Speaking also about Turkey, Baldwin said that the appropriately educated young section is an important service export opportunity.

Richard Baldwin, former Center for Economics and Policy Studies (CEPR) Leader and Founding Editor-in-Chief of VOXEU, responded to the developments in Davos and developments in global trade to BloombergHT. Stating that the global economy has changed and the world is slowing down in globalization, Baldwin said, “This situation, especially with regard to goods, has been continuing since 2008. The globalization of trade and services has never slowed down. In fact, there is no talk of globalization, only the nature of globalization is changing. Globalization actually consists of arbitrage. The price of goods from different countries is different. Someone in one country buys a good and sells it in another country and profits from the difference in the middle. As the price difference of goods decreases, the opportunity for arbitrage has decreased, but this is not the case with services. “If the house is far away, it becomes very profitable. For me, globalization has not slowed down or stopped, only its structure has changed.”

The structure of development and growth has changed

Stating that the structure of development and growth has changed and needs to change, Baldwin said, “With the idea that globalization is getting heavier on services, this needs to be more inclusive. It should include women and men equally. Working from a residence involves women more, is more equitable and pollutes the environment. “If we look at it, it’s a term we’ve been familiar with for a long time. I hope it comes true.”

The West and China must learn to live in a middle

Stating that he thought that the tension between the West and China was exaggerated and fueled, Baldwin stated that this situation was experienced with many countries that were seen as commercial rivals, and said, “While I was working in the White House, the USA was struggling with Japan. Automotive industry was dealing with the semiconductor industry. As a result, the USA and Japan They found a way to live in a middle ground. In China, the situation is a little different. China is the world’s largest producer and Chinese artifacts make up artifacts from every country, including the US. It becomes very valuable when it crosses all borders, and it’s something nobody wants For a few branches such as semiconductor and medical, Western countries felt that they were importing too much, plastic toys or flat-screen televisions, all of which came from China, so we have to learn to live in the middle.

We can get through this breakup phase with a little discipline to each other. There is a very strong economic incentive for cooperation and we should not separate them outright. I think we will find a way to live together when the era of the Chinese opposition is over. However, the changes we see in China and Leader Xi’s confirmation of this situation made us even more hopeful that this problem can be overcome.”

There is an opportunity to export services for adequately educated young people in Turkey.

First of all, I have to say this. Turkey has been in the world trade center for thousands of years. This is nothing new for Turkey. When we look at the 90s, Turkey did a very good job producing works for European producers. That phase is no longer as fast as it used to be in terms of increase. In the second phase of globalization, intermediary services will increase. There is a relatively adequate supply of educated people from Turkey and many of them speak English and are very cheap compared to prices in Europe. Because of this, a service export opportunity may arise for young people working from housing in the services sector.