KEY GLOBAL TURNING POINTS

Emerging economies have come to represent more than half of global economic activity. They account for two thirds of foreign exchange reserves and are accumulating an additional two billion dollars every day.

From an economic point of view, the transition from the twentieth to the twenty-first century took place in the midst of growing trade and financial interrelationships among countries, and the widespread impact of information and telecommunication technologies. Another important development was an increasing cross-national convergence in policymaking, as a result for the most part of a consensus over the fundamental features of monetary and fiscal policy, the benefits of deregulation, and the importance of letting markets allocate capital, labor, and other resources. The global economy was simply tending towards greater integration under a liberal set of rules (Abdelal 2007; Stiglitz 2002). As Robert Gilpin (1987: 389; 2000) once put it, the late twentieth century resulted in an “increasing interdependence of national economies in trade, finance, and macroeconomic policy.” The global economy was moving in the direction of tighter integration in all of its different aspects, from production and distribution to capital and information flows. In this vein, sociologist Manuel Castells (1996: 92) argued that the global economy had become “an economy with the capacity to work as a unit in real time on a planetary scale.”