Inflation, globalisation, and localisation

It is difficult these days to go anywhere or do anything without thinking or hearing about inflation – what is less obvious is what to do about it. As the price of food, petrol, housing, and just about everything else continues to rise dramatically while salaries fail to follow suit, people are suffering. The problem of dramatically rising prices is not limited to Bangladesh. In the Americas, Europe, Africa, and across Asia, people are struggling to pay for rent, food, and other necessities. According to the United Nations, global inflation is on track to increase to 6.7 percent in 2022, twice the average of 2.9 percent during the previous decade.

There is much speculation about the causes of inflation, including fiscal policy, oil prices, the war in Ukraine, Covid-related supply issues, and corporate greed. Since most of what people consume is produced and transported with fuel, the price of oil affects the price of just about everything else.

No doubt global inflation is due to various causes. But given the fact that inflation is global, and that some of the causes have to do with international trade, it may be worth considering the possibility that globalisation itself is a cause of inflation. Consider the case of corporate monopolies: without competition, there is no need to keep prices low. And various products are becoming more and more concentrated in the hands of a few corporations. Consider also global trade, wherein some countries export and import nearly the same amount of the same product, be it wheat or beef or vegetables. Shipping products around the world is expensive, more so as oil prices rise. It is the very definition of unsustainable. And it is mandated under global trade agreements.

Imagine instead a very different situation. One in which countries attempted to meet more of their needs locally, and where global trade was restricted to cases where it is necessary rather than mandated. Wherein most food, even in cities, is grown close to the consumers, and people's diet consists mostly of locally available, seasonal items. Where the focus is no longer on traveling as far and fast as possible, on spreading global networks, on foreign exchange and foreign direct investment, but rather on building strong, resilient local economies. Where, when the price of petrol continues to climb, governments shift from providing roads to building bicycle networks and bicycle highways, and to improving conditions for public transit and walking.

Where, rather than being obsessed by all that is foreign, people take pride in what is local.

This is not to say that globalisation brings no benefits. Most of us during Covid-19 have benefited from global communication networks. The global exchange of information and ideas is often fruitful. But the increasingly globalised world economy is too fragile, too liable to cause suffering throughout the planet when a crisis—like Russia's invasion of Ukraine—occurs.

Local Futures, and its partner organisations around the world (including here in Bangladesh) envision a future that is genuinely sustainable, in which thriving economies need not decimate nature or contribute to dangerous climate emissions. A future where the focus is not on constant growth in the supply of unnecessary stuff but rather on having enough of what people need, and sourcing it, as much as possible, close to home.

In order to share its vision of an economics of happiness, Local Futures celebrates World Localisation Day each year on June 21. While the concept of localisation is always relevant, it is more relevant than ever as we face the crisis of inflation on top of other crises: Climate, environmental destruction, species extinction, pollution, and the ongoing slaughter on our roads, to name a few.

There are solutions to the problems we face, and the best solutions are those that resolve multiple problems simultaneously rather than attempting to tackle problems individually, too often contributing to a new problem while trying to resolve an existing one. A focus on the local would not only help address the epidemic of inflation, but help reduce those other problems. A vastly better alternative to inflation, environmental devastation, and other global and local problems exists – if only we have the courage to pursue it.

Debra Efroymson is the executive director of the Institute of Wellbeing, Bangladesh, and author of "Beyond Apologies: Defining and Achieving an Economics of Wellbeing."