The International Monetary Fund (IMF) reported Wednesday that within some developed countries, the gap between successful and "backward" regions is widening, driven mainly by automation and productivity trends, rather than global trade.
"Generally speaking, trade shocks, especially the intensification of import competition in foreign markets, do not seem to lead to differences in labour markets between backward and other regions. By contrast, technological shocks, represented by the decline in the cost of capital goods for machinery and equipment, have led to an increase in unemployment rates in areas more vulnerable to automation, especially in areas with greater exposure to the benefits of backward areas.
The issue is at the heart of the debate about globalization, how it affects politically influential voter groups, and whether protectionist therapies pursued by some politicians pose risks to global economic growth, thereby putting everyone in a worse position. This is undoubtedly a concern for IMF officials as global trade flows decline.
Although employment and financial enrichment in some parts of a country may be a "normal growth feature" that will eventually bring "catch-up" benefits to other regions, the IMF said that, according to the current situation, the "convergence" process in developed countries has slowed down or stopped.
The IMF said areas suffering from "sustained inefficiency" could be left behind forever, which "aggravates discontent and political polarization, erodes social trust and threatens national cohesion".
It can be said that this is the case in the United States, where workers who think they are unemployed because of trade and migrant workers are dissatisfied, which played a role in Trump's victory.
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