T

he presence of Indonesia in the recent G20 meeting held in London has increased the country's leverage in the world. This is a strategic move given the past failure of the Indonesian government to seize opportunities for playing a greater role in the globalized political economy.

As the G20 is basically an organized effort to control the globa-lization process that affects every individual country including Indonesia, we need to have a deeper understanding of how globalization poses unprecedented risks to all of us.

Envisioned by American social thinkers such as Marshall McLuhan, Daniel Bell, and Alvin Toffler, globalization is essentially, to borrow from Robert Merton, a self-fulfilling prophecy.

It is not a reality driven by natural forces but constructed by an intellectual discourse that later on guided the motion of the world political economy. For the past forty years, globalization has penetrated nearly to every corner of the globe.

The concept of globalization is highly contested in that the benefits and detriments it spawns have been a heated debate among scholars.

Joseph Stiglitz, the mouthpiece of the critical group against globalization, has emphasized vivid facts of the way in which globalization has provided the means to Western industrialized countries only to exploit natural resources from less developed countries.

Likewise, Naomi Klein in her provocative "No Logo", which inspires many anti-globalization groups, undermines the logic of global capitalism that justifies the unethical manner of multinational cor-porations in exploiting Third World workers for the sake of profit-making.

Those who think of globalization otherwise are not silent. In his "In Defense of Globalization", Jagdish Bhagwati seeks to highlight positive effects of globalization process from the international economics perspective.

Bhagwati argues that rather than creating malaise globalization plays a positive role in improving the livelihood of the Third World people. He refers to India where globalization has done a great deal in reducing child labor, illiteracy, and women poverty. This is in line with arguments made by some Indonesian economists emphasizing the benefits of global capital flow to the country.

Bhagwati and other pro-globalization scholars could be right. Nevertheless, every social scientist is deeply aware that any change in society always comes with unintended consequences.

Globalization is not exempt from this axiom. A range of latest studies by globalization sociologists such as Anthony Giddens, Ulrich Beck, Joost Van Loon, and Scott Lash reach a conclusion that the globalized society is a risk society. In this light, no other countries could exemplify the notion of risk society better than Indonesia.

As Ulrich Beck has elaborated in his "World Risk Society", globalization produces not only physically damaging risks but also socio-economic risks distributed across nations. To understand how this is possible, an imaginative framework from sociologist Manuel Castell helps to explain globalization as the integration process of every individual and group around the earth into a gigantic network mediated through information infrastructure. He refers to this complex web as the network society.

This concept is useful to reveal how randomly constructed globalization carries a fatal risk to the network society. As globalization is constituted by networked local systems that facilitate exchanges of information, goods, capital, and labor, the very structure of this network is vulnerable to severe impacts resulting from socio-political dynamics of the local systems. Malfunction in any point of this network would easily spread creating damage to the entire system.

Such a risk is also prevalent in the global financial system constituted by a network of local independent financial institutions. If one local institution experiences a breakdown, the whole network will be exposed to fatal risk. This is the risk of globalization. But the more crucial risk of the global financial system, as Deidre Boiden has observed, lies not in the capital circulation but in the circulation of trust every actor bestows to the system. If the circulation of trust grows thin, then the whole global financial system would get into a crisis then possibly collapse.

What the United States is currently undergoing is evidence that confirms inevitable consequences of globalization. The severe contraction in the American economy does not result from internal factors per se but more from the global dynamic. Within such a circumstance, the declining volume of trust circulation is now impacting on the global economy compelling every state to take necessary actions if they wish to save its economy. This makes neoliberal economists worried seeing protective policies being a growing trend in many places. What they fail to realize, however, is that the trend is actually a rational response to minimize the global impact.

What lessons can Indonesia learn from the risk of globalization? This is a relevant question as the nation is in a process of choosing its leader for the next five years, a period in which the structure of globalization will reconfigure. Whoever gets the chance to lead the country needs to be cautious in facing the temptation of globalization.

Of course isolating the country from the global economy is not a wise direction. What the country crucially needs is a protective mechanism to curb the negative impacts of the globalization process on the national economy and social stability.

To that end, as Ulrich Beck has suggested, the state must retake its key role that has been taken away by neoliberal institutions. This is a plausible prescription given that ethics and moral responsibility constitute the legitimacy of the state institution while both do not exist in the (free) market system that the neoliberalism persistently promotes.

The implication is that the concept of the welfare state as the institution that protects the people from multiple forms of risk should be resurrected and manifested in the state structure and policy. As Beck hints, the welfare state is the most stable insurance in the world of risk.