GLOBALISATION: TOTTERING ON THE BRINK OF DECLINE? Any Remedy?
As one listens to speeches, participates in national and international conferences, takes a casual browse of television channels or simply log on to the internet it becomes difficult not to conclude that the world has really become a ‘global village’. When one however, also take some time to follow the proceedings of international conferences on climate change, the proceedings of the United Nations, or when one is confronted with news of war going on in Afghanistan, Iraq or threatening to begin between North Korea and South Korea; when one looks at the African and most third world economies where there exist so much to be done to meet up with the rest of the world; the critical mind cannot fail to question whether the so much talk about globalisation is not simply a façade. Many economists, political theorists, developmental agencies, governments and the academia have propounded myriads of positions to the question of globalisation but these seem to be more and more of rhetoric in the face of growing fragmentation in the world.
In this essay I explore the likelihood of the process of globalisation to slow down or even go into reverse in the future. It has five main sections. The first introduces the work by pointing out to some recent happenings in the world; the second looks at the general notion of globalisation trying to evaluate what globalisation is and what it is not; the third, drawing on the experience of third world countries in the areas of trade, growth of multinational corporations and migration, questions whether globalisation is a ‘myth’, the fourth section looks at the future of globalisation and points out certain things that need to be done to prevent the total reversal of the process of globalisation. This is then followed by a conclusion.
On January 1, 2007, the great news was that two more countries from Eastern Europe, Bulgaria and Romania had joined the EU, bringing the number of member states to 27 countries while Croatia, the Former Yugoslav Republic of Macedonia and Turkey were also candidates for future membership. As we entered 2011, a great number of Estonians are embracing the joining of their economy to the eurozone in spite of the deepening crisis of confidence in the single currency. This makes Estonia the 17th country to adopt the currency, while scepticism increases in some countries especially the United Kingdom. On the other side of the globe, over 1 million Zimbabweans face deportation from neighbouring South Africa for failure to get the necessary documentation to regularise their stay (Mlotshwa, 2011) and Sudanese began voting on the 9th of January, 2011, as part of a referendum that may create a new State in Africa some Eighteen years after Eritrea gained independence from Ethiopia in 1993. Hence while some regions are converging, some are disintegrating. So what then is globalisation?
- 2. Globalisation: Quid Sit?
Globalisation is not new. What is new however, is the understanding of globalisation which has been the basis of many debates. In this section I will therefore look at what globalisation is and what it is not.
2.1. What Globalisation is:
It has been from the dawn of modern civilisation, the aspiration of dominant empires to universalise, or cause to be present world-wide, their socio-economic, political ideology and their way of life. It therefore involves the days of the European explorers and the era of the colonisers who scouted for slaves and empires to extend their political and economic strength. Globalisation became the new buzzword in 1990s and has been getting much attention since then. According to the proponents of globalisation, the benefits are myriad which inter alia include, heightened mobility of capital, increase growth of multinational corporations (MNCs), intensification of international economic interconnections, improvement of international trade, greater mobility of human resources across countries and greater outsourcing of business processes to other countries.
Globalisation is therefore defined as, “the growing economic interdependence of countries worldwide, through the increasing volume and variety of cross border transactions in goods and services and of capital flows as well as through the most rapid and widespread diffusion of technology.” (IMF, 1997) Also, it is “the increased interdependence of world economies, investment liberalisation and deregulated policies.” (Dembele, 1998, p.91)
these definitions place more emphasis on economic factors because of the complexity involved in capturing the concept of globalisation in a single definition. In fact, the simple truth is that the definition of globalisation cannot be globalised. Collier divides the economic aspects of globalisation into three – trade in goods, capital flows and migration of people – and states that they are “…so distinct that even the idea that economies have become more globalised depends upon which dimensions you take.” (Collier, 2007, p.80) Since I consider globalisation to be a combination of economic, technological, socio-cultural and political forces and a process by which the people of the world are unified into a single society I think its definition should of necessity include other issues like politics, religion, language and culture. I therefore tend to agree more with Held et al’s (1999) definition which gives a more general view of the concept of globalisation and argues that globalisation is not a singular process but a multidimensional force evident across the cultural, political, ecological, military and social domains Taking Held’s view I will look at some different domains such as politics, religion, culture and language to see if there is such a possibility in these areas. My intention will be to show that globalisation is actually none of these.
2.2. What Globalisation Is Not
Politics: The political aspects of globalisation can be said to be when governments create international rules and institutions to deal with issues such as trade, human rights, and the environment. While some new institutions and rules that have come to fruition as a result of globalisation such as the World Trade Organization, the area of governance still leaves much to be desired. It would have been thought that with the collapse of communism and the USSR in 1990, there was going to be a greater degree of harmony in the world and that American liberal democracy was going to become the world system of politics. The reality of the world today has never been further from this. China and North Korea still maintain their versions of communism, In Europe and the USA, where there exist democracies, they are varied. Furthermore since the turn of the century, there has been more secessions and as I indicated in the beginning, Southern Sudan is set to become a new country as voting for secession began on 9 January, while the Southern Cameroons National Congress (SCNC) in Cameroon and the Movement for the Actualisation of the Sovereign State Of Biafra (MASSOB) in Nigeria have not given up the struggle to separate the Nations. The end of the cold war rather ushered in a new system of increasing local, non-state and organisational conflicts hence there has been the ‘increasing localisation’ of conflicts. (Srnicek, 2010) I therefore feel that if there is increasing interdependence in the world today, it certainly is not in the area of politics.
Religion: Religion seems in no period in history to have been more of a divisive factor as it is today. While there are several religions in the world, the there is an increasing growth in the number of atheists and also an increasing call for secularism. This was greatly manifested during the Catholic Pontiff’s visit to the UK (msnbc.com 16/09/2010). While in the past, there have been attempts at universalising religion, such as the crusades and Jihads; it cannot even be conceived today. Terrorist attacks are given religious connotations and some try to justify their actions using religion, Christians and Muslims slaughter each other in many places like the recent case of Egypt where a suicide bombing at a church killed 21 people and wounded 79 on New Year’s Day. The Daily Times quotes Time magazine as having written that “for months, al Qaeda militants in Iraq have called repeatedly for attacks on Christians — in retaliation, they say, for the alleged kidnapping and detention by Egypt’s Coptic church of two Christian women who are believed to have converted to Islam”. (Daily Times Editorial, 03/01/2011) Even within Christianity there is no unity of purpose, which accounts for the massive proliferation of churches in many developing countries. And within Islam, there are several factions that have been the source of lingering conflicts in many Islamic states such as Iraq. The world is clearly not getting more interdependent in the religious sphere though there is need to mention that there have been some recent attempts to bring certain religions together in what has been called ‘inter-religious dialogues.’
Language: While language may be considered to be a very good tool in breaking down barriers between people and nations, it is clear that it cannot also be considered today to be a veritable tool for international integration. While there is no denying the fact that knowledge of English and some European languages opens a person’s world to almost all parts of the world, it is also a fact that a great number of people still do not understand these languages. Even within the same country, the official language is not spoken by all. (Welch is a UK language which many people in England do not understand and many people from Wales seldom communicate in English. Also, Cameroon’s president, Paul Biya for 28 years in power speaks only French and cannot communicate in English even though the two languages are constitutionally, the official languages of the country). The increasing number of variants in what used to be ‘One’ English language is a mark of division and not of unity. (just checking on the language icon of my computer showed on Microsoft word 2007 19 different versions of English and 15 different versions of French). Increasing technological advancements in the world today which make high speed translations possible is an attempt to break this barrier.
Culture: The increasing spread of multiculturalism and better individual access to cultural diversity, for example through the exportation of Hollywood Bollywood and Nollywood movies could be seen as a sign that there is increasing interdependence among cultures. However, the imported culture can easily supplant the local culture, causing reduction in diversity through hybridisation or even assimilation. The most prominent form of this is Westernisation. The reaction of the Dependency theorists against the Modernisation theorists as early as the 1960s clearly tells the story of how people think about adopting other cultures. The Modernisation Theory was criticised for being synonymous with westernisation simply because it presented the ideas that could lead to the development of third world countries against a Western background. There was a massive challenge of the ethnocentrism of a political economy derived exclusively from the experience of Europe and the United States and then generalised to the rest of the world, with much reliance on certain value judgments about valued ends of development. (Brohman, 1995) The dependency theorists argued against what they felt was the crusading imperialism of the modernisation theorists arguing that they were not in line with the experience of the Third World countries. To them, the modernisation theory was too simplistic, taking it for granted that everyone will accept western values. While people could be said to be more receptive of other cultures today than was the case in the pre-colonial and colonial eras, the world is still far from experiencing a smooth interchange of cultural values and ethics. Poznan (2008, p.11) acknowledges that “…is it true that globalisation is leading to a homogenised global culture, one in which life in the Netherlands approaches being indistinguishable from life in Brazil” but then pops the mind-searching question “…more to the point – is it leading to a world in which every country looks like southern California?” Answering this question will clearly point to the fact that globalisation of cultures could lead to erosion of cultural authenticity.
- Globalisation: A Myth?
Does it then mean that the whole idea of globalisation is merely a chimera? I certainly do not think so and so does McCormick (2002) who thinks that globalisation is the panacea to the problems of Third world Countries “for without it, the developing world and the millions in it who live in extreme poverty will lose the best chance they have of improving their lot in life.” Such a statement taken in isolation will seem the best possible thing to say in defence of globalisation. However if we hearken to Santayana’s popular quote that “Those who cannot remember the past are condemned to repeat it”, it becomes expedient to look back a little at Africa’s past, for as John Paul II holds, “if you want to understand the situation in Africa, its past and its picture, we must start from the truth of the African person – the truth of every African in his or her concrete and historical setting.” (John Paul II, 1980, 200)
In so doing, one notices that the present structure of underdevelopment in Africa starts from the incorporation of the continent in to the capitalist system over a period of 400 years. This process began in the 16th century when the mercantile phase of capitalist expansion brought European explorers and traders to the coasts of Africa and was completed in the 19th century with the partition and colonisation of Africa. This latter phase took place under the imperialist expansion of industrial rather than mercantile capitalism, and at a time when the capitalist system was characterised by a number of competing industrial powers. The benchmark of this period was the destruction of the traditional pattern of economic relationships in Africa and their replacement with satellite economies whose primary function was the production of one of a few cash crops or raw materials for exportation to the colonial mother country.
Well, this can be said to have been before independence, so what then is the situation today? To answer this question, I will look at the area of trade and the influence of Multinational corporations.
BERR (2008 p.34) makes the pronouncement that “to maximise the benefits from globalisation it is vital to have a free and fair multilateral trading system to foster economic cooperation, international trade and investment.” While this is very true, it is also true that though today, for the first time, developing countries have made the most impressive breakthrough into global markets for goods and services other than just primary products, (Collier, 2007) most of the firms established during the colonial era, still continue to play a major role in the export-import trade of the now independent States which were their former colonial preserves. Most of these pay very low prices for the cash crops they export to Europe while they set very high prices for the finished products they import for sale in Africa. Also, the major share of their profits is sent back to their home countries rather than being invested in the African economies where the profits are made. This has the unfortunate effect that a structural imbalance is created in the African economies resulting from their over dependence on the export of one of few primary products and this makes their economies extremely vulnerable to external factors and seriously hinders their internal development.
In a nutshell, the deformed development that took place under colonialism has rendered the economies of present day African states highly dependent, on poor international trade relations. This and other external economic interests have made their balanced developments extremely difficult. The chronic trade deficits of many African countries in the recent past can be attributed to this structural imbalance, and the dependence on exports. This is made worse by the rising prices of imports and the declining prices of exports a situation compounded by the structural adjustment policies of the World Bank and the IMF whose deregulation and privatisation policies implemented in over 90 countries have left the world with a bitter legacy of “…growing poverty in all regions of the developing world, except China.” (Coates, 2002) At this period of increasing imports of manufactured goods for developmental purposes, this decline in export prices relative to import prices is nothing but catastrophic.
According to Green and Seidman (1969), the unfavourable incorporation of the underdeveloped world into the world economy is like a ‘giant price scissors’ that have led to the growing deficits in the balance of trade faced by poor countries. As a result of these balance of trade deficits, the African countries have been forced to finance imports as well as their development programs through borrowing from foreign sources. This has led to their increased dependence on foreign capital and ‘foreign aid’ from Western governments and donor agencies. These circumstances therefore make it practically impossible for these economies to pursue policies designed to achieve economic independence and hence, economic growth. And as Kiely warns, the study of international political economy ‘‘… should not assume away the existence of the highly unequal international political and economic order’ (2007: 24).To make a bad situation look worse, Collier (2007) presents the fact that a bottom billion of the third world has ‘missed the boat’ and are therefore marginalised in the world economy hence, though “the growth of global trade has been good for Asia…don’t count on it to help the bottom billion. Based on present trends, it seems more likely to lock yet more of the bottom-billion countries into a natural resource trap than to save them through export diversification.” (Collier, 2007 p.87)
3.2. Multinational Corporations:
The typical expatriate firm operating in Africa today is more and more what has been called Multinational Corporation or “an organised ensemble of means of production subject to a small policy-making centre which controls establishments situated in several different national territories.” (Arrighi and Saul, 1968, p.225) Following from the gloomy and deplorable nature of trade relations between poor and rich nations it is not surprising that many poor countries see the solution to the problem as lying with these multinational corporations. Little wonder McCormick (2002) argues that “multinationals are a powerful force for good in the world. They spread wealth, work, technologies that raise living standards and better ways of doing business. That’s why so many developing countries are competing fiercely to attract their investment.” What McCormick fails to realise is that this in itself is also a can of worms since the natural tendency for foreign investors in Africa has been only to invest in the high profit sectors of the economies, with the level of interest and profit remittance being extremely high in relation to capital invested to the value of production by foreign firms, and to the taxes paid. (Green & Seidman, 1969) Hence, the lucrative profits which are made from these sectors are immediately sent back to metropolitan banks, and/or home offices. This practice hampers domestic capital formation, and results in a net overflow of capital from the African economies to the developed capitalist economies in the form of repatriated profits and royalties. Green and Seidman (1969, p. 128) point out that “…it has been estimated that profits, interests, and personal remittances exported from Africa total as much as one quarter of the continent’s gross annual income.”
According to Arrighi & Saul (1968), the investment policies of these multinationals are biased against the development of capital goods industries in Africa and other underdeveloped countries, and are biased in favour of the use of Capital-intensive techniques, their extractive and export-oriented undertakings in these countries. Both of these biases hinder the balanced development of the African economies. While it can be argued that these persons where writing some four decades ago, the reason I am using their thoughts is because I feel that those forms of investments were and still are incompatible with both the attainment of sustainable economic development and any significant improvement in the standards of living of the African people. Moreover, the governments of the African States are no march for the multinational corporations; hence, their efforts to bargain with and regulate the operations of these giant corporations are largely ineffectual. This is because of the fact that multinationals are more powerful than many governments and tend to have their way around several issues. As Miller points out, “Shell Oil’s 1990 gross national income was more than the combined GNPs of Tanzania, Ethiopia, Nepal, Bangladesh, Zaire, Uganda, Nigeria, Kenya and Pakistan—countries that represent almost one-tenth of the World’s Population.” (Miller 1995, p. 35) With such figures, how then will Shell not buy-off their involvement in perpetrating the loss of human life and destruction of livelihoods in the Ogoni – shell saga that led to the killing of Ken Sero-Wiwa and eight others in 1996? Green and Seidman note that “the individual African States are usually small in terms of revenue and reserves than the firms whose policies, they seek to control.” And that the high level of dependence of these countries upon foreign investment and foreign aid “results in the determination of ‘national’ economic policy and even the limitation of domestic investment resources by foreign public and private interests.” (Green & Seidman, 1969, p.81)
While it is a fact that globalisation can make the conditions for investment in poor countries more feasible and enhance the movement of capital into these regions, available evidence makes me feel that the poor countries got integrated into the global economy through the wrong end. For “…despite being chronically short of capital, the bottom billion are integrating into the global economy through capital flight rather than capital inflows…so don’t count on global capital mobility to develop the bottom billion, capital-scarce as they are. It is more likely to reinforce the traps.” (Collier 2007, p.93)
When Collier talks of the traps, he means what he calls the Conflict Trap, the Natural Resource Trap, Landlocked with Bad Neighbours, and Bad Governance in a Small Country. What he fails to realise is the fact that his analysis of globalisation supports the fact that rather than being a solution, globalisation is becoming itself a trap. The skewed nature of the world economy structure is such that poor nations are finding it more and more difficult to access the benefits of globalisation because they are ridden with huge debts, rising unemployment, cannot compete favourably in a free trade world and of course the Collien Traps which are both causes and effects of the others and therefore appear together and reinforce each other. But if trade, financial liberalisation and all associated with them are failing to make globalisation benefits global, what about the movement of people across borders.
There is no doubt that one of the most visible effects of globalisation has been the massive shift in the global demand for labour. The creation of new work opportunities in many richer economies in recent years, due to the shifts in type of industries could account for this. At the same time, lack of development and the absence of employment opportunities in poorer economies have created a labour force more eager, and able, to migrate to take advantage of these opportunities. The result of this has been a significant expansion of global mobility. It is argued that the movement of people from Europe to North America in the Nineteenth century did more to raise and equalise incomes than trade and capital flows and that in recent years, the Indian Diaspora in the United States acted as an important catalyst to India’s breakthrough into the global market for e-services. (Collier, 2007) While it is a truism that the volume of people moving across countries seems to be increasing, so also is it true that the amount of restrictions placed on immigrants has doubled if not tripled in the last few years since 9/11.
In today’s scene, the poor are not welcomed into Europe and the United States in the same way that elites are hence the few who do manage to get in do so at great risks. Some have to sell all their family assets to be able to travel and even when they do, most are not sure of the next day as any false move will see them being repatriated on the next available flight. Many are exploited by ‘people-traffickers’ who take their life savings in exchange for facilitation of passage, Even the vessels used to cross the Mediterranean from Africa are unsafe, and there are reports of thousands who have drowned, Similar stories are told about poor Mexicans heading for the USA, or Burmese entering Thailand and of course the Zimbabweans I mentioned at the beginning. While globalisation has made it easier to move money and goods around the world, it is not true that all people are free to move. It is therefore much easier for people with money and skills to migrate than it is for the poor hence it will not be hasty if I conclude that there is no level playing field for global migrants.
- Globalisation: What Future?
There is no doubt from what I have been presenting thus far that greater global integration through trade, investment, financial liberalisation and even migration does not lead to convergence but intensifies the gap between powerful and powerless, rich and poor countries in the world order. What I have succeeded in convincing myself is the fact that globalisation is truly a PROCESS. It is therefore contingent and something in potency with the hope of actualisation. This can only happen if and only if we take cognisance of the fact that issues of development and inequality remain central to understanding globalisation and making it a reality. This should begin with the recognition of differentiation within ‘Third World’ (Schuurman, 2000)
If progress is to be made in the process of globalisation, I feel the first major challenge now lies with the international community firmly taking a resolution towards handling the problems of international security, poverty and regional inequality and most important global warming and climate change. BERR acknowledges that “Meeting the challenge of climate change, including reducing greenhouse gas emissions, is clearly integral to how we manage internationally the ongoing process of globalisation” (Berr, 2008, p.viii) These and many more global issues need to be looked at with a growing sense of urgency and greater international solidarity. Meanwhile, the great question of the day still remains as to whether the process of globalisation will slow down or go into reverse in the future. In certain aspects it’s a ‘Yes’, and in certain aspects it’s ‘No’.
First the ‘Yes’ part: The question of globalisation should not be discussed as if it was a ‘one-size-fits-all’ thing. It is clear that in the areas of trade, the spread of multinational corporations and even migration, many poor nations are not benefiting from the advantages of globalisation. For example, Collier points out that “…the exodus of capital from the bottom billion was only phase one of the global integration of the bottom billion. Phase two will be an exodus of educated people. As Somalia continues to fail and other places continue to develop, more Somalis will leave, as there will be more places for them to go. But emigration will be selective…” (Collier, 2007, p.94) This is a pen portrait of what is actually happening now to most of the poor countries. The best and the brightest are the ones who can afford to get to other countries and study and because the situation is bad in their home countries and they have to pay a high price for their education, they tend to look for employment in the more advanced countries and in most cases apply for citizenship. As this process continues, other areas will suffer, there will be a lack of professionals in these countries and their economies and system of governance will continue to decline. A bad economy coupled with bad leadership is a fertile ground for conflict to develop. When this happens, the climate becomes unsuitable for investment and multinationals will either flee or not invest in these countries. The process of globalisation in this instance will definitely slow down.
Also most of the middle income countries and some of the high income countries have recently been adopting protective strategies. With the financial crises in Southeast Asia in 1997, that began in the relatively small debt-ridden economy of Thailand but quickly spread to Malaysia, Indonesia, South Korea, most of these countries began to adopt protective measures. Thailand’s adoption of the ‘sufficiency economy philosophy’ shortly after the crises was a clear indication of their desire to retreat from the global sphere and implement something that was home-grown. Also the onslaught of the most recent crises that began with the collapse of the Lehman Brothers in the USA in 2007 and has sent ripples and shock waves to most economies around the world demonstrated the new risks and volatility in rapidly changing globalised markets.
Smalley argues that the call for the Regionalisation of Britain is entirely an EU project and condemns the White paper ‘Your Region Your Choice’ while calling for the independence of Britain. I think however that the call for the revitalisation of the English Regions is rather a reaction to globalisation. This is because “regionalisation can be a response to globalisation and at the same time stimulate the microeconomic forces that drive globalisation. Regionalisation and globalisation can thus be, and often are, mutually reinforcing” (Oman, 1994, p.16) The recent moves by the UK governments to strengthen the regions more in an era of increasing globalisation is not in the least surprising since “The global is an extension of the local,” and an examination and understanding of “global actors and events must focus on the local.” (Srnicek, 2010, p.38) In the light of this, I feel that as the negative effects of globalisation keep spreading as fast as its positive side, most countries and regions will tend to revert to strengthening themselves so as to be able to better compete on a global scale. The recent rise of regions like the EU, ECOWAS, NAFTA, and the fact that countries still try to protect their national interests above anything else (The UK not willing to accept the Euro, China still maintaining censorship of communication with the rest of the world), is simply a sign that effective nationalisation and regionalisation are actually the prelude to globalisation. Hirst & Thompson (1996, p.2) make the point that “one key effect of the concept of globalisation has been to paralyse radical reforming national strategies, to see them as unfeasible in the face of the judgement and sanction of international markets” hence, I believe that in the short run, there will be a massive slow down of the process of globalisation as the processes of nationalisation and regionalisation gain impetus and it may only be in the long run that the success of these can therefore act as a catalyst for globalisation.
And now the ‘No’ part: The aspect of globalisation that indubitably will continue to grow is the revolutionary changes in technology, particularly in transport and communications, which ostensibly creates a ‘global village’. In the 19th century, it took a nearly a year to sail around the World, today I can fly around the world in a day, send an email anywhere almost instantly even using mobile phones, be part of global networks like Twitter and Facebook, sending messages to all parts of the world within milliseconds. As a result of technological advances there has been a massive drop in transportation costs that make foreign markets more accessible to trade. Express mail services can deliver mails and parcels to any part of the globe within the same day and billions worth of assets and currencies are exchanged daily around the globe by electronic means at little or no cost. There is no gainsaying the fact that these trends are going to continue and increase in efficiency hence, in this regard, the process of globalisation is not going to slow down anytime in the near future.
I began this essay by pointing out that while some countries and regions in the world were converging some parts of the world were disintegrating. I therefore sought throughout this essay to inquire why this is happening in this era of growing talk about globalisation. The one theme that cut across all the arguments I put forward was the fact that there was no level playing field and so there was always going to be a problem with globalisation if these inherent injustices are not looked into ab initio. Unless this is done, countries and regions will always retreat to their shells at the slightest signs of danger – the recent financial meltdown being one of such – leading to increasing nationalism and regionalism rather that globalism. In the final analysis however, I argued that while the process of globalisation may slow down or even go into reverse in certain aspects, there are certain aspects where the process has already reached a stage that is irreversible.
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