Winners and Losers
Globalisation has drawn attention to itself as a consequence of its rapid acceleration. The spread and integration of people, commerce, knowledge and culture across the planet has advanced since the dawn of civilisation.
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| Motherboard of a laptop © Greenpeace International |
The pace of change is most apparent in developed countries. Most everyday household goods and clothing are imported from a single country, China; simple enquiries about banking or insurance may involve a call centre in India, and flexible educational courses are available from institutions across the world through distance learning.
These illustrations of globalisation are broadly positive in their effect, creating space for personal fulfilment, stimulating wealth through efficiency and encouraging cross-cultural experience. They also betray how these rewards are weighted towards those whose circumstances are already relatively prosperous.
By contrast, the global poor have been left behind in the slipstream. Whereas sharply rising volumes of foreign trade and investment over the last twenty years have transformed standards of living in industrialised countries, the number of sub-Saharan Africans living in extreme poverty has risen.
Whereas internet technology has revolutionised our capacity for knowledge and interaction, swathes of South Asia and Africa provide no electricity, let alone computers. Whereas the global supply chains of our supermarket culture deliver exotic year-round affordable foods, over a billion people in the developing world are too poor to feed themselves adequately.
Contemporary globalisation is therefore linked with widening global inequality. The post-colonial search for an effective development model for the losers of globalisation reflects the anxiety of the winners.
Modern Economic Integration
The sequence of major wars and economic depression that marked the first half of the 20th century induced a profile of inward-looking states with closed economies. The relative stability that evolved after 1945 boosted confidence so that, by the 1980s, most of the wealthier western economies had lifted capital controls, enabling foreign ownership of business assets.
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| Bolivians protesting against water privatisation © Julie Plasencia / AP / The UNESCO Courier |
This openness to world market forces was conceived as a natural evolution for mature industrialised economies. Less logically, it was imposed on developing countries through the 1980s as a condition for World Bank and IMF support. The collapse of the Berlin Wall in 1989 added countries of the former Soviet Union to the western template, its greatest moment of triumph.
Even the major surviving communist regimes in China and Vietnam had by then introduced doi moi (open door) policies as a gesture to market discipline. Within this short space of time, the conduct of the world economy had become aligned with the principles of “neoliberal” or “open market” economics.
A key tenet of this model is to maximise opportunity and minimise regulations for capitalist enterprise. And corporations, as the organs of capitalism, had been presented with what they desire above all else – a massive increase in the size of the market.
Many industrial and financial corporations quickly became larger entities than the developing countries with which they were involved. It is no wonder that the economic branch of globalisation became its dominant force.
Governance of Globalisation
If globalisation was to surge on a tide of corporate growth, then governance of the process would be crucial in determining whether the more positive impacts of neoliberal economics can prevail over the negative. Strong representative global institutions are necessary to bestow legitimacy on the the goals and rules for business activities which transcend national jurisdiction.
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Rules made by richer countries rarely favour the poorer. Although efforts are under way to broaden global decision-making, in practical terms African governments have been largely excluded from the latest crisis discussions on international banking regulations and the right to emit greenhouse gases.
Exclusion from Globalisation
By 2005, the results of this lopsided governance were painfully clear. Developed economies gorged on booming international trade and investment, much of it massaged by investment bankers whose sobriquet, “masters of the universe”, sheds further light on the power structure of globalisation.
Meanwhile, global poverty remained trapped in a parallel expanding universe, driving embarrassed world leaders to the Millennium Declaration, a targets-based promise to direct new policy to the cause of poverty reduction.
Led by the World Bank, many economists have published research which disputes this view of globalisation as a driver of inequality. They assert that those developing countries which seize the opportunities of global integration achieve higher economic growth.
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| India hosts both global industry and global poverty © bbjee (flickr) |
These studies also make the presumption that globalisation is an option for poor countries to exercise or decline as a matter of policy. In reality it is impossible to jump on to the bandwagon of trade in modern goods and services from a standing start. An underdeveloped country needs a roadmap for entry to the global market, growing embryonic industries through concessionary rules for trade and investment.
In practice, globalisation reproduces the foibles of big business, erecting high barriers to entry and favouring monopoly profiles. China’s dominant position in manufacturing volume consumer goods is the obvious example.
Indeed if China’s success in poverty reduction is removed from global figures for the period 1990 to 2005, the number of people living below the international poverty line of $1.25 per day has risen. This is a poor advertisement for globalisation.
Those who describe our world as flat, or as a global village, in which we can understand and support each other in our increasingly common lifestyles, overlook the exclusion of many countries from the opportunities of globalisation.
A more accurate representation is of an interconnected world in which the actions, and more especially the excesses, of a consumer culture impact unjustly on those unable to enjoy its rewards. The three major contemporary crises of global recession, food insecurity and climate change can each be interpreted in these terms.
The Price of Inclusion
In an open market world economy, a multinational corporation is free to create a global chain of production in which each component of its operation is delivered by the country best equipped for the task. Accessing the rewards of globalisation therefore requires a country to organise its resources, infrastructure and regulations so as to bid competitively for the links in the chain.
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| Nike worker in Asia © Corporate Watch |
The price of inclusion in globalisation can therefore be high; foreign investment has limited value to a developing country if no tax is paid, if no skills are transferred to local workers, if domestic businesses are forced to close and if no intellectual property rights are gained.
The value of foreign investment therefore lies in the creation of new jobs, although these can be compromised by the pressure to drive down wage levels, labour conditions and environmental standards. Corporate social responsibility departments of large western companies are much exercised in vetting their production chains for sweatshop labour or environmental abuse.
Developing countries which make inroads into the globalised economy must then face up to the inherent risks. Hard earned foreign investment has a habit of exercising sudden reversal in response to economic setbacks in far off countries.
Threats to relocate often greet proposals for new taxation, labour or environmental laws. Indeed collection of taxation is a recurring challenge for developing countries whose modest public administration capacity may be outmanoeuvred by the ingenuity of global executives. Loss of national sovereignty is the undertone of globalisation.
International Migration
An alternative for the global poor is international migration. Globalisation has commoditised labour migration, notably in many Middle Eastern countries which are totally dependent on Asian migrants for the “dirty, dangerous and difficult” jobs rejected by nationals.
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| Migration in Europe © Fòrum Barcelona 2004 |
Payments, known as “remittances”, that are sent home by international migrants have become an important measure of the performance of a globalised world economy. In 2009, remittances exceeded $300 billion, almost three times total foreign aid disbursements.
Opportunities for migrant workers can therefore be viewed as a positive characteristic of globalisation. However, the ideological passion for free movement of goods and capital extolled by many of the richer countries is not extended to people. Most rich countries impose strict regulations on labour migration.
The unacceptable component of international migration is human trafficking. This has grown in parallel with economic globalisation, perhaps as a consequence of it. As extreme poverty and cross-border mobility are the drivers of sex trafficking and other bonded labour, the suggestion of cause and effect is inevitable.
Globalisation and the Environment
Inequality is not the only failing of neoliberal economics that has been globalised. The blindness of market pricing to environmental costs exposes the global supply chain as an unsustainable model of production.
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| Container shipping © AH Knight / Flickr |
Unnecessary transport emissions are only part of this lapse in common sense. Until emissions trading schemes extend their reach, the manufacturing process in most parts of the world incurs no costs for its carbon dioxide emissions or use of water. The global economy therefore contains incentives to export production from low to high carbon locations.
Globalisation is not itself responsible for these failures of open market economics. Indeed, if we could identify an alternative and sustainable economic model, then its globalisation would become desirable.
Anti-globalisation
The 1990s slide towards greater poverty and environmental breakdown, together with the dilution of powers of developing countries to manage their own affairs, led to a strong public reaction against global bodies deemed to be responsible.
For many activists, globalisation had lost its broader meaning and become synonymous with the advance of capitalism. Others went further and perceived globalisation as Americanization, a new form of cultural imperialism.
The term “anti-globalisation” therefore embraces a broad range of causes and is often associated with activists who target assemblies of world leaders or international financial institutions. Anti-globalisation campaigners unite around the belief that world governance is influenced too strongly by corporate interests.
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| Joseph Stiglizt at the WSF, Mumbai, 2004 © OneWorld TV |
A paradox of anti-globalisation campaigns is their adoption of the same tools and techniques that drive economic integration. International activism has been galvanised by smart use of new communications technologies.
Successful campaigns for aid and debt relief leading up to the Edinburgh G8 summit in 2005 were associated with synchronised world concerts and “branding” of the globally recognised white band.
Globalisation in Retreat
The current sense of a world in crisis has greatly strengthened the hand of the anti-globalisation movement. No greater damage could be done to the creed of globalisation than the extensive state ownership of western banks that now prevails.
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| 21st century search for food security © ActionAid UK |
Some major corporations are openly talking of an end to global production chains, compressing them instead into regional chains in order to reduce transport costs and emissions.
The WTO’s pursuit of the so-called “Doha development round” over the last decade has proved futile. High rates of unemployment are more likely to persuade richer countries to pull up the drawbridge on economic integration than make the trade concessions necessary to resolve the Doha round.
Despite all these setbacks, globalisation appears to be staggering back to its feet, having narrowly avoided a knockout punch. No credible alternative global economic model emerged, even when the world's investment banks were at the mercy of public opinion.
It seems possible that the anti-globalisation movement has missed its golden opportunity. If this is so, then the planet’s major problems urgently depend on a new vision of globalisation, recalibrated to address the mistakes of the past.
http://uk.oneworld.net/
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