The nation states affected by globalisation
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Published: Mon, 5 Dec 2016
In Viewing Globalisation and the ways it has affected nation states; it is safe to study it from two different schools of thoughts: The globalists and the sceptics.
It is almost impossible to talk about Globalisation without relating it to a Nation States’ economy or politics. The two go together. A Nation State is affected by Globalisation in so many ways, and vice versa.
The hyper globalists argue that the nation states have lost their power completely in this era of globalisation. The fact that the world is globalised means the end of the nation states especially through what is termed the “Borderless World” (Ohmae, 1990:172). For the complex globalists, although the international organisations are powerful, the nation states haven’t completely lost their powers. (Held et al, 1999: p27).
The Sceptics, on the other hand disagree with the theories of the globalists that see the “end of nation states”. For Hirst and Thompson, The nation states are still very much in control, in fact, they have the most power and there is no such thing as the word “globalisation”, therefore, the notion that there is an effect of globalisation on nation states does not make sense (Hirst and Thompson, 1999: p256-280)
In this essay, the hyper globalists and the complex globalists are classified as the liberalists or the globalists as they accept the concept of globalisation, believe in the reduction of the nation state’s powers, view the world as “being governed globally and conceptualise globalisation as a reordering of the frame work of human action” (Held et al, 1999: p10). They believe that globalisation is being spread through the technologies arising everyday.
The Sceptics are classified as the realists who believe that the word should not be “globalisation, rather it is internationalisation and regionalisation” (Held et al, 1999: p10) and this “internationalisation depends on state’s acquiescence and support” (Held et al, 1999: p10)
Firstly, the term “Globalisation” would be defined for clarification and the definition would serve as a reference to my points.
Secondly, this essay would point out the relationship between globalisation and nation states, the institutions that arose with globalisation and how they affect nation states politically, economically and culturally, with examples.
Thirdly, I would raise arguments from the globalists and sceptics points of view; my argument would show that nation states have lost their power due to the spread of globalisation and I would buttress my argument with citations and relative examples. I would also examine concerns (if any).
Lastly, I would draw a conclusion which would portray my personal thoughts on globalisation and how it has affected nation states as a whole.
“A globalised world is one in which political, economic, cultural, and social events become more interconnected….by Globalisation, we mean the increase of connectedness between societies” (Baylis, J. et al, 2008:8)
Globalization, affects states, not only political but culturally as well as economically. The connectivity of these states and their dependence on one another for political stability, economic growth and cultural modification or awareness is also a factor of Globalisation. Nation states are naturally dependent on themselves for different resources, it could be as a result of competition, power in the international arena, or simply, for sustenance to their own economy (which may not be as rich).
One major effect Globalisation has had on nation states was obviously the spread of the Global Crisis earlier this year. The crisis which was believed to have started in the United States seeped its way through other nation states and affected a large number of countries economically. The idea of globalisation which relates to interconnectedness of states, broken barriers and “borderless world” seems to have played a huge role in spreading the Financial Crisis witnessed by nation states. Banks were shut down as a result of illiquidity, not just in the United States but some countries in the EU, Brazil, and Japan etc. Unemployment rates sky rocketed in countries like Nigeria. People were getting sacked from their jobs all over the world. Even though this economic crisis started in the United States, the fact that it has the biggest economy in the world and lots of other nation states were connected to its economy meant the downfall of these nation states too.
It is safe to say that international organisations or institutions have become the defining factor for most nation states in their global relations. The United Nations (for example) is the only international organization that has the authority over a state’s security and economic developments, “encompasses the protection of human rights and…..the environment” (Taylor & Curtis in J. Baylis et al, 2008: p.314). This further explains the effect of globalisation on nation states. Due to the tribal and religious wars in Africa and Asia, for example, The UN stepped in to examine these conflicts. Nation States now have to rely on these international organisations in times of conflicts especially when they cannot solve their problems on their own. The United Nations was created in 1945 and hosts different positions such as UNICEF which assists children; WHO which works on global public health and the UNHCR which provides aids to refugees. (Weiss, Forsyth & Coates in O’Brien & Williams, 2007: p125). In this organisation, Weiss et al also state that the peace keeping/building of nation states are treated and looked into as well as some elections. (2007: p125). The United Nations is a very powerful organisation because it makes its laws and compels nation states to abide by them, and not the other way round. Nation states have more benefits when they work with these international organisations in terms of the security they are being offered (most times).
The World Trade Organisation (WTO) was created in 1995 and is usually affiliated with trade and economic activities. The organisation has support from some of the wealthiest economies in the world such as the nation states in the EU, the United States and Japan. Developing countries would argue that some of these international organisations do not favour them because they are real powerful and tend to support the already developed countries in terms of these economic activities.
The Rise of the Bretton Woods Institutions and its effect on Nation States.
The Bretton Woods Conference in 1944 had a prominent effect on the world today. Out of this conference, two very important institutions: The International Monetary Fund (IMF) and The World Bank emerged (O’Brien & Williams: 2007, pp. 209-210). The IMF was the regulatory body that nation states had to apply to, to be part of the “gold standard” policy. This policy meant that the dollar would be the world’s currency and would be exchange for gold to determine its worth. The policy did not hold but the IMF is still the body in charge of global exchange and interest rates (O’Brien & Williams: 2007, pp. 86-89). More nation states were trading with each other; therefore, it became necessary, with time, to have exchange rates. The decision on what a dollar is to a pound is based on the outcome of what the IMF has concluded; not the nation states.
The World Bank on the other hand is known as “the lender of the last resort”. Although, it claims to benefit nation states in crisis by bailing them out, there are also strict rules governing this procedure. The World Bank has the final say on which countries are benefitting from whatever money it would lend. The Nation States are entirely under their control here, they play no significant role; their only “role” is to fulfil all the rules the World Bank has set, and they just might be eligible for these monies.
Ngaire Woods describes the IMF and World Bank as “The Globalizers”. She says that they have inculcated a good number of nation states into world economy by advising the governments of these states to be more open to investments and capital, and to allow for global trade (2006, p 3). She also states that “they have presented globalisation as a solution to challenges they have faced in the world economy” (2006, p3)
Another major effect globalisation has had in nation states; (especially in recent years) is in the area of Migration. In the EU states, the schengen visa makes it possible to visit as many states as there are in the EU. Years ago, one would have needed 12 different visas to visit 12 different countries in the European Union, but today, with the spread of globalisation, one visa gets you to those 12 nation states. The sceptics like Hirst and Thompson might argue that although, we are seeing the emergence of these international organisations (in this case, the EU), which might have a say in national policies, “people are less mobile than money……they remain ‘nationalized’, dependent on passports, visas, residence and labour qualifications” (Hirst and Thompson,1999: p257). Thereby arguing that in fact, we do not live in a borderless world; rules in terms of migration are still made by the nation states.
Globalists can defend their theories here that although individuals may need visas to move around countries, it is still the organisations that determine the nature of these visas especially in the EU where a visa to Italy equates a visa to France.
Currencies are no longer national, that is, peculiar to their nation states. The Euro, for example is being used by nation states in the European Union. The use of this single currency by countries in the European Union has made it possible to break barriers (if any) of economic trade across EU nation states. This was implemented, not by the nation states but by the European Monetary System. Globalisation has affected the states in the sense that they had no option than to give into the use of this common currency or face the threat of having a depreciating currency that would eventually lead to a depreciated economy. Therefore the benefit of being in a unit saves exposure in the case of Recession etc.
It is no shock that the nation states with the most powerful economies have the most amounts of Multi National Corporations. A survey done in 2006 by Data from Fortune shows that the top 25 (twenty five) MNCs in the world consist of nine in the United States, thirteen in the EU countries and two in Japan. Twenty four out of the twenty five largest corporations (by revenues) are for the wealthiest states (O’Brien & Williams, 2007: p175). This shows how relevant these MNCs are to their nation’s economy.
MNCs now find their ways into different nation states with thriving economies to make profit from them. Borders are broken when a US based MNC decides to have an operating base in China, for example. The above citation goes to prove that MNCs are no longer ‘nation-owned’ but actually control the nations in the sense that they move to whichever state they want to be situated.
Speaking as an individual from a third world country, it is easy to say that there is a major concern and it is rightly justified in the sense that these governing international bodies which have been springing up due to the spread of globalisation, has still been one-sided.
Politically, in 2007, Nigeria witnessed the election of President Umaru Yaradua. Usually, during elections, the US organises an electoral committee to oversee the process, making sure it is free and fair. During the elections, the national television authority in Nigeria (NTA) announced that some of the ballot boxes had gone missing during the course of the elections. Of course, that meant that something was not right. The individuals sent by the Electoral Commission went on international television (CNN) and announced that they had, in fact, over seen the elections and it was free and fair so whatever the result, the election was a success. Now, to who’s benefit? Is it to the Nigerian public? The Nigerian Politicians? Or the United States’ electoral body sent to conduct these elections?
Culturally, norms and values are deteriorating speedily. In today’s society, globalisation of the media and internet has made it easy to have access to Hollywood and the Western fashion. It is very easy to get lost in the world of pornography (easy access through the internet where restrictions are not followed), under aged drinking is more prominent with the youth today because they see their favourite stars on television and they believe its the norm. Nation States cannot stop these infringements into their societies because as they have embraced globalisation, they have welcomed its positive and negative results.
We are aware of the show down that took place in sports recently. The World cup qualifiers between France and Ireland, to be more specific. A controversial goal was scored by William Gallass of France after Thierry Henry (France captain) was said to have handled the ball and passed it. The goal was allowed by the referee and France qualified on that note. After much contest and ‘a million’ highlights of that moment, The Irish football association (as a nation state) challenges FIFA (Federation Internationale de Football Association) which is in charge of regulating laws concerning football internationally, to replay the match for a fair result. FIFA ruled against it and France was named as one of the countries participating in the world cup next year. The questions here are direct: Does France deserve to be in the world cup? More importantly, is France in the world Cup because Sepp Blatter, the FIFA president is close friends with French man Michel Platini, the UEFA (Union of European Football associations) president?
It is notable that FIFA and UEFA, the football governing bodies have the final decision on whatever happens on the pitch, sometimes, it could be a wrong call and nation states that are reportedly treated unfairly have no say in these matters.
In my opinion, drawing concerns from globalisation is very crucial to nation states. Globalisation’s effect on nation states, as important as it may be, calls for a lot of attention and scrutiny. The systems that have come up as a result of our globalising world have not been entirely fair, because in the end, who are those governing in these international organisations and MNCs? Who are those in power making all these decisions? They are the people with hegemony, with power and wealth who are able to control nation states and make them puppets. They are the capitalists whose ultimate goal is to make profit, so we should definitely be concerned since it affects us globally. Globalisation is not successful until concerns are next to irrelevant. Every nation state should be able to benefit from the spread of globalisation, but at the moment, the powerful states are only getting more powerful, sapping resources form the developing countries by situating MNCs strategically. Nation states now go out of their way to create a more suitable business environment because these MNCs chose the best possible location involving cheap labour to situate their business. Therefore, states now compete with each other to be more and more favourable to the MNCs, most times, at the risk of their citizens.
Generally, it would be of less concern if it benefitted the whole world equally. Concerns have risen because some nation states are being treated with more advantages than others.
In concluding, the nation states played a huge role in policy making which affected individuals but with the spread of globalisation, states roles became very limited and less conspicuous in these political arenas. Territorial boundaries were becoming less important because they became more connected to one another (the states), flows of technology such as the internet and satellite made views and news more global; there by restricting in determining what its individuals are exposed to, movements became globalised such as the NGOs, INGOs; flows of capital ran through borders; and the media made everything recognisable especially through the consistent rise of Hollywood (the US film industry).
Ohmae conceptualizes my idea on globalisation and how it affects nation states when he describes the states as “a dysfunctional unit…represents no shared community of economic interest” (1990, p.24). It is clear that nation states are now being governed by external forces, whether it is the MNCs, the International Organisations, the NGOs or INGOs and it is important to note that most organisations are in business for profit making so the best possible state with the least possible labour would be a recipient of their businesses.
However, many arguments may arise over the concerns of globalisation and how it affects nation states. Some may argue that it has enriched their nation’s economy; others may argue that it has given their nation states more exposure on the international scene, but a nation state that cannot make its own decisions because of a “governing body” is almost powerless. Decision making, governing its people, security for its citizens and most importantly, culture of a nation’s people should be overseen by its government.
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Held, D. & Mc Grew, A., Goldblatt, D. & Perraton, J. (1999) The Global Transformations: Politics, Economics & Culture (Cambridge: Polity Press)
Hirst, P. & Thompson, G. (1999) Globalisation in Question, 2nd edition (Cambridge: Polity Press)
O’Brien, R. and Williams, M. (2007) Global Political Economy: Evolution & Dynamics, 2nd edition (New York: Palgrave Macmillan)
Ohmae, K. (1990) The Borderless World: Power and Strategy in the Inter linked Economy (London: Fontana)
Stone, D. & Wright, C. (2007) The World Bank and Governance: A Decade of Reform and Reaction (New York: Routledge)
Taylor, P. & Curtis, D. (2008) “The United Nations” in Baylis, J. et al, The Globalization of World Politics: An Introduction to International Relations, 4th edition (New York: Oxford University Press) pp. 314-315
Weiss, Forsyth & Coates (2001) “International Organisation and Governance” in O’Brien, R. & Williams, M., Global Political Economy: Evolution & Dynamics, 2nd edition (New York: Palgrave Maxmillian) Pg 125
Woods, N. (2006) The Globalizers: the IMF, the World Bank & their borrowers (New York: Cornell University Press)
Woods, N. (2008) “International Political Economy in an age of Globalization” John Baylis, J. et al, The Globalisation of World Politics: An Introduction to International Relations, 4th edition (New York: Oxford University Press) pp. 244-258
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