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Globalization: Developmental Boon or Bane? Years ago, globalization was the curious “buzzword” which was viewed with much optimism by much of the world, including the poor and underdeveloped nations. The merging of the world’s economies promised great opportunities for growth and development especially for Third World economies. Today, there are two prevailing sentiments on globalization: either that globalization has resulted to prosperity for the poor nations or that it has resulted to the prosperity of the rich at expense of the world’s poor (Irogbe, 2005). This paper posits that while globalization have provided a range of benefits for underdeveloped nations, the wheels of globalization has led to the deterioration of national economies, marginalization of the South, cultural homogenization, and intensified international migration.
Main Features of Globalization
Globalization is a complex process which has many facets: economic, political and cultural. To understand this more concretely, discussed are the main features of globalization from the perspective of the developing world and how it is concretely manifested. Looking at globalization from a Third World lens is crucial to our understanding of it (Yotopoulous & Romano, 2007). This is because, when viewed from the perspective of the First World, it is easy to appreciate the obvious benefits of globalization. For instance, globalization has enabled Americans to get hold of a wide range of products and services from all over the world. The margining of the world’s economies have allowed us to enjoy goods previously inaccessible to us because of high cost: for instance, fruits such as pineapples, bananas, and mangoes that is not homegrown in the United States. We can listen to world music, Africa, Jamaican, Latin American, and Arabic rhythms through our iPod all day long. What is not clearly visible to us is how the wheels of globalization impact the farmer in Southeast Asia, the coffee growers in Latin America, and the agricultural workers in Africa.
While faster interconnected through advanced technology and transportation is the most popular idea about globalization, globalization is a fundamentally economic phenomenon. The economic promise of free trade and free competition was supposedly designed to help Third World economies to gain market access previously impossible to penetrate (Lechner & Boli, 2004). This has been true. Underdeveloped countries have been able to export their local products to developed markets unlike in the past (Sen, 2000). However, the bigger picture suggests because of the inherent asymmetries of the world’s economies, globalization also leads to asymmetrical development – benefitting the rich countries more than the poor (Yotopoulous & Romano, 2007).
Economic integration through the merging of the global economies takes on three primary forms: liberalization, privatization, and deregulation (Benyon & Dunkerley, 2000). Liberalization is “the downgrading of the social goals of national development, combined with the upgrading of participation in the world market” (McMichael, 2004, p. 158). This is achieved by reducing and eventually removing the barriers to flow of goods, capital, and services among countries, e.g. the removal of tariffs on agricultural products such as corn, rice, or beef. Deregulation means the reduction of the reduction of the role of governments in regulating trade and production and in providing services (Yotopoulos & Romano, 2007). It adheres to the belief that the market is the most efficient and effective determinant of what should be produced and what would be consumed. Privatization in its purest sense means divestiture of state-owned enterprises or SOEs (McMichael, 2004). What used to be an ideological battle between “big government/welfare states” and “more marketless state” has moved into the mainstream economic development debate under the guise of sound economic management and “good governance” (Benyon & Dunkerley, 2000, p. 45). A deregulated market freed from the visible hand of government is the most efficient, less burdensome system that will result in economic progress through foreign investments, so goes the argument. Economic pragmatism and expediency are the main motives for privatizing today, driven mainly by balance-of-payment imperatives and the need to shift the “burden of development” from the public to the private sector (Leeds, 1990).
To drive these three key strategies of economic globalization, two main institutions are responsible: the world’s transnational corporations (TNCs) and the triumvirate of public international financial institutions (Buckman, 2004). The global TNCs hold tremendous influence in global trade because it has control over investment, employment, and trading decisions which surpass the decision-making power of most developing countries. The triumvirate of the the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO) act as a global overseer of the processes of economic globalization (Benyon & Dunkerley, 2000). In theory, the triumvirate could be held accountable by the world’s governments but in practice, it has become “a major global bureaucracy wielding enormous, largely unaccountable influence” (Buckman, 2004, p. 87). The global privatization network includes multilateral and bilateral lenders, large MNCs, merchant banks, stockbrokers, accounts and management consultants, legal firms, marketing, specialist consultants, and think tanks (Leeds, 1990). The TNCs control the lion’s share of the world trade. The strongest among them, “act more cohesively, in close cooperation with their respective governments, to assault or defend markets” (Bello, 1997, p. 5). Hence, globalization also means the most intense competition even among industrialized economies. For instance, the United Sates and the business interests it represents stands to gain the most from globalization, which is why it has tried to dominate both the GATT-WTO and the APEC (Benyon & Dunkerley, 2000). While imposing unilateral measures to protect its own market, the US is trying to prevent other countries from acting in the same way by invoking the principles of free trade. On another plane, many Northern governments, despite the neoliberal ideology of reducing the role of the state in economic matters, still heavily subsidize their agricultural products. These then become very cheap and when dumped into the markets of developing countries, local products cannot compete. This explains why farmers in Chile, Latin America, South Asia, and Southeast Asia have experienced destruction of their local economies such as in textile, transport, and even agriculture (Bello, 1997; McMichael, 2004).
Globalization has also resulted to the political asymmetries leading to the marginalization of the South. Globalization has proceeded under the premise that modernization is the key towards the genuine development of the Third World. However, the dependency theory of development suggests that modernization will only lead to increasing domination of the major world economic players to the detriment of the poor nations. The basic decisions in global trade are still influenced by the dominant countries, leaving dependent nations with few choices because the parameters have already been set by the former (Willis, 2005).
It is in the South where globalization as a political process really reduces the role of the nation state in terms of deciding the direction of development through macro-economic policies. Parallel to this is the “qualitative strengthening of the institutions of global economic governance” (Bello, 1997, p. 8). The main mechanism for this has been the debt trap, whereby highly indebted countries are compelled to undergo structural adjustment programs (SAPs) in exchange for more loans. The SAPs comes in the benign form of development loans from the World Bank but with them come harsh conditions or impositions on the developing nations to abandon crucial social services and domestic programs that benefit their local population. SAPs include having governments abandon health services, education, and environmental programs which are not profitable and hence, cannot be used to replay World Bank and IMF loans and interest. Eventually, this leaves countries solely dependent on the market as well as pricing systems well beyond their control. Essentially, the political process of globalization renders countries powerless over the fate of their national economies (Bello, 1997).
Globalization leads to a borderless world, one which erases political and geographical borders, essentially making countries operate and act similarly. As a consequence, culture is also gradually being erased as the development of a “global” culture emerges (Norberg, 2003). Because of globalization, local products, cultures, and services disappear into this global culture – one that is shaped and defined by the world’s economic and political powers. Critics have referred to this phenomenon as the McDonaldization of the world (Buckman, 2004).
Globalization has also penetrated the sphere of culture and ideology. Cultural influences from the North are transmitted through the media – whose impact is intensified by the spread of television, the use of the World Wide Web, computer products, and other technologies (Cohen & Kennedy, 2007). The process of cultural homogenization or the fashioning of one global culture is presently ongoing. Aside from creating an insipid culture, it has also forced people to redefine their lives to promote this global culture. In order to make Nike shoes, designer clothing, and computers, poor Filipino and Indonesia farmers are forced to abandon their way of life to provide these consumer goods (Irogbe, 2005). Moreover, the environment is being degraded in order to provide room for giant farms for TNCs and ancestral lands of the indigenous peoples of the world are being plundered by mining TNCs (Bello, 1997). While the Internet has provided wider democratic space and a venue for greater cultural exchange, the increasing homogenization of culture through the Internet has also created greater insecurity (Cohen & Kennedy, 2007).
Globalization also means the waves of migration in search of better earning opportunities. With the relative ease in transportation and communication, the number of international migrants has approached staggering levels (Lechner & Boli, 2004). Aside from the migration of people, jobs have also been shipped off to Third World economies – a contentious issue for First World nations because industries are slowly dying in the latter because business processes are outsources to countries like India, the Philippines, and China. This has created tensions among the workers of the First World countries (Bello, 1997). Moreover, an increasing concern of globalization is the globalization of the sex trade. Women and girls are being trafficked across national borders for the purpose of prostitution (Irogbe, 2005).
Globalization has several implications on the world and not all of them are negative. It has been an important engine of growth for many poor countries (Norberg, 2003; Sen, 2000). Access to trade and foreign markets, more democratic structures of communication through technology, are some of its benefits. Nonetheless, as a result of intense competition of the economies and the inherently asymmetrical political and economic conditions of countries, the economic development now rest on the decision-making powers of a few nations, leaving poor countries dependent.
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