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Globalization
By Abdullah Mapol
[Semester 1 2003]
The multifaceted nature
of globalization allows much debate to rise in term of
defining the idea. Academics fail to agree on a
definitive definition of globalization; however many
definitions share common elements which provide a broad,
conceptual foundation Globalization is an economic
phenomenon centered on the expansion of global markets,
an expression for the contemporary dominance of Western
values, and a capitalistic emphasis on technology (Higgott
R. and Anthony P. 2000). Many problems experienced by
developing countries have been attributed to
globalization; a mindset that shall be explored
throughout this essay. The discussion will assume an
economically driven focus that hopes to elucidate the
political dimensions of our current international
climate. This essay will prove that globalization is not
the only factor for developmental dilemmas of developing
countries and that it holds both positive and negative
consequences.
The introduction of
computer technology has made processing of multiple
tasks including information, to reach an extraordinary
speed. This together with the formation of international
networks such as the internet has increased the distant
of information sharing that can be conducted. The
implementation of electronic trading system in stock
exchange and international trading of currencies and
commodities has permits a massive improvement in the
speed and the distance of ‘traditional’ trading.
Electronic trading system enables twenty-four hours
trading sessions thus contributes to a significant
amount of financial flows across international
boundaries. Traditionally, these economies were
‘preserved’ by the lack of connectivity between
different states. However presently it can be seen that
these economies has been exposed to the risk of
potential devaluation of currencies and ‘manipulation’
of resources by the international community. This can be
seen as a negative prospect toward ‘weak’ economies.
Thailand’s economy in 1997 has demonstrated this
negativity of globalization. Furthermore, the declining
of restriction between states has ‘pull down’
international boundaries to some extent that could
jeopardize the power of state level governments over
their territory, economy and resources. This, in time
put these governments under severe pressure. Pressures
faced by these governments will initiate a certain level
of conflicts between states (Strange 1998). On the other
hand, capitalistic emphasis on technology has also
brings positive impacts to the economy of a state. The
extreme level of speed and the distant of trading helps
the government to govern a state in a more effective and
flexible character. This can be seen in the development
of many new and technologically advanced administration
centers around the world. Canberra, Washington D.C. and
Putrajaya have established a layout of a fully modern
and technologically advanced foundation of an efficient
network of state governing. This in turn, will make the
communication and information sharing between state and
their territories to be more dynamic and ‘up to date’.
The functions of these cities also evolved from serving
local interests to serving the global economy thus
forming a new generation of world cities (Jones R. J. B,
Jones P. M. and Dark K. 2001). With an efficient
government, a state will have less bureaucratic problems
thus attract a high level of foreign investments. On a
local perspective, the promotion of information and
communication technology will improve the standard of
living for domestic populations. High-tech hospitals and
up-to-date learning schools will raise a suitable set of
educated and ‘culturalized’ working population in order
to fulfill the needs and the survival of the state and
its economy. This is the main address of the
director-general of the International Labour
Organization, Juan Somavia, and the interim chairman of
the African Union, Amara Essy at the opening ceremony of
the African Regional Dialogue of the World Commission on
the Social Dimension of Globalization in Arusha,
northern Tanzania (Africa News Service, Feb 7,
2003). Furthermore, with the introduction of the
internet, several methods of trades also evolved. The
outburst of web based companies such as Yahoo!, Google,
eBay and many others, helps local entrepreneurs to reach
a bigger market thus bringing in profits to the state.
Ecommerce implemented in financial institutions also
create a variety of options for both local and
international populations to do banking and other
financial tasks. A significant numbers of state level
governments have also ‘use’ the rapid development of
technology to attract foreign companies into their
states thus bringing in profit. The establishment of
Silicon Valley and others alike around the world has
proven that with complete facilities and backed by
highly advanced technologies, these areas will create a
safe haven for giant corporations to do business thus
bringing millions to the provider (Dertouzos M. 1997).
Globalization also
initiates a high level of connectivity and
interdependence between several states. The complex
pattern of interdependence has now characterized the
financial relations of the contemporary international
system. This in fact carries a problematic risk – ripple
effect. This effect is defines as problem started at one
location or in one financial relationship or
institutions could spreads throughout the whole system (Kahler
1998). This is just what had happed to Asian economy in
1997 when currency speculation causes an outflow of
foreign investments from the Asian countries hence,
causing instability to its economy (Mohammed 1999).
Asian Economic Crisis started in March 1997 in Thailand.
Financial institutions in Thailand faced difficulties
that initiate an immense outflow of foreign investments
from the country. Fast withdrawals of investment from
Thailand results the Thai bath to weakened and drive the
government to float. It lowers bath’s value by 15 – 20
per cent. In a short time the catastrophe spread to most
of the Southeast Asian and East Asian nations. This
situation was labeled as ‘currency meltdown’ by the
International Monetary Fund (IMF) (Woods 1997). However
this complexity of interdependence also holds positive
consequences for both state and its economy. With state,
both weaker and more powerful depended on each other,
the probability of one state to sabotage others is low.
This somehow increases the influence of smaller
economies upon bigger and more stable economies.
Government will have more ‘confident’ in formulating a
radical change of its trade policies. This is
illustrated by the Malaysian Government when imposing
capital control in order to stem the damaging effects of
capital mobility on 1st September 1998 (Baylis
and Smith 2001). States will try to prevent conflict
toward its neighbors to insure minimization of refugee
that will eventually inundate into their own territory.
In addition, neighboring states will also ‘try’ to
provide solution for the conflict. In an ideal
situation, global integrity will also promote the idea
of one state to ‘help’ others to prosper in order to
avoid an overflow of foreign migration into the country.
Hence, encourage a level of equality towards every state
in the system. Mutual gains among states that cooperate
will be established. The failure of WTO due to the
demand of a group of developing countries in bringing
profits to every state within the alliance is partly
because states within the organization lack of
understanding the complexity of globalization thus fails
to realize the dependence of developing countries with
the developed countries. Scholars and media reported
that with the failure of WTO, developing countries are
the most negatively effected among the global community
(Weekend Inquirer Sep 20-21, 2003). This is because
bigger economy will try to seek a much cheaper ways to
lower production cost. By this, developing countries are
the best solution. This brings benefit to both the
developing countries and the ‘big economy’. Developing
countries will have more job opportunities and the ‘big
economy’ can receive more profit (Multinational
Monitor, Jan-Feb 1998). With the realization of
China's entry into the World Trade Organization, the
best strategy for neighboring Asian countries is to
create a closer regional economic cooperation or
integration. Asia can capture more of the benefits
related to the emerging China and maximize the benefit
of globalization by strengthening their efforts in
promoting regional and sub regional cooperation and
dependence. This in time will lower the dependency of
Asian Nations on the West (Xinhua News Agency,
March 23, 2000).
Due to the dependence
of states with each other, various international
alliances and governance organization (IGOs) has been
formed and established. The International Monetary Funds
(IMF), World Bank, United Nations (UN) and North
Atlantic Treaty Organization (NATO) have illustrated a
significant increase of power of economy, politics and
military over states. Much of the legal and intuitional
framework of inter-state system is based on equality.
Vote in the General Assembly of the UN is not determined
by any measure of differential strength or capability of
a state. While globalization has led to benefits for
some, it has not led to benefits for all. The benefits
appears to have gone to those who already have the most,
while many of the poorest have failed to benefit fully
or become poorer (Green and Griffith 2002). Many
‘international’ institutions recognize the differences
of sovereign states and reflect the practice of
inequality. The position of leading the world’s military
powers has been entrusted to the permanent members of
the UN’s Security Council (Jones 2000). Furthermore, the
‘missing link’ between globalization and poverty
reduction in redistribution equity of wealth adds to
this inequality. This clearly reflects the
disproportionate influence of those states.
Globalization and the erosion of national sovereignty
drew growing attention from the global community to the
undemocratic and closed nature of increasingly powerful
global institutions and the influence and lack of
accountability of global cooperation (Green and Griffith
2002). In order to achieve an optimum ‘equality’ states
within the IGO has to sacrifice some of its interest for
the benefits of others. The unwillingness of some states
within the organization especially the most powerful has
made the cooperation between states to be difficult and
destructive. This can be seen when the US has forces
itself to go to war with Iraq without the UN’s mandate
hence causes a crisis between the US with France and
Arab nations. This demonstrates that decision made by a
state level government is one of the major causes of
negativity within IGOs. However, the formation of IGOs
poses a significant number of benefits to the state both
economically and security. The Great Depression has
caused the establishment of the IMF and the World Bank.
The main reason for this is in fact to create a stable
exchange rate system, a reserve asset or unit of account
and an international capital flows could be controlled
(Woods N. 1997). Over time, the IMF and World Bank had
achieved majority of its purposes thus create a level of
stability to the world’s economy. Although in many cases
recipient countries having to commit to undertake
specific ‘conditions’ or policy reform, this in time
will help its economy (Woods N 1997). The experience of
the Great Depression also bring to the reality of risk
involved when cooperation between states ‘stops’. The
main cause of the crisis is in fact that states merely
began to increase its ‘boundaries’ for international
trade and struggle for their own advantage.
International policy making also has been significantly
changed from this experience. Most states have trade
policies that encourage cooperation and alliance for
trade. The formation of the UN has been seen to be able
to curb conflicts between states. Somalia, Bosnia and
many other states has been stabilized with the
mobilization of the UN’s peace keeper soldiers. Although
the level of effectiveness is still under debates, a
significant degree of stability has been achieved. The
formation of the UN also helps many states in various
aspects. UNCEF has helped many children in poverty to be
able to live by providing basic necessities. Both UNHCR
and UNHCHR protect the rights for individuals under both
political pressure and conflicts.
In summary,
globalization will continue to grow and absorb states
toward international cooperation. Economy and politics
are some of the aspect of states within an international
system that are affected by globalization. Technological
advancement, cooperation between states and the
formation of alliances has been seen to bring both
positive and negative consequences. State level decision
and the lack of understanding the complexity of
globalization has cause the idea of a ‘global nation’ to
be demonized. The ability of a state to understand the
complexity of globalization and hence use it toward the
advantage of itself and others will ensure the stability
and the cooperation between states to hold. In
conclusion, states will not ‘survive’ without
globalization.
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China
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