People around the world are more connected to each other than ever before. Information and money flow quicker than ever. Products produced in one part of a country are available to the rest of the world. It is much easier for people to travel, communicate and do business internationally. This whole phenomenon has been called globalization. Spurred on in the past by merchants, explorers, colonialists and internationalists, globalization has in more recent times been increasing rapidly due to improvements in communications, information and transport technology. It has also been encouraged by trade liberalization and financial market deregulation.
Globalization offers a higher standard of living for people in rich countries and is the only realistic route out of poverty for the worlds poor. Pro-globalization groups e.g. World Trade Organization and the World Economic Forum believe that globalization helps to reduce poverty and increase living standards as well as encourage a better cultural understanding. Also, due to globalization, there can be international co-operation to solve environmental and social problems.
Technology has now created the possibility and even the likelihood of a global culture. The Internet, fax machines and satellites have swept away the old national cultural boundaries. Global entertainment companies now seem to shape the understandings and dreams of ordinary citizens, wherever they live. Globalization leads to better cultural understanding and tolerance. Because of improvements in travel, more and more people are traveling to different countries, thereby spreading their culture to other parts of the world.
The beauty of globalization is that it can free people from the tyranny of geography. Just because someone was born in France does not mean they can only speak French, eat French food, read French books, enjoy French entertainment etc. A Frenchman — or anyone for that matter — can take holidays anywhere in the world, eat sushi, drink Coke or Cape wine, watch a Hollywood blockbuster, listen to kwaito or opera, practice yoga or karate ! The fact that we are increasingly free to choose our cultural experiences enriches our lives immeasurably. Now we have the opportunity to experience the best that the world has to offer.
Globalization not only increases individual freedom, but it also revitalizes cultures through foreign influences, technologies, and markets. Thriving cultures are not the ones set in stone. They are the ones that are forever changing due to inside and outside sources. Each generation challenges the previous one; science and technology alter the way we see ourselves and the world; fashions come and go; experience and events influence our beliefs; outsiders affect us for good and bad. Cross-cultural exchange can spread greater diversity as well as greater similarity: more gourmet restaurants as well as more McDonald’s!
A bigger worry of anti-globalization groups is that greater individual freedom may come at the expense of national identity. But such fears are overdone. Natural cultures are much stronger than people seem to think. They can embrace some foreign influences and resist others. Foreign influences can rapidly become accepted, changing national culture, but not destroying it. Amartya Sen, the Nobel prize-winning economist, is quite right when he says that, “the culturally fearful often take a very fragile view of each culture and tend to underestimate our ability to learn from elsewhere without being overwhelmed by that experience.”
Self-proclaimed opponents of globalization also argue that global integration is increasing poverty and inequality — both within and between nations. Such critics propose “progressive solutions” including slowing down, controlling, and even reversing the globalization process. However, a closer look at the evidence shows that the anti-globalization case is based largely on false assertions. The wealth of evidence available shows that international trade and investment, when accompanied by other development policies, are powerful engines of economic growth. This research also shows that economic growth, on average, raises incomes for both the rich and the poor. It helps to lift the poorest in society out of absolute poverty and does not automatically increase inequality. More importantly, no country has managed to lift itself out of poverty without integrating into the global economy.
The countries that have experienced high and rising levels of poverty are more often than not, the developing countries that have been marginalised from the process of globalization. Think of North Korea or many countries in Africa. Such countries have insufficient levels of international trade and investment — not too much. Whether poor countries are poor because they do not trade enough or because poverty stricken countries are prevented from engaging in the global economy, less globalization is generally associated with less development. Ernesto Zedillo, the former president of Mexico seems to have understood the power of globalization when he said, In every case where a poor nation has significantly overcome its poverty, this has been achieved while engaging in production for export markets and opening itself to the influx of foreign goods, investment and technology — that is, by participating in globalization.”
One of the most common claims made against globalization is that it increases world poverty. Often this claim is supported with a statistic showing the high rates of poverty in a given developing country or one highlighting the meager incomes on which many people survive. Yet, poverty is not a new concept — it did not emerge with the onset of this new phase of globalization. More importantly, the recent significant economic growth has raised incomes and reduced the number of people living in poverty. For example, rapid economic growth in Japan after World War II helped raise per capita income from $4,672 in 1960 (one third of the level in the United States) to $21,158 in 1990 (higher than many Western European countries and close to that of the United States).
( Bureau of Labor Statistics, Foreign Labor Statistics. On the web at www.stats.bls.gov/flshome.html)
Basically, globalization enabled the Japanese to go from rags to riches in a generation!
Similarly, average manufacturing wages in developing countries have increased from 10 percent of the U.S. level in 1960 to nearly 30 percent of the U.S. level in 1992, showing that average workers in developing countries are benefitting directly from economic growth and development. ( Gary Burtless, Globaphobia: Confronting Fears About Open Trade, Brookings Institution, Progressive Policy Institute, and Twentieth Century Fund, 1998. )
The World Bank Research Report States the following facts: About three billion people live in newly globalizing developing countries. During the 1990s this group grew at five percent per capita compared to two percent for the rich countries. The number of extremely poor (living on less than $1 per day) in the new globalizers declined by one hundred and twenty million between 1993 and 1998. These facts show that countries who take part in the process of globalization are benefiting and it is resulting in the reduction of poverty and an increase in the living standard of people around the world. Those who favour the process of globalization, like the former head of the International Monetary Fund, Michael Camdessusm argue that the prospects of globalization are good for achieving more rapid poverty reduction and faster growth.
Because more and more countries are linked, there can now be greater international co-operation to solve environmental and social problems. To address global problems a very strong majority of people support increased international cooperation. Support is strong for international institutions dealing with global problems like terrorism, the environment, and human rights issues. Only a small minority prefers to see the US tackle these problems on its own. Strong majorities believe it is necessary to create more international agreements to solve a variety of problems, such as terrorism, environmental degradation, inadequate labor standards and human rights violations.
The United Nations -which has about 191 countries as members – is an organisation where countries put their heads together to address the most difficult and substantial issues and problems affecting a majority of the world’s population – poverty eradication, fight against diseases, including HIV/AIDS, achieving universal primary education, gender equality. (President of the UN General Assembly Statements – 7 March 2003). The UN is a source of international law and standards and a convener of global action. Shipping, aviation, telecommunications, weather-forecasting, trademarks, patents, statistics, pharmaceutical – all these activities and many more fall within the purview of the United Nations agencies. The more we live in a single economic environment, the more we depend on such vital services, universal standards and rules. (President of the UN General Assembly Statements – 7 March 2003).
International treaties are eliminating ozone-destroying CFCs, have made a start at combating climate change and have limited the spread of chemical weapons, among other things. These examples of governments working together are still better than going at it alone or turning ones back on the world.
Another Pro-globalization organisation -The World Trade Organisation (WTO) – is the only international organisation dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.
At its heart are the WTO agreements, negotiated and signed by the bulk of the worlds trading nations and ratified in their parliaments. These agreements are the legal ground-rules for international commerce. They are contracts, guaranteeing member countries important trade rights. They also bind governments to keep their trade policies within agreed limits to everybodys benefit. The WTO has helped to create a strong and prosperous trading system contributing to unprecedented growth. The past 50 years have seen an exceptional growth in world trade. Merchandise exports grew on average by 6% annually. Total trade in 2000 was 22-times the level of 1950.
( http://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm )
Its a fact that the world economy produced more output in the twentieth century alone than it produced in total over the entire preceding years of recorded human history! (Bradford DeLong,Estimating World GDP, One Million BC – Present, University of Berkeley. Available on the web at http://econ161.berkeley.edu/TCEH/1998_Draft/World_GDP/Estimating_World_GDP.html )
But how does globalization affect issues closer to home? According to the Foreign Policy (The Magazine of Global Politics, Economics and Ideas), South Africa has an overall ranking of 38 on their globalization scale. There is obviously room for improvement. The expansion of global companies into South Africa will create thousands of jobs and this will help stifle the ever-increasing unemployment rate. The creation of jobs therefore increases the economic power and living standard of citizens as more people earn a salary and can support their families. Indeed, higher levels of trade and investment tend to increase economic growth and bring other positive effects (such as access to new, better technologies).
There are heated debates about globalization and its positive and negative effects. While globalization is thought of by many as having the potential to make societies richer through trade and to bring knowledge and information to people around the world, there are many others who perceive globalization as contributing to the exploitation of the poor by the rich, and as a threat to traditional cultures as the process of modernization changes societies. World- changing processes are not going to be perfect and globalization is no different. But it is not logical to ignore or downplay the positive effects of globalization in order to attack its negative effects. Globalization is an unstoppable process but it is one that we have control over. This means that we should stop wasting our time and resources attacking globalization and should give our all to combat the negative effects of globalization and to enhance its advantages.
1. Bureau of Labor Statistics, Foreign Labor Statistics. On the web at www.stats.bls.gov/flshome.html
2. Gary Burtless et al., Globaphobia: Confronting Fears About Open Trade, Brookings Institution, Progressive Policy Institute, and Twentieth Century Fund, 1998.
3. Keith Somerville; Africa: Globalization or Marginalisation; BBC December 4, 2002
4.The New Wave of Globalization and its Economic Effects (Reader pp 18-27) In World Bank Policy Research Report. Globalization, Growth and Poverty: Building and Inclusive World Economy. A co-publication for the World Bank and Oxford University Press; 2002