Globalization: Economic, Cultural, and Political Impacts

• Globalization is a complex process with significant global and local changes.
• Economic globalization includes cultural and political globalization.
• Critically evaluate the impacts of globalization, especially on poor countries.

Definition

• Development paradigms: An idea of prescribed path to attain development through activities, according to a vision.

Introduction

• Globalization caused remarkable changes in the 20th century.
• It is important to examine the changes and underlying processes of globalization.
• Globalization operates on assumptions that need evaluation.
• Deeper analysis is needed to ensure globalization is sustainable, just, and equitable.

Economic, Cultural, and Political Globalization

• Globalization is mainly conceptualized as intensified transference/exchange across existing boundaries
• Globalization is an economic process driving for integration of economies through trading and financial flows across borders.
• Globalization and processes point to a development paradigm.
• Development can be achieved through rapid economic growth, due to economic integration.
• As a growth oriented model, GDP is seen as an indicator of success.
• Economic globalization is a complex global process expanding the market economic system worldwide.
• The market economy gives entrepreneurs freedom to control processes to pursue profit.
• It is a corporate-driven process enhancing transnational exchange of products, services, technologies, and capital.
• Capital movement is a key aspect of globalization along with global trading, and movement of people

Trading

• International trading involves economic exchanges between countries.
• These exchanges are enabled via international fiscal payments.
• Private and central banks play important roles.
• Global trading concerns both importation and exportation.
• World trade increased from 1971 to 1999.
• The largest increase was in the export of manufactured goods.
• Export of primary commodities often produced by poor countries declined.

Capital Movement

• There was an increase in capital flows to poor countries during the 1990s.
• One manifestation of capital movement is foreign investment.
• Foreign investment types include commercial loans, official flows, or foreign direct investment.
• Commercial loans are money lent to foreign businesses or governments.
• Official flows refer to development aid granted by rich countries to developing nations.
• Foreign direct investment involves buying/setting up a firm in a foreign country or enhancing an existing one.
• Transnational corporations primarily undertake foreign direct investment, operating in more than one country.

Movement of People

• People migrate to other countries for better employment opportunities.
• In the Philippines, about 2.3 million OFWs during April-September 2018.
• Increased interdependence of economies also combines with globalization of culture and politics.

Cultural Globalization

• Globalization is having a homogenizing influence on local culture.
• It promotes integration and provides opportunities but may cause a loss of uniqueness of cultures.
• This can lead to loss of identity, exclusion, and conflict.
• Cultural globalization refers to increasing contact between people and their cultures
• This is deeply entrenched in societies and linked to lifestyles like music, media, fashion, food, knowledge, science, and technology.

Political Globalization

• Political globalization enlarges the international political system.
• It establishes inter-regional dealings, including trade.
• Political decision making can transcend national boundaries.
• This includes management of economic, trading, security, environment, and other transnational issues.
• Institutions like the World Bank, IMF, and United Nations come into play.

Assumptions Behind Globalization

• Globalization operates on assumptions about a desirable economy and development.
• Critique: Rapid economic growth is only one aspect of development.
• Other aspirations include broader social objectives, justice, self-reliance, welfare, and equitable distribution.
• Critique: Trading benefits some more than others.
• Borrowing of poor countries are coupled with conditions (SAPs), where countries compromise spending.
• Critique: Social services and Welfare suffer.
• It is difficult for poor countries to catch up due to unequal exchanges and underdevelopment.
• Underdevelopment analyzed within the historical and worldwide political-economic system.
• Critique: Reduction of tariffs in the Philippines since the 1980s led to unfair competition.
• It lead to the the loss of local industries and massive unemployment.
• Fast-paced international economic transactions are driven by actors in engagement with sectors.
• Globalization is not random but devised by humans with assumptions development.
• Transnational corporations are important players in globalization.

Institutions Shaping Globalization

• Institutions ensuring globalization are international financial and trade institutions, UN agencies, and regional organizations.
• The World Bank facilitates capital investment for member countries by funding large-scale projects.
• Implements Structural Adjustment Policies (SAPs) for borrowing countries.
• SAPs reduce spending for social services, prioritize debt repayment, increase exports, and remove tariffs.
• The International Monetary Fund (IMF) provides short-term emergency loans.
• Short term loans help bring enormous flow of foreign money through loans and speculative investment.
• The World Trade Organization (WTO) creates rules for global trade and investment.
• WTO aims to reduce tariffs and create agreements regarding multilateral policies.
• These push governments to relax regulations and encourage countries to deregulate economies.
• The World Bank, IMF, and WTO promote movement of products, capital, and trading between countries.
• Enforce common trading financial flow standards/policies and "deregulate" firms reducing government's control.

The Impacts of Globalization

• Globalization aims to reduce poverty.
• It is often with disapproval from labor organizations, environmental groups and others.
• Lessening government control may lead to neglect of environment and low wages
• It can result in unstable employment, under servicing of consumers, and privatizing common resources.
• Supporters carry positive assumptions about globalization.
• IMF acknowledges existing poverty alongside economies, but globalization must continue via policy changes.
• Positive Evidence: increased jobs and income
• Increased trading may result to a decline in poverty.
• Increased trading causes a wider choice of consumer goods in the market.
• Restructuring of economy from flux of capital across countries impacts places and social relations.
• These can have disintegrating effects.
• Global interactions produce uneven development.
• Unequal playing field local vs foreign producers leads to losses for local producers.
• Enhanced global trading leads to cheap imported vegetable in the local market.
• Local consumers and businesses find it cheaper to buy imported agricultural products made in China, Australia, and New Zealand.
• Globalization comes short because it widens the gap between developed and developing countries.
• It hinders democracy and social justice.
• It damages small communities, displaces farmers, and sped up environmental degradation.
• The only groups who benefited are top officials of corporations and bureaucracies sustain them.
• An important impact is the increase in per capita GDP for the richest 25% of the world population.
• However, poor populations did not experience this growth and income inequality worsened.

Globalization's impact evaluated, focusing on economic, cultural, and political dimensions. Examines effects on poor countries and the sustainability of globalization processes. Analysis includes development paradigms and assumptions driving global integration.