Globalization PDF

COLLAPSE OF THE SOVIET UNION AND THE NEW WORLD ORDER GLOBALISATION AND THE NEW WORLD ORDER The process of globalisa1on has been the biggest change to the world order for over 300 years. Na1on-states have to share their power with new global actors: mul1-lateral organisa1ons (such as the United Na1ons), transna1onal corpora1ons, and non-governmental organiza1ons (NGOs). These forces have eroded the no1on of a na1onal economy; there is Francis Fukuyama and the now only a global one. Transna1onal corpora1ons sprawl across “End of History” na1onal poli1cal boundaries. Na1onal governments no longer have full After the Cold War, a thinker na1onal control over their economies. named Francis Fukuyama suggested that people would Understanding the Concept of Globalization care a lot about two things: the right to choose their Following the end of the Cold War, many observers struggled to leaders through democracy understand how the world would be organized once the ideological and the right to take part in a conﬂict between East and West had ended. The Japanese-American market-based economy. He got this idea from a academic, Francis Fukuyama, oﬀered a solu1on. He suggested two philosopher named Georg things would become important to people aRer the Cold War: Hegel, who believed that history would stop when there was nothing left to fight for. The right to par1cipate in a market-based economy: he believed that an economic policy which supported the market contributed towards Fukuyama thought markets, the end of Communism. not governments, should be the main force in how we run things. This was a big change The right to exercise democracy: ci1zens all over the world would from the Cold War, which was want the right to elect the governments that would rule them. all about countries. The term "globalization" became popular to describe this new So, while states were s1ll central to how the world was organized, way of organizing how people interna1onally, another way of organizing social rela1onships was connect with each other worldwide. necessary. This was to be through the market – Globaliza1on. So, after the Cold War, Globaliza1on involves cross-border social, economic, and technological people started to see the world differently, valuing exchange. As a result, goods, services, and wealth move across democracy, markets, and the interna1onal borders in increasing quan11es, bringing economies, idea that everything could socie1es, and technologies closer together. It happens under happen on a global scale. 'condi1ons of capitalism' i.e., a free market global economy with minimal interference from governments. 1 It does not aﬀect the few remaining totalitarian states as much because they keep 1ght control of the country's economy and trade. Globaliza1on is deﬁned as follows: Globaliza1on refers to the rise of a worldwide economy and integrated poli1cal organiza1on. It is the increasing interdependence of the na1ons of the world on each other, to the extent that events in any one country will aﬀect many if not all, the states in the rest of the world. However, many would suggest that it is the dominance of developed countries in decision- making, at the expense of poorer, less powerful na1ons. How did globalization come about? The voyages of explora1on, the growth of interna1onal trade and the building of empires over the last 500 years has contributed to the separate countries of the world establishing greater contact with each other. In the middle decades of the twen1eth century, globaliza1on was largely driven by the global expansion of mul1na1onal corpora1ons based in the United States and Europe, and the worldwide exchange of new developments in science, technology, and products. Two major developments since the 1970s and 1980s have sped up these connec1ons. 1. Technology Technological development has increased exponen1ally in the last 50 years. Air travel can move goods, people (even diseases) anywhere in the world within 24 hours. Telephones, computers, e-mail, and the internet enable people to communicate instantly across the globe. The internet enables people to access informa1on from a huge variety of sources, on a huge variety of topics. 2 Computers and the internet mean that money and investments can be moved across the world instantly. 2. The collapse of the USSR The end of Soviet control in Eastern Europe opened an enormous market to the capitalist world. As Soviet socialism collapsed, western investment and inﬂuence poured into the former Soviet Region. Computer technology was taking oﬀ at this 1me, and this helped the people and resources of the former Soviet world to join the world economy. Globalisa1on in its modern sense is a recent development and growing but it does not aﬀect everybody to the same extent. Overall, it is driven by the technologies of computers and the instant communica1on of e-mail and the internet. This means that those who beneﬁt most are in the developed northern hemisphere (including Australasia) while those who suﬀer most are in the poor southern hemisphere. Transnational Corporations Transna1onal Corpora1ons are one of the major forces behind globalisa1on today. Transna1onal Corpora1ons (TNCs) or mul1na1onal corpora1on (MNCs) are companies that manage produc1on or delivers services in more than one country. The rise of TNCs has been a topic of concern for many people who have seen it as a threat to basic 3 civil rights. These companies dominate the world economy and may have an exploita1ve adtude towards workers in poor countries. An1-corporate protesters suggest that corpora1ons answer only to shareholders, giving human rights and other issues almost no considera1on. They have pointed out that TNCs create false needs in consumers and have had a long history of interfering with the policies of countries. TNCs may use scarce local capital to ﬁnance their subsidiaries rather than bring needed capital into the host country, thus ac1ng as a drain on the host country’s resources. Compe11on from TNCs aﬀects local industry adversely. TNCs produce non-essen1als for the host country and usually set up only a part of a produc1ve process, thus crea1ng only a limited increase in employment and discouraging compe11on. Moreover, TNC may: increase the gap between rich & poor countries. misallocate & misuse of scarce natural resources. aggravate unemployment in developing countries. However, TNCs are also a good source of technology not otherwise available. They have also very oRen provided an element of entrepreneurship and risk-taking and introduced new skills to the local market. They may also increase the pace of economic development, promote beger products at lower costs, increase produc1on, GDP and exports, as well as increase Government revenues. Whether TNCs are good or bad depends very much on whom you ask. But there is no doubt that they are playing a more and more important role in the economies of diﬀerent countries, and as a result, drawing them closer together. The result has been the development of a Global Economy, with new bodies and organisa1ons to administer it. 4 The Global Economy Globalisa1on has linked the world’s economies so closely that a crisis in one country can lead to economic hardships in others. This happened in 1997 when a crisis in Thailand spread through Southeast Asia and in 2008 when a banking crisis in the USA aﬀected banks in Britain and Europe. Following the great depression and towards the end of the Second World War, two new bodies were created to deal with the reconstruc1on of the global economy: The Interna1onal Monetary Fund (IMF) and The World Bank because of the Bregon Woods Conference, formally known as the United Na1ons Monetary and Financial Conference. This was a gathering of 730 delegates from all 44 Allied na1ons at the Mount Washington Hotel, situated in Bregon Woods, New Hampshire, United States, to regulate the interna1onal monetary and ﬁnancial order aRer the conclusion of World War II. The conference was held from the 1st to the 22nd of July 1944. Agreements were executed that later established the Interna1onal Bank for Reconstruc1on and Development (IBRD, which is part of today's World Bank Group) and the Interna1onal Monetary Fund (IMF). By the 1me the Cold War ended, they were enthusias1c supporters of neo-liberal, market- centred economic thought and strong supporters of globalisa1on. The International Monetary Fund The IMF describes itself as "an organiza1on of 187 countries, working to foster global monetary coopera1on, secure ﬁnancial stability, facilitate interna1onal trade, promote high employment and sustainable economic growth, and reduce poverty." Its inﬂuence in the global economy has steadily increased as it accumulated more members. The IMF was created in 1944 to provide ﬁnancial assistance to countries that experience serious ﬁnancial and economic diﬃcul1es. In return, countries are usually required to launch certain reforms (the structural adjustment programs), which have oRen been dubbed the "Washington Consensus". The World Bank The World Bank was also created at the Bregon Woods Conference of 1944. Like the IMF, the World Bank provides ﬁnancial assistance to countries, but World Bank loans are only given to countries to help with speciﬁc developments (such as building highways or dams). 5 The World Bank's lending policy is quite strict, and loans are only granted to projects that will assist in reducing poverty. The World Bank loans are usually to invest in educa1on, health, and infrastructure. The loans can also be used to modernize a country's ﬁnancial sector, agriculture, and natural resource management. However, to qualify for a loan, the country must adhere to strict budgetary reforms, the structural adjustment programs. Some of the condi1ons of the structural adjustment plan (SAP) include: Cudng expenditures Focusing economic output on direct export and resource extrac1on Devalua1on of currencies Trade liberaliza1on or liRing import and export restric1ons. Increasing the stability of investment (by opening domes1c stock markets) Balancing budgets and not overspending Removing price controls and state subsidies Priva1za1on Enhancing the rights of foreign investors Improving governance and ﬁgh1ng corrup1on. Considerable cri1cism has been levelled against these structural adjustment programs. Cri1cs claim that SAPs threaten the sovereignty of na1onal economies because an outside organiza1on is dicta1ng a na1on's economic policy. SAPs encourage countries to take advantage of a lack of environmental regula1ons to create goods at a lower price. Cri1cs have condemned priva1za1on, claiming that it only enriches the elite. In other words, SAPs can be extremely detrimental for poor countries, as many people cannot aﬀord to pay for health care or educa1on, leaving popula1ons sicker and less educated. The agricultural, an1-land reform and food trade policies associated with SAPs have major social consequences. A large por1on of SAP's policy on agriculture focuses on the increased use of fer1lizers and pes1cides, which harm the health of local bodies of water and therefore ﬁsh popula1ons, etc. 6 The World Trade Organization The predecessor of the WTO, the General Agreement on Tariﬀs and Trade (GATT), was also established in the wake of the Second World War. GATT was the only mul1lateral instrument governing interna1onal trade from 1948 un1l the WTO was established in 1995. The aim of the World Trade Organiza1on (WTO) is to promote free trade and s1mulate economic growth. It does this by implemen1ng a framework for trade policies; it does not deﬁne or specify outcomes. The ﬁve most important principles of this framework are: Non-Discrimina1on Reciprocity (responding to a posi1ve ac1on with another posi1ve ac1on, and responding to a nega1ve ac1on with another nega1ve one) Binding and enforceable commitments Transparency (WTO members are required to publish their trade regula1ons) Safety valves (in speciﬁc circumstances, governments can restrict trade) The ac1ons and methods of the World Trade Organiza1on evoke strong cri1cism too. Cri1cs contend that small countries in the WTO wield too ligle inﬂuence. Some claim that the WTO is biased toward rich countries and mul1na1onal corpora1ons, harming smaller countries, which have less nego1a1on power. 7 They cite the following as examples of this: Rich countries can maintain high import du1es and quotas on certain products, blocking imports from developing countries. Developing countries are oRen prevented from doing so under IMF and World Bank SAPs and by ac1ons from the WTO. The maintenance of high protec1on of agriculture in developed countries. Developing countries are pressed to open their markets. Many developing countries cannot follow the nego1a1ons and par1cipate ac1vely. Under the interna1onal Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, ini1ated by the WTO, developing countries are prevented from u1lizing some technology that originates from abroad in their local trade systems. Some cri1cs claim that the issues of labour and the environment are steadfastly ignored. Other cri1cs have characterized the decision-making in the WTO as complicated, ineﬀec1ve, unrepresenta1ve, and non-inclusive. The Organization of Petroleum Exporting Countries (OPEC) OPEC was created in 1960 to unify and protect the interests of oil-producing countries. OPEC allows oil-producing countries to guarantee their income by coordina1ng policies and prices among themselves and presen1ng a uniﬁed front. 8 OPEC was created primarily in response to the eﬀorts of Western oil companies to drive oil prices down. OPEC represents a considerable poli1cal and economic force. Two-thirds of the oil reserves in the world belong to OPEC members; likewise, OPEC members are responsible for half of the world's oil exports. The best display of the eﬀect OPEC power could have on the world's poli1cs was in the 1970s: When the Yom Kippur War broke out, the United States assisted Israel against the Egyp1an and Syrian armies. In response to this interference in the war, OPEC ins1tuted an oil embargo that targeted the United States and its European allies. The embargo lasted from October 19, 1973, to March 17, 1974. The eﬀects of the OPEC oil embargo were widespread. Immediate eﬀects included inﬂa1on and economic recession in the United States and other countries targeted by the embargo. OPEC agempts to guarantee the interests of its members by managing the produc1on of oil among its members through a system of quotas. This allows them to control the price of oil and therefore guarantee the proﬁts of its members. OPEC's inﬂuence on the market has also been widely cri1cized since it became eﬀec1ve in determining produc1on and prices. Other Organizations The Group of Seven The Group of Seven (G7) is an intergovernmental forum comprised of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. Addi1onally, the European Union (EU) is recognized as a "non-enumerated member." Founded on shared values of pluralism, liberal democracy, and representa1ve government, G7 members are major advanced economies according to the Interna1onal Monetary Fund (IMF). The G7 originated from an informal gathering of ﬁnance ministers in 1973 and has evolved into a formal and prominent plaqorm for addressing global challenges. It serves as a venue for high- level discussions and coordina1on on issues spanning trade, security, economics, and climate change. Over the years, the G7 has played a crucial role in catalysing global ini1a1ves, such as comba1ng HIV/AIDS, providing ﬁnancial aid to developing na1ons, and contribu1ng to the 2015 Paris Agreement on climate change. 9 The G7 operates without a formal treaty, permanent secretariat, or oﬃce. Its organiza1onal structure relies on a rota1ng presidency among member states. The presiding state determines the group's priori1es and hosts the annual G7 Summit. Italy is set to hold the presidency in 2024. Despite lacking a legal or ins1tu1onal founda1on, the G7 is widely acknowledged for its signiﬁcant interna1onal inﬂuence. While the G7 has been instrumental in spearheading global ini1a1ves, it has faced cri1cism for its perceived limita1ons. Cri1cs point to its outdated and exclusive membership, which may not fully represent the global landscape. The G7's eﬃcacy has also been ques1oned, with observers highligh1ng concerns about its narrow global representa1on and alleged ineﬀec1veness in addressing contemporary challenges. Russia was a formal member of the G8 from 1997 un1l its expulsion in 2014. The expulsion occurred in response to Russia's annexa1on of Crimea, marking a shiR in the group's dynamics. The G7, despite its lack of a formal structure, remains a signiﬁcant plaqorm for major economies to coordinate on global issues. BRICS BRICS, which stands for Brazil, Russia, India, China, and South Africa, is a group of countries aiming to create a more balanced world order, giving a stronger voice to the Global South. Brazil, Russia, India, and China formed an informal interna1onal alliance known as BRIC. The concept behind this coali1on came from the belief that by 2032, the combined economic inﬂuence of these na1ons will surpass that of the six major Western economies. The inaugural gathering of this alliance took place on June 16, 2009, concentra1ng on strategies to enhance and revamp the global economy. Addi1onally, discussions centred around fostering collabora1on among these na1ons and increasing their par1cipa1on in global aﬀairs. South Africa joined this coali1on in 2010. Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates joined the organiza1on on 1 January 2024. 10 BRICS countries are major players in terms of popula1on, size, and economic power. They contribute signiﬁcantly to the world economy, with a combined GDP of about US$28 trillion. They also hold substan1al foreign reserves, approximately US$4.5 trillion. BRICS is seen as a geopoli1cal rival to the G7, a group of advanced economies. It has introduced various ini1a1ves, like the New Development Bank and a reserve currency pool, challenging Western-dominated ins1tu1ons. 11 Opinions about BRICS are mixed. Some see it as having the poten1al to reshape the global order, oﬀering an alterna1ve to Western-dominated ins1tu1ons. However, cri1cs ques1on its eﬀec1veness and point out internal issues, like the China-India border dispute. In 2014, BRICS created the New Development Bank with a signiﬁcant capital of US$100 billion, providing an alterna1ve to ins1tu1ons like the IMF and World Bank. They also set up a reserve currency pool worth over another US$100 billion. Despite its ambi1ons, there's scep1cism about BRICS's ability to challenge the exis1ng world order. Concerns have been raised about China using BRICS to expand its global inﬂuence, and internal disagreements, like the China-India border issue, have been noted. BRICS na1ons, encouraged by Russia, are working towards reducing reliance on the US dollar. This poses a challenge to US interests, poten1ally limi1ng its ability to run deﬁcits, maintain low-interest rates, and enforce eﬀec1ve sanc1ons. 12 Changes in the Balance of Power and Responses to Globalisation The aRermath of the Cold War led to signiﬁcant and complex changes globally. Na#onalism and Localiza#on The disintegra1on of states posed a formidable threat to globaliza1on, with the Soviet Union and the violent breakup of Yugoslavia, leading to the ﬁrst war in Europe in nearly 50 years. The Balkans, enduring a cruel and biger conﬂict from 1990 to 1997, involved "ethnic cleansing" and external interven1ons by en11es like NATO and the United Na1ons. The breakups of Yugoslavia and the Soviet Union raised ques1ons about the dominance of local interests over common global interests promoted by globaliza1on, sparking a debate between "localiza1on" and globaliza1on. The central issue in this debate was iden1ty, as individuals and communi1es grappled with whether they belonged within the state or more closely to their immediate, familiar surroundings. This led to the emergence of iden1ty poli1cs, which proved to be a potent but poten1ally violent force. Religious Divides and Clash of “Civiliza#ons” Religion, a longstanding divider in the Balkans, gained prominence in the post-Cold War era as a dividing line between the Western and Islamic worlds. Samuel P Hun1ngton's no1on of "The Clash of Civiliza1ons" in 1993 foresaw a future shaped by people's failure to coexist due to diﬀering beliefs, par1cularly between Chris1anity and Islam. This ideological divide found expression in events like the 1993 government siege of right-wing Chris1an extremists in Texas and the subsequent Oklahoma City bombing in 1995. The rise of terrorism as a threat, epitomized by Al-Qaeda's ac1ons and Osama bin Laden's jihad against the United States, marked a signiﬁcant shiR in global dynamics. Global “War on Terror” 13 The 9/11 agacks coordinated by Al-Qaeda in 2001 prompted a strong response from the United States. President George W. Bush declared a 'Global War on Terror' and ini1ated military campaigns in Afghanistan and later Iraq. This war extended to various regions, including the Philippines, the Horn of Africa, the Sahara, Pakistan, Kashmir, and Yemen. While the 'War on Terror' has become a global undertaking, historical pagerns suggest that wars oRen revolve around past issues. This perspec1ve raises concerns that these conﬂicts may exacerbate the world's pressing challenges—economic and environmental. The complex aRermath of the Cold War con1nues to shape global responses and agendas. Changes in the Balance of Power The Cold War's end shiRed global power dynamics, with the U.S. and its allies perceiving a triumph. The U.S. con1nued its military engagements, while NATO transformed. The world seemed unipolar, with the decline of Cold War considera1ons. Post-Cold War, North-South rela1ons shiRed from aid-based coopera1on to market-oriented policies. Developing na1ons adopted neoliberal strategies, reducing state spending on welfare. South-South Coopera1on emerged, fostering collabora1on among developing countries. Global wealth dispari1es, termed "global apartheid," widened, contribu1ng to violence. The poor faced increased restric1ons, notably in the U.S. The rise of emerging economies and diﬀerent forms of capitalism added complexity to these issues. 14 Crisis in Market-Driven Capitalism Market-driven capitalism faced a crisis, marked by declining conﬁdence in the concept of debt. Economic crises, especially since 2008, raised concerns about the sustainability of this model and its dispropor1onate beneﬁts to the wealthy. The Occupy Campaigns in major ﬁnancial hubs worldwide, including Oakland, Quebec, Barcelona, Wall Street, Moscow, and Frankfurt, served as expressions of deep discontent with the prevailing economic system. Civil Society Responses to Sustainable Development Threats In the post-Cold War era, civil society responses to threats against sustainable development have become more organized globally. Ini1a1ves like Agenda 21, a non-binding ac1on plan from the UN on sustainable development resul1ng from the UN Conference on Environment and Development in Rio de Janeiro in 1992, exemplify global eﬀorts. Environmental organiza1ons like Greenpeace have adopted asser1ve strategies to safeguard the environment. Movements focused on protesta1on are visible at global summits addressing environmental and economic issues. Simultaneously, others engage in the challenging task of educa1ng people worldwide to adopt more sustainable and responsible lifestyles. These organized responses underscore a growing awareness of the interconnectedness of global challenges and the need for concerted eﬀorts to address them. In response to economic hegemony from the North, par1cularly prejudiced global terms of trade, countries in the South turned to each other for mutual beneﬁt. Agricultural subsidies from developed na1ons, detrimental to Africa, prompted South-South collabora1on to counter such challenges. This coopera1on, emphasizing equality and mutual beneﬁts, has resulted in sustained economic growth in many Southern countries since the late 1980s. Despite resistance to globaliza1on, exempliﬁed by Malaysia's deﬁance of IMF advice in 1997, eﬀorts to counter free-market globaliza1on were oRen dismissed by economic experts. China China adopted a unique approach, promo1ng free-market policies for economic growth while resis1ng pressures for liberal democracy, exempliﬁed by the Tiananmen Square crackdown in 1989. China's success in globalizing its economy has had a profound impact globally, but challenges like corrup1on and environmental issues persist. 15 India What Is Keynesian Economics? India, another economic success story, underwent signiﬁcant economic reforms, John Maynard Keynes, a British economist from the early 1900s, is famous for creating but dispari1es between the rich and poor Keynesian economics. This is all about how big and regional imbalances emerged. systems like economies work. Unlike what many Russia people believed at the time, Keynes said that demand, not supply, is what really drives an Russia, despite economic liberaliza1on economy. eﬀorts, faced challenges such as high corrup1on and widening wealth gaps. Keynes had two main ideas. First, he thought that governments should actively work to Brazil influence economies, especially during tough Brazil successfully balanced market forces times, by increasing spending. This is because with government concerns for the welfare he believed that total spending, both by people and the government, determines everything in of its people, achieving economic growth, the economy, from making things to creating but socio-economic dispari1es remain a jobs. concern. Second, Keynes believed that the best way to lift an economy out of a recession is for the These emerging economies challenged the no1on government to spend more money, even if it that free markets alone ensure economic growth, means going into debt. According to him, this boosts consumer demand (people spending advoca1ng for a mixed economy approach money), which then leads to more production reminiscent of Keynesian economics. and more jobs. In simple terms, Keynes thought that making sure people spend money is the key to fixing an Civil Society Resistance to Global economy, even if it means the government has Capitalism to borrow some money to help out. Cri1cs of bodies like the Bregon Woods Ins1tu1ons argue that these en11es have become sources of conﬂict by advancing the interests of the wealthy, oRen at the expense of the less aﬄuent, through policies deemed unfair or unsuitable for impoverished na1ons. This discontent led to mass protests by an1-globaliza1on groups, such as People's Global Ac1on and Friends of the Earth Interna1onal, who were alarmed by the perceived ampliﬁca1on of power for aﬄuent states and the further marginaliza1on of the poor. People's Global Ac#on: Established in Geneva in 1998, People's Global Ac1on func1ons as a coordina1ng body against "free trade" and the World Trade Organiza1on (WTO). It iden1ﬁes itself as a tool for communica1on and coordina1on for those opposing the adverse impacts of capitalism on humanity and the planet. The organiza1on's primary focus involves orchestra1ng global demonstra1ons on designated "global ac1on days," typically coinciding with WTO mee1ngs. 16 Friends of the Earth Interna#onal: As the largest environmental network globally, Friends of the Earth Interna1onal operates in over 70 countries with over 2 million members and supporters. Their mission centres on defending the environment and advoca1ng for a healthy and equitable world. A key objec1ve is to challenge the prevailing model of economic and corporate globaliza1on, seeking solu1ons that promote environmentally sustainable and socially just socie1es. Protest groups also voiced concerns about the erosion of cultural diversity due to globaliza1on. English as the language of globaliza1on and the widespread dissemina1on of American culture via television were iden1ﬁed as contributors to the decline of local cultures' ability to compete. These an1-globaliza1on demonstra1ons became increasingly frequent at mee1ngs of Heads of State, the Interna1onal Monetary Fund (IMF), the World Bank, and the WTO. They reﬂected a global sen1ment rejec1ng the no1on that neo-liberal globaliza1on was the inevitable post-Cold War paradigm. Instead, people worldwide viewed globaliza1on as a detrimental force that would consolidate power among the aﬄuent while diminishing the inﬂuence of the impoverished. In essence, the post-Cold War era brought about a complex tapestry of poli1cal, economic, and social changes with both challenges and organized responses on a global scale. 17 18

Document Details

Tags

Related

Summary

Full Transcript

Upgrade to continue