Globalization entails the increased dependency of developing countries on the West. Discuss

University Degree Business and Administrative studies

Globalization entails the increased dependency of developing countries on the west. Discuss

Globalization. It is regarded by some as an irresistible and desirable force sweeping across frontiers, overthrowing governments, liberating individuals: enriching everything it touches. Others regard it as an undesirable malign force that impoverish the masses, destroys cultures, undermines democracy, ruins the environment and enthrones greed.

I will be finding out in this essay, if globalization is a good thing or not, and if it has indeed, made third world countries more dependant on the west.

We live in a world of twenty-four hour trading in which billions of dollars are sent around the globe for an eighteen cent phone connection. This is the age of globalization, considered an economic phenomenon, Boutros-Ghali, (1996), where technology is sweeping across frontiers, promising high things: Harold Levitt’s ‘Globalization of Markets’ (1983) or Jenichi Ohmae’s ‘Borderless World’ (1990)promise boundless prosperity and consumer joy as a result of globalization. But if one looks at the wider aspects of globalization, one can see that there is not all joy.

Globalization has left some to believe that leaders in the third world are being pushed around like a puppet on a string by American and English powers, hence displaying their dependency on the west. Is it true that ‘the west respects Japan, Hong Kong, China and Taiwan today because these countries did not wait for the advice of the white many to jump into their own style of modernity?’ Diawara (1998)

One can see that globalization has brought about a degree of exploitation. Multinational companies exploit workers in poor countries by paying lower wages that they would pay in their home countries thus reducing the costs of production; multinational corporations destroy the environments of smaller, poorer countries; multinational corporations with all their power threaten the sovereignty of smaller nations. Because of the sheer exploitation that is taking place, one can see that some would argue that these third world countries are dependant on the west in order for them to survive, even if it entails exploitation because of the fact that if these multinational stopped investing in these poorer countries, millions of people would lose their livelihoods. However, one could also argue that these companies are enabling these poorer countries too become less attached to the west, as they are enabling them to make their own money thus strengthening their economy.

Many like to align the domain of market with that of political power. The belief is that liberal markets will promote a stable society. States will have to be interdependent and poor quality jurisdiction in the world will have to develop, for both economic and security reasons, dealing with global health and the environment. As more movement of goods, services, capital and people crosses borders, there is increasing pressure for governments to intervene and impose regulations. The general belief here is that such pressure would create universal standards of goods and services. The WTO and AS summits, the IMF, International Standard Organization etc are all bodies working towards these goals.

Free flow of capital quickly creates what some international economists call a virtual senate of financial capital which will impose its own social policies by the threat of capital flight, which leads to higher interest rates, economic slowdown, budget cuts for health and education, recession, maybe collapse. It's a powerful weapon. By the 1980s capital controls were mostly gone in the rich countries and the smaller economies like South Korea were simply compelled to drop them. That, incidentally, is widely regarded now as a major factor in its recent collapse, alongside of quite extreme market failures in ...

This is a preview of the whole essay

If one wants to see the meaning of free trade and neo-liberalism in its cruelest form, one just has to take a look at the relation between the richest and the poorest country of the hemisphere - the United States and Haiti. Haiti was forced to liberalize radically as a condition on terminating the terror and torture of the coup regime. The cost of liberalization was quite severe. One effect is that Haitian rice production, one of their few potential economic strengths has been seriously harmed and virtually destroyed because it is now competing with US agri-business, which is crazy to begin with, and even crazier when you recognize that 40 per cent of its profits come from government subsidies, thanks to Reaganite contributions to free trade. This shows the power that the west has over these smaller countries, and how they can threaten the sovereignty of their nations.

But it has not stopped there. The United States has started dumping chicken parts in Haiti, undermining another. The reason is that American consumers don't like dark meat, so the producers, these big factory farms, have a lot of extra dark meat, so why not dump it on Haiti? This is wiping out one of the few hopeful enterprises that had developed there. This shows the power the U.S has, but does it show dependency?

U.S. steel manufacturers have been demanding that the U.S. government force Japan and Russia to cut back steel imports into the United States; they are particularly worried about Japan because it's high quality steel, which is undercutting them. And probably they will. The U.S. has instruments to do that. Super 301 it's called: you threaten to close off the market to a country and if they don't do it you tell them. And of course Haiti, since it's a free and equal world, Haiti has the same instrument: they could object to U.S. dumping of chicken parts by threatening to close off Haitian markets to U.S. exporters, just as the U.S. can do, so it's all free and equal.

Global market forces have not been able to homogenize the world to the extent that globalization theorists would want us to believe. More than two-thirds of the trade conducted by the industrialized countries ( EU, North America, Japan) is moving within this industrialized region. The intraregional trade in other markets is increasing rapidly. (Page 1994) When one looks at regionalization, one can see how Latin America is very much dependant on trade with partners outside their region.

Paul Hirst and Graham Thompson argue that globalization is not new. It is certainly not new to the Caribbean, where economies, societies, and political systems are the direct results of larger developments beyond local control. Ironically, the threat now is that the Caribbean will be left out of global developments, which shows that the threat of being ostracized from the west is as potentially dangerous as being dependant on the west. When one looks at ‘Globalization in question’ (Hirst 1996) one can see that the idea that globalization is not as pervasive as many make it out to be is most conspicuous. The international economy, he asserts, is perfectly governable, given the political will and cooperation of the major powers. He argues that the position of the state has become more complex, that the state inevitably has been implicated in these globalizing developments, that its role has been profoundly transformed by this participation, but that it has maintained its status as a viable and strategic institution. (Vellinga 2000)

David Held argues that the nation-state cannot remain at the center of thought about democracy if we take account of the numerous pressures which facts about the real world have brought to bear. Chief amongst those facts are facts about globalization. There is no longer symmetry between political decision-makers and recipients of decisions. Local events can have enormous global effects which can considerably alter people's life prospects. Aerosol use in Europe can cause cancers in South America; interest rate changes in the US can cause greater unemployment in Indonesia which shows how globalization is interlinked everywhere and how the effects of something somewhere, will thus in turn affect a country elsewhere. However, can the developing world reap these effects if something goes wrong as much as the west can?

We will continue to see pressure groups campaigning for the cancellation of debts from developing countries, pressure from Green peace and other environmental groups for environmental preservation and more government subscribing for market liberalization and greater transparency in government. In a society where political power determines the allocation of wealth, it is impossible to be independent without being powerful.

Anyhow, the institutions are not self-legitimizing. They are internally tyrannical, they are unaccountable to the public, they administer markets through their internal operations and through strategic alliances with alleged competitors, they are backed by powerful states which provide subsidies and risk protection and bailouts if needed, and this is the danger of globalization and for developing countries, its increasing dependency on the west.

One can see the dangers of globalization and/or good effects of globalization when one considers the news, which is fast bringing the vast diverse countries into a truly global village. It is no longer news that any occurrence in the remotest parts of the world could simultaneously and potentially be shared in virtually all homes throughout the world. Whether it is the US-led bombing of Iraq in 1990, the senseless genocide in Rwanda in 1994, the judicial killing of the Nigerian writer and environmentalist, Ken Saro-Wiwa in 1995, or the sex scandal of the American President, the Western media, if they so wish, can elevate them to "global" issues. I think this shows the dependency of developing countries to the west, because it is up to us if we want to act upon something we hear, or just choose to ignore it. The genocide of Rwanda is a perfect example, where through globalization, the news was spread to us of the terrible atrocities taking place there, but we still chose to ignore it. This shows their dependency on the west to act upon certain things, or in some cases, not act upon it. The reality of this was recently stated by one Nigerian political scientist when he observed that from "Coca-colonization of the world, we have arrived at the CNNization of the world" (Elaigwu 1995)

The forces of globalization are such that individual cultures will be unable to resist them. Does this not show that developing countries are kind of ‘forced’ in to it, because if they do not, they will be left behind? Once again, this shows that even if developing countries refuse to get involved in the ‘scrabble for modernity’, and if any local culture or people fail to get integrated to this all-embracing process, it will be left behind, suffer isolation and stay in its "primitivism". (Wilfred 1997). I think this shows their dependency on the west because globalization is forcing them to move at a pace, where if they do not keep up, they will be in trouble.

Present-day globalization is but a continuation of a long tradition of over five hundred years, the tradition of imperialism. Globalization is only the latest phase and _expression of this uninterrupted history of domination and subjugation of peoples, nations and cultures through the conquistadors and colonizers. It is a tradition of political, economic and cultural domination of some nations over others. (Wilfred 1997). This shows to me that globalization is not as value-free as it is being portrayed in the West. Globalization is only the latest stage of European economic and cultural domination of the rest of the world which started with colonialism went through imperialism and has now arrived at globalization stage.

For some, globalization has been a force that has brought much good, leaving people less isolated, and has given people in the developing countries access to knowledge well beyond the reach of even the wealthiest in any country a century ago (Stiglitz 2002). But everything has come at a price. I think that globalization has increased the dependency of developing countries in the west, as much as the west is now dependant on globalization. As is stated by Paul Hirst:

Most countries still have distinctive national capital markets and source the vast bulk of their investment domestically. Most of their major companies still have most of their assets in their home country, and make the bulk of their sales in their home region. The UK's manufacturing sector, by contrast, is increasingly dominated by foreign-owned firms. And our banks, pension funds and investment houses invest a far larger proportion of domestic capital abroad than their G7 equivalents. (Hirst, 2002) This shows that even for the west, dependency on globalization is also an issue.

Bibliography

Magazine article by Paul Hirst; New Statesman, vol 129, (September 18th 2000), Why Britain is too far ahead

Sheila Page; (1994), How Developing Countries Trade. The Institutional Constraints

Menno Vellinga; Westview Press, (2000), The Dialectics of Globalization: Regional Responses to World Economic Processes Asia, Europe, and Latin America in Comparative Perspective

Elaigwu, Isawa J., (1995), From Might to Money: The Challenging Dimensions of Global Transition to the 21st Century (1995 NIPSS Distinguished Annual Lecture), Kuru: National Institute.

Wilfred, Felix (1997), "Globalization and Cultures - The Other Voice, Bulletin of Ecumenical Theology

Paul Hirst and Grahame Thompson;Cambridge: Polity Press, (1996). Globalization in Question