Globalization - discuss the integration of the worlds economy.

In today’s modern age, there are new global problems which require new global solutions. The key challenge now is to devise procedures that will rule the game by delivering greater stability and prosperity for all our citizens in industrialized and industrializing economies alike (Brown, 1999:16-19). Many economists believe the essential answer to the problems of the moment is not less globalization, but more. Increasing international trade and investment will brings more nations into the global capitalist system. As a result there will be a greater need to build international structures in order to make globalization work in harder times as well as easy ones (Brown, 1999: 16-19). Therefore International institutions are essential and can operate within the competing demand of the forcer of globalization. The process of globalization has had a number of effects on today’s businesses and society. These effects will be evaluated by investigating the trend towards a more globalize economy and will explore the questions raised about the shifting role of governments, and the increasing new responsibility and direction of international institutions (Ricupero,1997:409).

Globalization has helped to create endless opportunities for many people, groups and countries, as democratic beliefs have spread throughout the world replacing despotic systems of government. (Streeten, 2001:27). Countries are now opening up to international trade and investment more than ever, this change has enabled and allowed many nations to develop at a faster rate than they would otherwise have done (Stiglitz, 2002: 4). International trade improves and helps with economic development; an example is when Asia exports led it to economic growth. Asia’s main drive for growth was its outcome with trade, this lead them to a centerpiece of the industrial policy which enriched and developed much of Asia and left millions of people in the country much to be grateful for as they were given better opportunities. (Broad, 2002:23) and (Stiglitz, 2002:4). People in the west, more particularly developed countries such as Australia, United States and UK may regard low-paying jobs at Nike as exploitation of worker (Stiglitz, 2002:14). However for many people in the developing countries like Korea, China and Vietnam consider working in a factory is a far better option than staying down on the farm and growing rice (Stiglitz, 2004:14). This is just an example of the improvements, on how globalization has decreased the sense of separation and isolation that was once felt in many parts of the developing world. (Nye, 2001:4). While it has also given many people in under developed countries access to a broader knowledge beyond the reach of even the wealthiest in any country a century ago (Stiglitz, 2002:5).

However at the same time, globalization a force that has bought so much good, has also been seem by many as a controversial matter. (Stiglitz, 2002:5). This is because the liberalization, technological transformation, intense competition and the economic restructuring, all of which are the cause of a more globalize world have contributed to an increased impoverishment, inequalities, work insecurity, weakening of social support system and wearing down of established identities and values(Streeten, 2001:28). Globalization has also not been successful in reducing the poverty line, neither has it achieved stability. For instance the crises in Asia and Latin America had threatened the economies and the stability of all developing countries (Stiglitz, 2002:6). There were fears of financial corruption that were seen as spreading thin around the world, that the failure of one emerging market currency will mean that others fall as well (Stigiltz, 2002:6). During 1997 and right through to the end of 1998 there was a concern for a while that the Asian crisis appeared to pose a threat to the entire world economy. Thus the complexities of globalization have led to calls for a global institutional response (Nye, 2004:4). So who is responsible for the overall effects of globalization and the promotion of respect and responsibility of human rights (Morias, 2000:71)?

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There are a great number of significant issues that have been raised by globalization, and at least as many organization attempting to tackle them. The growth of the global market, international trade and investment has reduced the role of national governments (Lechner and Boli, 2000:70). However globalization does not mean the fading way of nation policies and national institution systems, it merely means their partial reinvention Lechner and Boli, 2000: 70-71). Governments have the ability to reinforce and support an economy’s capacity to respond to a more market-oriented and integrated world (Ricupero, 1997:409). While governments can help meet international demand, they also stimulate, facilitate and sustain the development of competitive enterprises, thus enhance the linkages between investment, production, trade and technology (Ricupero, 1997:410). However the process of globalization has diminished the role of the government to a certain extent (Streeten, 2001:10). Their reduced power in the regulation of international economic activity, combined with the spread of world-wide free markets and technological innovation, have called upon international institutions to adopt more efficient developmental policies that will see international trade as a tool for integration, growth and development (Ricupero,1997:411).

The road to economic progress is now directed towards international institutions as they play a potential role helping to set the international agenda (Lechner and Boli: 2000:82). International Monetary Fund (IMF) and the World Trade Organization (WTO) are two of the most important and influential international economic institutions, which are often described as “international of global governance.” (Broad, 2002: 39). However in practice they are much more a global anti-government, unaccountable to any electorate (Broad, 2002:40). However previously these financial institutions were once seen as being inflexible and at times confrontational system of bilateral negotiation, thus a large gap existed between their promises and achievements (Broad 2002:43). Setting aside what was once seen, international institutions now emphasize partnership and cooperation for development through a multinational frameworks (Streeten, 2001:28) and (Ricupero, 1997: 411). Partnerships are mainly founded upon a common theoretical policy while the programs that are implemented for achievement are accepted by national governments (Ricuperi, 1997: 410). Thus the new approaches of international institutions see them as being more cooperative within national societies than the traditional ones (Zurn, 2004: 260). The change that has occurred within international institutions will enable them to restructure economic relations, and improve upon countries extreme poverty and growing inequality. The new direction international institutions are now taking will provide assistance for meeting the challenges that are faced to a global society in respect to globalization (Ricupero,1997:411).

In the past, the IMF was established to achieve growth and economic stability by constructing loans conditional on changes in monetary, fiscal, exchange rate, and trade or labor-market policies (Stiglitz, 2002, 10). Often the countries that participate with the fund were resisted from the role of national political institution and the development of responsible, democratic institutions (Broad, 2003, 31). It was believed that because of the IMF pervious conditions and the pressure put of these countries many global crises were caused (Stiglitz, 2002:12).

However over the years since its foundation the IMF has changed noticeably, although improvements still need to be made to their financial crises by improving their current programs. (Stiglitz, 2002:12) and (www.imf.org/). They need to focus their attention on institutional reform, incentives for improved domestic arrangement and policies greater transparency and accountability reduced opportunities for corruption in developing and restructuring countries, and the provisions of global public goods (Broad, 2003: 107) and (www.imf.org/). These improvements will yield maximum benefits only if governments continue to foster open market reduce barrier to trade in goods and services, and long term capital, all forces of globalization (Broad, 2003, 109).

The Word Trade Organization (WTO) is among the mot influential, powerful and secretive international bodies in the world. The WTO symbolizes the rule-based system of the policy of economic globalization. Unlike other institutions the WTO rules can be enforced through sanction. This gives WTO more power than any other international body (). The WTO acts as an agent of and for states, operating solely in response to the wishes of it members (Lechner and Boli: 2000:189). Over the years the WTO has shown that trade and investment not only brings economic development, but often bring higher standards of human rights and environmental protection as well (Broad, 2003:27). It was formed in order to prevent and encourage the free flow of goods and services. Although the General Agreement on Tariffs and Trade (GATT) did succeed in lowering tariffs enormously is was difficult to reach the final accord (Stiglitz, 2002:16). It was not until 1995 a half century after the end of the war and two third of a century after the Great Depression, that the WTO came into existence (Stiglitz, 2002:16-17). This international institution is considerably different from the IMF it does set rules itself, however it provides a forum in which trade negations go on and it ensures that it agreement are lived up to (Stiglitz, 2002: 16-18). What the WTO now wants to do is achieves greater determination by government to tackle social and political issues directly. This than will give institutions that exist for that purpose that funds and authority they need (Stiglitz, 2002: 1618). The United Nations and it specialized agencies are charged with advancing the causes of development, environment, human rights, and labour (Broder, 2002:26-27). However the WTO wants to be apart this program as well. They believe that getting involved with the private sector, international companies which are the prime receivers of economic liberalization must share some of the responsibility for dealing with its social and environmental consequences that have occurred over the decades (Braoder, 2002: 26-27).

Globalization has many implications to today’s business and society. The current period of globalization now more than ever calls upon International Intuitions to assist in solving global problems and maintaining international relationships (Ryan, 2003: 94). These organizations provide a forum for legitimizing many policies and practices that effect human rights violations or the invasion of independent self-governing nations (Ryan, 2003:94). Information and money flows more efficiently than ever, while goods and services produce in one part of the world are increasingly available in all parts of the world (Michie and Smith, 1997:112). This phenomenon described the political, economic and culture atmosphere of today (Detomasi, 2002:428). While international institutions have little legal authority, they are essential in giving international authority to common agreed positions as well as setting the international agenda (Ryan, 2003: 94).

International Institutions are able to operate within the competing demand of the forces of globalization. This is due to the fact that within the global economy the role of the government has significantly decreased in response to the pressures of globalization and economic liberalization (Stiglitz, 2002:16). International Institutions believe that nations should encourage development, by opening up markets to trade and encourage private ownership, the rule of law, political democracy and individual freedom (Broader, 2002: 32-33). Globalization and institutions have been able to connect in a certain manner that allows them to make a contribution to the word economy (Detomasi, 2002:428). Despite the fact that privatization has reduces the existence of governments within a countries marketplace, government still have much to contribute towards an efficiently operated economy. However international organizations can further enhance from the governments ability (Broader, 2002: 32-33). These organizations are able to encourage growth through the creation of global coordination and norms for state behavior (Stiglitz, 2002:16). Even through international institutions contribute to a broader acceptance of human right and democratic principles, they still need to develop and strengthen, so they can respond more efficiently to the increasing problems of an interdependent world ().

REFERENCE LIST

Broad, R. (2002) Global Blacklash: citizens Initiatives for a just World Economy, England: Rowman & Little Publishing Groups.

Brown, J. (1999) ‘The globalization of politics’ The Brooking Review’ [Online]. Vol 21, p.16-18. Availabe: Proquest Journal Database. [Accessed 31 March 2004].

Detomasi, D. (2002) ‘International institutions and the case for corporate governance: Toward a distributive governance framework?’ Global Governance’ [Online]. Vol, 8, p. 421-443. Availabe: Proquest Journal Database. [Accessed 2 May 2004]

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Michie, J., Smith. G.J. (1997) Managing the Global Economy, United States: Oxford University Press.

Morais, V.H. (2000) ‘The globalization of human rights law and the role of international financial institutions in promoting human rights’ The George Washington Journal of International Law and Economic [Online].Vol, 33, p.71. Available: Proquest Journal Database. [Accessed 19 March 2004].

Nye, S.J. (2001) ‘Globalization's Democratic Deficit: How to Make International Institutions More Accountable’ Forign Affairs [Online]. Vol, 80, p. 2. Available: Proquest Journal Database. [Accessed 19 March 2004].

Porter, K. (2004) Your Guide to Globalisation Issues [Online]. Available: [Accessed 9 May 2004].

Ricupero, R. (1997) ‘Privatisation, the state and international institutions’ Journal of International Affairs [Online]. Vol. 50, p.409-419. Available: Proquest Journal Database. [Accessed 19 March 2004].

Ryan, N., Parker, R. and Brown, K. (2003) Government, business and society, NSW: Pearson Education Australia.

Stiglitz, E.J. (2002) Globalization and its Discounts, Great Britain: Clays LTD.

Streeten, P. (2001) Globalisation Threat or Opportunity, Demark: Copenhagen Business School Press.

Sutherland, D.P., Sewell, W.J. (1998) ‘Gather the Nations To Promote Globalization’ New York Times [Online]. Vol, 26, p.3-15. Availabe: Proquest Journal Database. [Accessed 2 May 2004]

Zurn, M. (2004) ‘Global Governance and Legitimacy Problems’ Government and Opposition [Online]. Vol, 39, p260-288. Available: Proquest Journal Database. [Accessed 19 March 2004].

Globalization - discuss the integration of the worlds economy.

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