FORD FOUNDATION INTERNATIONAL FELLOWSHIP PROGRAM 8TH COHORT PRE-DEPARTURE IMPERIAL RESORT BEACH HOTEL ENTEBBE –UGANDA By; Dr. John Nyerere Globalization Today’s discussion - Content 1. Defining globalisation 2. Description of the process of globalisation 3. Causes of globalisation; 4. Historic epochs of globalisation; 5. Consequences and dangers of globalisation; 6. Future of the globalisation process. 7. Globalization and Africa 8. Case Study 3 Globalisation • Google’s search returns over 24, 000,000 hits to the searchphrase “globalisation” • Globalisation as a buzz word – Is it the root of all evil or the engine of economic growth? Hence -- Social Justice !!! 4 What Is Globalization & What Are its Manifestations? Greater integration within the world via increased openness to: • International Transport, trade • International capital and labor movements • International flow of technology • International flow of information, knowledge, and ideas (Internet super-highway) Globalisation • “...globalisation, is ...simply the logical extension of the tendency towards specialisation and trade, … has been going on almost since mankind first walked on the surface of the earth” (Eslake, 2000) • In economic terms, globalization refers to the growing economic integration of the world, as trade, investment and money increasingly cross international borders 6 Globalisation • Broad definition (Nye, 2009): “increase in worldwide networks of interdependence” • Not only economic globalisation Environmental: i.e. smallpox epidemic originated in Egypt in 1350 BC. It reached China in 49 AD, Europe after 700, the Americas in 1520, and Australia in 1789. Bubonic plague, or the Black Death, originated in Asia, but its spread killed a quarter to a third of Europe's population in the 14th century. Lately- Avian flu, swine flu? 7 Globalisation • Social globalization consists in the spread of – Peoples, – Cultures, – Images, and – Ideas. Migration is a concrete example. 8 Globalisation • Ever increasing integration of the world economy from the early 1950s in terms of trade, investment and production; • The process in not new, but has garnered added attention of late; • Liberalisation of trade and finance has driven changes in functioning of the firms; • Progress in transport and telecommunications. • Technology 9 What is Globalization? • “Process in which the constraints of geography recede and in which people become aware that they are receding” • “Widening, deepening and speeding up of worldwide interconnectedness in all aspects of life” • Process by which networks of interdependence become large and continuous, or “thick” What is Globalization? • A quantitative and qualitative change • Not only economic • Has 4 dimensions: – Space - extensiveness of global networks – Regularity - intensity of global interactions – Speed - velocity of global flows – Depth – impact of global interconnections on quality of life When did globalization begin? • Underway since dawn of history • Emerged with industrialization and capitalism – i.e 1. Slave trade to fuel western industrialization 2. Colonization • Recent development of Information Age • Globalization not linear • Ebbs and flows with politics Historical Forms of Globalization • 21st century “thick globalization” – high extensity, intensity, velocity and impact • Western imperial expansion (18th century) – high extensity, impact; low intensity, velocity • Silk and luxury trade (200 BC-200 AD) – high extensity; low intensity, velocity, impact The Globalization Debate • 3 Schools of thought • Hyperglobalizers – new epoch in human history – logic of market trumps state power • benefit or oppressive? – emergence of global civil society – smooth unfolding of human progress The Globalization Debate • Skeptics – current levels of interdependence not new • classical “Gold Standard” period 1870-1914 – power of national governments endures • hegemon important – regionalization prevails – inequality undermines global civilization – global culture not emerging – global governance illusory The Globalization Debate • Transformationalists – current globalization unprecedented – but outcome unclear – globalization has contradictions – unclear if single world society will result – national governments not powerless but must share governance with IGOs and NGOs Theme 1: Integration-Fragmentation • Integration - breaking down barriers historically separating people – communications, economics, security, ideas • Fragmentation – nationalism, regionalization, religion, ethnic conflict, inequality Theme 1: Integration-Fragmentation Dilemma • integration satisfies material needs, freedom from want • fragmentation satisfies non-material desires, freedom from fear Theme 1: Integration-Fragmentation • Examples of fragmentation and inequality • Africa – region of the world most excluded from global economy • Access to information technology – the “digital divide” • Science and technology for public health and food production skewed to solve problems of developed world over those of poor countries Theme 1: Integration-Fragmentation Summary - Fragmentation can be viewed as: • Nationalism, ethnic conflict, identity • Regionalization • Inequality Theme 2: Universalism-Particularism • Focus on global culture vs. local culture – globalization as convergence, homogenization, uniformity • Cultural imperialism thesis - variants: – Americanization – Westernization – Core over periphery – Modern over traditional – Global capitalist monoculture Theme 3: Borderless World-Sovereignty • What are states? • Why are states under pressure? • Causes of state decline – market forces; technology; skills revolution • But states not powerless • Historically rooted political agents interact with increasingly globalized economic agents Transmission Belts for Globalization • Media • Tourism • MNCs, TNCs, MNEs • Air • Capital • Water • Labor • Science and • Transportation Technology • Communication • Others? Globalization Summary • Globalization best conceived as a dialectical process stimulating: – integration and fragmentation – cultural differentiation and convergence – borderless world and evolution of state Advantages and Disadvantages of Globalization Realm of Advantages Disadvantages Globalization Weakens power of Unwanted external authoritarian influences difficult to Political governments control Jobs, capital, more Exploitative; benefits Economic choices uneven Offers exposure to Risks cultural Cultural other cultures imperialism Arguments for and against globalisation • Globalisation’s critics: – against free trade; – effect of corporations on souvereign governments; – ecological standards; – rights of local communities; • Supporters of globalisation: – free trade; – world without borders; – end of “national” economies. 26 Antiglobalisation movement • Critics of globalisation believe that the rulling elites garner all benefits of globalisation, leaving nothing for the people/workers • Against “neoliberalism” 27 Antiglobalisation movement • Heterogeneity – anarchists; – socialists; – NGOs; – developed country unions; – rare 3rd world protesters; – environmentalists; – even some economists who oppose certain aspects of globalisation (J. Stiglitz (2002): “Globalization and its discontents”, D. Rodrik (1997): “Has globalization gone too far?”) 28 Criticism of antiglobalisation • Critics argue that antiglobalists have no empirical evidence; – There has been a decrease in the absolute and relative number of people living in absolute poverty (wage below 1$ per day); – Average income per capita in the period 2002-2007 has experienced fastest growth in recorded history, but the benefits were not equaly distributed; – Life expectency in most of the world (except sub- Saharan Africa) has increased markably. In sub- Saharan Africa it stayed more or less equal. 29 Criticism of antiglobalisation (poverty level) Source: Sachs (2005) 30 Criticism of antiglobalisation • Antiglobalist criticism is misdirected: – Farming sectors of the third world are mainly harmed by restrictions to developed countries’ markets and not free trade as antiglobalists tend to believe; – Third world workers have a choice between opitons on offer to them (take on a job at a TNC or get a job at a local plant); – There is broad agreement amongst economists that greater transparency in the functioning of TNCs and capital flows is needed. 31 Two epochs of globalisation • 1492-1820: Anti-globalist (mercantilist) restrictions; – Discovery of America, sailable root to India,... – Strong impact on commerce, growing share of trade in GDP; – Trade is NOT a consequence of falling trade restrictions and global integration; – There was, namely, no decrease in price differences between the export and import centers, – Discoveries and the progress made in transport technology lead to trade monopoly markups, tariffs, non-tariff barriers, wars, pirates,... 32 Two epochs of globalisation • 1820-1913: first global century – With the end of mercantilism, a period of relative peace (after the Napoleonic wars) and improving transport connections (pax Britannica); – Convergence of prices (not only across the Atlantic), but primarily with Asia and Africa, where there was a strong presence of European colonial powers; – Integration of factor markets, global capital markets after 1913 were comparable to those of today in terms of global coverage (J.G.Williamson, 2002), labor migration reaches its climax (no restrictions33) Two epochs of globalisation • 1913-1950: antiglobalisation – complete disintegration of the