Amplifier Shaw

Globalisation: the Coup de Grace

Everyone is currently at loggerheads about globalisation. But who actually appreciates its landscape? There is nothing new-fangled about globalisation as such. It can be seen everywhere. The events of 11 September instantaneously echoed across the world. But more importantly, their reasons and effects demonstrated that in the composition of everyday life. We are without doubt side by side not just in catastrophes, but in trading, financial markets and environmental change. However, the revolution in communications, media, and transportation systems are not just embellishments. They are re-creating the fundamentals of the way the world is doing business.

So, what does that mean? The service sector jobs are going to become increasingly less skilled, and the skilled service sector jobs will become outsourced. Education diplomas will start looking bleaker. The raison d'être is that technology and globalisation are breaking down educational, cultural, social, political and economic barriers that have stood for years. The problem is not that the barriers are being torn down, but rather the rate with which it is happening.

Deplorably enough, the global economy at present is still in fact a game of two-and-a-half players. What’s really significant is that when you break up the global economy into what it is, it remains the European Free Trade Area, NAFTA and Japan. We can then argue that in 1914 there were eight great powers, now there is the G8. The difference between then and now is that Austro-Hungary has been replaced by Canada and Russia shows up as the poor guest. Thus, the global economy is still concentrated more or less around the same rich countries.

Even if you live on the margins of this hierarchical economic order, you are still profoundly affected by it. Take the African countries, for instance, when the International Monetary Fund and the World Bank shows up in to negotiate loan structures. If the country refuses to sign the loan packages on the grounds that this was a new form of colonisation. These esteemed but yet lofty organisations simply leave. No agreement signed, therefore, no loans.

The excitement over globalisation, however, has succeeded to conceal the bona fide social and economic inequalities that are not just a surplus from the past, but are products of the new global economy. The promise of globalisation is just that, a promise, while globalisation itself generates new forms of economic and political exploitation and marginalisation.

Anti-globalisation movements, is anyone listening?

"We are looking to brands for poetry and for spirituality, because we're not getting those things from our communities or from each other." (Naomi Klein)

Anti-globalisation may occur in order to maintain barriers to the international transfer of people, goods and beliefs, particularly free market deregulation. Moreover, as Naomi Klein argues in her book ‘No Logo’ "anti-globalism can denote either a single social movement or an umbrella term that encompasses a number of separate social movements such as nationalists and socialists."

These protesters’ apprehension about the dominance of the market economy, the freedom to accrue almost enormous wealth, the priority given to consumption, brands and promised quick fixes, points to an intersection with the concerns of many in the developed and developing world. Their apprehension is that unrestrained economic power, weak democratic governments, politicians' selfishness, and the endangered invasion of the public realm by large corporations – all defy our sense of social justice and democracy.

However, we have to agree that Davos and Porto Alegre are part of the same world, and must communicate. In their different ways, advocates of the Washington consensus and the anti-globalisation movements are both materialists.

Nevertheless, anti-globalisation movements do have a point in such criteria as: (1) Exploitation of foreign poor workers: The decline of protections for weaker nations by stronger industrialised powers has resulted in the exploitation of the people in those nations to become cheap labour. It is true that the workers are free to leave their jobs, but in many poorer countries, this would mean starvation for the worker, and possible even his/her family if their previous jobs were occupied by others. (2) The shift to outsourcing: The low cost of offshore workers have inveigled corporations to buy goods and services from foreign countries. The laid off manufacturing sector workers are forced into the service sector where wages and benefits are low, but turnover is high. This has contributed to the disappearance of the middle class which is a major factor in the increasing economic inequality.

(3) Weak labour unions: The surplus in cheap labour united with an ever growing number of companies in transition has caused a weakening of labour unions. As a result unions hold less power over corporations that are able to easily replace workers. (4) Increase exploitation of child labour: countries that are experiencing an increase in labour demand due to globalisation and consequently goods produced by children will experience a greater demand for child labour. This can be both "hazardous" and “exploitive”, e.g. trafficking, forced labour, prostitution, pornography and other illegal forms of labour.

WTO: “re-inventing the wheel” or “mid-life crisis”??!

“The world’s poor do not resent the rich anywhere nearly as much as the left-wing parties in the developed world imagine. What they resent is not having any pathways to get rich and to join the flat world and cross that line into the middle class.” (Thomas L. Friedman)

Peter Sutherland, who created the World Trade Organisation (WTO), says “name me a country that hasn’t benefited from greater access to free trade”. The more countries enter the WTO arrangements the greater their benefit will be. In which way shall we look at it? Is the WTO better than what was going on before? In all fairness and so not to be querulous, it is a less hierarchical, more culpable, and more open to rapid improvements. At the very least it forces the well-heeled to stage an auction in front of the less fortunate. The dilemma is with the notion that somehow this regime will benefit all, or that it represents free trade.

The WTO agreements on free trade have functioned principally to prise open markets for the benefit of multinational corporations at the expense of national economies; workers, farmers and other people; and the environment. They should not solely focus on opening markets but also allow trade to be restricted to support human rights, labour rights and environmental objectives in other countries. The WTO and trade agreements should also allow non-government organisations a direct voice in their governance.

We cannot easily dismantle the causal relationship between globalisation and inequality, though the "champagne glass" approach comes really close. Relatively speaking, it argues that, the rich have got richer and the poor have got poorer. In reality, every developing country, the numbers living on less than a dollar a day have increased over the last two decades.

Globalisation has its advocates like Sutherland – for whom globalisation inherently works – and its critics, the anarchist protesters – who claim that globalisation is intrinsically polluted and beyond salvation. Clearly, both approaches aren't in fact working for everyone.

The need to be a “Global Citizen”

“Before you finish eating breakfast this morning, you’ve depended on more than half the world.” (Martin Luther King, Jr.)

Today, every single one of us is a 'Global Citizen', whether we are conscious of it or not. Global inter-dependence happens everyday. We rely on countless different people from all over the world for the clothes we wear, the food we eat and the technology we use. Our daily lives are constantly affected by what people on the other side of the planet are doing!

We all live in a great time. The internet gives us the chance to come together as never before while still reaching for our individual dreams. We also live in a time of great danger. Global problems like climate change, dwindling natural resources, economic recession and conflicts between nations threaten the very existence of humanity. The time has come to overcome our fears and prejudices. We drifted apart and forgot our shared destiny. The burden of global citizenship binds us together. So everyone of us is required to do more, not less! The crave to be a “global citizen” is highly underestimated, craves that are vividly apparent in our everyday life, for instance, the ‘Facebook’ phenomenon.

Civil society at its best

"Globalisation in its current form cannot deliver the benefits expected of it. Civil society, particularly in developing countries, must ensure that it does." (Martin Khor, Director, Third World Network)

So what does this all leave civil society? The implications of the current economic order to civil society are substantial. On the one hand, working autonomously, liberated from the control of dominant institutions at national and global levels assumes that there is such a thing as an independent public arena. On the other hand, co-operation with governments and global institutions could compromise an NGO's image if it was believed that the capital was more significant than the message.

Technically, like the United Nations, the WTO is itself a creature of nation-states, together with the IMF and many other market institutions could be considered executives of international governance. But privatisation has deprived the nations that supposedly control it of their will, and subsequently, envisaged as servants rather than masters of the new global corporate sovereigns. With animals running the zoo, those who seek public good, such as environmental protection, transparency, accountability, labour safety, and the protection of children, ultimately settle for theatrics, raising brouhaha rather than imposing change.

The Egyptian civil society: A success story

"The policy of letting things alone, in the practical sense that the Government should never interfere with business or go into business itself, is called Laisser-faire by economists and politicians. It has broken down so completely in practice that it is now discredited; but it was all the fashion in politics a hundred years ago, and is still influentially advocated by men of business and their backers who naturally would like to be allowed to make money as they please without regard to the interest of the public." (George Bernard Shaw,1928)

Last year, Canadian petrochemical giant Agrium received the approval of the Egyptian government to build a fertiliser plant on Damietta's Ras al-Barr island, about 200 km from Cairo. In April, however, residents began voicing concern over the plant's potentially negative impact on public health and the environment. Local civil society groups expressed fears that factory emissions could pose a danger to residents and adversely affect marine life. Growing public concern about the plant's safety quickly led to a popular campaign against the project. Led by local activists, environmentalist groups and opposition figures, residents began staging large demonstrations in which they demanded the project be halted. In a dramatic show of popular opposition, Damietta households began draping their homes in massive black banners reading 'No to the factory of death'.

Company officials, meanwhile, hastened to vouch for the project's safety. Consequently, popular pressure appeared to trump big business interests when parliament approved a recommendation - tabled by 59 MPs from both the ruling National Democratic Party (NDP) and the opposition - to relocate the plant. "This is a sweeping victory for civil society in Damietta," a coordinator of a popular committee that campaigned against the factory, was quoted as saying.

Globalisation and workers—The good, the bad and the ugly:

In The Republic, Plato talks of the threat posed to a ship’s captain by a rebellious crew, “What a preposterous idea to put the wheel of a ship in the hands of the sailors, when only the captain has the expertise”. From that time to the present day we hear the same phrase reverberated: “people cannot understand”. “They cannot be empowered to know.” In that sense, the notions of the "knowledge worker" and the "learning organisation" are utterly incongruous.

A major trend in the drive for global economy growth is privatisation of public sector enterprises. These range from public railroads and bus lines to water works and hospitals. Particularly hard hit are the admittedly less efficient state sector manufacturing facilities in some weak economies.

While, from the perspective of enterprise level efficiencies, much of this privatisation is justified, but still removing important social safety mechanisms from societies, as these public firms have often served as the employer of last resort and an important tool against unemployment. And these changes, mandated by the international financial institutions as part of the structural adjustment, often are put in place without adequate, sometimes, without any, compensating mechanisms to protect those most harshly affected. This is resulting, in many less developed states, in large "floating populations" of unemployed workers, barely surviving on minimum payments if at all.

From "brain drain" to "brain gain"

The opportunity to work in developed countries is a priceless source of skills and experience. For those with high state-of-the-art technical skills, interaction with leading researchers in the competitive environments of the developed countries augments productivity and innovation. What starts out as “brain drain” – a concern for governments - can be turned into “brain gain”, along with financial resources, if the developing countries practise openness and integration with the industrialised economies.

This is largely demonstrated in the Chinese Diaspora that contributed significantly to the growth of south-east Asian economies. Similarly, as India liberalised its economy, the Indian community has become far more active in launching business ventures in the subcontinent and supporting the development of skills for ICT and high tech industries. Other regions, such as Sub Saharan Africa have drawn much less on their human resources in the developed countries. Nevertheless, the Asian experience shows that a Diaspora can become a powerful instrument for development only if countries are prepared to open their economies, lower the barriers to trade and capital flows and begin enforcing legal and commercial rules vital to a dynamic economy.

So when we discuss globalisation, let’s keep in mind the women who make garments that are now becoming too expensive for them to wear every day. Those are the flesh and blood people whose fates will be decided, for better or for worse, by the debate over globalisation. Will they become richer or poorer— will their lives be longer or shorter— as a result of wise or foolish policies? Trade policies, in fact, do not affect the number of jobs, but rather the kinds of jobs people have. Globalisation has affected workforce demographics, as well. Today's workforces are characterised by greater diversity in terms of age, gender, ethnic and racial background, and a variety of other demographic factors. In fact, management of diversity has become one of the primary issues of 21st-century business.

Globalisation in general has lifted living standards throughout the world. Now there have been obviously some dislocations from that. If you are an American worker and your manufacturing job goes to a country in the developing world where someone is going to get paid one-fifth of what you're earning, then you have been somehow harmed by globalisation.

At the same time, that manufacturing worker and his or her family benefit from the lower cost of goods and services because of falling trade barriers. And they benefit obviously from all the technology that helps enable globalisation. So, globalisation is mainly a plus.

Proponents of globalisation propagate two cases most commonly cited as examples of allegedly negative environmental effects of trade agreements— the “tuna/dolphin” and “shrimp/turtle” cases— that show a race to the top, not to the bottom, as other countries have adopted U.S. legal standards to protect dolphin and sea turtles. The same is true of working standards. Jobs in foreign-owned enterprises are usually greatly sought after, because they both pay higher money wages and offer better working conditions than the domestic alternatives.

Globalisation is not a panacea. Under some circumstances it can increase the susceptibility of countries to shocks. It subjects states to disciplines and checks that circumscribe sovereignty. A key issue in managing globalisation is therefore how to organise the global investment and labour markets to meet the needs of flexibility for enterprises, security for workers and quality for consumers. We need new proactive policies that focus directly on how authorities in the public and private sphere can blend economic and social policies with an enabling environment for private initiative to create market opportunities for "Decent Work". Thus, avaricious corporate enterprises have to be confronted with the fact that they are disregarding their most “valuable strategic asset” -- their workers.

Conclusion

Following a period of economic boom, a financial bubble has now burst - globally. The scope of this problem has been so rigorous that some of the world’s largest financial institutions have collapsed. This problem could have been averted (in theory) as people had been pointing to these issues for decades. However, during boom, very few wanted to hear such pessimism. Does this crisis bring an end to the lackadaisical forms of banking and finance? Will it harbinger a better economic age, or are we just destined to keep forgetting history and replicate these mistakes in the future?

Clearly, the new global economy isn't working for workers in China, Burma, Egypt or even Burkina Faso any more than it is for workers in the United States or Europe. It is no longer tolerated that multi-nationalists can emerge as the driving force of progress, even as they undermine it at the workplace. How can we best use the information presented thus far to amplify the benefits of globalisation without ignoring the costs? The way out, is to strengthen the ability of our 21st century workforce to compete without having to deal with disproportionate share of the risks embedded in the dynamic, competitive global economy..

That much seems certain. This paper does not attempt to convince the reader to believe in a scrupulous set of arguments. Already far too many globalisation and anti-globalisation ‘working in the new economy’ proponents preach or chant at, rather than talk to, each other. The goal was instead to expand the understanding of the scope of sound and valid arguments about the impacts of the ongoing changes to the global economy. The hope is that one day those who decide to act on their beliefs—from joining the World Bank’s team to protesting at an anti-globalisation rally—will do so with the power of knowing the complexities and uncertainties of the correlation between globalisation and the workforce.

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