Monday, April 5, 2010

Globalization – the Growing Integration of Economies and Societies Around the World

As the World Bank states: Globalization – the growing integration of economies and societies around the world – has been one of the most hotly debated topics in international economics over the past few years. Rapid growth and poverty reduction in China, India, and other countries that were poor 20 years ago, has been a positive aspect of globalization. But globalization has also generated significant international opposition over concerns that it has increased inequality and environmental degradation’ . Globalization is viewed not as the final stage of human progress, but rather an ideology imposed on the world by transnational corporations and their fellows in governments and universities. These forces have elevated theories about market economics, free trade, consumer choice and economic efficiency’ to the level of a religion – indeed, to the level of scientific fact, akin to the laws of physics – because it boosts their profits and expands their political control’ . The main globalization directions are promoting free trade which would lead to the liberalization of markets and their efficient functioning due to the competitive advantages, liberalization of foreign direct investments to increase the flow of capitals to the developing countries from the international financial markets , which of course finds reflection in the nature of multicultural and multination relations. Together with mutual penetration capitals another very important aspect of globalization occurs which is mutual penetration of cultures on the base of goods exchange, export and imports. So the culture which is being introduced by globalization is based on consumerism, culture of postindustrial societies such as the USA and the most developed countries of the European Union.

As it was marked above, globalization is to some extent Americanization and Westernization of social, economic and cultural international society has both positive and negative effects. Here I shall concentrate on the negative as to my mind the positive can be outweighed by the loss of national cultural identities.

As the empirical study of Francesco Daveri and Paolo Manasse suggests, when the firm becomes globalized, thus is engaged mainly in exporting activities rather than producing for the local community or region, the wages of the workers of this firm do not grow, thus, specializing on exports will not make the workers of the firms better off and this ruins the statement of globalists that interfering in international trade more and more will bring higher payoffs to the workers. Of course, the owners of the firms will enjoy higher profits, but not the majority of the workers. But the bad news for the firm when the globalization/westernization is rising, is the very much increasing uncertainty about the future of the firm: in their operational activities, thus, sales, profits, employment and prices. This arises from the fact that all the global firms become interrelated and dependant on the American and European economy and its’ trends, as soon as there are signs of worsening economic environment, the firms will turn to the other part of the world and satisfying the needs of the customers there, and this will affect numerous firms as they are all interrelated. There is though a good impact and higher career growth perspectives for the citizens in the developing countries who work for the firms that are owned by foreigners and operate in the developing countries, or firms that are oriented at exporting goods to developed countries. In his report of examining globalization effects on labor-market efficiency, Noel Gaston has discovered, that open trade and globalization of all the commodity markets has a small effect on the skill-premium on wage (maybe 10-20%), but that other factors (especially technological change) are more important’. This implies that the payback for the skilled workers will not increase as the globalization and better efficiency of the markets due to increase American and European market-oriented conception comes to the international arena. But globalization and the conception of harsh natural selection when only the strongest survive increases gaps in the unemployment in different economic sectors and reduces the power of unions to demand minimum wage levels for the workers ‘. What can be inferred is that the globalization for the developing countries will not help out the industries that are already lacking behind other growing industries, but on the contrary, will speed up the development of competitive firms and worsen the situation of the firms that were experiencing troubles.

The impact of globalization on civil society has a lot of positive impacts. Globalization of economy by transnational corporations caused supplementary processes in institutes of civil democracies which resulted in spread of non government organizations of different kinds. Starting from the foundation of United Nations organizations there appeared a trend of founding international cultural, science and education organizations which have the purpose of promoting western principles of democratic societies and monitor execution of democracy principle world wide. Human Rights Watch organizations, Sores foundation organizations, IREX and number of other organizations contribute to the promoting of universal democratic values worldwide. Non government organizations played a key role in promoting democratic freedoms and in fall of authoritarian political regimes in Yugoslavia, former USSR countries such as Georgia, Ukraine, and Kyrgyzstan. In many respects the role of non government organizations especially in developing countries with poor financing of culture , education and science national programs should not be undervalued and they finance a number of cultural, education, scientific and civil programs and projects, which are beneficial both from the national and international aspects. For example David Brown in his study notes:
“The growth of international NGOs and NGO alliances has also been shaped by

globalization, with impacts particularly visible for provides of services and disaster relief, policy analysis and advocacy, and social learning and problem-solving. At the international level NGOs and NGO alliances have identifies emerging problems, articulated new values and norms, created or reformed institutional arrangements, fostered innovations in international practice, and helped resolve conflicts and manage differences. These contributions to international governance in turn highlight problems of democratic and institutional accountability of international NGOs and NGO alliances, and the possibilities of multisectoral cooperation to solve complex problems of international governance.”

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