Is globalization good or bad for us?

GLOBALISATION: Salvation or threat to humanity? – by Kadian Taylor BSc.

Globalisation refers to a set of economic, political and cultural processes of increasing special and temporal interdependency. It is also a process of political and economic, as well as cultural evolution. The United Nations Development Project (UNDP) states:

“Globalisation is both a description and a prescription. The description is the widening and deepening of international flows of trade, finance and information in a single, integrated global market.

“The prescription is to liberalise national and global markets in the belief that free flows of trade, finance and information will produce the best outcome for growth and human welfare.”

The argument therefore is that Globalisation carries the economic benefits of specialisation and the division of labour to the world level. Trade and Foreign Direct Investment (FDI) are the most commonly used indicators of Globalisation and these indicators experienced rapid growth in the 19th and early 20th centuries. Globalisation, then seem to suggest economic growth at the global or world level.

However, the Human Development Index (HDI) has demonstrated that even though there is a strong link between trade and growth, there is no automatic link with human development, nor is there between FDI, economic growth and human development.

Many theorists in the Dependency School of Thought also argue that the process of Globalisation is one that leads not to economic growth, but to dependency.

They contend that Globalisation is beneficial only to certain groups, countries or people within the global arena, and exists to the detriment of others.

Political Theorist Immanuel Wallerstein reveals that within the process of Globalisation, there is an international division of labour, which emerges through the presence of unequal exchange.

There is an occupation hierarchy that has the western wage labourer at the top and all the others including the Third World are located at the bottom. All territories thus become dependent on each other, but the relationship is an unequal one.

There is therefore a link between the developed world and the dependency of the Third World.

Underdevelopment is seen as a process and not just a state of existence. Hence, the process of Globalisation that First World countries such as the US argue will lead to development also leads to underdevelopment.

A growth in trade must take place for Globalisation to be successful. World trade it is argued, has been expanding rapidly since the 19th century, and has increased greatly between 1820 and 1992.

However, it has been observed that there was a shift of importance and trade from primary products to that of manufactured goods.

This shift has brought much economic growth to countries of the North, because these countries have increased mechanisation and technology. For these countries Globalisation is a salvation.

However, this is not so for countries, which sit on the periphery such as the Caribbean Islands.

With this shift, the economies of these countries are threatened such that they are plunged into a state of underdevelopment and dependency.

Third world countries, rich in raw materials such as bauxite, gold and other minerals become underdeveloped, while countries of the centre enjoy economic growth and development.

The core (1st World countries) therefore develops at the expense of the periphery (Third World countries). Globalisation results in the weakening of the economy of the Third World.

Globalisation also promotes the liberalisation of trade through the removal of barriers and free flow of goods and services at the world level.

This allows companies such as Multi- National Corporations (MNCs) and Trans- National Corporations (TNCs) to enter our shores with the promise of job creation and economic growth.

However, if we will stop to note, we will realise that all revenues are often sent out of the host country and are seldom re-invested into the national economy.

This relationship is therefore imperialist in nature and Globalisation becomes more of a threat as the market is controlled by a few and there is a widening of the income gap as the rich gets richer and the poor gets poorer.

Further, Globalisation poses a threat to the development of many countries because the globalisation of production reduces trade.

When products become global such as fast foods, films, soap operas, magazines etc., the uniqueness of national lifestyles, values and culture is eroded. Everyone becomes “Europeanised” or “Americanised” and so we are all selling the same thing.

Globalisation through economic liberalisation may seem to improve market efficiency and accelerate growth, while it intensifies uneven development within and between countries.

It also reinforces or aggravates income, technology and knowledge gaps and promotes a disparity between skilled and unskilled workers through income inequalities.

Therefore only those industrialised countries are likely to successfully benefit from globalisation and successfully integrate into the global economy, as it is organised by them to suit their own economic interests.

There is hope. Our hope lies in the successful implementation of the Caricom Single Market and Economy (CSME).

For those who doubt this, I ask the question: “What economic chance does the Caribbean or any other Third World country have in trading individually with the countries of the First World? The answer is none, not individually. But unity has always yielded strength.

If the islands of the Caribbean can truly come together and push CSME forward, then we will have a greater level of bargaining power in international trade. What we are unable to accomplish individually, is certainly achievable when united.

Think on these things.