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| Image: Courtesy |
The global integration of the nations
of the world on different paradigms and strands has largely been beneficial but
at the same time, it has generated negatives on a wider scale. This is in no
means to suppose or suggest that the global inter-linking of states and
non-state actors is doomed to fail, but rather a wake-up call to the concerned
entities (the multi-lateral institutions in particular) about the rising
uncertainties and/or backlash against the doctrine of globalization.
There are two critical junctures in
world history that apparently and ultimately led to the surge of globalization;
the economic reconstruction of Europe after World War Two as directed by the
Marshall Plan, formulated under the auspices of George Marshall, who served
then as the Secretary of State for the United States of America. It was during
this point in time that the Bretton Woods institutions namely the World Bank
(International Bank for Reconstruction and Development, IBRD) and the
International Monetary Fund (IMF) were established. The economic relations
between Europe and the USA were furthered by these institutions and the mandate
of the two was later expanded to reflect a global view.
The other critical juncture was the
fall of the Berlin Wall and the fall of communism in Eastern Europe that
culminated in the end of the Cold War. This was a milestone in view of globalization
because it meant the opening up of the communist states and other aligned
communist nations to the politico-economic activities of the rest of the world
(Read the capitalistic world). It is important though to note that the surge in
globalization was dampened by the global financial/economic crisis witnessed in
2008/09.
So, why the dissatisfaction and dissent
against globalization? This has largely been occasioned by unfulfilled promises
propagated by the pro-globalization individuals and institutions. As a matter
of fact, globalization was initially touted as a mechanism that would
effectively enhance the economic growth and development of the so called Third
World countries. The notions that were initially harbored envisaged a fair
global trade regime with minimal interference and interventionist policies by
the advanced economies of the world. But the resentment against globalization
can be clearly noticed even in the developed economies.
The Developed Economies Vantage Point
As noted, the negative effects of
globalization are not confined to the developing economies and the newly
industrializing economies as a significant number of the advanced economies are
experiencing the backlash against this politico-economic phenomenon. The
relocation of a good number of industries from the Western world to some of the
Asian economies has resulted in labour redundancy with the industrial workers
of the former being rendered jobless. Of course this relocation of industries
is premised on the incentives at play and the aspect of economic geography. The
Asian economies where these industries relocated were guaranteed access to
relatively cheap labour plus other subsidies offered by the governments. This
is a matter that a significant number of citizens in the Western economies view
as a negative engendered by globalization.
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| World Bank headquarters. Photo: Courtesy |
It goes without doubt that the rise in
populism and nationalism in some of the Western nations is perhaps a harsh
reaction to globalization. The influx of immigrants has led to resentment with
the right-wing ideologues taking it as part of their agenda to formulate
policies and pieces of legislations that seek to check on the number of
immigrants. There is a growing perception that the immigrants are competing
directly for employment opportunities with the natives even for the low skilled
jobs and this factor was partly responsible for Brexit and the triumph of
President Donald Trump in the hotly contested and divisive US presidential
election.
Of essence is the prevailing attitude
that membership to economic blocs and/or economic unions has curtailed the
power of the independent states to be able to negotiate for better trade deals
with other countries. Despite a guaranteed access to a ready market, majority
of the Britons so it fit to vote in favour of Brexit in pretext of the jeopardized
sovereignty thanks to the policies and legislations of the European Union.
Through the Executive Orders, President Trump nullified the membership of the
USA to the North America Free Trade Agreement (NAFTA) and the Trans-Pacific
Partnership (TPP). The reason for this; industries/firms would shift to member
countries where business costs are a bit lower.
An African Standpoint
Whether the African countries have
benefited from globalization or not depends on which angle one views the matter
from. The concept of globalization, from an African point of view, has not
greatly benefited the African economies. Of course one of the factors that
supports this statement is the aspect of global trade where African economies
operate on the periphery and are well stuck at the bottom of the international
trade. This has ostensibly been precipitated by the protectionist measures
adopted by the developed economies and some of the newly industrializing economies.
The World Trade Organization (WTO) has
never been committed to ensure that the principle of fairness is adhered to in
global trade which has given room for the advanced economies to institute
protectionist measures against some of the agricultural products/produce
originating from Africa. But it is a matter of political expediency as the WTO
is controlled by the world’s developed economies. Even the Africa Growth
Opportunity Act (AGOA) was to help the African economies to access the American
textile market but its efficiency as a policy instrument is highly
questionable.
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| Map of Africa. Image: Courtesy |
Economic globalization has led to the
incidence of capital flight and tax evasion from Africa through the
multi-national corporations (MNCs). This is simply corruption at play and the
bottom line is that most of the African governments collude with some of the
MNCs to rob the African countries. When the so-called trade deals are signed
between two countries (an African one and a foreign state) to develop
infrastructure or exploit minerals, full disclosure of the trade agreements are
never made to the public. This is the major reason why some of the MNCs take
the lion’s share of the revenue from the natural resources and even engage in
illicit economic activities.
Political globalization has always
taken a backseat with economic globalization being prioritized and this has
disadvantaged Africa. The non-commitment by the advanced economies to
institutionalize reforms in the multi-lateral institutions is a pointer to the
continuation of the dependency syndrome which has over the years been perfected
by the world’s dominant economies. The World Bank must be reformed if the development
assistance that it offers to African countries is to be beneficial. The
International Monetary Fund should be reformed so that its policies are not in
favour of the USA and other advanced economies as it is currently. Reforms are
needed at the WTO to ensure that Africa, highly disadvantaged on the global
trade scale, benefits the most from international trade. The United Nations
must also be reformed and have an overarching role in view of the other
multi-lateral institutions.
The Chinese Eye View
For a relatively long period of time,
accusations have been labeled against the Chinese for being circumspect towards
globalization. Should the Chinese really be blamed for this? The Chinese should
not be blamed wholesomely for the (perceived) failures of globalization. China
was very clear on its economic model and set out to actualize it through the
implementation of feasible and viable economic policies that were suitable to
the Chinese socio-economic and political conditions.
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| A man looks at the Pudong financial district of Shanghai in this November 20, 2013 file photo. REUTERS/Carlos Barria/Files |
China outsmarted globalization at that
point in time when the Western nations were busy propagating for the idea. It was
through the economic wisdom of the Chinese that they instituted industrial
protectionist policies to cushion the local industries and create more employment
opportunities for the Chinese nationals. In fact, the industrial economies of
scale created from the concentration of industries in regions/cities with very
high populations (economic geography) led to the relocation of a significant
number of industries from the Western economies to China. If China was to fully
embrace globalization as it was being pushed to, then the economic growth and
structural transformation witnessed in the country could not have taken place.
From a Chinese perspective, embracing
globalization at the early stage of the economy’s reformation would have been
economically suicidal as globalization is a jungle where the strongest
(advanced economies) always take advantage of the weakest (economies that are
playing catch-up). At the moment,
though, China’s economic progress significantly relies on globalization with
the country making serious infrastructural investments in Africa, Europe, South
America and largely trading with the USA (China is the largest trading partner
of the US). There is a very high possibility that China could be the world’s
major driver of globalization at this moment in time.
The Road Ahead
The world should concentrate its
efforts in making political globalization to work by being committed to
reforming the United Nations, the World Bank, the IMF, and the WTO among other
multi-lateral institutions. Institutional reforms would imply that proxy wars
are eradicated from the face of the globe and viable investments are made by
these institutions. This is a potent way of reducing the number of immigrants
into the advanced economies. Advanced economies allocate a lot of financial
resources to fund the wars at the expense of investing in their respective
economies.
Skepticism in the face of constructive
globalization is inevitable because of the geopolitical interests at play.
Africa, through the African Union must seize the moment and push for better
deals at the global roundtable. The reformation of globalization will be
beneficial to all the units though in varying degrees but at least guarantee
the socio-economic transformation of developing economies ceteris paribus.
China’s continued structural
transformation will play a very significant role in reshaping the globalization
trajectory. This could work in favour of Africa or against Africa depending on
the costs and benefits realized from the Chinese model of international
relations.
This article was first published on blog.savicltd.co.ke.
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