A double edged sword called Globalization

Adfer Rashid Shah writes on the positive and negative effects of globalization

Globalization is a process of integration, an ongoing one. This is the process of integration of various economies, societies, cultures, value systems, beliefs, traditions, norms, incentives etc. It is a convergent and an equalizing force. Any strong conclusive evidence needs hard facts and fortunately the facts are now coming up to break most of the myths regarding globalization. And it is a hard fact that not a single society in the world, no matter what its political system is, has ever modernized with a closed door policy. Globalization is neither a new nor a western phenomenon. The process that led to a more interconnected and interdependent world was experienced way back in the 13th century with Marco Polo opening up the trade routes in spices and Christofer Colombus in tabacco. Cultural exchange dates back to Ashoka's religious teaching missionary work to emissaries. Next phase of globalization took place from mid 19th century up to the World War 1. Colonies were built with investments in infrastructure such as road and rail networks, ports and cities. With the technological advancement, trade flourished by building upon the primary resources. During world wars and the great depression, countries adopted the protectionist measures and restrictive policies. 1945 onwards again there was an upsurge in globalization.

From the Sociological point of view, perspectives on globalization fall into three broad categories. The first approach believes that globalization can be harnessed for the benefit of the world and whole social organism. The second approach is opposed to globalization in its form and advocates localization and places emphasis on the cost of globalization, deterioration of environment and perceived assault on human dignity. The third approach sees globalization as a tool that should be used for poverty reduction and call for critical engagement with the issues.

The process of integration (globalization) is manifested most prominently in the field of economy. Here it means greater trade in goods and services, movement of capital and integration of financial markets, movement of labor, migration and travel and finally rapid advances in technology. The economic globalization is driven by the need for business to increase profit margins and for markets to grow. Trends of globalization depict that world GDP has grown at a faster pace. World trade growth has been even faster than growth in output and financial flows that has outpaced everything else. Growth in exports worldwide outpaced growth in output every year between 1965 and 2000 by an average ratio of 1.5 to1. Developing countries have become more important players in the global market place. Their share of world trade has increased over the past 35 years from about 25% in 1972 to 35% in 1979 and their share of trade in manufactures has more than doubled from about 15% to nearly 35%.Thus developing countries have become less reliant on traditional exports of agriculture and raw materials.

Often globalization and its impact on countries and different sections of world societies, especially the poor ones have been very hotly debated and contested. Actually it is a double edged sword, there are some positive as well as some negative effects. The positive effects include: competition enhances efficiency and productivity, increases consumer choice, increased access to information and technology, myriad of commodities and trade allows countries to gain from trading in goods and services which they produce most efficiently and have comparative advantage over the countries. Advanced technology improves quality of life for people by providing improved facilities of health care, education, agriculture etc and MNCs and TNCs can provide wide access to new technology, widen employment skills, improve infrastructure and generate income for investment in local services and national projects.

"Talking of globalization and Kashmiri society, it can help address unemployment crisis and if we are able to grab the attention of international market on our natural resources and our art, we can become best overnight provided our media links us with the rest of globe. The definition of globalization can itself be the best tool of resolution of Kashmir issue and it could be a factor to take us out of contemporary cultural crisis", comments an eminent scholar and faculty member from Department of sociology and social work, University of Kashmir.

The negative effects of globalization include: lack of regulation on market which can lead to money laundering, black marketing and free movement of arms and weapons, undermining global security, emergence and dominance of transnational corporations, giving a blow to local small scale industries, cottage industries etc. There is a predominant view that poor countries can extort their way out of development, yet the share of world trade in terms of real income is uneven. For every $1 generated through export activity of $0.75 goes to the world's richest countries and low income countries receive around $0.31. Due to profit motive, it can by-pass the holistic approach to development that encompasses respect for human rights and for sustainable development to be based on community participation. It poses a big threat to local culture and the traditional ethos of the societies.

Empirical studies are coming up now with facts and figures so that some strong conclusive evidences can be drawn. In the pre 1980 period, the developing economies were growing at 20% per annum and developed countries at 3.4% per annum. But in the globalizing era of post 1980, the trend has been virtually reversed. While developing economies were growing at 3%, the growth was 1.5% in developed economies in period 1980-2000. Also the two countries having most number of poor i.e. India and China together account for more than one billion poor, and grew at more than 5%. PCI growth also shows a similar trend in the last 20 years with 175% increase in poor countries while as only 35% increase in rich countries. The data trend shows that only those countries achieved large scale poverty reduction in the 1990's which have become more open in international trade and investment. If we go by the $1percapita per day definition of poverty, the developing countries globalizing after 1980 have been successful in reducing their absolute number of poor by 120 million in a short span of 5 years from 1993-1998. While as it has increased by 20 million in the same period in rest of the poor countries. If we come to middle class, wage rate movement is a good indicator. ILO data shows that the growth in globalizing developing countries is twice as faster as in any other developing countries and is even faster than developed countries. Thus we see that trade is virtually acting as substitute for physical movement of labour across boundaries. So it is clear that globalization as a process of integration is also a convergent force. There is clear convergence between rich and poor people on the one hand and the developed and developing countries on the other. This is why pressure is felt by the rich and we find most of the organized protests against globalization originating from the U.S and Europe and not so much in Asia.

Then why is poverty persisting globally? The reason is not globalization but isolation, further it is the inaction on the part of local governments which costs very dear to poor and poverty persists. This is supplemented by lopsided and unequal setting in terms of social and political asymmetry, which is disadvantageous to the poor. Institutional set up and unequal incentive structures are other components. Ignoring these factors and blaming globalization has become a fashion. Facts are now coming up to break most of the myths and negative generalizations regarding globalization.

This article appeared in Greater Kashmir newspaper in 2007. (The writer is a student of Sociology from Department of Sociology, University of Kashmir.) 

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