Who are the 'winners' and 'losers' in globalization - Essay Example

"With a focus on economic factors, evaluate competing accounts of who are the 'winners' and 'losers' in globalization". Number Abstract This paper examines the impact of globalization primarily in terms of economic factors. It is generally presumed that the concept of globalization would usher in economic advantages which must accrue to the entire globe rather equitably. Review of area specific gains reveals that not only specific geographical areas have been the primary recipient of gains from globalization but also globalization has bypassed economic inequality of pre globalization period and in some sense has exacerbated it. In a different context Devetak and Higgott explain how globalization has brought about a weakening of an intra national social bond. They further posit that ongoing process of globalization causes constant disruption in existing social bond. It is their view that "under conditions of globalization, assumptions made about the social bond are changing; .... the article concludes that the prospects for a satisfactory synthesis of a liberal economic theory of globalization, a normative political theory of the global public domain, and a new social bond are remote"( Devetak & Higgott 1999). Largely looking in terms of distribution of economic benefits of globalization it can be surmised that entrenched vested interests and inequalities have remained or even worsened. These inequalities, by themselves, would make any concept of global polity, economy or social bond from arriving in synthesis for maintenance of global social order. We examine the extent of inequalities below. Again in a slightly different context Phillip W.Jones makes a statement which is extremely relevant to the definition of globalization in present context. Jones states that," The logic of globalization contrasts markedly with that of internationalism. The latter, with its intrinsically democratic foundation, looks to a world ordered by structures supportive of that functionalism which is embedded in accountability. Globalization, by contrast, implies few logical imperatives in favour of accountability, but rather looks to the pursuit of interest on the global level through the operation of unfettered capitalism"(Jones,1998). Examining the globalization context from economic point of view prima facie capitalist motives of profits appear predominant. New technological developments, improvements in communication, growth in transnational infrastructure and liberalizing of trade and capital flows have enabled entrepreneurs the globe over to deploy and run their capitals chasing markets the globe over. The globalization aligned attitudes of IMF and World Bank are exemplified with clarity by Jean-Claude Trichet, President of the European Central Bank, when he says that," The key aim of today's policy makers has not changed compared to those at the Bretton Woods times - it has been, and still is, global prosperity and stability - but the environment in which we are acting has changed profoundly......Today we are striving for stability of the international financial system in a world of free capital flows with a growing importance of private flows and increasing trade and financial integration"(Trichet, 2004). As Roby says," world-wide output and trade have grown apace with market openings and the rise of efficient global business networks these past 15 years. An entrepreneurial class is energizing once-stagnant command economies" (Roby, 2005). It is at once apparent that this 'entrepreneurial class' is essentially limited in number the globe over. They also have limited spheres of influence. Consider for instance, the pharmaceuticals giant Astra Zeneca (AZ) has multinational operations and employs just about 65000 employees globally (Annual, 2004). Such instances abound in almost all industrial and commercial sectors where spread and success have been limited. Has AZ been able to provide cheap drugs to global population-perhaps no. We perhaps need more global entrepreneurs in each activity to raise production levels to reach global masses. Roby has clear views on the matter when he states that," yet, one blemish remains in the idyll of globalization: Except in China, there has been scarcely a dent in endemic poverty. Half the world's wage earners - around 1.4 billion people - still subsist with their families on income below $2 a day, the International Labor Organization said in a year-end report..... Matching of local buying power with to the strong world-wide momentum of production .... can only be achieved by spreading more evenly the material benefits of borderless commerce" (Roby, 2005).Traditionally quoted bottlenecks to either growth of wealth or its distribution such as value and cultural systems, corruption, complex legal systems, obsolete political systems, small national markets, intricate and messy policy making, bureaucracy etc still stand tall playing their inhibiting roles. Globalization was expected to sweep away all these but that has not come about. Some state with confidence that globalization would bring wealth first to companies and then through labor distribute it down the line. Again Roby quotes Roland Berger, chairman and founder of Roland Berger Strategy Consultants based in Munich as saying that," It is the companies which first bring the wealth.......Only later is it distributed through labor" (Roby, 2005).The moot points are pace, timing and quantum of this redistribution hampered by above stated inhibiting factors. Within Asia globalization benefits have been skewed sharply. Hannon states," In Asia, all conversations about globalization tend to revolve around one country: China......When China began to industrialize in the early 1990s, the key elements of globalization were in place internationally: growing cross-border movement of production and capital, fueled by excellent telecommunications and increasingly freer trade. As a result, China enjoyed an accelerated pace of development, and today, it is one of the fastest-growing countries in the world. Since 1995, China has posted average annual GDP growth of 8.3%, and per-capita GDP has almost doubled during the same period. Clearly, China has benefited enormously from globalization"(Hannon, 2005).It appears rest of the Asia has been left behind from obtaining full benefits of globalization. Hannon can be quoted yet again to produce evidence that globalization benefits have accrued more to west than to Asia. He states," Contrary to its reputation, Asia is far from matching the West in terms of overall competitiveness. According to the 2004 A.T. Kearney/Foreign Policy Globalization Index, published in Foreign Policy magazine, Asia lags the Western world in most key aspects of globalization. China ranked 57th of 63 countries surveyed in the report. Other Asian countries fared somewhat better: Singapore was number two, but the next Asian country, Malaysia, was 20th, followed by Japan at number 29 and Korea at 32. "(Hannon, 2005). Evidence indicates that the 8 new East European members of the widening EU customs union have also gained in prosperity.Roby, quotes Thomas Ganswindt, Siemens managing board director in Munich. "This means that the quicker the EU makes its new members fit for international competition, the more rapidly all participants will profit"(Roby,Eight). Roby further provides the requisite data as follows," Together, the three Baltic States and the five Eastern European countries which joined the EU on May 1, 2004, form Europe's fastest-growing region. The EU had projected 3.8% average gross domestic product growth for new members in 2004, following 3.1% in 2003. Measured in dollars, the per-capita GDP in Poland, the Czech Republic and Slovakia rose an eye-catching 240% between 1994 and 2003, outpacing China, Mexico and India"(Roby, Eight).Thus regional gains have been substantial and skewed in favor of west. For instance evidence of sub-Saharan gains from globalization not all that straight. Economists agree that globalization results in tremendous economic gains and works to increase trade and investment leading to creation of additional wealth. The networked global economies have the backbone of advances in communication and technology. These advances are irreversible and getting entrenched with passing years, bringing about more globalization. Evidence suggests that due to skewed globalization benefits a relatively prosperous middle class has emerged. However percolation down and beyond has been limited with relative and absolute poverty persisting. It is apparent that concerns of commercial capitalism have to mould to benevolent capitalism whose object will not be to indulge in sunken charities but to expend resources and education to lift suffering masses from out of self imposed drowsiness and sluggishness and make them full economic man. Globalization would not only synthesize a lot then but leave more of winners than losers in reversal of present trend. References Devetak ,Richard & Higgott ,Richard (1999) "Justice Unbound Globalization, States and the Transformation of the Social Bond." International Affairs Volume 75Page 483. Jones, Phillip W.(1998) " Globalization and Internationalism: democratic prospects for world education." Comparative Education Volume 34, Number 2.pp 143 - 155. Trichet, Jean-Claude" The international financial architecture - where do we stand" Speech by Mr. Jean-Claude Trichet, President of the European Central Bank, at the Conference "Dollars, Debt and Deficits - 60 Years after Bretton Woods", Madrid, 14 June 2004. Roby, Edward. (2005) "Globalization spawns wealth, but not equality as deep poverty persists" The Asian Wall Street Journal dated 19 January 2005. AstraZeneca Annual Report and Form 20-F Information 2004, pp 11. Hannon, Brent. (2005) "Asia lags west in most key aspects of globalization" The Asian Wall Street Journal dated 19 January 2005. Roby, Edward. "Eight new EU members from the east flex their economic muscles" Retrieved April 2, 2006 from http://www.questionsforthefuture.tv/ws1/wsj03.htm . Read More