9 Globalization

9 Globalization - Globalization and Development...

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Unformatted text preview: Globalization and Development Globalization Chapter 9 s s s s s s Globalization – the most fundamental reorganization Globalization of the planet’s social and economic structure since the Industrial Revolution. the In today’s world money flows faster, goods move In quickly and information and communication is instantaneous instantaneous People travel more quickly and more often Human contact has been changed/transformed Clothing is manufactured a world away, call centres Clothing provide services in countries far away provide Planet Hollywood - conjures up an image of Planet globalization globalization Globalization ­ Globalization ­ s Wikipedia s s In its literal sense is the process of transformation of local or regional phenomena into global ones. It can be described as a process by which the people of the world are unified into a single society and function together. This process is a combination of economic, technological, sociocultural and political forces. Globalization is often used to refer to economic globalization, that is, integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology. Economic globalization ­ 4 main economic flows: 1. goods and services (exports/imports), 2. Labour/people (migration), 3. Capital (investment inward or outward) 4. Technology (call centres etc) Globalization Globalization s s s s s s Many view globalization as primarily an economic phenomenon involving the integration of national economic systems through the growth in international trade, investment and capital flow. Involves social, cultural and technological exchange. Began primarily after the collapse of the Soviet Union. Internet – makes global business possible Increases competition, spread of new technologies and ideas, flow of goods and capital across international borders What are the social costs? The Third World The s s s First World also know as The West (Industrialized First countries of North America and Europe) countries Second World - Soviet - led Eastern bloc Third World - countries closer to the equator and Third poorer. poorer. s s s s Former colonies Since the collapse of the Soviet Union the concept has Since less meaning less Now referred to as The South, Majority World, Now underdeveloped countries underdeveloped “Developing countries send developed countries 10 Developing times as much money through unequal trade and financial relations as they receive in foreign aid.” financial Newly Industrialized country Newly Industrialized country (NIC) A socio­economic classification applied to countries whose economies have not yet reached first world status but have outpaced other developing countries s NIC’s are undergoing rapid economic growth (export­oriented). s In many NICs social upheaval is occurring as rural populations migrate to cities where manufacturing jobs are s NICs NICs s s s s s s s s s South Africa Mexico Brazil China India Malaysia Philippines Thailand Turkey Workers in developing countries Workers Bangkok 1993 ­ A fire in a toy factory left 188 workers dead (the factory made Bart Simpson and Big Bird dolls) s No one knows the actual death toll because only 100 of the 3000 workers, mostly women, were legally employed there. The other 2900 were contract workers from Thailand s Corporate Responsibility Corporate s s s What is the responsibility of the corporations What using third world labour to safety? using Profit and Power come into play Author William Greider states “Firms behave Author this way because they could, because nobody would stop them. When law and social values retreated before the power of markets, then capitalism’s natural drive to maximize returns had no internal governor to check its social behaviour.” check Reactions Reactions Those concerned with human rights Those such as Students Against Sweatshops organized to improve the plight of workers workers s Anti-globalization movements sprung Anti-globalization up around the world up s How do we control capitalism’s social How behaviour to minimize harm? behaviour s Social Analysis Social “What’s new about globalization?” s Who is in control? s How is this different from other eras? s What values take priority and why? s “No Logo” by Naomi Klein s In her book Ms. Klein describes how In companies market to consumers in an attempt to get people to identify with products and logos (nike etc), playing down the realities of the working conditions in those countries conditions Colonial Period Colonial Period For hundreds of years Europe For expanded their control over other nations nations s Canada supplied Britain with fish, fur Canada and lumber and s Africa - sugar cane s India - tea/spices s Time of exploitation (slavery) s After WW 11, factories sprung up in After poor countries poor s Today Asian countries that once Today produced tea and spices export computer chips and dollar store products products s All this global trade does not generate All economic growth necessary for “development” Why? “development” s Democracy, fairness, development Democracy, s s s s 1960’s colonialism was ending Soviet Union 1960’s collapses collapses Countries free themselves from control by European Countries power power The gap between rich and poor becomes more The pronounced Between 1990 and 1997 the underdeveloped Between countries paid out more in debt service than they received from new loans and this has resulted in a $77 billion transfer of wealth from South to North $77 IMF - International Monetary Fund International s s s IMF and World Bank established in the wake of IMF WW11 to promote stability in the international economy following the Depression of the 1930’s economy In 2002, Joseph Stiglitz (chief economist of the World In Bank and Nobel Prize winner for economics) described the IMF as “the new missionary institutions” who pushed loans on poor countries. According to the banks the governments were the According problem and the answer was free-market capitalism but how did this actually work? but s World Bank/IMF/WTO World Bank/IMF/WTO s s s Primary function is to make loans to poor countries in order for them to build infrastructure and economic foundations International Monetary Fund – short term loans to countries having difficulty repaying loans World Trade Organization – concerned with lowering trade barriers in order to enhance economic globalization Ethiopia 1977 Ethiopia At this time Canada was ranked At number 1 in the UN’s human development index development s Ethiopia was emerging from years of Ethiopia drought, famine and military rule and 170 on the UN list (sixth to last) 170 s Ethiopia started paying back its foreign Ethiopia loans to save interest accumulation, however, US objected to early loan s s s s Ethiopians felt this was just another form of Ethiopians colonialism but to the IMF it was “standard operating procedure” operating IMF encouraged global financial institutions IMF provide loans and services provide Local poor farmers unable to secure Local necessary loans from these institutions necessary What is the marketplace? What s s s s s In Ethiopia farmers travel with goods to sell to In markets in towns (place where goods are exchanged for money) for Europeans did this in the middle ages Today’s “market” is more principle than place (ups Today’s and downs of the dollar) and The “marketplace” today refers to the world of The business and commerce business As a principle is looks at social relations between As people, countries and corporations people, Savings & Loans Scandal (S&L) (S&L) s s s Recession triggered by deregulation of US Recession banking system in the 1980’s banking Cost to taxpayers - $200 billion The government bailed out floundering banks The and big banks took over smaller, weaker ones ones Double Movement Double s s s s s s Capitalism is a double­edged sword. It generates goods and services in abundance but distributes them unevenly Capitalism produces negative social and environmental costs such as poverty and pollution During the 20th century - human rights, laws to control pollution, During public health promotion, safer work environments, health care, unemployment insurance, welfare, pensions, non-profit housing unemployment The belief was that the market was efficient at providing material The goods like cars etc but the government had to ensure all citizens access to basic services access Protecting the environment and looking out for workers’ best Protecting interests not a priority for companies interests Private enterprise, after all, contributed to pollution etc Polanyi describes the “double Polanyi movement” as “two organizing principles of society” with opposing goals goals s Laissez-faire and free trade vs. social Laissez-faire protection protection s Markets have a tendency to ignore Markets social and environmental effects social s Neo-liberalism Neo-liberalism s s s s In the 17th century “liberalism” referred to getting In away from the restrictions of kings and their governments governments Limited government, rights of citizens, freedom of the Limited individual, and tolerance of religion and values individual, Liberals: concerned with social change, rights of Liberals: everyone (women, non whites etc), distribution of wealth wealth Neo-liberals/Libertarians: emphasize freedom in Neo-liberals/Libertarians: market exchanges, concerned with a market free from government regulation than human liberties from Anti-Globalization movement Anti-Globalization Emerged by the end of the century s s s Corporations feel responsible to shareholders Corporations not society at large not Amnesty International: One of the NGO’s Amnesty fighting for rights and freedoms of poor Article 25 of the Vienna Declaration states “It Article is for states to foster participation by the poorest people in the decision-making process and in the promotion of human rights and efforts to combat extreme poverty.” s The anti­globalization movement organized campaigns to curtail greenhouse gas emissions and promote Third World debt relief Global Constitutions Global s s s s “Formal system of law and principles by Formal which the people of a state are governed” which Protects citizens’ rights and freedoms Can be equated with “Ten Commandments” Can of a country or the rules they live by of A constitution sets limits on the governments’ constitution powers powers Canada’s Charter of Rights and Freedoms Freedoms s s s s s Guarantees citizens certain rights that politicians, Guarantees parties, and governments cannot change easily. Includes Aboriginal rights and gender equality The economic constitutions (NAFTA etc) provide The similar rights and freedoms to private businesses, particularly transnational corporations dominating global commerce global Once this happens market forces regain freedom Once from public control from Governments are wary of involvement in international Governments trade disputes and do not concern themselves with worker and consumer protection or environmental Charters Charters s s s Similar to political constitutions, charters Similar establish the basic framework that govern the economy economy Economic charters govern a country’s Economic business, finance, production and trade business, Canada has adopted the following Canada international economic agreements: Free Trade Agreement (1989), NAFTA (1994) and World Trade Organization (1994) World NAFTA/WTO NAFTA/WTO s s s 1994 Mexico, US and Canada formed the world’s 1994 largest free trade area. Promoted economic growth and higher standards of living. Between 1993 and 2006 trade among the NAFTA nations climbed 198% from $297 billion to $883 billion. WTO - The only global international organization WTO dealing with the rules of trade between nations. (1995). It’s purpose is to promote free trade by persuading countries to abolish import tariffs and other barriers. other Canada and the US contested a European Union ban Canada on beef from cattle raised with growth hormones as they interfere with market forces. they Students Against Sweatshops Students Students organize to improve workers’ Students rights in the worldwide garment industry rights s Use negotiation and direct action to Use push for anti-sweatshop codes of conduct (fair work conditions) conduct s TRIPS (Trade-Related Aspects of TRIPS Intellectual Property Rights) Advocates for HIV/AIDS medicines for poor in Africa poor s Action Action s s s s Anti-viral drugs were widely available in industrial Anti-viral countries but were expensive globally countries It would cost over $10,000 per year for treatment and It at that rate Zambia would be spending 3 times its entire national income to treat ill people in that country country The campaign sparked international outrage over an The industry that was putting the rights of patent holding corporations over the health of sick people corporations The Transnational drug companies lowered their The prices as a result of this pressure prices s s s s According to free market economy theory, According competition keeps prices down. competition Generic version of drugs are cheaper than the Generic patented ones In 1998 the world spent $70 billion on health In research, of which only $100 million went on malaria research. Only 14 cents of these research dollars went to research into major killers in poor countries went Drug companies advertised to rich countries: Prozac, Drug Viagra (profitable brands) Viagra What about the poor? What s s s s Activists question why economic constitutions Activists don’t consult those harmed by the decisions don’t “development” can’t just mean economic development” growth (growth for whom?) growth Development must be just, sustainable and Development participatory participatory Development for 2/3 of the world’s poor has Development come to signify undesirable conditions come s s s “Mexican writer Gustavo Esteva describes a Mexican mindset in which people from the South are encouraged to believe in Planet Hollywood, to look down on what their own societies have as being somehow inferior to what the rich countries have to offer.” countries Is this “McWorld” development? Is it justice that indigenous cultures and Is societies are integrated into this world market? market? Russia Russia s s s s Russia’s market expanded after the fall of Russia’s communism communism Gangster capitalism followed (corruption) Few elite became super wealthy while more Few Russians experienced poverty Russians In 1989, 2% of Russians lived in poverty and In by 1998 it was 28.3%, with half the country’s children in poor families children s s Development requires the removal of what Indian economist Amartya Sen calls sources of “unfreedom” - poverty, tyranny, poor economic opportunities and social deprivation, neglect of health, education and other public facilities. other “The liberty to participate effectively in public The decision-making is a prerequisite for ensuring that the benefits get spread around equally.” that What about public debate? s Considerations Considerations s s s s Involve ordinary citizens in decision making process Involve around free trade Propose lowered tariffs for countries with social Propose protections similar to Canada’s social programs, environmental standards, right to form unions etc. environmental Those who experience the impact of globalization’s Those new economic constitutions should help design the rules rules Citizens play a role in addressing poverty and Citizens inequality inequality s Democratic development is key Democratic involve those directly affected involve ...
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