GLOBALISATION

Globalisation

Globalisation

Introduction

Globalisation is a long-term historical process of world integration involving social, economic and political changes as a result of technological advances. As McLuhan (2001) says, "The concept is of one being connected by an electric nervous system within which the actions of one part will affect the whole".

Globalisation, intended as the removal of barriers to free trade and the closer integration of national economies, can have the potential to enrich everyone in the world. However, the mismanagement of the processes of privatisation, liberalisation and stabilisation has led to more people worse off now than they were before. Furthermore this mismanagement has caused a serious deterioration of the environment and created great global economic instability.

While the development of China shows that a gradual integration can produce better results, the creation of a trading bloc with a strong tradition of social protection, the EU, has not yet proved a challenge to the USA led anti-social policies accompanying globalisation.

Benefits

The three main institutions that have been governing globalisation - IMF, WB and WTO - point out that the free market policies of the Washington Consensus have brought enormous benefits to global competition through the reduction of costs of transportation and communication, the breaking down of artificial barriers to the flows of goods, services, capital, knowledge, and (to a lesser extent) people across borders (Stiglitz, 2002). However, for these institutions this is a marked ideological change.

In particular, nowadays the IMF points out that the 20th century saw unparalleled economic growth, with global per capita GDP increasing almost five-fold. Furthermore the developing countries that have been able to integrate (mostly East Asian) experienced faster growth and reduced poverty (IMF, 2002).

Drawbacks

On the other hand, globalisation has widened inequalities. The share of the poorest fifth of the world's population in global income has dropped from 2.3% to 1.4% over the past 10 years. Meanwhile the proportion taken by the richest fifth has risen from 70% to 85%. In Africa and Latin America most countries have lower incomes per capita than two decades ago (Castells, 2000).

Along with expanding inequality, the most serious issue facing world society is ecological deterioration. In fact, in many developing countries, safety and environmental regulations are virtually non-existent. By taking advantage of these flaws in international legislation, some TNCs are also selling goods to developing countries that are banned in the home countries (Stiglitz, 2002).

Mismanagement of The Process

The anti-globalisation movement claims that capitalism has ...