You are on page 1of 7

The Impact of Globalization on Hawaii

John Jesus Orr


November 7, 2012

Contents

The Impact of Globalization on Hawaii ........................................................................................................ 1


The Economic Impact of Globalization .................................................................................................... 2
Tourism ........................................................................................................................................................... 4
Human Capital ............................................................................................................................................ 5*
Opposition to Globalization ............................................................................................................................ 6*
Globalizations Continuing Contribution ................................................................................................... 9*
Exhibits .................................................................................................................................................................. XX
References ............................................................................................................................................................ XX

*Not included in the example

A beautiful sunrise framed against the Diamond Head crater, ukulele music, the hula, and
huge waves and surfers at Waimea Baythese are a few of the images that come to mind
when people think of Hawaii. Although small in land area and isolated 2,400 miles from the
U.S. mainland, Hawaii has a complex culture and a long-running relationship with
globalization.
Even the genes of the states inhabitants carry evidence of globalization. For example, one
individual can have ancestors from the Chamorro of Guam, a Samurai lineage from Japan,
and varying European peoples. The iconic Hawaiian instrument, the ukulele, is another
example of cultural mixing. The instrument so strongly identified with the islands isnt
Hawaiian. It was brought by Portuguese sailors in the nineteenth century and was
integrated into music that has roots going back 1,000 years.

The Impact of Globalization on Hawaii


Both Hawaiis culture and economy have been global for over 100 years and both have
thrived.
Hawaiis ethnic mix is representative of its geographic midpoint between the western
United States and the emerging yet ageless East. But so is its economy. From both
directions, east and west, have come not only immigrants but also people seeking
commercial ties. The influx of tourists and foreign immigrants has driven Hawaiis tourism
industry and enriched its human capital. In addition, flows of investment from the
mainland and foreign countries have fueled an important new industry, high tech.
However, globalization has become controversial in the state. The hard truth is that
wherever it occurs, globalization seems to have winners and losers. Native Hawaiians lost
their kingdom and some of them feel they have never been compensated for it.
Until the 1890s, the Kingdom of Hawaii was recognized as an independent state with a
ruling monarch. A coup detat led by immigrants, all U.S. citizens, and helped by Marines
deposed the reigning queen in 1893. Although the president of the United States criticized
the coup and the use of its armed forces, the new government was eventually recognized as

legitimate by the United States and other major countries around the world. American
citizens ran Hawaii and Native Hawaiians lost political power. The islands were eventually
made a U.S. territory and, in the twentieth century, a majority of Hawaiian citizens voted
for their home to become a state.
For over 100 years, native Hawaiians have fought vehemently to preserve claims to land
and their ancient culture. The U.S. Congress has been considering a bill that would create a
process for giving Native Hawaiians recognition similar to that accorded to Native
Americans on the mainland.

The Economic Impact of Globalization


For the majority of the population, globalization has had a positive socioeconomic impact,
primarily through tourism, human capital, and high tech. But it has also brought with it
significant risks.
Tourism
Tourism has historically been the single largest engine of growth for the economy; at
statehood, residents outnumbered tourists by 2:1 and now tourists outnumber residents
6:1. Tourism brings in $10 billion in state revenue, making it easily the strongest sector in
Hawaii. The strength of this dominating sector is also a vulnerability. Overreliance on
tourists from a small number of developed countries presents a high degree of systematic
risk; historically, the largest share of tourists hails from Japan. Hawaiis Economic Data
Department found that Hawaii has the least diversified state economy in the United States,
with only a 1.2 percent increase in degrees of diversification between 1990 and 2009.
Exhibit 11 shows that this is especially apparent in nonmanufacturing tourism-related
industries such as entertainment and nightlife.
As we can see in Exhibit 22, tourism decreased during 2008 and 2009 by 10.6 percent and
4.5 percent, respectively, during the global financial crisis. This shows that the tourism

Measuring Economic Diversification in Hawaii. Internet <http://hawaii.gov/dbedt/info/economic/data_reports/reports-studies/201112-diversification.pdf > Hawaii DBEDT: Accessed January 11, 2012.

Debt Forecasts (4Q 2011). Internet < http://hawaii.gov/dbedt/info/visitor-stats/tourismforecast/Forecast_Arrival_1Q2011.pdf >


Hawaii DBEDT: Accessed January 11, 2012.

sector in Hawaii is highly sensitive to global market risk. It is one thing to have an economy
highly skewed to one sector, but it is another thing to have that sector largely depend on
one foreign economyJapan.
Paradoxically, globalization has started to ease this vulnerability. With economic growth,
shares of tourists from Canada, Australia, and China have recently increased between 10
and 25 percent.3 Globalization has therefore helped the economy of Hawaii through
growing the number of countries tourist travel from, thereby decreasing overexposure to
single economies.

Bank of Hawaii Offers a Safe Port. Internet:


<http://online.barrons.com/article/SB50001424052702304133804576560534020892142.html?mod=BOL_twm_da >
Accessed January 12, 2012.

Exhibits
Exhibit 1

The Diversification of the Hawaiian Economy, 19902009

Exhibit 2

Visitor Arrivals in Hawaii by Air

References
Measuring Economic Diversification in Hawaii. Internet
<http://hawaii.gov/dbedt/info/economic/data_reports/reports-studies/2011-12diversification.pdf > Hawaii DBEDT: Accessed January 11, 2012.

Debt Forecasts (4Q 2011). Internet < http://hawaii.gov/dbedt/info/visitorstats/tourismforecast/Forecast_Arrival_1Q2011.pdf > Hawaii DBEDT: Accessed January
11, 2012.

Bank of Hawaii Offers a Safe Port. Internet:


<http://online.barrons.com/article/SB5000142405270230413380457656053402089214
2.html?mod=BOL_twm_da > Accessed January 12, 2012.