Caribbean Studies

What is globalization?
Globalization is the process whereby “flows of trade, finance and information between countries are broadened
and deepened so they function as one global market.” (Mohammad, 2007)
Globalization- refers to the growing economic integration of the world through the removal of barriers to trade,
investment, capital, information as well as goods and services. (Beckford, 2006)

 Globalization is a process that has been going on for decades from as early as the nineteenth and
twentieth century. Today with the rapid spate of inventions and developments associated with the
microchip and microelectronics, information and communication technologies (ICTs) are driving the
globalization process as never before, Digital technologies, the Internet and cell phones truly operates
as if the world has no borders. Globalization makes the idea of a nation state an illusion.
 What is a truly globalized world is one in which there is a level playing field between all the players on
the world stage
Technology and Globalization

The Information and Communication technologies (ICTs) are the driving force behind the process of
globalization. Two of the most dynamic technologies that regulate the process are cell phones and the internet
which touches all income groups across borders.

 The giant state- owned telephone companies in the region are no more with competition from
companies such as Digicel, Flow, Lime and Claro which offer better prices coupled with the fact that
they now offer high speed internet services. As such, this places high demands on the old companies to
improve the quality of their services offered to local citizens.
 The ICTs have necessitated changes in the way companies operate, so one may question the extent to
which capitalist organizations can tolerate a truly global world. For example, the old monopolies of the
telecommunication authorities have had to be dismantled and are no longer profitable as before.
 Computers too are less expensive and are more accessible to more income groups.
 The ICTs have also facilitated the internationalization of trade, finance and transportation.
 These technologies allow people to communicate in “real time”- there are no delays. Cell phone
technologies, e- mails and chat rooms allow instant communication anywhere in the world.
 Business and industry have been quick to see the advantages of incorporating these modern
communications technologies into their operations. Not only do they enable businesses to communicate
with suppliers and customers in a timely way but computer technologies have now become an
indispensable part of production and manufacturing.
 In the World Bank’s Report on Development ( 2005) the example is given of a small group of
businesses, known as Unique Jamaica, which was able to put ICTs to work for them in novel ways.
This group of small hoteliers and tour operators needed to boost their productivity. They thus designed
tour packages around the themes of nature, culture and culinary practices. The ICTs were utilized in
marketing campaigns and from this they created a web based booking engine which helps them to
generate businesses

1
Negative Effects of Globalization
 The region is forced to adopt liberal economic model or be left out in the cold
 Erasure/ hybridization of cultures, values and norms via the influence of the foreign media.
 No preferential trade agreement
 Destruction of local production base.
 Increase inequality of income distribution

Positive Effects of Globalization

 Provide new opportunities for competition in the global market place.
 Increased access to markets for goods
 Free movement of capital
 Competitive production of goods and services
 Force local businesses to become efficient
Key concepts to Know
 Regionalism: is a political ideology that focuses on the interests of a particular region or group of
regions, whether traditional or formal (administrative divisions, country subdivisions, political
divisions, subnational units). Regionalism centers on increasing the region's influence and political
power, either through movements for limited form of autonomy (devolution, states' rights,
decentralization) or through stronger measures for a greater degree of autonomy (sovereignty,
separatism, independence)
 Globalization- refers to the growing economic integration of the world through the removal of
barriers to trade, investment, capital, information as well as goods and services. (Beckford, 2006)
 Internationalization- This describes the present programmes and policies of international institutions
such as the World Bank, the International Monetary Fund (IMF) concerning flows of capital, finance
and trade. It is a process conceived of as interactions between nations or countries.
 Information and Communication Technologies (ICTs):- this is the networking of computers and
other digital technologies into integrated mass information, communication systems and databases.
 Multilateral Agencies- these are institutions where many members can participate on an equal footing.
There must be some consensus among all participants. Examples of multilateral corporations are the
World Bank, The IMF and the WTO.
Facilitators of Globalization
World Trade Organization (WTO)
 Recently formed in 1995 after the demise of the General Agreement on Tariffs and Trade (GATT).
 Its headquarters are in Geneva (Switzerland) and it has about 148 members.
 It not only regulates trade in goods and services among nations but it includes services such as
telecommunications and banking.
 Its task is to remove all barriers of trade anywhere in the world which is part and parcel of
internationalization.
 It overseas the rules of trade and to arbitrate disputes arising from these rules.

2
  It promotes a forum for trade negotiations
 Irrespective of this the WTO is criticized for its favoritism shown to transnational corporations and
developed nations.
 The idea of free trade works in tandem with their desires of gaining wealth for themselves while poor
nations suffer.
The World Bank
 This was established after the Second World War
 It was formally known as the International Bank for Reconstruction and development (IBRD)
 Its headquarters are in Washingston, DC, and there are some 184 member countries.
 The bank is involved in providing finance for projects to promote development.
 Its emphasis is to reduce poverty.
 It provides long term loans to developing nations to promote equity and productivity in education,
health, agriculture and industry.
 The bank has been criticized by others as a “tool of western imperialism.” This is due to its
unconditional endorsement of the internationalization of markets through trade liberalization policies as
the path to economic development.
 These policies only benefit the richer countries because they can take more advantage of the free
markets of the developing countries.
 It is US bias say critics.
The International Monetary Fund ( IMF)
 This is an international lending agency/ organization based in Washington that provides short term
loans to its 184 members.
 Plans for the IMF were drafted in 1944 at the Bretton Woods Conference in Newhampshire and began
operation in 1947.
 Its focus is on fostering global monetary cooperation and ensuring financial stability worldwide
 It extends not only loans but technical assistance to expand trade, and to help countries promote
exchange stability and manage their balance of payments problems.
 It helps countries to control their debts and give advice to policies most likely to encourage stable
exchange rates and economic growth.
 The standardized solutions that the IMF suggests are austerity based. For example:
1. Keep interest rates high to stabilize the currency
2. Devalue the currency in order to boost exports and this will help to decrease imports,
which becomes more expensive
3. Reduce government spending, especially in non- productive sectors such as health and
education and social welfare, and increase taxes
4. Sell public and state owned corporations, especially utility companies, to private owners as
they are a drain on public purse.
 The austerity base measures are popularly known as “structural Adjustment Policies” (SAP). The
implementation of these programmes has resulted in widespread unemployment and increase in
poverty.

3
  The IMF has made huge profits in restructuring loans for debtor countries.
 The removal of subsides on basic food items, laying off of workers through downsizing hurt the poor in
developing countries.
 Caribbean countries lose their sense of autonomy as lending agencies dictate how funds ought to be
used
 Provision of aid creates a cycle of dependency which is difficult to break.
Transnational Organization (TNCs)

 Transnational Organisations/ Transnational Corporations are mega franchises and multi- million profit
businesses that spawn international boundaries.
 They have operations in every continent, with multiple and regional headquarters all in coordinated
cooperations.
Examples of TNCs

 GlaxoSmithKline
 Diageo
 ABB
 PepsiCO
 Nestle’
 Cable and Wireless
 Scotia Bank
 Johnson & Johnson
 Exxon Mobile
 KPM
The Economic Partnership Agreement (EPA)
the Economic Partnership Agreement is a preferred trade arrangement between countries and is intended to
facilitate free trade. Specifically was developed as a response to the rejected non- reciprocal and discriminating
preferential trade agreement offered by the European Union (EU) to African, Caribbean and Pacific Countries
(ACP) countries.

CARIFORUM (Caribbean Forum of African, Caribbean and Pacific States)

 The CARIFORUM region include 15 countries.

 Before CARIFORUM, trade between the European Community as it was then called (now the EU) and
some Caribbean states was governed by trade agreements known as Lome Convention.
 This organization was established in 1992 by agreement of the European Commission (EC) and
Caribbean ACP states jointly to accommodate two non- CARICOM members at this time- Haiti and
the Dominican Republic- to benefit from the new trade agreement that was being negotiated to replace
the previous one. These trade agreements opened up new access to the European Market for Caribbean
countries who signed to the EPA.