Debate on globalisation

Personas:

Exponents of Globalisation

Jagdish Bhagwati- In defence of globalisation

Critics of Globalisation

Marxist scholars and scholars with left leanings -Emmanuel Wallerstein (world system theory),
Noam Chomsky (Profit over people), Arundhati Roy (Capitalism: a ghost story), George Heine
and Prof. Ramesh Thakur (Dark side of globalisation)

Those who support Globalisation but are critical of present form of globalisation

Joseph Stiglitz, Amartya Sen, Pratap Bhanu Mehta.

Arguments in favour of Globalisation

Prof. JC Bhagwati in his book ​In defence of globalisation​ has provided quantitative as well as
qualitative analysis of globalisation. According to him, those who oppose globalisation are not
economists but psychiatrists. Globalisation has brought unprecedented level of growth to the
poor countries and poor people. Growth is trickling down Inequality has started diminishing. For
the first time in centuries, there is a reversal of the trend.

In support of globalisation, following data can be given-

● Percentage of people living in developing countries below 1 USD per day has become
half in only last twenty years.
● Life expectancy has almost doubled in developed world.
● Child mortality has declined in every developing region. Global literacy was 59% in 1970,
it is 80% in 2000.
● JC Bhagwati admits that globalisation in itself doesn't offer solution. Variety of steps has
to be placed to ensure that globalisation reaches to its logical end. Globalisation if
properly governed is the most powerful source of social good today.
Arguments against Globalisation

According to ​Emmanuel Wallerstein,​ the present phase of globalisation is actually the

continuation of the beginning of the capitalist exploitation which started in 17th century. It is just
a new name. According to him, poverty in Africa or wars in Balkans is all because of capitalists
search for markets and accumulation of capital. According to him, we are passing through the
phase when capitalism is going to collapse because of its contradictions.

According to him, humanity has only two options- socialism or barbarianism. He points toward
the rising anti globalisation movements around the world because of the growth of inequalities
and miseries around the world.

According to ​Noam Chomsky,​ the damages of globalisation aren't just limited to the developing
countries but even people in America are sufferers. There is a distinct decline in educational
and health programs. According to him, the states in capitalist countries can go for even wars
for the protection of the interest of its corporate classes. Many Americans have lost their lives
since 1991. According to him, US Security policy is a pretext for subsidizing the transfer of
taxpayers funds to major arm dealers.

George Heinz​ and ​Prof Ramesh Thakur​ in their work have presented the impact of
globalisation on the developed as well as the developing world. According to them,
Globalisation is the soft underbelly of capitalism. According to them, we haven't reached the end
of history but we are coming closer tot he end of geography. The development assistance from
North to south in the last two decades has been on average 50-80 billion USD per year whereas
there is a per year movement of goods worth 500-800 billion USD just from illegal channels from
poor countries to rich countries. Wage share has fallen, profit share has increased. Bargaining
powers of workers have declined. Labour rights have been diluted and property rights have
been strengthened. There is a weakening of social and economic rights.

Globalisation has adversely effected economic sovereignty, cultural integrity and social stability.
Globalisation has given rise to ​uncivil society​ ie. rise of trans national organised crimes.

The three Baltic states have registered double digit negative growth in 2009.

In Africa, the number of LDCs remain constant. Overall the number of LDCs have increased. In
Africa, illegal mineral exports, drug trafficking, gun running, terrorism has increased. Guinea
Bissau has become world first narco state.

Joseph Stiglitz​ in his book ​Globalisation and its discontent and making globalisation work​ he
has highlighted the growth of interstate and intra state inequalities because of globalisation. He
has highlighted the hardships faced by the people in countries of south. He has pointed towards
a democratic deficit​ of the institutions of global governance and suggested to bring transparency
and represntativeness in these institutions like IMF, World Bank, UNSC.

In his recent article, ​Globalisation and its new discontent,​ he has shown increasing protest
against Globalisation in developed countries. His study show that median income for full time
male workers in USA is actually lower in real terms than it was 42 years ago. Real wages at the
bottom are comparable to the wages sixty years ago. Not just incomes are moving in the wrong
direction, but health, education, statistics are also moving in wrong direction. The winners of
globalisation are 1% of the world's plutocrats and middle classes emerging economy. Those at
the bottom in developed and developing countries, middle classes in developed countries have
been adversely impacted.

Amartya Sen​ suggested that the countries which opted out of globalisation are in the worst
situation then those which join the globalisation. However he admits that globalisation has not
resulted into inclusive growth and recommends that state should invest in the capacity building
of the people.

Effects on developed countries

● Rising inequality
● Worst effected are middle classes and working classes
● Income stagnation
● Decline in health and educational standards
● Protectionism
● Racism
● Right of right, rise of left
● Globalisation has also effected the physical security (increasing terrorist attacks ) and
not just economic security.

G20 Summit in China​ has acknowledged the problems that have come up because of
globalisation and has urged countries to strengthen and open world economy rather than going
for protectionism. It admits that there is the need to build an inclusive world economy to make it
a win win situation.

G20 Summit​ will take place on July, 2017 at Gamburg, Germany. The government of Germany
has brought paper highlighting the priorities of G20 summit. Paper recognises the problems of
hunger, geo political conflicts, natural and climate or health disasters. It accepts that global
economic growth remains weak. It recommends to strengthen economic resilience, global
financial safety net, enhance and improve employment promotion of health, improve food
security, address displation and migration and intensify participation with Africa.

Role of Transnational Actors

Types of actors in international politics

● State actors
● International actors
● Trans national actors (actors acting beyond borders)

Is there any role of transnational actors in international politics?

It is a debatable issue. It depends on the schools of thought.

Realists : ​Realism is a state centric view. It doesn't give importance to transnational actors. At
max, they can be said as proxies.

Liberals​ : Optimistic view. Transnational actors have been the source of modernisation,
development in the third world and the factor of stability and peace. They appreciate the role of
MNCs and non governmental organisations.

Feminists :​ They are critics of state centric view but they are also not positive about the role of
MNCs. Consider them as a source of exploitation specially by women in third world countries.

Marxists :​ They criticise realists for purposefully misguiding. MNCs and NGOs have been
working since beginning but realists don't want them to attract the limelight. According to
Marxists, MNCs and NGOs have been working in the interest of the elite class in western
countries. Instead of development, they have been the cause of underdevelopment and poverty,

Present situation :​ There has always been the role of transnational actors but the role has
increased considerably in recent years.

Views of Joseph Nye :​ International Politics at present look like ​three dimensional chessboard.
 ● First Dimension : Military power, world is unipolar.
● Second dimension : Economic power, world is multipolar.
● Third dimension : social power, world is diffused.

States are not in a position to control the social power which has got diffused throughout the
society because of

● IT revolution
● Growth of democracy
● Consciousness of human rights.

Hence in present times, there is a greater role of soft power, public diplomacy and transnational
actors.

Multinational Corporations

Analyse from different schools of thought.

Role of MNCs has always been the issue of political controversy. Joseph Nye in his article
MNCs : the game and the rule​ published in Foreign Affairs has given the analysis of their role.

The key points on the role are

● As world has become multidimensional, there is increase in their role.

● There is a dramatic increase in the number.
● Earlier, it was limited to the western world but now developing countries also have
MNCs. MNCs of china, India, Ventura challenge western countries in oil and gas sectors.

MNCs have not only played role in shaping economic policy, but also been involved in
deomestic politics. At times, MNCs use their mom countries for economic leverage and mother
countries use MNCs for geo political advantages.

Role of MNCs has been a matter of criticism especially from developing countries. In 1973 itself,
UN has set up a committee under UN ECOSOC to analyse the role of MNCs in developing
countries. In the decade of 70s, opposition to MNCs was one of the major programs NAM
countries. NAM countries has adopted the resolution called New International economic order.
One of the major attacks was on the role of MNCs.
In present times, MNCs are playing multiple roles. At times, it has also brought some positive
changes like the source of capital, creation of employment, transfer of technology and financing
charitable activities.

Non Governmental Organisations

● Role of NGOs are as old as MNCs. For instance, with East India Company came the
Christian missionaries as a soft face of the British empire.

● MNCs and NGOs work in close cooperation.

● NGOs are the beneficiaries of funding by MNCs.

● Still there is a domination of western countries. Some NGOs like Amensty International
has more budget and more more personnel than the combined GDP of many small
countries.

● Amensty International and Red Cross have also been awarded the novel peace prize.
US has used NGOs to build its soft power.

● Article 71 of UN charter acknowledges the consultative power of the NGOs and they are
associated with UN ECOSOC.

● Countries like Russia, China and at times even India have taken stance against these
advocacy groups. These groups put considerable challenge in the exercise of
Sovereignty by smaller states.

Role of Terrorist Actors

Terrorist organisations have become major non conventional security threats. The role of
terrorist organisations isn't new. It has always been a part of foreign policies of communist
governments to use left wing guerrillas as well as USA to use non state actors.

Much of the transnational terrorism is concentrated in Middle East. One of the earliest
recognised terrorist organisations has been PLO. After Arab countries couldn't win in direct war
against Israel, they started promoting terrorist organisations.

USA has used Islamic fighters than USSR during Cold War. In recent times, there has been a
considerable increase in the physical and ideological powers of these non state actors. They are
proving to be Frankenstein's monster even for the western countries.

Role of terrorist actors has increased considerably after the end of Cold War. US analyst John
Levis Gaddis had warned that we are killing a python but we are giving rise to numerous
poisonous snakes.

In recent times, there is also a fear of nuclear terrorism. Terrorist actors have forced countries to
cooperate with each other. One of the major formal objective of SCO is to fight against terrorism
and extremism. Obama government has started an initiative known as nuclear security Summit
to check the proliferation of nuclear weapons in the hands of non state actors.

New International Economic Order

● Purpose : Poverty in south

● Theoritical basis : Dependency school

● Historical context​ : Oil diplomacy used by Oil producing countries of Middle East to
pressurise the western countries to withdraw support from Israel.

NAM adopted it as a program in Algiers Summit, 1973. NAM countries kept on presenting
the agenda at UNGA and UN Conference on Trade and Development (UNCTAD)

● Demand​ :
○ increase the prices of goods exported by poor countries .
○ Enforce discipline on MNCs
○ Transfer of fund and technology
 ○ Countries go for autonomous national development.

● Outcome​ : No achievement

● Cause of failure :
○ was a lack of solidarity among third world countries
○ other commodities have bargaining power like that in case of oil
○ Gulf countres never provided leadership

● India was a major advocate of NIEO as a basis of solidarity in south, which earned India
the title of ​trade union leader.