Chapter Six

Globalization and Sustainable Development

6.1. Meaning of Globalization

 Globalization can be defined as the transfer of
technology, trade, finance, communication,
social systems, culture and patterns of living
across the national boarder.

 Globalization is a process of economic, political and

cultural integration and unification.
 The implications of the globalization concept can be
expressed as:

• International interdependence or international integration is

growing;

• Trade, global financial flows, technology, international

convergence of real wages are the main aspects of
globalization;

• Globalization involves free trade agreements.

 6.2. Dimensions of Globalization
 The dimensions of globalization include:
i. Economic globalization- economic interrelations around
the globe.
ii. Political globalization- intensification and expansion of
political interrelations around the globe
iii. Cultural globalization - the intensification and
expansion of cultural flows across the globe
iv. Ecological globalization - global environmental issues
v. Ideological globalization - way of looking at the world
in specific terms.
vi. Technological globalization: Convergence of the
world with expansion of communication &
transportation technologies.
6.3.Genesis of Globalization/Waves of globalization

 The first wave:

 Spanning the period 1870-1914
 Triggered a massive increase in the flows of
goods, capital and labor
 Exports relative to world income nearly doubled
 Foreign capital more than tripled relative to
income in the colonies and developing countries
 Migration boomed
 Genesis of globalization cont’d
 The second wave:
The period after the Second World War - roughly
spanning 1950 to 1970
It is also known as the Golden Age of economic
development
The term Third World was being given for
developing countries
Promoted economic integration of Europe, North
America, and Japan
 Most developing countries remained trapped in
primary commodity exporting and were largely
isolated from international capital flows.
 Second wave cont’d
 The countries belonging to the Organization of
Economic Cooperation and Development (OECD)
economically converged.
 The gap between rich and poor countries continued to
increase.
 Development assistance was introduced - in the form
of a continuation of former colonial relationships.
 Aid was used by the superpowers as an instrument to
gain Third World support in the fight against
communism or capitalism.
 Genesis of globalization cont’d
 The third wave:
 This started around 1980 and is continuing till today

 It was encouraged by a lowering of tariffs, technological advance in

transport and communication technologies.

 It was also stimulated by the choice of large developing countries,

notably China and India, to improve their investment climates and to
open up to foreign trade and invest­ment.

 For the first time, poor countries were able to use the potential of
their abundant labor to break into global markets for manufactured
goods and for services.

 The more globalized developing countries have increased their per

capita growth rate.
 6.4. Debates on Globalization

 Three scenarios of globalization for African

countries:
1. The pessimistic scenario
2. The moderately optimistic scenario
3. The radically optimistic scenario
 Debates on globalization
1. The pessimistic scenario :
 African states are unable to progress from “guarding the
gate”
o This situation will continue for generations to be weakened by
internal conflicts and inter-state wars.
 External pressure on Africa’s resources will increase,
primarily from China, India and Japan, in competition with
Western firms.
o As a result, huge assets are taken from the continent
without any positive spillover.
 The new superpower of China will have a negative political
influence.
 Globalization continues while Africa and other developing
countries remain marginalized.
 Debates on globalization
2. The moderately optimistic scenario:
 New opportunities for African to overcome old-aged
communication problems.
 Exports of raw materials at higher prices provide growing
and relatively stable government revenues
 Open access to Western markets for export
 Security for investors is increased through more effective
rule of law, financial reforms and anti-corruption measures
 The regional organizations will be strengthened .
 China could have a positive influence; Chinese demand and
investments are beneficial and create new opportunities for
African and other developing states.
 International development assistance is maintained at a
stable level.
 Debates on globalization
3. The radically optimistic scenario:
 Represents a new vision, a new approach to developing countries’
problems;
 Globalization brings the countries of the world closer together;
 Countries are more dependent on each other, and consequently are in
greater need of collective action.
 Reformed globalization is needed, where international measures are
used to strengthen the use of common goods.
 Global identity will be ensured – every citizen will think him/her self
like all other people and citizen of the world.
 Global social contract – rich and poor countries bind each other to
commitments in the interest of the common global good (aid, investment,
trade, migration, climate change, etc)
 Global justice – narrowing the gap between poor and rich; reducing the
vulnerability of poor to adverse shocks; ending hunger, starvation,
disease, exclusion, violence, etc.
 6.5. Advantages and Disadvantages of Globalization
 Generally, globalization has the following advantages and
disadvantages:
A. Advantages of Globalization
• Bring economic efficiency and prosperity to the entire world;
• Remove trade barriers and make local industries more efficient and
effective;
• Increase the mobility of foreign capital;
• Create strong bondage among countries through the revolutions in the
technologies of transport, travel, communications, and information systems.
• Resources of different countries are used for producing goods and services
they are able to do most efficiently.
• Consumers to get much wider variety of products to choose from.
• Consumers get the product they want at more competitive prices.
• Companies are able to procure input goods and services required at most
competitive prices,
• Businesses and investors get much wider opportunities for investment, etc.
 Advantages and Disadvantages of Globalization
Cont’d
B. Disadvantages of globalization
 Developed countries can stifle development of undeveloped
and under-developed countries.
 Economic depression in one country can trigger adverse
reaction across the globe.
 It can increase spread of communicable diseases.
 Companies face much greater competition.
o This can put smaller companies, at a disadvantage as they
do not have resources to compete at global scale.
 Loss of culture - Most of the people choose the well
advanced world rather than to live just like the way before.
 Environmental Degradation: Most companies often destroy
the land which often contains lots of minerals and resources.
6.6.The Role of Global Institutions in Development
 Today’s globalization era necessitates thinking globally even
though we need to act locally.
 Five important global conferences have produced resolutions,
agreements and commitments for globalization and
development :
1. The Global Compact
o Formed in 1999
o By UN and business leaders
o Focused on advancing the contribution of corporations to
development action
o Focused on corporate social responsibility (CSR)
o It emphasized a voluntary compliance and learning
approach, rather than international regulation.
 The Role of Global Institutions in Development

2. The Doha Meeting on Trade and Development

 The Doha Ministerial meeting of the World Trade
Organization in 2001 was intended to strengthen the
development role of opening up global trade.
 The World Trade Organization (WTO) is the global body established
to regulate trade relationships and mediate in trade disputes.
 Generally accepted that appropriate reform in trade
conditions is needed.
 Focused on strengthening the development role of opening
up global trade.
 Paid attention to the concern of developing countries.
 Developing countries demanded for Special and
Differential Treatment .
 The Role of Global Institutions in Development

3. The Monterrey conference

 Held in 2002.
 Brought together governments, civil society organizations,
the business community and institutional stakeholders on
global economic issues.
 Committed to the question ‘how can development be
financed’? - particularly in relation to MDGs.

 Focused on increasing donor allocations to development

budgets and on reducing the debt burden of developing
countries.
 To increase the commitment of governments of developed
countries to support poor countries - US & EU.
 The Role of Global Institutions in Development
4. The Johannesburg Summit on Sustainable Development
(JSSD)
 The Johannesburg Summit on Sustainable Development
held in 2002.
 Focused on how to align and apply economic and social
development with environmental protection.

 UN launched a WEHAB initiative focusing on five

thematic areas: water, energy, health, agricultural
productivity and biodiversity
 The meeting was both to assess progress of the 1992
meeting in Rio de Janeiro and to agree on an updated
plan of implementation to guide future financing,
partnerships and development priorities.
 The Role of Global Institutions in Development
5. The Copenhagen Climate Summit:
 Fifteenth Session of the Conference of the Parties to the
United Nations Framework Convention on Climate Change was held in
December 7-18, 2009, Copenhagen, Denmark .
 It is the fifth Session of the Meeting of the Parties to the
Kyoto Protocol- adopted in Kyoto, Japan on the 11th of December,
1997, to help combat the adverse effects of climate change, or global
warming.
 The Copenhagen Accord represents an important milestone
in international efforts to address climate change.

 For the first time, the US, China and all other major
economies have committed to take concrete and verifiable
action to reduce greenhouse gas emissions; new money
source and keeping global temperature increase.
 The Role of Global Institutions in Development
5. The Copenhagen Climate Summit:
 Key elements of the Copenhagen Accord include:
 an aspirational goal of limiting global temperature increase to 2
degrees Celsius;
 a process for countries to enter their specific mitigation pledges by
January 31, 2010;
 broad terms for the reporting and verification of countries’ actions;
 a collective commitment by developed countries for $30 billion in
“new and additional” resources in 2010-2012 to help developing
countries reduce emissions, preserve forests, and adapt to climate
change; and
 a goal of mobilizing $100 billion a year in public and private finance
by 2020 to address developing county needs.
 The accord also calls for the establishment of a Copenhagen Green
Climate Fund, a High Level Panel to examine ways of meeting the
2020 finance goal, a new Technology Mechanism, and a mechanism
to channel incentives for reduced deforestation.
 6.7. Development Policies in Africa

 In the case of Africa, there are two areas of policy:

1. Africa Growth and Opportunity Act (AGOA)

2. The New Partnership for African Development

(NEPAD)
 Development Policies in Africa
1. Africa Growth and Opportunity Act (AGOA)
 It is a legislation that has been approved by the USA
congress in May, 2000.
 The purpose of this legislation is to assist the economy
of Sub-Saharan Africa and to improve economic
relationship with the US and the region.
 AGOA extended market access to textile and apparel
goods into the US though many other goods are
included .
 Offers tangible incentives for African countries to
continue their efforts to open their economies and build
free market.
 African Development Policy cont’d

2. New Partnership for African Development (NEPAD):

 NEPAD is a vision and a socio-economic development

framework for Africa.

 The need of African countries has necessitated the

transformation of the Organization of African unity (OAU)
into the African Union (AU) in 2002 and adopted the New
Partnership for Africa’s Development (NEPAD).
 The Primary Objectives of NEPAD
• To eradicate poverty;

• To place African countries, both individually and

collectively, on a path of sustainable growth and
development;

• To halt the marginalization of Africa in the globalization

process and enhance its full and beneficial integration
into the global economy;

• To accelerate the empowerment of women.

 6.8. Sustainable Development

6.8.1. Meaning of Sustainable Development

 Sustainable development is “Development that meets

the needs of the present without compromising the
ability of future generations to meet their own needs”.

 Sustainable Development is a development that is

maintaining a balance between the human needs to
improve lifestyles and feeling of well-being on one
hand, and preserving natural resources and ecosystems,
on which we and future generations depend.
 Sustainable development cont’d
6.8.2. The dimensions of sustainable development and
the 3-pillar model
 Sustainable development encompasses three
dimensions or three pillar models:
1). Environmental (conservation),
2). Economic (growth), and
3). Social (equity)
Figure 6.1: The three pillars of Sustainable Development

SOCIAL SOCIAL ECONOMIC

Equity & ECONOMIC
WELFARE
Efficiency DEVELOPMENT

Sustainability

Habitability & Carrying Capacity

Accessibility

ECOLOGICAL INTEGRITY

ENVIRONMENTAL
1). Environmental sustainability
 Environmental sustainability includes the management of
elements like: Climate change, Air pollution, Ozone depletion,
Oceans, Freshwater, Wildlife, Soil, Land use, Waste,
Radioactivity, Noise pollution, and Light pollution.

2). Economic sustainability

 To make the economy sustainable, investment needs to be
increased; stability promoted; the skills of the work need to be
improved and workers empowered and rewarded.

 Economic sustainability includes the elements: energy,

transport, employment, poverty reduction, investment;
competition and stability, business and industry, trade,
tourism, etc.
3. Social sustainability

 The goal with social sustainability is a sense of social cohesion,

cultural inclusion and people empowerment.

 The key elements within the social sustainability pillar are:

culture, health, education and skill, communities, housing,
crime prevention, recreation, consumption, food safety, etc.
6.8.3. Dominant Views on Sustainable Development

 The objectives of sustainability require the protection of the

natural resource based upon which future development
depends.

 It seeks to reconcile the ecological, social and economic

dimensions of development, now and into the future, and
adopts a global perspective in this task.

 It aims at promoting a form of development that is contained

within the ecological carrying capacity of the environment,
which is socially just and economically inclusive.
 6.8.4. Promoting Sustainable Development at grass
root level
 In order to promote sustainable development at grass root
level, it is important to consider the elements like:
A). Context and Local Knowledge
 The local people irrespective of how poor they are, usually
have the appropriate information about any development
program that is suited to their particular conditions.

o It is not up to the outsiders to prescribe to the local

people what the local priorities are in terms of
development.

o The local people are the experts in their particular

area and the value of their knowledge should not be
undermined.
 Promoting Sustainable at grass root level

B). Participation and Local choice

• Collective participation of the local people should be

considered to unlock the collective knowledge of the social
and ecological system.

• The process of participation should be managed in an open

ended way to ensure that there is continued space for new
inputs in the process.

• The local people should have the choice to determine their

own destiny.
 Promoting Sustainable at grass root level
C). Devolution of Power
• To enhance effective local knowledge and participation in
the local development efforts, the local people should have
access to decentralized institutions at the local level to
honor their priorities.
• The local institutions should empower local people to
tackle many issues collectively through the application of
their own knowledge and skills.
• Local communities should enjoy a partnership approach to
development with formal development institutions and
informal community based organizations.
• The formal development institutions should be able to
reach the people with appropriate information through mass
media, and creating links with community based
organizations.