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Transcript
IV – Working Group : Globalisation/Delocalization.
IV – Groupe de travail : Mondialisation/Délocalisation.
IV – Gruppo di lavoro : Mondializzazione/Delocalizzazione.
Globalization/De-Localization
Andrzej Potocki – rapporteur (SD) – Poland
Bruxelles, 11-12/11/2010
4ème Congrès
4° Congresso
4th Congress
Andrzej Potocki
Stronnictwo Demokratyczne – The Alliance of Democrats
International Secretary
GLOBALIZATION / DE-LOCALIZATION
Report of the EPD Working Group
…a good part of globalization consists of an enormous variety of microprocesses that begin to denationalize what had been constructed as national —
whether policies, capital, political subjectivity, urban spaces, temporal frames,
or any other of a variety of dynamics and domains… (Saskia Sassen, Territory,
Authority, Rights…)
1. The definitions and descriptions
Globalization describes a process by which regional economies, societies, and
cultures have become integrated through a global network of communication,
transportation, and trade. The term is sometimes used to refer specifically to
economic globalization: the integration of national economies into the
international economy through trade, foreign direct investment, capital flows,
migration, and the spread of technology. However, globalization is usually
recognized as being driven by a combination of economic, technological, sociocultural, political, and biological factors. The term can also refer to the
transnational circulation of ideas, languages, or popular culture through
acculturation.
Globalization as the international system replaced the Cold War system. It
relies on two principles:
Firstly, the idea that freedom, human rights and democracy are the most
efficient means of sustaining growth and development.
Secondly, globalization implies a panel of policies based on the Washington
consensus: fiscal discipline, a redirection of public expenditure priorities
toward fields offering both high economic returns and the potential to improve
income distribution, such as primary health care, primary education, and
infrastructures, tax reform, interest rate liberalization, a competitive exchange
rate, trade liberalization, liberalization of inflows of foreign direct investment,
privatization, deregulation (to abolish barriers to entry and exit), secure
property rights and so on.
In short, globalization is the integration of democracy, legal reforms, capital,
technology, and information across national borders, in a way that is creating a
single global market and a global village. As a result, there is an increase in
global wealth: by 1950 world GDP was about $4, 000 billion. Today, it accounts
for more than $13, 800 trillion.
What is more, globalization also means a shift and the entrance in the
informative age.
The word 'globalization' was first employed in 1930, to denote a holistic view of
human experience in education. An early description of globalization was
penned by the American entrepreneur-turned-minister Charles Taze Russell
who coined the term 'corporate giants' in 1897, although it was not until the
1960s that the term began to be widely used by economists and other social
scientists. The term has since then achieved widespread use in the mainstream
press by the latter half of the 1980s. Since its inception, the concept of
globalization has inspired numerous competing definitions and interpretations,
with antecedents dating back to the great movements of trade and empire
across Asia and the Indian Ocean from the 15th century onwards.
The United Nations ESCWA has written that globalization ‘is a widely-used term
that can be defined in a number of different ways. When used in an economic
context, it refers to the reduction and removal of barriers between national
borders in order to facilitate the flow of goods, capital, services and labour. . .
although considerable barriers remain to the flow of labour. . . Globalization is
not a new phenomenon. It began in the late nineteenth century, but it slowed
down during the period from the start of the First World War until the third
quarter of the twentieth century. This slowdown can be attributed to the
inward-looking policies pursued by a number of countries in order to protect
their respective industries. . . however, the pace of globalization picked up
rapidly during the fourth quarter of the twentieth century. . . ’
Tom J. Palmer of the Cato Institute defines globalization as ‘the diminution or
elimination of state-enforced restrictions on exchanges across borders and the
increasingly integrated and complex global system of production and exchange
that has emerged as a result. ’
Thomas L. Friedman has examined the impact of the ‘flattening’ of the world,
and argues that globalized trade, outsourcing, supply-chaining, and political
forces have changed the world permanently, for both better and worse. He
also argues that the pace of globalization is quickening and will continue to
have a growing impact on business organization and practice.
Noam Chomsky argues that the word globalization is also used, in a doctrinal
sense, to describe the neoliberal form of economic globalization.
Herman E. Daly argues that sometimes the terms internationalization and
globalization are used interchangeably but there is a significant formal
difference. The term ‘internationalization’ (or internationalisation) refers to the
importance of international trade, relations, treaties etc. owing to the
(hypothetical) immobility of labour and capital between or among nations.
Takis Fotopoulos argues that globalization is the result of systemic trends
manifesting the market economy's grow-or-die dynamic, following the rapid
expansion of transnational corporations. Because these trends have not been
offset effectively by counter-tendencies that could have emanated from tradeunion action and other forms of political activity, the outcome has been
globalisation. This is a multi-faceted and irreversible phenomenon within the
system of the market economy and it is expressed as: economic globalisation,
namely, the opening and deregulation of commodity, capital and labour
markets which led to the present form of neoliberal globalisation, political
globalisation, i. e. , the emergence of a transnational elite and the phasing out
of the all powerful-nation state of the statist period, cultural globalisation, i. e. ,
the worldwide homogenisation of culture, ideological globalisation,
technological globalisation, social globalisation.
2. Globalization Results in De-localization
Many of the activities that previously involved face-to-face interaction, or that
were local, are now conducted across great distances. There has been a
significant de-localization in social and economic exchanges. Activities and
relationships have been uprooted from local origins and cultures. One
important element in this has been the separation of work from the home (and
the classic move to the suburbs - see Putnam's discussion of the impact on this
on local social relations). But de-localization goes well beyond this. Increasingly
people have to deal with distant systems in order that they may live their lives.
Banking and retailing, for example, have adopted new technologies that involve
people in less face-to-face interaction. Your contact at the bank is in a call
centre many miles away, when you buy goods on the internet the only person
you might speak to is the delivery driver. In this last example we move beyond
simple notions of distance and territory into a new realm. When we buy books
from an internet supplier like Amazon our communications pass through a
large number of computers and routers and may well travel thousands of miles,
the computers taking our orders can be on a different continent, and the books
can be located anywhere in the world. The 'spaces' we inhabit when using the
internet to buy things or to communicate (via things like chatrooms and
bulletin boards) can allow us to develop a rather different sense of place and of
the community to which we belong.
Not everything is global, of course. Most employment, for example, is local or
regional - but 'strategically crucial activities and economic factors are
networked around a globalized system of inputs and outputs'. What happens in
local neighbourhoods is increasingly influenced by the activities of people and
systems operating many miles away. For example, movements in the world
commodity and money markets can have a very significant impact upon
people's lives across the globe. People and systems are increasingly
interdependent.
3. The Effects of Globalism
Various aspects of globalization affect the world in several different ways:
Industrial - emergence of worldwide production markets and broader access to
a range of foreign products for consumers and companies. Particularly
movement of material and goods between and within national boundaries.
International trade in manufactured goods increased more than 100 times
(from $95 billion to $12 trillion) in the 50 years since 1955. China's trade with
Africa rose sevenfold during 2000-07 alone.
Financial - emergence of worldwide financial markets and better access to
external financing for borrowers. By the early part of the 21st century more
than $1. 5 trillion in national currencies were traded daily to support the
expanded levels of trade and investment. As these worldwide structures grew
more quickly than any transnational regulatory regime, the instability of the
global financial infrastructure dramatically increased, as evidenced by the
Financial crisis of 2007–2010.
Economic - realization of a global common market, based on the freedom of
exchange of goods and capital. The interconnectedness of these markets,
however, meant that an economic collapse in one area could impact other
areas. With globalization, companies can produce goods and services in the
lowest cost location. This may cause jobs to be moved to locations that have
the lowest wages, least worker protection and lowest health benefits. For
industrial activities this may cause production to move to areas with the least
pollution regulations or worker safety regulations.
Health Policy - On the global scale, health becomes a commodity. In developing
nations under the demands of Structural Adjustment Programs, health systems
are fragmented and privatized. Global health policy makers have shifted during
the 1990s from United Nations players to financial institutions. The result of
this power transition is an increase in privatization in the health sector. This
privatization fragments health policy by crowding it with many players with
many private interests. These fragmented policy players emphasize
partnerships and specific interventions to combat specific problems (as
opposed to comprehensive health strategies). Influenced by global trade and
global economy, health policy is directed by technological advances and
innovative medical trade. Global priorities, in this situation, are sometimes at
odds with national priorities where increased health infrastructure and basic
primary care are of more value to the public than privatized care for the
wealthy.
Political - some use ‘globalization’ to mean the creation of a world government
which regulates the relationships among governments and guarantees the
rights arising from social and economic globalization. Politically, the United
States has enjoyed a position of power among the world powers, in part
because of its strong and wealthy economy. With the influence of globalization
and with the help of The United States’ own economy, the People's Republic of
China has experienced some tremendous growth within the past decade. If
China continues to grow at the rate projected by the trends, then it is very
likely that in the next twenty years, there will be a major reallocation of power
among the world leaders. China will have enough wealth, industry, and
technology to rival the United States for the position of leading world power.
Informational - increase in information flows between geographically remote
locations. Arguably this is a technological change with the advent of fibre optic
communications, satellites, and increased availability of telephone and
Internet.
Language - the most popular first language is Mandarin (845 million speakers)
followed by Spanish (329 million speakers) and English (328 million speakers).
However the most popular second language is undoubtedly English, the ‘lingua
franca’ of globalization: About 35% of the world's mail, telexes, and cables are
in English. Approximately 40% of the world's radio programs are in English.
About 50% of all Internet traffic uses English.
Competition - Survival in the new global business market calls for improved
productivity and increased competition. Due to the market becoming
worldwide, companies in various industries have to upgrade their products and
use technology skilfully in order to face increased competition.
Ecological - the advent of global environmental challenges that might be solved
with international cooperation, such as climate change, cross-boundary water
and air pollution, over-fishing of the ocean, and the spread of invasive species.
Since many factories are built in developing countries with less environmental
regulation, globalism and free trade may increase pollution and impact on
precious fresh water resources. On the other hand, economic development
historically required a ‘dirty’ industrial stage, and it is argued that developing
countries should not, via regulation, be prohibited from increasing their
standard of living.
Cultural - growth of cross-cultural contacts, advent of new categories of
consciousness and identities which embodies cultural diffusion, the desire to
increase one's standard of living and enjoy foreign products and ideas, adopt
new technology and practices, and participate in a ‘world culture’. Some
bemoan the resulting consumerism and loss of languages. Spreading of
multiculturalism, and better individual access to cultural diversity (e. g. through
the export of Hollywood). Some consider such ‘imported’ culture a danger,
since it may supplant the local culture, causing reduction in diversity or even
assimilation. Others consider multiculturalism to promote peace and
understanding between people. A third position that gained popularity is the
notion that multiculturalism to a new form of monoculture in which no
distinctions exist and everyone just shift between various lifestyles in terms of
music, cloth and other aspects once more firmly attached to a single culture.
Thus not mere cultural assimilation as mentioned above but the obliteration of
culture as we know it today.
Travel and tourism. WHO estimates that up to 500, 000 people are on planes at
any one time. In 2008, there were over 922 million international tourist
arrivals, with a growth of 1. 9% as compared to 2007.
Greater immigration, including illegal immigration. The IOM estimates there
are more than 200 million migrants around the world today. Newly available
data show that remittance flows to developing countries reached $328 billion
in 2008.
Spread of local consumer products (e. g. , food) to other countries (often
adapted to their culture).
Worldwide fads and pop culture such as Pokémon, Sudoku, Numa Numa,
Origami, Idol series, YouTube, Orkut, Facebook, and MySpace. Accessible to
those who have Internet or Television, leaving out a substantial segment of the
Earth's population. Worldwide sporting events such as FIFA World Cup and the
Olympic Games.
Incorporation of multinational corporations into new media.
Social - development of the system of non-governmental organisations as main
agents of global public policy, including humanitarian aid and developmental
efforts.
Development of a Global Information System, global telecommunications
infrastructure and greater trans-border data flow, using such technologies as
the Internet, communication satellites, submarine fibre optic cable, and
wireless telephones.
Increase in the number of standards applied globally, e. g. , copyright laws,
patents and world trade agreements.
The creation of the international criminal court and international justice
movements.
Crime importation and raising awareness of global crime-fighting efforts and
cooperation.
The emergence of Global administrative law.
Religious - The spread and increased interrelations of various religious groups,
ideas, and practices and their ideas of the meanings and values of particular
spaces. Most statistical sources make Christianity the most popular current
religion worldwide, with Islam second, Hinduism third, and Buddhism fourth.
4. Threads of globalization
Globalization has generated significant international opposition over concerns
that it has increased inequality and environmental degradation, thus lowering
the quality of life.
Some also view the effect of globalization on culture as a rising concern. Along
with globalization of economies and trade, culture is being imported and
exported as well. The concern is that the stronger, bigger countries such as the
United States, may overrun the other, smaller countries' cultures, leading to
those customs and values being faded away. This process is also sometimes
referred to as Americanization or McDonaldization.
In many poorer nations globalization is the result of foreign businesses utilizing
workers in a country to take advantage of the lower wage rates. Specifically,
these policies may lead to use of child labour, forced labour, violating freedom
of association, right to organize and bargain collectively, as well as the right to
decent working conditions.
On the other hand those negative side-effects are partially caused by the
limitations to free flow of labour.
A flood of consumer goods such as televisions, radios, bicycles, and textiles into
the United States, Europe, and Japan has helped fuel the economic expansion
of Asian tiger economies in recent decades. However, Chinese textile and
clothing exports have recently encountered criticism from Europe, the United
States and some African countries. In South Africa, some 300, 000 textile
workers have lost their jobs due to the influx of Chinese goods. The increasing
U. S. trade deficit with China has cost 2. 4 million American jobs between 2001
and 2008, according to a study by the Economic Policy Institute (EPI). A total of
3. 2 million – one in six U. S. factory jobs – have disappeared between 2000 and
2007.
Opportunities in richer countries drives talent away from poorer countries,
leading to brain drains. Brain drain has cost the African continent over $4. 1
billion in the employment of 150, 000 expatriate professionals annually. Indian
students going abroad for their higher studies costs India a foreign exchange
outflow of $10 billion annually.
It is becoming increasingly difficult to maintain food security in a world beset
by a confluence of ‘peak’ phenomena, namely peak oil, peak water, peak
phosphorus, peak grain and peak fish. Growing populations, falling energy
sources and food shortages will create the ‘perfect storm’ by 2030, according
to the UK government chief scientist. He said food reserves are at a 50-year low
but the world requires 50% more energy, food and water by 2030. The world
will have to produce 70% more food by 2050 to feed a projected extra 2. 3
billion people and as incomes rise, the United Nations' Food and Agriculture
Organisation (FAO) warned. Social scientists have warned of the possibility that
global civilization is due for a period of contraction and economic relocalization, due to the decline in fossil fuels and resulting crisis in
transportation and food production.
Globalization has also helped to spread some of the deadliest infectious
diseases known to humans. One example of this occurring is AIDS/HIV. Due to
immigration, approximately 500, 000 people in the United States are believed
to be infected with Chagas disease. In 2006, the tuberculosis (TB) rate among
foreign-born persons in the United States was 9. 5 times that of U. S. -born
persons.
The United Nations Office on Drugs and Crime (UNODC) issued a report that
the global drug trade generates more than $320 billion a year in revenues.
Worldwide, the UN estimates there are more than 50 million regular users of
heroin, cocaine and synthetic drugs. The international trade of endangered
species is second only to drug trafficking. Traditional Chinese medicine often
incorporates ingredients from all parts of plants, the leaf, stem, flower, root,
and also ingredients from animals and minerals. The use of parts of
endangered species (such as seahorses, rhinoceros horns, saiga antelope horns,
and tiger bones and claws) has created controversy and resulted in a black
market of poachers who hunt restricted animals. In 2003, 29% of open sea
fisheries were in a state of collapse.
5. The Present and the Future
We still see globalization as a problem, as a threat, as a phenomenon which is
leading us to the unknown. We are aware of a possible depletion of raw
materials, irreversible damage to the environment, and increase imbalance
between the richest and poorest. These fears have been naturally strengthened
by the shock of the current financial crisis.
The developing countries are gaining competitiveness and at the same time
this implies delocalization of European companies which sometimes causes
closures, therefore redundancies. However, the growth in the developing
countries is opening new markets.
The delocalization is an inevitable phenomenon, but it not only has a negative
side, it will depend on the way we tackle this trend to transform a risk into an
opportunity.
Not everything is going to be manufactured outside Europe, in countries with
low labour costs. As all those products where the key is price, will not be made
in EU, we should work on the rest of the characteristics like design, technology,
transport, the quality of the workforce. . . Consistently we are forced to
innovate in products and services.
However, amid concerns about poor quality and higher freight costs, some big
manufacturers are already moving production back to Europe or US. This
process require further support. Free flow of labour will also work for further
equalization of labour conditions in developed and developing countries.
Three future areas where the EU has to be ahead, so where knowledge and
technology have to be applied are:
- Life, taken in general terms: from cosmetics to biotechnology.
- The shortage of energy and the climate change will develop not only new
sources of energy but new methods of manufacturing.
- The need and the desire of mobility. New infrastructures and new means
of transport.
Politically, further support to democratization in developing countries will also
build a barriers against the decrease of global poverty. It still remains a big
challenge. However, between 1965 and 2008, average income almost tripled.
Life expectancy in poor countries increased 20 years on average. Infant
mortality rate fell by half. 37% of people in poor countries were
undernourished in 1970. The figure has fallen to 18% in 2006.
Since World War II, barriers to international trade have been considerably
lowered through international agreements. Elimination of some barriers
include poorer countries in a world market. Main areas of policies should
strengthen some of the processes promoting free trade started by GATT, as:
- elimination of tariffs, creation of free trade zones with small or no tariffs;
- reduced transportation costs, especially resulting from development of
containerization for ocean shipping;
- reduction or elimination of capital controls;
- harmonization of subsidies for local businesses;
- harmonization of intellectual property laws across the majority of states,
with more restrictions;
- supranational recognition of intellectual property restrictions.
The EU should also strengthen the efforts to support free flow of people,
goods, ideas and labour. More, taking into account that globalization favours
human rights and the emancipation of women, Europe should use the political
and economical opportunities to promote those values. Political reform is a
pre-requisite. Societies must eliminate civil war, predatory conducts, and
discrimination against women and ethnic minorities. When freedom is
enlarged, technical progress can be harnessed to serve the interests of poor
people.
Global culture must be supported by global education. This is the only solution
to gather universal and identity and to solve problems arising from ethnic
diversity.
Cultural globalization, driven by communication technology and the worldwide
marketing of Western cultural industries, was understood at first as a process
of homogenization, as the global domination of American culture at the
expense of traditional diversity. However, a contrasting trend soon became
evident in the emergence of movements protesting against globalization and
giving new momentum to the defence of local uniqueness, individuality, and
identity. Europe should invest in people through better education and training.
What is more, as education raises, people consume more spiritual goods. This
evolution authorizes a sustainable growth: Material goods use resources and
bring negative externalities such as pollution. On the contrary, spiritual goods
which are mainly made up of ideas, need a few resources and have only
positive externalities. It means that the fight against pollution also depends on
the level of education.
Further recommendations include:
- Creation of quality jobs.
- Meeting the EU´s 2020 objectives to cut greenhouse gas emission by
20%.
- Increase of renewable sources of energy (20% of its needs).
- Research & development should use 3% of GDP of Europe.
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Acknowledgments
The author wishes to express his gratitude to all members of the Working Group for their
contribution. Your texts, as well as books and quotations delivered to me, are the core of
this report.
I also thank all the people in EPD and IDE who supported me in the process of leading the
Group and creating the report, especially Gerard Deprez, who encouraged me to take the
responsibility for the WG and Flaminia Baffigo, Cristina Bruschetti and Luca Bader, who
patiently assisted in all practical matters.
Warsaw, October 2010