Introduction
Chap 1: The globalisation process and Capitalism .
Chap2: Globalisation and the third world
Chap3: Debate on globalisation and underdevelopment
Conclusion.
Introduction
Globalisation or global financial space・ (1) is one of the main political debates since the rise of anti-capitalism demonstrations and the 11th sept terrorist attack on America. Both the anti-capitalism demo and the 11th event raise the same concern: is globalisation and free trade the expansion of capitalist imperialism and the exploitation of the poorer? Is it neo-colonialism through multinational enterprise?
Then if that is not the case, what is the place of third world in the implementation of this new global free market? Have the IMF politics changed or is the WTO implementing new policies that protect global interest? How is possible a global village if some can eat and other starve; some can get medicine and other die; some capitalist and other cheap labourer? p>To raise these question and oppose the actual capitalist philosophy where free trade means protecting the richer and exploiting the poorer, is essential. But to pretend that ・globalisation is a cause of underdevelopment rather than a mean of overcoming it・ is arguable in many aspects.
- The first argument against this assumptioon is that life is made of dualities: some are stronger, other weaker; some are beautiful, other ugly; some are developed, other under-developed・there is no point of fussing around;
- The second is that the actual state of uunderdevelopment of post-colonial Africa is the result of the division of Africa: within determined boundaries different tribes struggle for political power and can not get consensus on anything. Obviously when politics are in trouble, economics suffer.
- pointing out the devil without reacting iis a waste of time: do Third world countries have another issue to the world politics and economics?
The question of Third world raises many problem when it comes to the globalisation debate・But globalisation, though not a bad thing, is not a magic solution to all third world's problems.
This essay will comprise three chapter: the first one will focus on history of capitalism and globalisation; the second will concentrate on globalisation and the third world; the last one will be about the debate on globalisation and underdevelopment. A short conclusion with our views will end the whole.
Among those people who sailed for overseas lands, some sought better life at the search of the untold gold in Eldorado or hoping to get rich through trade and plunder; some were fleeing religious persecution and other wanted glory by winning land for the king and soul for the church.
But contact with others cultures transformed Europeans tastes, introducing for example Asians spices into dishes... England benefited most from these contacts at the point of becoming the predominant global trading empire until the industrial revolution in 1776 which gave more chance to globalisation.
In the 18th century globalisation took of: the railway was created and the telegrah invented. The world was mapped.
On the political and cultural aspect, globalisation wave ideas were circulating more quickly than before the invention of telegraph. That is how the American revolution in 1776 will be a precursor to the French revolution in 1789 though the French one had more impact on the ulterior development of political organisation, philosophy and law.
Art, literature and music were becoming a part of the bourgeoning global economy (ex writer Dickens・.
p> Colonisation in the 19th century reinforced the globalisation of capitalism by offering a legal framework. It had also a huge impact on culture development with the introduction of new conception of art, music, folklore, languages.
International tourism will develop sensibly in this post industrial revolution period reinforcing so the global economy.
But the World War1 and the 1917 Russian revolution will Break apart this global economy the next 30years until the World War2 .
American and European isolationism (1930s The U.S passed protectionist tariff act・ and Bitain applied a duty on import・)on one side and communist one on the other, will be a blow to the emerging global economy.
This had the consequence of drying up capitals flows and halting the migration process.
Globalisation will be timidly reactivated in 1944 with the Brettons Woods institution where Keynes (3) ideas gave some light to a new direction in a divided world between communism and capitalism. Among these Keynesian ideas there are:
- The international trade should be graduaally freed
- The speculative capital should be tightlyy controlled
- goods can circulate freely, not money.
- the exchange rate of currency convertiblee has to be controlled but the exchange rate must be fixed.
- The government should be more interventioonist
- The International bank (world bank) wouldd make loans to help rebuild war-torn economy and to finance development. This has been completed by the Marshall plan in 1947.
-Tthe stabilisation fund ( IMF) would lend money to countries that temporarily have difficulty financing a balance of payment deficit; it should also sanction an adjustment in their exchange rate if the problem seems permanent.
The explosive growth of international financial market and the take off of the Eurocurrency markets out of reach of American (1960) has transformed the IMF.
In 1971 the world moved to floating exchange rates: markets set the currency rates.
In 1973 when the oil prices rose, there was a chock that will have as consequence the lift on capital movement control so that to attract foreign capitals. This will impact also on the IMF stabilization politics.
In 1995, the WTO replaces the GATT that once was created in 1948 to help lower trade barriers multilaterally.
1989- 1991 the fall of communism gives a new breath to globalisation with only capitalism as sole philosophy.
Transport and communication are faster and cheaper than ever. A part of the world trade is now in services (ideas, knowledge, intellectual property・ and not in goods.
The growth of multinational is linked to a big change in manufacturing: parts of the same product (ex car) can be made in different places.
The international financial flows is bigger but a tight lid on migration has reduced migration sensibly, acting so against rules of globalisation.
The attack on the symbol of capitalism ( world trade center) in sept 2001 has changed the conception of globalisation and has raised questions about the best way to achieve a perfect cross-border political and economical co-operation. How to integrate Islam, as an anti-globalisation philosophy(since the 15th century it stands against christian imperialism and its capitalist philosophy), and the third world in the new conception of global world?
Isolationism (American, Japanese or Chinese) is no longer an option!
The third world (Africa in particular) is part of the global village where 鼎apital・decides about politics, trade and culture from the time Europeans set his foot on the continent. Then trade of goods and slaves by Arab Muslims merchants essentially will characterise the period before Colonisation. A dark period when the African continent were just a kind of jungle with communities organized in relatively small kingdom.
Colonisation in the 19 century brought in the notion of states and new social organisations where the authority was no more the traditional chef but institutionalised personalities.
Later, people learned all kind of administrative formalities and at the same time, they discovered a more sophisticated division of labour and the real notion of 菟rivate property・defined and defended by legal text: in summary, they discovered the real face of capital and its social contradictions. Cities were erected and communities were divided in first and second class citizens depending on the division of labour.
First class citizen who had commanding functions executed colonial decisions and therefore were used for the expansion of European capitalism.
The first and the second world war where Africa will be fully involved as a reserve in human and resources will bring in new capitalist tactics. Firstly making sure to stop the expansion of communism in Africa will cause a massive military cooperation with the West and post-independence dictatorships; secondly, making sure that politically and economically these states are stable and, in need of balance of payment adjustment, lend them money.
For this last purpose, Bretton Woods institutions, the World Bank, the International monetary fund were well equipped to deal with Third World Countries.
African economies, (4) in majority, share a number of important features such as heavy reliance on primary product exports for foreign exchange and fiscal revenues; weak domestic financial structures; large urban populations employed in export- related commerce and service activities; infrastructure geared to exporting; land tenure systems that inhibited full exploitation of the land痴 potential; very unequal distribution of income; and small industrial sectors・
The rising urban population increases demand for food import.
Low exports and high demand for imports causes rise on import tariff and therefore to devaluation which causes inflation. The foreign exchange is unaffected, prices of imported consumption goods increase causing higher wages demands.
Also the fact that administrations rely on export-import tax as major source of revenues, tax reforms are sources of inflation. Then a vicious circle ties up the economies: prices control to fight inflation, discourages investments; the contrary causes inflation.
In this situation, supplying money to the African economy, is seen by monetarists as a cause of permanent uncontrollable inflation.
Unless there is an integral development process satisfying the demand-supply equilibrium, then there is no immediate solution to the problem.
The politics of Brettons Woods institutions to deal with these problems have, in each particular case, been following the same logic.
The IMF identifies the endogenous causes of payments crisis mostly among:
- the expansion of public sector spending wwithout adequate taxation and a passive monetary policy leads to increasing demand which causes inflation and widen the current account deficit;
- The increase in domestic costs productionn is nurtured by non taxed import
As solution to deal with the crisis the IMF proposes the compression of aggregate demand and the reforms in exchange rate.
If a particular third world country refuses the IMF tactics, then the fund is blocked.
But when African countries subscribe to the IMF plans, allowing a floating exchange rate, controlling food and fuel prices, reducing public spending, raising interest rate・they eventually access the IMF fund but the inflation may not improve and if it happens, it is never for long, meaning that these countries are obliged to borrow and borrow again to try to stabilise the balance of payment.
In fact the IMF plays the 田apitalist game・and try to secure its investments in these economies in crisis. An alternative to borrowing could be to bring in private investments but the post-colonial Africa has proved to be very unstable and not law abiding. Government could change any time and any law could be passed any how. The example of Ugandan IDI Amin expropriating all foreigners and the MOBUTU's Zairianisation are example why foreign investments could not pour in. The consequence has been poor economies without industry and without exports revenues but with higher demand of imports.
On the above point, Globalisation and free trade barrier might bring in new solution. But Africa needs some prealable to overcome its underdevelopment. Globalisation as a process can not solve problems for African economies. It is known, even with Karl Marx, that Politics and economics inter-react. To get the economy flourish, there is need for a state to abide by the rule of law. To get the politics to maximise their program, there is a need of a working economy. If in post communism period, African leaders are still behaving like Mugabe (no matter whether it is against whites or blacks), obviously free trade policies won't help the African economy!
Here will stand face to face Philippe Legrain against the Nigerian Akindele. Opposing these two thesis is quite interesting taking in account the fact they have different approach of the problem.
Legrain is white, European, probably middle class intellectual, who has been working at the World Trade Organisation. Akindele is black African, lecturer at university in Nigeria with conviction that misery of Africa is planned and maintained by western capitalism.
For Akindele: (5)
- Globalisation is the final conquest of ccapital which cannot exist without parasitic expansion.
Its immutable central and primary focus is to exploit African resources, disintegrate its economies and incorporate it into the international capitalist economy.
- the reformed old Bretton Woods institutioons (IMF and World Bank), the World Trade organisation and the G8 - are wicked Machines of the Imperialists・ The IMF and the World Bank have played crucial roles in the enthronement of global capital. This has been done through policies such as liberalisation, privatisation and deregulation.
Africa and Africans・One of the choices is the creation of a blockade on the 菟ath of the train・ They could conceivably create Regional Economic and Political blocks equal in magnitude and potency with that of the European Union (EU), to effectively challenge, and influence the trajectory of the globalisation train
For Akindele, The case of the Niger Delta where oil is produced in Nigeria, is a flagrant example of how global capital operates. In addition of the fact that The area continuously lacks basic infrastructural facilities such as good roads, schools, electricity, communications, hospitals and so on, oil spills have drastically affected the supply of potable water, leading to the high prevalence of water-borne diseases. Didn稚 Marx say that 登ur social being determines our way of thinking・ then if Akindele is an Ogoni, he thinks probably that the Niger Volta is the heart of Africa!
On Akindele's views, Legrain could oppose that blocking globalisation is possible but where could lead the creation of an African Community comparable to the E.U? Already simple problems of discrimination and civil war can not find African solution. The case of Rwandan genocide and the discrimination against minority Tutsi in Congo are flagrant.
Economical progress and development are a long process needing resources and sacrifices that Africa can not provide for the moment being.
Giving the case of Vietnam and the NIKE investment, Legrain will show how opening doors to free trade, can benefit locals・
Legrain does not only praise the globalisation process, he raises concerns as well. One of his concerns is about the WTO and law on patent ("Agreement on Trade-Related Aspects of Intellectual Property Rights" =TRIPS) (6) in pharmaceutical domain on the case of industrial property and intellectual property brought against the RSA trying to deal with his AIDs problems , Legrain reckon that though globalisation might be helpful to African countries, there remain still practical question to solve before the world can become a global village. On this matter, Legrain pleads for those who can not afford health care because the WTO protects capitalist interest of drug companies・ Meeting with anti-globalisation protesters, Legrain agrees that there can not be free trade where inequalities in prices is against the poorer!
As African, I can not see Akindele痴 point. Does Africa has immense resources? Than after 40 years independence, what have achieved African, except civil war and dictatorship?
Africa needs to get involved in the dialectic of history as an actor and not a victim. Can we forget our claims at once and give a jump in the future?
Legrain shows more analysis of the global problem, he points out with details ( on environment, on health, on trade, on politics) the faults and deals with the way to solve them!
He somehow even does better than Susan George, Walden Bello and Naomi Klein (7) who wrote a searing denunciation of the outsourcing of the Western capitalist countries to the neo-colonial world where it superexploits local labour but who failed to give an alternative.
Is globalisation a cause of underdevelopment?
Firstly there is a simple common truth that may be refuted as non- scientific: the success of any economical program depends on luck・and management・(8)and is never everlasting! Even good management and the best of luck are subject to uncontrollable situation such as war or earthquake!
This is a response to sceptical about the benefit of globalisation: sure, globalisation is not the magic solution to African Problems but with little management and good luck, it is one of the best alternative to economical crisis.
It is not about economical equality or abolition of property, but it gives more chances of better life for those who can struggle a bit. And who knows? It may, with little discipline and competition, help African States to become Welfare states where manageable social benefits are available to those in need!
To subscribe to the assertion that globalisation is cause of underdevelopment because, as claim anti-capitalist theorists like Naomi Klein, it leads to the exploitation of the poor, may seem stupid because underdevelopment is a complex situation that no one knows the exact starting point. Criticising the World bank, the WTO, the IMF politics in dealing with post-colonial period is one thing. But in the post-communism era, the debate brought in by ant-capitalist demonstrations (Islam included) against the Brettons Woods institutions does not give new alternative.
Free trade barriers won't mean only green light to the multinational capitalist like Nike, Mc Donald・It is also working on ways of protecting global environment, guaranteeing world security and minorities rights, the reduction of gap between prices in the North and the South, a global easy accessibility to Health and drug (see case of RSA on AIDs drug)・
Finally, underdevelopment in relation to what? Means of transport? communications? Security? Order? Human right?
Is development the culture of individualism where community has no place and where the individual faces a complexity of stresses though he does not starve?
Do all so-called 鍍hird world countries・ want to reach the European standard?
Then they should start by dividing their vast spaces in multiples independent and autonomous states easy to organise・
Shutting African doors to globalisation as suggested by Akindele is not an issue to underdevelopment. Anti-globalisation feeling might be legitimate but is there any other option at the horizon?
Philippe Legrain is right when looking at the issues of the benefit of free trade. Though the gap still exist in wages but, workers in multinationals (ex of NIKE in Vietnam) are better paid and happy with their salary because the conditions of life are such as they can live decently compared to their country mates. In fact, it is a wrong analysis to compare wages in England where life is expensive with wages in Vietnam or Africa (9) where less than 300 hundreds dollars are enough for a family monthly expenses!
A positive aspect of globalisation for Africa may be the coming in of foreign investments and the production of domestic goods at home for an affordable price!
Obviously, culturally, the impact of westernisation may be damaging for African communities in the sense that individualism, liberalism, secularism and western consumerism do not fit in African societies (particularly in Muslim one) where large family are still the basis of the state.
But still a global tolerant world with free movement of people and goods, with mixed race, common language・is not a bad thing! It may even be a way of overcoming underdevelopment!
REFERENCES
(1) Daniels, P.W & Lever,1996, The global economy in transition, England, Longman, p62
(2) Penton, Dave, 2001, Marx on globalisation, London, Lawrence & Wishart limited, p3
(3) Legrain, Philippe, 2002, Open World:/ the truth about globalisation, London, Abacus
(4) Sutton, Mary &・1984, The IMF and stabilisation, London, H.E.B,
(5) http://globalization.icaap.org/
(6) http://www2.netdoor.com/~aminyard/
(7) http://www.spiked-online.com/Articles/00000002D1B2.htm
(8) Daniels, P.W & Lever,1996, The global economy in transition, England, Longman
(9) http://www.libertylog.com/000386.html
Bibliography
Book
1. Legrain, Philippe, 2002, Open World:/ the truth about globalisation, London, Abacus.
2. Daniels, P.W & Lever,1996, The global economy in transition, England, Longman
3. Sutton, Mary &・1984, The IMF and stabilisation, London, H.E.B
4. Hooggvelt,Ankie, 1997, Globalisation and the post-colonial world, London, McMillan
5. Penton, Dave, 2001, Marx on globalisation, London, Lawrence & Wishart limited
Web pages
1. http://www2.netdoor.com/~aminyard/
2. http://www.spiked-online.com/
3. http://www.libertylog.com/000386.html
4. http://globalization.icaap.org/
Conclusion.