Is a Fair Outcome of Globalization Attainable Both for Developed and Developing Countries?

Globalization

Is a Fair Outcome of Globalization Attainable Both for Developed and Developing Countries?

Kristian Øfstegaard Viflot, The Hong Kong Polytechnic University

ABSTRACT

This article will discuss whether an equitable outcome of the benefits of globalization is attainable for both developed and developing countries. It will be argued that the progress of globalization is dictated by industrialized countries, and that developing countries have a negligible influence upon the process. It will also be argued that a fair outcome of globalization may not only be manifest in hard economical terms, but should also be measured in the positive future expectations of all societies. The article focuses on two primary areas, culture and governance, in which developed countries create the rules that developing countries are obliged to follow. It will be argued that cultural factors are deemed of no significant importance, as economic growth is, in many cases, given priority over maintaining and preserving indigenous cultures. The growth of the middle-class in rapidly developing countries such as China, Brazil and India (BRICS) results in a change in national consciousness reflecting a preference for economic growth over the preservation of traditional values. New identities values and beliefs are constructed which reject established, notions. The article concludes with the assertion that a fair outcome of globalization does not imply that all countries have the same material outcome, but rather that all countries should have a positive outcome. This outcome should not only measured in terms of capital and economic growth, but also in non-economic factors such as higher living standards, greater respect for human rights and for cultural diversity and distinctiveness. A fair outcome of globalization should also enable developing countries to retain their national identity, and resist imposed external values.

Keywords: China, culture, economic growth, globalization, middle class

International society is currently undergoing a vast change due to globalization. There is an increasing flow of goods, human beings, culture and money across countries’ borders, and this free flow has hit a global scale. Globalization is a wide term used to describe many of the processes that lead to change in the world today. There are various forces linked to globalization, such as, economic and monetary forces that influence the global economic market. This essay will examine some of the consequences faced by the international communities of ever-expanding globalization, and argue that a positive outcome of globalization for both developed and developing countries is possible, but that there is a long way to go. Measures should be taken in governance, ideology and living standards, and countries must work even harder to agree on the future development of global society. This essay will first examine and argue that forces of globalization may pose a threat to developed countries and their strong position in the global economic market. Secondly, it will examine to what extent positive economic factors are more important than cultural and human rights and values in terms of changes due to globalization. Lastly, it will look at the possibility of an agreement and willingness among developed countries to compromise and create common ground with developing countries to establish and create a future path towards a fair, globalized world.

Before examining the various reasons and impacts globalization has on both developing and developed countries, some definitions need to be provided. Globalization is a term to explain what is and has happened in our world the last twenty years or so. Countries have become closer in terms of trade, culture and people. Economic activities cross borders. Foreign Direct Investment (FDI), international trade of goods, and multinational organizations are our new economic world. People flow back and forth between countries, either to work, study or migrate.  Globalization makes different cultures easy to discover, experience and adopt.  To put it simply: the world has become smaller. Technological progress and human innovation appear to be the driving forces behind this change.

All developed countries have a few common similarities. They tend to be highly industrialized, dominated by the tertiary and quaternary sectors of industry (Kaya, 2010). They have high economic freedom and provide a safe and healthy environment for their citizens. Developing countries are defined as countries that lately have experienced some economic growth, and most of their governments are making reforms to become more democratic. Because of economic growth, the middle class in most developing countries seems to be expanding rapidly (Thirkell-White, 2008).

Since the burst of the dot.com bubble in early 2001, the global economy grew rapidly until the year of 2008, when the global financial crisis occurred. In this period, some developing countries managed to raise their economic and general living standards in an impressive way. China is an excellent example of a developing country that has experienced economic growth, notwithstanding the fact that globalization has helped developed countries gain more in terms of economic growth, than developing countries. The World Commission on the Social Dimension of Globalization (2004) tried to put this unbalanced trend on the political agenda in their report from 2004, “The current path of globalization must change. Too few share in its benefits. Too many have no voice in its design and no influence on its course” (p. 2).

The commission’s report argues that a few developed countries are designing the path of globalization, hence also the path of the future development in the world. This could be a great problem for developing countries, because they have little influence on their future growth and development. This unbalanced influence could be a result of a general fear of developed countries losing their power.

Our world society, as a whole, is changing. But globalization tends to be giving more growth to developed countries than to developing countries. The fear amongst developed countries of loosing their strong economic position in the world could have roots at a domestic level. The middle class in developed countries has had future expectations of becoming upper class for a long time now. The new rising, gigantic middle class of developing countries like India, Brazil and China may be a cause of concern to the already established middle-class of developed countries.

Globalization is also providing a good basis for multinational corporations (MNC´s) to outsource their production to developing countries, where labour cost is lower. Many skilled workers in developed countries could be in danger of loosing their jobs as a result of this outsourcing (Sarkar, 2009). Capital exporting, developed countries heavily depend on a well-educated population. The under-educated could easily fall through the system, with no jobs, no health systems and no education. Their expectations of a good job, high pay and a pleasant life may consequently be affected. The current trend is that the difference between rich and poor is getting bigger. Governments have a tough job trying to adjust to these differences (Albert, 2003).

A fair outcome for both developed and developing countries does not necessarily mean an equal outcome, but rather a positive outcome in terms of future expectations. A fair outcome is here defined by positive growth and development. This definition makes it even more difficult to achieve fair globalization, because things get more complex when opportunities need to be created and achieved by all parties (Held & McGrew, 2002). There are many theories about how to achieve a fair globalization. What all theories have in common is that there is no one simple solution. In the introduction, globalization was defined as a term to explain the changes where countries become closer in terms of trade, culture and people.

The three elements of this definition, trade, culture and people, are all highly differentiated from each other and closely bound together at the same time. They are highly differentiated in terms of measures taken in order to satisfy needs, whilst they are closely bound together because the measures taken to satisfy one element are likely to affect the two other elements. For example, one action to promote trade is the reduction of trade barriers. Reductions of trade barriers would in most cases promote freer trade between countries, which is positive for the element of trade, but a reduction of trade barriers could cause many people to lose their jobs in their country’s domestic sphere due to cheaper imported products. There is an issue of how to find the balance here. Measures must be taken to balance the gains and losses between developed and developing countries.

If the solution of how to find a point where fair globalization could be attained, the discussion about the future, globalized world would be much more predictable. The question that arises is how we can find this balance, and who should be the authority to set the rules and regulations. The difference between developed countries and developing countries in terms of human living standards, governance and resources are significant (Streeten, 2001). A reformation of global governance and institutions could be necessary to attain the shared goal of a fair globalized world. Today, there are global institutions like WTO and UN, which to a certain extent have the authority to keep the forces of globalization under control.

From a Western point of view, democracy is seen as the ultimate way of governance to attain fairness, human rights and freedom of expression in the world. On the other hand, there are cultural and demographical problems related to democratisation. Nevertheless, many of the developed, Western countries argue that their democratic model could be the reason for their fast development (Cunningham, 2003). China is a good example of a country where democracy could be challenging to implement. In recorded history, China has never had a democracy; therefore people are not familiar with this way of governing. In addition: China´s huge population may not suit such governance, at least not in the same way as in the US, and many European countries. As a communist state, the Chinese government may have the ability to react to economic and demographical problems more flexibly than they could with democracy. In the past years, China has implemented more civil rights and laws, as well giving its people more freedom of speech, which seems to be a direct result of globalization (Yu, 2008).

When the Nobel Prize committee chose to give the Nobel Peace Prize to Liu Xiaobo, a Chinese democracy activist in 2011, China and other developing, non-democratic countries reacted with anger (McLaughlin, 2010). The prize is awarded to people who have made an extraordinary effort to promote peace. Liu Xiaobo is seen as a criminal in China, where freedom of expression is limited due to their authoritarian, communist ideology. The Nobel Prize committee could by this nomination signal that democracy is the right way to achieve peace. The Nobel Prize could be evidence to show the existing situation that only developed countries are setting the standards, and thus are the designers of the future path of globalization. Globalization is accelerating the spread of more democratic governments. However, the democratization process may take many years, because countries need reforms and the implementation of human rights and property laws. The rapid economic growth, and the pressure of democratization from the outside world, could in fact cause countries to implement democracy before it has the legal and regulatory framework (Grindle, 2000).

Cultural differences make it even more important for world society to create or reform current platforms and institutions whose goals are to work towards a global agreement about what measures and actions should be taken to promote globalization. A global platform is also important to maintain the views of developing countries, and to understand what it takes to attain a fair, globalized world for them as well. It could also be argued whether governments of states should shift their ultimate political authority to a global level in order to have a more integrated, global society. Pauly (2003) argues that people are not yet ready for such power shifts in the world, even though it might benefit the procedure of decision making and make the outcome of globalization much more fair to all countries. The European Union (EU) may be the closest example of a multinational agreement to have a union of several countries to provide free trade of goods, human and capital, albeit not the shift to a multinational political authority.

There may be many ways for global society to achieve a fair outcome of globalization for both developed and developing countries in the future. It is possible that we are in the middle of a large transition of world power from the western, developed countries to the rapidly growing developing countries like China, India, Brazil and Russia (BRIC). A fair globalization does not necessary mean that all countries should have the same outcome, but rather that all countries could have a positive outcome. There are more factors of a positive outcome than just a positive outcome in terms of capital and economic growth. Better living standards, human rights and traditional cultural diversity are examples of positive non-economic factors that could be emphasized. A fair outcome could as well be the opportunity for developing countries to keep their national identity without too many imposed values by developed countries. Democracy tends to be looked at as a basis of growth and further development, mainly because most western, developed countries are democracies. If the power balance had been different, maybe another type of governance would be looked upon as the best way to achieve growth. But as this essay argues, economic growth is only one side of globalization. Cultural and human movement are two other important factors of globalization. The IMF and the World Bank were created to take care of, and promote economic factors. In the future, maybe a similar institution for cultural and human factors could gain the same, strong position in the world society as the IMF and World Bank have today. Perhaps also in the future, human rights and civil laws are not just associated with democracy, but could also be found in countries with other governing systems. Then globalization could be said to have reached a new level. Then it would not just show results in economic growth, but also better living standards and equal opportunities for all people on this planet.

REFERENCES

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Cunningham, F. (2003). Democracy and globalization. In R. Sandbrook (Ed.), Civilizing globalization (pp. 139-155). Albany, NY: State University of New York Press.

Grindle, M. S. (2000). Ready or not: The developing world and globalization. In J. Nye Jr. & J. Donahue (Eds.), Governance in a globalizing world (pp. 178-07). Washington: Brookings Institution Press.

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McLaughlin, K. (2010, October 8). China angry as Nobel peace prize goes to jailed dissident. globalpost. Retrieved from http://www.globalpost.com/dispatch/china-and-its-neighbors/101008/nobel-peace-prize-goes-jailed-chinese-dissident

Pauly, L. W. (2003). Reforming global governance: The continuing importance of the nation-state. In R. Sandbrook (Ed.), Civilizing globalization (pp. 181-188). Albany, NY: State University of New York Press.

Sarkar, S. (2009). Outsourcing: A story of metamorphosis. In H. Marques, E. Soukiazis & P. Cerqueira (Eds.), Integration and globalization (pp. 105-123). Cheltenham, England: Edward Elgar Publishing Limited.

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Thrikell-White, B. (2008). Globalization and development. In T. C. Salmon & M. F. Imber (Eds.), Issues in international relations (2nd ed.)  (pp. 136-152). NY: Routledge.

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ASSIGNMENT SUMMARY

This article is based upon a requirement of a course focused on the effects of globalisation upon the rising Chinese middle class and how this segment of  society has adapted.

ABOUT THE AUTHOR

Kristian Viflot is a Norwegian student currently pursuing his BBA in Global Supply Chain Management at The Hong Kong Polytechnic University. He has published on the experience of Jews in Norway during World War 2. His goals include pursuing a master’s degree in International Relations at Tsinghua University, Beijing upon graduation.