Globalisation, its challenges and advantages

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  • I think every country should do everything to survive. Globalization means a way of solution to crisis in the world, but these are only some data. Let's come back to nature! E.Redmann
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  • 1. GLOBALISATION CHALLENGES AND ITS ADVANTAGES Globalization Globalization has come to be a principal characteristic feature of the new millennium and it has become an inescapable reality in today's society. No community and society can remain isolated from the forces of globalization. The cyber society has come with a bang. The computer culture is spreading rapidly. Even in a poor country, coca-cola, cars, cosmetics and clothes seen in the cities and towns hide the reality of poverty and suffering of the people. We have almost reached a point to believe that "We cannot reverse the trend; we can only go forward!" We need to ask: What is the role and priorities of theological education in this fast changing situation. What is Globalization? Globalization is a new contemporary stage of development of capitalism over the world. It is a process of social change in which geographical and cultural barriers are reduced. This break down of barriers is the result of transportation, communication and electronic communication. It also involves a process by which economies of different countries are oriented to a global market and are controlled by multinational and global financial institutions. It is not merely an economic process, it is also a cultural process. It creates, by the help of media, a mono- culture - a culture of rich and powerful. It is no longer a theoretical concept; it is a glaring reality, impinging upon almost every aspect of human existence - economic, political, environmental, and cultural and the like. Globalization can be described as ‘…a widening, deepening and speeding up of worldwide interconnectedness in all aspects of contemporary social life, from the cultural to the criminal, the financial to the spiritual’. 1
  • 2. Globalization in its literal sense is the process of transformation of local or regional things or phenomena into global ones. It can also be used to describe a process by which the people of the world are unified into a single society and function together. This process is a combination of economic, technological, sociocultural and political forces. Globalization is often used to refer to economic globalization, that is, integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology. Tom G. Palmer of 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 "examines the impact of the 'flattening' of the globe", 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 slight formal difference. The term "internationalization" refers to the importance of international trade, relations, treaties etc. International means between or among nations. "Globalization" means erasure of national boundaries for economic purposes; international trade (governed by comparative advantage) becomes inter-regional trade (governed by absolute advantage). History The term "globalization" has been used by economists since the 1980s although it was used in social sciences in the 1960s; however, its concepts did not become popular until the latter half of the 1980s and 1990s. The earliest written theoretical concepts of globalization were penned by an American entrepreneur-turned- minister Charles Taze Russell who coined the term 'corporate giants' in 1897. Globalization is viewed as a centuries long process, tracking the expansion of 2
  • 3. human population and the growth of civilization, that has accelerated dramatically in the past 50 years. Early forms of globalization existed during the Roman Empire, the Parthian empire, and the Han Dynasty, when the Silk Road started in China, reached the boundaries of the Parthian empire, and continued onwards towards Rome. The Islamic Golden Age is also an example, when Muslim traders and explorers established an early global economy across the Old World resulting in a globalization of crops, trade, knowledge and technology; and later during the Mongol Empire, when there was greater integration along the Silk Road. Globalization in a wider context began shortly before the turn of the 16th century, with Spain and Portugal. Portugal's global explorations in the 16th century, especially, linked continents, economies and cultures to a massive extent. A wave of global trade, colonization, and enculturation reached all corners of the world. Global integration continued through the expansion of European trade in the 16th and 17th centuries, when the Portuguese and Spanish Empires expanded to the Americas, followed eventually by France and Britain. Globalization has had a tremendous impact on cultures, particularly indigenous cultures, around the world. In the 17th century, globalization became a business phenomenon when the Dutch East India Company, which is often described as the first multinational corporation, was established. Because of the high risks involved with international trade, the Dutch East India Company became the first company in the world to share risk and enable joint ownership of companies through the issuance of shares of stock: an important driver for globalization. Globalisation was also achieved by the British Empire (the largest empire in history) due to its sheer size and power. British ideals and culture were imposed on other nations during this period. The 19th century is sometimes called "The First Era of Globalization." It was a period characterized by rapid growth in international trade and investment between the European imperial powers, their colonies, and, later, the United States. It was in this period that areas of sub-saharan Africa and the Island Pacific were incorporated into the world system. The "First Era of Globalization" began to break down at the beginning of the 20th century with the first World War, and later collapsed during the gold standard crisis in the late 1920s and early 1930s. Historical Development Globalization has been a historical process with ebbs and flows. During the Pre- 3
  • 4. World War I period of 1870 to 1914, there was rapid integration of the economies in terms of trade flows, movement of capital and migration of people. The growth of globalization was mainly led by the technological forces in the fields of transport and communication. There were less barriers to flow of trade and people across the geographical boundaries. Indeed there were no passports and visa requirements and very few non-tariff barriers and restrictions on fund flows. The pace of globalization, however, decelerated between the First and the Second World War. The inter-war period witnessed the erection of various barriers to restrict free movement of goods and services. Most economies thought that they could thrive better under high protective walls. After World War II, all the leading countries resolved not to repeat the mistakes they had committed previously by opting for isolation. Although after 1945, there was a drive to increased integration, it took a long time to reach the Pre-World War I level. In terms of percentage of exports and imports to total output, the US could reach the pre-World War level of 11 per cent only around 1970. Most of the developing countries which gained Independence from the colonial rule in the immediate Post-World War II period followed an import substitution industrialization regime. The Soviet bloc countries were also shielded from the process of global economic integration. However, times have changed. In the last two decades, the process of globalization has proceeded with greater vigour. The former Soviet bloc countries are getting integrated with the global economy. More and more developing countries are turning towards outward oriented policy of growth. Yet, studies point out that trade and capital markets are no more globalized today than they were at the end of the 19th century. Nevertheless, there are more concerns about globalization now than before because of the nature and speed of transformation. What is striking in the current episode is not only the rapid pace but also the enormous impact of new information technologies on market integration, efficiency and industrial organization. Globalization of financial markets has far outpaced the integration of product markets. Modern globalization Globalization in the era since World War II is largely the result of planning by economists, business interests, and politicians who recognized the costs associated with protectionism and declining international economic integration. Their work led to the Bretton Woods conference and the founding of several international institutions intended to oversee the renewed processes of globalization, promoting growth and managing adverse consequences. 4
  • 5. These institutions include the International Bank for Reconstruction and Development (the World Bank), and the International Monetary Fund. Globalization has been facilitated by advances in technology which have reduced the costs of trade, and trade negotiation rounds, originally under the auspices of the General Agreement on Tariffs and Trade (GATT), which led to a series of agreements to remove restrictions on free trade. Since World War II, barriers to international trade have been considerably lowered through international agreements - GATT. Particular initiatives carried out as a result of GATT and the World Trade Organization (WTO), for which GATT is the foundation, have included: · Promotion of free trade: o Reduction or elimination of tariffs; creation of free trade zones with small or no tariffs o Reduced transportation costs, especially resulting from development of containerization for ocean shipping. o Reduction or elimination of capital controls o Reduction, elimination, or harmonization of subsidies for local businesses · Restriction of free trade: o Harmonization of intellectual property laws across the majority of states, with more restrictions. o Supranational recognition of intellectual property restrictions (e.g. patents granted by China would be recognized in the United States The use of the term globalization (in the doctrinal sense), in the context of these developments has been analysed by many including Noam Chomsky who states " That enhances what's called "globalization," a term of propaganda used conventionally to refer to a certain particular form of international integration that is (not surprisingly) beneficial to its designers: Multinational corporations and the powerful states to which they are closely linked." Critics have observed that the term's contemporary usage comprises several meanings, for example Noam Chomsky states that: The term "globalization," like most terms of public discourse, has two meanings: 5
  • 6. its literal meaning, and a technical sense used for doctrinal purposes. In its literal sense, "globalization" means international integration. Its strongest proponents since its origins have been the workers movements and the left (which is why unions are called "internationals"), and the strongest proponents today are those who meet annually in the World Social Forum and its many regional offshoots. In the technical sense defined by the powerful, they are described as "anti- globalization," which means that they favor globalization directed to the needs and concerns of people, not investors, financial institutions and other sectors of power, with the interests of people incidental. That's "globalization" in the technical doctrinal sense. Pro-globalization (globalism) Globalization advocates such as Jeffrey Sachs point to the above average drop in poverty rates in countries, such as China, where globalization has taken a strong foothold, compared to areas less affected by globalization, such as Sub-Saharan Africa, where poverty rates have remained stagnant. Generally, the ideas of free trade, capitalism, and democracy are widely believed to facilitate globalization. Supporters of free trade claim that it increases economic prosperity as well as opportunity, especially among developing nations, enhances civil liberties and leads to a more efficient allocation of resources. Economic theories of comparative advantage suggest that free trade leads to a more efficient allocation of resources, with all countries involved in the trade benefiting. In general, this leads to lower prices, more employment, higher output and a higher standard of living for those in developing countries One of the ironies of the recent success of India and China is the fear that... success in these two countries comes at the expense of the United States. These fears are fundamentally wrong and, even worse, dangerous. They are wrong because the world is not a zero-sum struggle... but rather is a positive-sum opportunity in which improving technologies and skills can raise living standards around the world. Libertarians and proponents of laissez-faire capitalism say that higher degrees of political and economic freedom in the form of democracy and capitalism in the developed world are ends in themselves and also produce higher levels of material wealth. They see globalization as the beneficial spread of liberty and capitalism. Supporters of democratic globalization are sometimes called pro-globalists. They 6
  • 7. believe that the first phase of globalization, which was market-oriented, should be followed by a phase of building global political institutions representing the will of world citizens. The difference from other globalists is that they do not define in advance any ideology to orient this will, but would leave it to the free choice of those citizens via a democratic process •Income inequality for the world as a whole is diminishing. Due to definitional issues and data availability, there is disagreement with regards to the pace of the decline in extreme poverty. As noted below, there are others disputing this. The economist Xavier Sala-i-Martin in a 2007 analysis argues that this is incorrect, income inequality for the world as a whole has diminished. . Regardless of who is right about the past trend in income inequality, it has been argued that improving absolute poverty is more important than relative inequality •Life expectancy has almost doubled in the developing world since World War II and is starting to close the gap between itself and the developed world where the improvement has been smaller. Even in Sub-Saharan Africa, the least developed region, life expectancy increased from 30 years before World War II to about a peak of about 50 years before the AIDS pandemic and other diseases started to force it down to the current level of 47 years. Infant mortality has decreased in every developing region of the world. •Democracy has increased dramatically from there being almost no nations with universal suffrage in 1900 to 62.5% of all nations having it in 2000. •Feminism has made advances in areas such as Bangladesh through providing women with jobs and economic safety. •The proportion of the world's population living in countries where per-capita food supplies are less than 2,200 calories (9,200 kilojoules) per day decreased from 56% in the mid-1960s to below 10% by the 1990s. •Between 1950 and 1999, global literacy increased from 52% to 81% of the world. Women made up much of the gap: female literacy as a percentage of male literacy has increased from 59% in 1970 to 80% in 2000. •The percentage of children in the labor force has fallen from 24% in 1960 to 10% in 2000. •There are increasing trends in the use of electric power, cars, radios, and telephones per capita, as well as a growing proportion of the population with 7
  • 8. access to clean water. •The book The Improving State of the World also finds evidence for that these, and other, measures of human well-being has improved and that globalization is part of the explanation. It also responds to arguments that environmental impact will limit the progress. Anti-globalization (mundialism) Anti-globalization is a term used to describe the political stance of people and groups who oppose the neoliberal version of globalization. “Anti-globalization" may involve the process or actions taken by a state in order to demonstrate its sovereignty and practice democratic decision-making. Anti- globalization may occur in order to put brakes on the international transfer of people, goods and ideology, particularly those determined by the organizations such as the IMF or the WTO in imposing the radical deregulation program of free market fundamentalism on local governments and populations. anti-globalism can denote a single social movement that encompasses a number of separate social movements such as nationalists and socialists. Participants stand in opposition to the unregulated political power of large, multi-national corporations, as the corporations exercise power through leveraging trade agreements which damage in some instances the democratic rights of citizens, the environment particularly air quality index and rain forests, as well as national governments sovereignty to determine labor rights including the right to unionize for better pay, and better working conditions, or laws as they may otherwise infringe on cultural practices and traditions of developing countries. Most people who are labeled "anti-globalization" consider the term to be too vague and inaccurate Podobnik states that "the vast majority of groups that participate in these protests draw on international networks of support, and they generally call for forms of globalization that enhance democratic representation, human rights, and egalitarianism." Critiques of the current wave of economic globalization typically look at both the damage to the planet, in terms of the perceived unsustainable harm done to the biosphere, as well as the perceived human costs, such as increased poverty, 8
  • 9. inequality, miscegenation, injustice and the erosion of traditional culture which, the critics contend, all occur as a result of the economic transformations related to globalization. They point to a "multitude of interconnected fatal consequences-- social disintegration, a breakdown of democracy, more rapid and extensive deterioration of the environment, the spread of new diseases, increasing poverty and alienation"which they claim are the unintended but very real consequences of globalization. The terms globalization and anti-globalization are used in various ways. Noam Chomsky states that The term "globalization" has been appropriated by the powerful to refer to a specific form of international economic integration, one based on investor rights, with the interests of people incidental. That is why the business press, in its more honest moments, refers to the "free trade agreements" as "free investment agreements" (Wall St. Journal). Accordingly, advocates of other forms of globalization are described as "anti-globalization"; and some, unfortunately, even accept this term, though it is a term of propaganda that should be dismissed with ridicule. No sane person is opposed to globalization, that is, international integration. Surely not the left and the workers movements, which were founded on the principle of international solidarity - that is, globalization in a form that attends to the rights of people, not private power systems. Critics argue that: o Poorer countries are sometimes at disadvantage: While it is true that globalization encourages free trade among countries on an international level, there are also negative consequences because some countries try to save their national markets. The main export of poorer countries is usually agricultural goods. It is difficult for these countries to compete with stronger countries that subsidize their own farmers. Because the farmers in the poorer countries cannot compete, they are forced to sell their crops at much lower price than what the market is paying. o Exploitation of foreign impoverished workers: The deterioration of protections for weaker nations by stronger industrialized powers has resulted in the exploitation of the people in those nations to become cheap labor. Due to the lack of protections, companies from powerful industrialized nations are able to offer workers enough salary to entice them to endure extremely long hours and unsafe working conditions, 9
  • 10. though economists question if consenting workers in a competitive employers' market can be decried as "exploitation". The abundance of cheap labor is giving the countries in power incentive not to rectify the inequality between nations. If these nations developed into industrialized nations, the army of cheap labor would slowly disappear alongside development. It is true that the workers are free to leave their jobs, but in many poorer countries, this would mean starvation for the worker, and possible even his/her family if their previous jobs were unavailable. o The shift to service work: The low cost of offshore workers have enticed corporations to move production to foreign countries. The laid off unskilled workers are forced into the service sector where wages and benefits are low, but turnover is high. This has contributed to the widening economic gap between skilled and unskilled workers. The loss of these jobs has also contributed greatly to the slow decline of the middle class which is a major factor in the increasing economic inequality . Families that were once part of the middle class are forced into lower positions by massive layoffs and outsourcing to another country. This also means that people in the lower class have a much harder time climbing out of poverty because of the absence of the middle class as a stepping stone. o Weak labor unions: The surplus in cheap labor coupled with an ever growing number of companies in transition has caused a weakening of labor unions. Unions lose their effectiveness when their membership begins to decline. As a result unions hold less power over corporations that are able to easily replace workers, often for lower wages, and have the option to not offer unionized jobs anymore. The critics of globalization typically emphasize that globalization is a process that is mediated according to corporate interests, and typically raise the possibility of alternative global institutions and policies, which they believe address the moral claims of poor and working classes throughout the globe, as well as environmental concerns in a more equitable way. The movement is very broad, including church groups, national liberation factions, peasant unionists, intellectuals, artists, protectionists, anarchists, those in support of relocalization and others. Some are reformist, (arguing for a more humane form of capitalism) while others are more revolutionary (arguing for what they believe is a more humane system than capitalism) and others are reactionary, believing 10
  • 11. globalization destroys national industry and jobs. One of the key points made by critics of recent economic globalization is that income inequality, both between and within nations, is increasing as a result of these processes. A chart that gave the inequality a very visible and comprehensible form, the so- called 'champagne glass' effect, was contained in the 1992 United Nations Development Program Report, which showed the distribution of global income to be very uneven, with the richest 20% of the world's population controlling 82.7% of the world's income. + Distribution of world GDP, 1989 Quintile of Population Income Richest 20% 82.7% Second 20% 11.7% Third 20% 2.3% Fourth 20% 1.4% Poorest 20% 1.2% Globalization of the Economy Advances in communication and transportation technology, combined with free- market ideology, have given goods, services, and capital unprecedented mobility. Rich countries want to open world markets to their goods and take advantage of abundant, cheap labor in the Poor countries, policies often supported by elites in Poor countries. They use international financial institutions and regional trade agreements to compel poor countries to "integrate" by reducing tariffs, privatizing 11
  • 12. state enterprises, and relaxing environmental and labor standards. The results have enlarged profits for investors but offered pittances to laborers, provoking a strong backlash from civil society. General Analysis on Globalization of the Economy With international trade, financial transfers, and foreign direct investment, the economy is increasingly internationally interconnected. Analyzes economic globalization, and examines how it might be resisted or regulated in order to promote sustainable development. International Trade and Development Trade Agreements, such as the FTAA, NAFTA, and CAFTA facilitate international trade, thereby strongly impacting people at all levels of the economy. They make trade "free" for Northern exports, without prohibiting the rich countries' protectionist measures that harm Southern competitors. Such agreements tend to slow development in poor countries and pull them deeper into poverty. Trade Agreements Trade Agreements, such as the FTAA, NAFTA, and CAFTA facilitate international trade, thereby strongly impacting people at all levels of the economy. Rich countries often manage to prioritize their own interests in such agreements, which tend to harm development of poor countries. Multilateral Agreement on Investment and Related Initiatives In May 1995, the Organization of Economic Co-operation and Development committed itself to the immediate start of negotiations aimed at reaching a Multilateral Agreement on Investment (MAI). Transnational Corporations Transnational corporations have become some of the largest economic entities in the world, surpassing many states. Their continuous push for liberalization has driven globalization while challenging environmental, health, and labor standards in many countries. Export Processing Zones Export Processing Zones, sometimes known as maquiladoras or Special Economic Development Zones, are usually exempt from national taxes, tariff duties and a wide range of regulations, including those on wages, working conditions, health protection, environmental safety and trade union rights. Governments have set up these zones in the hope of attracting investments and creating jobs. But in so doing, 12
  • 13. they turn over sovereignty to corporate investors and seriously undermine national tax and regulatory systems. Foreign Direct Investment Transnational corporations and private individuals invest more money abroad than ever before; foreign direct investment has increased tenfold over the last 20 years. While many poor countries see foreign capital as a tool for growth, it has often increased instability and inequality as well. World Trade Organization This intergovernmental organization sets and enforces the rules of international trade. It has become a target of civil society's criticism over its opaque, undemocratic operating procedures and neo-liberal ideology. World Bank The World Bank's mission is to erradicate poverty by loaning poor countries money for economic development, but these loans often come with demands of economic liberalization. International Monetary Fund The IMF was orginally envisoned as a "lender of last resort" for countries experiencing economic crises. Now, however, the IMF conditions assistance on neo-liberal reforms that exacerbate poverty. Global Taxes This explores the different ways to implement global taxes, the need for democratic oversight and control, the policy shaping effects, the distributive effects, and the possible use of such taxes to fund the UN, its agencies, and other programs for worldwide human security and development. Dollarization In many countries, the US dollar has become the national currency. In others, the national currency has been pegged to the US dollar. In still others, major transactions like real estate usually take place using the dollar. Dollarization eliminates the possibility of independent national monetary policy and it exposes countries to policies set in Washington. Who profits from economic globalisation? What are its advantages/disadvantages? 13
  • 14. Katie Bayly - Suzi Hall - Carolyn Kolasinski - Jacqueline Lawson - Rie Nakazawa Phil Lawn defined economic globalisation as “the integration of many national economies into one single economy through free trade and free capital movement.” Like the first phase of globalisation (from the mid 19th century to 1914), the second phase has been characterised by rapid advances in communications and transportation technology, travel and trade; and by a greater consciousness of the world as a single place, highlighted by global environmental concerns, more widespread demands for participatory democracy, concerns about a “race to the bottom” in labour standards and wages and increased class stratification between and within countries. Economic globalisation has provided new opportunities for those with capital to increase it, creating greater concentration of wealth in the hands of minority elites. Most international trade and investment takes place within the triad of the US, EU and Japan, and it is the multinational corporations based in these countries which have benefited the most from the free trade rules enforced by the WTO, and the deregulation of financial markets, that have brought financial instability, and hence exacerbated political corruption and instability, in parts of the world (such as South East Asia). Integration with the global economy, measured as an increase in trade relative to GDP, is not a one-size-fits-all recipe for economic development. This is not just because economic globalisation sometimes cannot benefit the poorest countries (and sectors of society) who lack sufficient capital, technology and sound institutions to underpin economic growth and development. There are many valid routes to economic growth. But there are limits to the planet’s capacity to absorb all this so-called ‘growth’. In the pursuit of economic growth and corporate profits, the natural environment is often sacrificed and not considered in government policies. Free trade and economic development International financial institutions and organisations like the OECD have pushed the idea that globalisation is an “engine of world growth” in economic terms. They continue to promote it as a means of economic development for the poorest countries. But the new “augmented” Washington Consensus laid out by the IMF may be misguided. It still operates within a narrow rich-country mindset, serving the interests of those most in control of it, with an eye to further global economic 14
  • 15. integration. In its 2002 report, Globalization, Growth and Poverty, the World Bank implies that integration with the global economy has been the main cause of the rapid economic growth and poverty reduction seen in those developing countries with the highest increase in ratio of trade to GDP between the 1970’s and the 1990s. These countries the Bank calls “new globalizers”.Joseph Stiglitz claims that “the battle is... to enable more poor countries to integrate into the world economy in ways that reduce, not increase, inequality and poverty.” Dollar and Kraay present that the "new globalizers" had the highest GDP per capita growth rate in the world during the 1990s (an average of 5 percent) but this may only show that countries which have managed to grow rapidly and reduce poverty, through various and often idiosyncratic means, have also, perhaps as a consequence, tended to become more integrated into the global economy, spurring further economic growth. This is one more illustration of the fact that economic globalisation gives those who already have the necessary capital, skills and products new opportunities to increase profits and expand. Measuring globalization Globalization has had an impact on different cultures around the world. Looking specifically at economic globalization, it can be measured in different ways. These center around the four main economic flows that characterize globalization: · Goods and services, e.g. exports plus imports as a proportion of national income or per capita of population · Labor/people, e.g. net migration rates; inward or outward migration flows, weighted by population · Capital, e.g. inward or outward direct investment as a proportion of national income or per head of population · Technology, e.g. international research & development flows; proportion of populations (and rates of change thereof) using particular inventions (especially 'factor-neutral' technological advances such as the telephone, motorcar, broadband) As globalization is not only an economic phenomenon, a multivariate approach to 15
  • 16. measuring globalization is the recent index calculated by the Swiss think tank KOF.According to the index, the world's most globalized country is Belgium, followed by Austria, Sweden, the United Kingdom and the Netherlands. The least globalized countries according to the KOF-index are Haiti, Myanmar the Central African Republic and Burundi. A.T. Kearney and Foreign Policy Magazine jointly publish another Globalization Index. According to the 2006 index, Singapore, Ireland, Switzerland, the U.S., the Netherlands, Canada and Denmark are the most globalized, while Egypt, Indonesia, India and Iran are the least globalized among countries listed. GLOBALIZATION AND DEMOCRACY Many people now believe that the advance of globalization is inevitable. Arthur Schlesinger, Jr. has gone so far as to exclaim, "Globalization is in the saddle and rides mankind." Hyperbole aside, the critical question is: What are the implications of globalization for political and economic rights in particular and for democracy in general? World opinion is sharply divided about the correct answer to that question. Those who view globalization negatively argue that it has political and economic ramifications which will prove detrimental to democracy. Whereas the Industrial Revolution created more jobs than it destroyed, the Technological Revolution threatens to destroy more jobs than it creates. Further, it will erect new and rigid class barriers between the well-educated and the ill-educated. Huge transfers of wealth from lower-skilled middle class workers to the owners of capital assets and to a new technological aristocracy will exacerbate the income disparities which already are evident in developed counties. In less developed countries such a transfer of wealth, and with it political power, could be devastating, and it could preclude progress toward democracy. One strident critic of what he considers to be runaway global capitalism is, perhaps, a surprising critic. George Soros contends that the "uninhibited pursuit of self-interest" results in "intolerable inequities and instability.... Although I have made a fortune in the financial markers, I now fear that the untrammeled intensification of laissez-faire capitalism and the spread of market values into all areas of life is endangering our open, democratic society." Similar worries are voiced by Arthur Schlesinger, Jr. who writes: The Computer Revolution offers wondrous new possibilities for creative 16
  • 17. destruction. One goal of capitalist creativity is the globalized economy. One- unplanned-candidate for capitalist destruction is the nation-state, the traditional site of democracy. The computer turns the untrammeled market into a global juggernaut crashing across frontiers, enfeebling national powers of taxation and regulation, undercutting national management of interest rates and exchange rates, widening disparities of wealth both within and between nations, dragging down labor standards, degrading the environment, denying nations the shaping of their own economic destiny, accountable to no one, creating a world economy without a world polity. Cyberspace is beyond national control. No authorities exist to provide international control. Where is democracy now? Those who take a pessimistic view of globalization also argue that it is responsible for a withdrawal from modernity, the resurgence of identity politics and a retreat from democracy. They allege that when people believe that powerful forces, such as globalization, are beyond their comprehension and/or control, they retreat into familiar, comprehensible, and protective units. They congregate in ethnic, tribal, or religious enclaves. Globalization through the creation of international, multinational or regional trade and economic institutions can lead to a feeling of loss of political power by groups within states. The sense of loss of power, in turn, leads to a fostering of "tribalism and other revived or invented identities and traditions which abound in the wake of the uneven erosion of national, identities, national economies and national state policy capacity." The upsurge of religious fundamentalism is one case in point. The hostility of fundamentalism to freedom of expression and belief has ominous implications for democracy. Globalism does have its defenders and they tend to see its potential for strengthening and extending democracy. Walter Wriston, former Chief Executive Officer of Citicorp and Chairman of the Economic Policy Advisory Board in the Reagan administration, is among them. He believes that we are living in the midst of the third great revolution in human history, the Information Revolution. Like the Agricultural and Industrial Revolutions which preceded it, this revolution was sparked by changes in technology. With the invention of computers and advances in telecommunications, time and distance have been obliterated. However, "instead of validating Orwell's vision of Big Brother watching the citizen, the third revolution enables the citizen to watch Big Brother. And so the virus of freedom, for which there is no antidote, is spread by electronic networks to the four corners of the Earth." William Meyer of the University of Delaware who has developed a quantitative model which attempts to measure the level of enjoyment of civil and political 17
  • 18. rights in developing countries has come to a conclusion akin to Wriston's. He concluded that the technologies of communication and transportation that have made economic globalization possible also make it possible for the human rights ethos to spread and take root in all sectors of global civil society. "Universal human rights represent nothing less than the ethical dimension of the emerging global culture." Another argument advanced to support the contention of a positive relationship Globalization as Ideology Globalization is just one of an array of concepts and arguing points that have been mobilized to advance the corporate agenda. Others have been deregulation and getting government off our backs, balancing the budget, cutting back entitlements (non-corporate), and free trade. Like free trade, globalization has an aura of virtue. Just as "freedom" must be good, so globalization hints at internationalism and solidarity between countries, as opposed to nationalism and protectionism, which have negative connotations. The possibility that cross-border trade and investment might be economically damaging to the weaker party, or that they might erode democratic controls in both the stronger and weaker countries, is excluded from consideration by mainstream economists and pundits.[fn 1] It is also unthinkable in the mainstream that the contest between free trade and globalization, on the one hand, and "protectionism," on the other, might be reworded as a struggle between "protection"--of transnational corporate (TNC) rights--versus the "freedom" of democratic governments to regulate in the interests of domestic non-corporate constituencies. As an ideology, globalization connotes not only freedom and internationalism, but, as it helps realize the benefits of free trade, and thus comparative advantage and the division of labor, it also supposedly enhances efficiency and productivity. Because of these virtues, and the alleged inability of governments to halt "progress," globalization is widely perceived as beyond human control, which further weakens resistance Modernity in its political and social forms refers to increasing specialisation of societal institutions like political systems, law, economic management, and 18
  • 19. education in isolation from religion. Unlike social life in the pre-modern era, in modernity these functions are carried out free from the overarching influence of religion. From this perspective, religious fundamentalism - in the sense of a return to a purist past - is a problem produced by the encounter between modernity and the Muslim ummah in all its diversity and cultural hybridity. Although the strength of fundamentalism varies according to the intensity of attitudes towards these features, it is clear that in a globalising world diversity and cultural crossovers will become a matter of routine. Instead of eliminating hybridity, this may in fact transform different Islamic countries and regions into autonomous cultural systems, thus posing a challenge to the conventional categorical oppositions of 'us' and 'them', 'Muslim' and 'others'. This type of development would have far-reaching implications for the Muslim ummah. Islamic countries in different parts of the world could be transformed into unique religious and cultural systems, each claiming acceptance and recognition as authentic traditions of Islam. This transformation may lead to the 'decentering' of the Muslim world from its supposed cultural and religious centre in the Arabic Middle East to a multi-centered world. Five such centres of the Islamic world can already be identified, namely, Arabic Middle Eastern Islam, African Islam, Central Asian Islam, Southeast Asian Islam and the Islam of the Muslim minorities in the West. The Bible and Globalization What principles of the Bible should bear on our choice of an economic structure? Can the holding of wealth and living in plenty be morally justified? It is right that a tiny percentage should enjoy wealth and conform, while a vast majority people life in misery and poverty? Does the Bible justify exploitation of earth's resources for the benefit of few people? The Biblical perspective is global: the grand vision of God unfolded in the creation of heaven and earth culminating in the creation of humankind in God's own image (Gen. 1:26). Similarly, the Bible ends with the universal vision of new heaven and new earth (Rev. 21-22). However, the same Bible plays into the hands of the vested interests to satisfy their unbridled thirst for power and pleasure at the expense of the right of fellow humans and the earth. A very powerful biblical teaching is that any economic system that relegates or marginalizes human life falls short of the divine standards. Each person is created in God's image and thus worth and valuable for the Creator. Therefore, in economic life, "any individual, class, caste, nature, gender and community, should not be regarded as an object whose value is determined by the fundamental of the 19
  • 20. market and who may be bought and sole or dispensed with a whim or will of those who possess economic power, he or she is not to be treated as a means but as an end."[5] The central preaching of Jesus is the Kingdom of God, a symbol with universal or global repercussions. It embraces the message that all are brothers and sisters in the one family of God and demands special concern for the marginalized people and justice for all. It demands a more equitable distribution of the world's resources, not the accumulation in the hands of a few. Globalization is definitely not the way of the Kingdom because it uses human beings as cheap labourers and does not respect them as person. This value is contrary to the biblical teaching of Kingdom's value. The Bible upholds a community where justice is expressed in equality and sharing and affirms a community economic system with reciprocal sharing and hospitality. The biblical principle of the use of land and its resources is based on "the earth is the Lord's and the fullness thereof" (Ps. 24:1). In the biblical principle of the divine ownership, human beings are stewards and co-workers and not absolute owner. Human's responsibility is to preserve and `exploit' the earth's fullness judiciously and wisely for both the present and future generations. Globalization also brings destruction to the earth. Nature is not to be exploited. It is not an object, but it is sacred and holy. It is an integral part of the people to be treated with respect and honour. Globalization destroys society The media are saturated with reports of violent crimes of all kinds. Some TV cameras morbidly play their images over the cadavers and blood of the victims. The frequency of violent crimes and armed robberies has become a plague in Salvadoran society. But El Salvador is not an exception. Criminal behavior worldwide has been growing much faster than the population. Only in Japan is there a diminishing tendency, perhaps thanks to their preventive programs. Everywhere else, the rise in violent crime is a characteristic of all societies on the planet. This assertion, which takes us beyond our narrow borders, is not made in order to console ourselves with the woes of others, but rather in order to comprehend a universal social phenomenon of which we obviously are a part. The rise in criminal activity is linked to another universal phenomenon, which is the globalization of social and economic relations. The forward progress of markets which favor the few and marginalize the immense majority of humanity is tearing apart societies and generating new inequalities. Unchecked consumerism and extreme individualism, unleashed by the marketplace, have considerably 20
  • 21. weakened the influence of the family, the community, churches, associations and even the State on individual citizens. Today, individuals are much more independent, but what they have gained in independence they have lost in terms of principles, values and vital reference points for human coexistence. Independence brings along a conviction that everything is permitted and everything is possible. It is the freedom of the marketplace taken to its final consequences, which are turning out to be fatal. The market has unleashed forces which are devouring its sponsors. Crime is linked to unemployment, since those who lack a steady job will steal to feed their families. Thus, crime is closely linked to poverty. As wealth becomes more concentrated, criminal activity increases. The nations which enjoy a high GNP, and which have the best-trained and -equipped police in the world (U.S., Canada, Australia, Germany) are also suffering some of the highest crime rates. But that is not all. People also steal out of frustration. Inequality and the lack of opportunities feed resentment, to such an extent that frustration is a more powerful motive for stealing than hunger itself. In this way, crimes against property serve a double function: to redistribute wealth and as social revenge. Crime not only allows low-income homes to have access to goods usually only enjoyed by higher-income neighbors, but also gives vent to frustration and resentment around the lack of opportunities, around inequality and injustice. Thus, the more skewed a nation's distribution of wealth, the greater the crime rate. The majority of crimes are committed by urban youth. Furthermore, criminal activity has increased along with urban areas. Youth emigrate to the cities with the hope of finding a steady, well-paid job, but their illusions are soon shattered. So, pressured by hunger, the yearning to find an opportunity and the changes happening around them, they are inexorably pushed toward crime. Frustration feeds profound resentments, which helps explain why youths reject education, church and community, political and social organizations. However, these youth do not remain isolated, but instead regroup and create subcultures which offer them an alternative to the society which rejects them and denies them opportunities, but which at the same time promote a life of crime. When a young person joins a gang [mara], it means that he or she acknowledges that other options have been closed off or that those which remain are not attractive. Street gangs offer youth an environment which fosters criminal activity, but it is also a space for them to show off their skills, make contacts and find some sort of mutual protection. Some of these groups operate like informal associations, but others are very well organized, and follow military, sports, monastic or police 21
  • 22. models. Society tends to consider these people criminals, not only because of their conduct, but also because of the way in which the authorities, politicians and the media react to them. The police, in particular, consider their lifestyle as the precursor to a life of crime. In fact, a confrontational attitude is the most obvious way to encourage them to behave like criminals. The use of violence to repress criminal activity is not a good solution. Repressive violence will not put an end to violent crime. Politicians tend to demand repressive violence in order to win prestige, to be seen as hard-line and intolerant of violent crime. It is a highly popular issue, and it has a low political cost. Increasing police capabilities and improving the administration of justice could be helpful in investigating and punishing crimes that have already been committed, but they won't wipe out crime. By the same token, the army also represents no solution whatsoever. Eradicating violent crime means attacking its causes and not its effects. The globalization of capital, investment and the marketplace has resulted in the universalization of violent crime. As wealth becomes evermore concentrated and the ranks of the poor swell, as attractive opportunities for the slip out of the grasp of the majority, and as community, religious and institutional links begin to break with the expansion of individualism, consumerism and freedom, the door opens wider to violent crime. If we choose to continue with globalization we must be prepared to coexist with violent crime. The accumulation of wealth in few hands will produce countless victims, among them even the very same privileged individuals who benefit from globalization. The principal enemy of a State of law is globalization. That ideal cannot become a reality as long as the majority of the people are marginalized and impoverished. How does globalization affect women? Many critics fear that globalization, in the sense of integration of a country into world society, will exacerbate gender inequality. It may harm women-especially in the South--in several ways: •Economically, through discrimination in favor of male workers, marginalization of women in unpaid or informal labor, exploitation of women in low-wage sweatshop settings, and/or impoverishment though loss of traditional sources of income. 22
  • 23. •Politically, through exclusion from the domestic political process and loss of control to global pressures. •Culturally, through loss of identity and autonomy to a hegemonic global culture. At the same time, globalization affects different groups of women in different ways, creates new standards for the treatment of women, and helps women's groups to mobilize. In situations where women have been historically repressed or discriminated under a patriarchal division of labor, some features of globalization may have liberating consequences. While in many countries women remain at a significant disadvantage, the precise role of globalization in causing or perpetuating that condition is in dispute. Women "missing" the world--Evangeline Anderson-Rajkumar The impact of globalization on women in informal sectors The emergence of a global market, with its associated policies of privatization, "stabilization", and liberalization, has led to the setting up of smaller new industries with highly flexible organization and simple infrastructure in developing countries. Closely related to this "informalization" of work is the feminization of work. Labour-intensive industries move to developing countries where women are the preferred labour force, because they can be hired at a low wage. Jobs become available for women, but only as unorganized labourers with no right to form unions or fight for their basic rights: the situation of women working in the garment industry is a case in point. Low-skilled jobs with low wages, long hours of work and lack of job security are typical of the feminization of labour in unorganized sectors. The state generally supports the management and ignores any violation of the labour laws. It is clear that the women are being exploited, but they may not raise their voices - not even against the sexual harassment they may face in the work place. Beauty pageants and globalization Patriarchy introduces new enemies within one's own territory using definitions of ideal femininity/womanliness. Women are asked to compare their beauty with one another: "Mirror, mirror on the wall, who is the fairest of them all?" Indian women, 23
  • 24. for whom the beauty pageant was once an alien concept, are today successfully drawn into the globalized capitalist system, which convinces them that it is a matter of freedom and choice and not a gender issue. Such is the power of patriarchy that anyone who recognizes the face of the demon and attempts to exorcize it, calling it by name, risks being condemned as a deviant, destructive element in society. A woman is identified in terms of her body. Globalization and its impact through the media have defined the ideal body of a "universal" and a "world" woman in India. One of the characteristics of globalization is fragmentation. The cosmetic industry will be helped only if the beauty of a woman is fragmented into her hair, teeth, skin, toe-nails etc. The concept of beauty is standardized as slim, tall, fair, blonde, blue-eyed, etc. An ideal feminine body is defined in terms of its slender shape. "Beauty can never be celebrated by the new global culture. It can only be vulgarized." Global watchers and feminist critics say that there is a direct link between the 1991 announcement by the then finance minister, Manmohan Singh, that India would open its markets to the outside world and the victories of Aishwarya Rai as Miss World and Sushmita Sen as Miss Universe in 1994. The two beauty queens were indeed the ambassadors to welcome the giants of the global economy to India. If there were only five cosmetics products to choose from before the opening, suddenly there was an influx of cosmetics companies. The excise on cosmetics was lowered from 120 per cent to 40 per cent in three years, while the tariffs on water, electricity and fuel shot up. Women in the villages were also searching for "fair, ever fair and lovely". The craving for "whiteness" became an obsession. The newspapers and other marriage bureaux also reveal the discriminatory gender slant in announcing the need for a bride or a groom. A girl who is "fair" in complexion stands more to gain than one who is "dark". Advertisements for cosmetics also promise the buyer that constant use of certain cosmetics would make the women look "fair and lovely". Thus there is a practice of apartheid of a different kind within Indian society where white/fair skin is celebrated, preferred against the dark/black skin. There is no formal law (yet) that punishes those guilty of discrimination based on skin colour. In the United States, this commodification of the woman's body extends to children as well. "The little girls strut their stuff in lipstick and tight dresses, even pull out their baby teeth to win big bucks and fame... Eating disorders and depression - particularly if the girls don't grow up to be beauties - are among the most common ailments that plague pre-teen pageant contestants... There are some 500 pre-teen 24
  • 25. pageants a year in the United States and some of the bigger state-wide contests pay out over a million dollars in prizes". The unethical values connected with this commodification of the body are clear in the case of young Jon Benet Ramsey, a "Little Miss Colorado", who was murdered after sexual assault. She was six years old! Nelia Sancho of the Philippines, who was crowned as beauty queen of Asia-Pacific a few years ago, has words of pain and caution to all women: "After being crowned "Queen of the Pacific" in an international beauty contest held in Australia, I was thrown into a dizzying world of travel and excitement. But also of drudgery and humiliation. As I went from one place to another and met different kinds of people, it became more and more evident that people only expected me to smile and look pretty; nobody expected me to have any intelligence at all, and after the preliminary greetings, nobody tried to have any sort of intelligent conversation with me. That was when I began to see that people saw me as nothing more than a pretty object to beautify a room or add atmosphere to a gathering or event. The most eye-opening experience of all is the way in which I had to promote one product after another which made me start to question the whole woman-product equation. After my reign, I began to more fully study the link between the market economy and the profit motive behind beauty pageants with the objectification of women. Women in a global market economy set-up are just another commodity to be bought and sold at a price." Today, Nelia is one of the prominent voices calling women to challenge these forces of exploitation. Differential Impacts on Women The impact of economic globalisation on women needs to be assessed in light of women’s multiple roles as productive and reproductive labour in their families, as well as their contributions towards overall community cohesion and welfare, and maintaining the social fabric. Because of deep-rooted differences in gender roles and socio-cultural expectations, the impacts of economic globalisation are felt quite differently by women and men. While economic class, race and culture are also extremely important factors in determining the nature and extent of impacts, by and large, the very same policies and trends are likely to have quite different implications for women and men. I will restrict my observations to Asia. Research in the 1980s and 1990s showed that structural adjustment policies 25
  • 26. promoted by the World Bank and IMF affected women much more deeply than men. The elimination of public subsidies for health, education and other social services resulted in a transference of the "welfare" function of the state onto families, and by extension onto girls and women. This trend became entrenched as governments continued to cut back on social spending, thus increasing the burden of caring for vulnerable community members (such as children, the aging, disabled persons or those with illness) on families. Because of women’s traditional roles in most societies in Asia as care-givers, this burden has been disproportionately borne by women than men. In many countries, when public hospitals are privatised or the cost of professional health care goes up, middle to low income families rely more on informal or traditional forms of care. This is usually provided by the female members of households and communities because of women’s traditional roles as service providers in the home. If basic education is privatised or if families cannot afford the rising costs of education, it is more often girls who drop out of school than boys because of beliefs that boys need formal education more than girls to prepare them for their future social roles. This has further implications for the type of employment that women are able to find when they move into the wage labour market. With lower levels of education, women will tend to be concentrated in the lower rungs of the labour market and in jobs that require less formal training or education. The replacement of manual labour with machines and new technology usually displaces more women than men since women have a larger education gap to cross compared with men (in the same class) in order to learn how to use new technologies. Similarly, increases in the prices of food, fuel and essential services such as water and electricity place extra burdens on females in low income households since women are usually responsible for managing domestic food and water consumption, as well as ensuring the overall health of their families. Female children are generally expected to perform more housework than male children and in poor families, the labour of girls in cooking, cleaning, child care, and caring for the elderly or sick family members is essential for household maintenance, and also to free up the time of older women who need to find wage labour. Trade liberalisation has also been shown to have differential impacts on women and men. An essential aspect of trade liberalisation is export competitiveness and much of this competitiveness in Asian countries has come from the labour of women. The development of export processing zones in the 1980s and 1990s in 26
  • 27. developing countries eager to industrialise was premised on the availability of cheap, docile, unskilled labour that would be willing to work at low wages for long hours. Given a longer history of men’s involvement in industrialised production, union organising and political negotiations in the labour market, these export processing zones targeted women as the primary work-force, relying on local cultural and social values as domesticating forces. Research shows that no country in Asia has been able to expand its manufacturing capacity without pulling an increasing proportion of women into industrial waged employment. In the early 1990s, women accounted for more than 43 percent of the manufacturing work force in Indonesia, Malaysia, Philippines, Singapore and Thailand. The manufacturing sector in itself accounted for more than 20 percent of GDP in these countries. In the Thai export sector, women accounted for 90 per cent of the workforce in the canned seafood industry and 85 percent in the garment and accessory industry. In the transition countries of Cambodia, Lao PDR and Vietnam, women’s labour is considered a significant element of their "comparative advantage" in export oriented manufacturing, as gvernments invite investors to establish manufacturing bases in their countries in an order to integrate with regional and global economies. While export industries offer women opportunities for employment and income, the unregulated and competitive nature of these trade regimes also means that women’s labour is often unprotected and dispensable. Few governments have, or are willing to enforce legislation that ensures women workers in this sector with fair living wages, benefits, occupational safety and opportunities for upgrading skills. Another area where women have made significant contributions to local and national economies is through the informal sector. A significant portion of economic activity in Asian countries is not fully counted and does not show up in national census or survey figures, since it is conducted by women in their homes or in small community level production units. These activities range from the sale of vegetables, locally processed food and other goods (artificial flowers, accessories, etc.) to piece work for factories, and the provision of services such as cleaning, cooking, caring for the elderly, childcare, etc. It is important to note that in many Asian countries (e.g., Thailand, Lao PDR, Phillipines, Sri Lanka, India and Pakistan), a large portion of informal sector activities are commercialised or "marketised" versions of women’s traditional skills of maintaining and reproducing the family and community spheres. While some of these activities are self-owned or self-regulated (i.e., women have 27
  • 28. reasonable control over production conditions), many are under sub-contract arrangements in which women are at the mercy of brokers who determine production and compensation rules. This is particularly the case in sub-contracted production for the manufacturing sector, which is generally organised around contracting agents who receive production contracts from larger agents and then sub-contract the work to the women workers. These workers would then perform the work in their homes, or in small production units set up by the principle contractor. A distinguishing feature of such work is that for both cultural and economic reasons, workers cannot and do not organise themselves in unions or associations to protect their rights as workers. Principle contractors are often people known and respected in the community, and take on the persona of "patrons" who bestow favours on community members through economic opportunities, etc. On the other hand, contractors may be from outside the neigbourhood or community, and will simply go elsewhere if workers decide to organise and negotiate as a group. Many researchers argue that there is a growing "informalisation" of labour in the export manufacturing sector, and that this informalisation taps into women’s needs to balance their productive and reproductive responsibilities. Economic opportunism and profits are served by local culture and tradition, which serve as domesticating forces and ensure a supply of cheap and manageable labour. Further, the expansion of this type of sub-contracted production has increased with the globalisation of production, and trade and investment liberalisation. On one hand, the informal sector has provided women with much needed income, which in some instances also enhances their status in their families and communities. But at the same time, the inability to organise as a group in such employment makes it extremely difficult for women to negotiate better compensation, working conditions and labour protection for themselves. The liberalisation of the agriculture sector has also affected women in a variety of ways, from losing access to local markets for their products to dislocation from traditional forms of livelihood, outward migration and re-settlement. Under trade liberalisation agreements (such as in the WTO) developing countries are bound to import a percentage of agriculture and food products for domestic consumption. The developing countries of Asia are primarily rural economies where at least 50 percent of agriculture and food production is done by women. Local and national food security is dependant on domestic production, which in turn ensures livelihood security for rural families. Obligatory imports of agricultural (especially food) products, accompanied by reduction in tariffs on imported goods and the removal of price controls creates pressure on making local goods "competitive" with imported goods (which are often subsidised in their countries of origin). This 28
  • 29. has negative impacts on food and livelihood security for domestic producers, leading to increased economic hardship for rural families and a gradual weakening of rural, self-reliant economic structures. Again, because of women’s dual roles as productive and reproductive labour, this burden is borne more heavily by women than men. Another crucial area that is affected by trade liberalisation and privatisation regimes is natural resources, particularly in relation to bio-diversity and traditional knowledge. A huge proportion of rural communities in Asia are subsistence producers who live off common lands and resources, and rely on traditional knowledge of local forests, plants, animals and fish for food and income. In these communities, women are usually responsible for meeting the family’s daily food and livelihood needs, and are veritable storehouses of knowledge about local bio- diversity and traditional extraction practices. But with commercial harvesting of natural resources for value added production, increase in plantation and mono- cropping for export markets, and transference of land, water and resource rights to private companies, both bio-diversity and environmental quality are seriously threatened, and local communities are alienated from the resource base they depend upon.. The loss of local plant and animal species is a serious blow to women since they rely on seasonal diversity and variation to ensure food, income and health for their families. When communities are displaced or relocated from traditional lands to make way for commercial enterprises, women are particularly disempowered since their sphere of activity is usually limited to local forests, rivers and common lands. Reduced access to these lands and resources, and reduced availability of local foods increases women’s work-load of family maintenance. The introduction of new resource tenure systems often marginalises women from access to and control over all types of resources—natural, economic and political. Bio-piracy and the patenting of women’ traditional knowledge of biodiversity and production processes by private corporations also disempowers women in very particular ways. Not only are women’s intellectual contributions to science, technology and modern know-how not recognised, but also, they are compelled to pay for the very resources that they have nurtured and protected for generations as these resources enter markets in the form of medicines and processed foods. While women in such situations face the danger of losing ownership and control over their indigenous resources through trade liberalisation, they do not necessarily gain access to new resources. Patents on products derived from local bio-diversity do not involve royalty payments to women and their communities who have 29
  • 30. stewarded and built a store of knowledge about these resources. Nor are women compensated for the "opportunity" costs of losing access to their primary sources of food and livelihood. The introduction of new, valued adding production technologies does not necessarily benefit rural women since they usually have neither the required capital nor the base of education and skills required to take advantage of these changes. Unless accompanied by deliberate measures to transfer new technologies and know how to women, the introduction of new technologies often displaces them from traditional areas of autonomy and control The above are just some examples of how women are affected by economic globalisation. The range of impacts is both vast and complex, and these impacts vary across countries, social and economic status, culture, and also across time. What were considered opportunities ten years ago may be considered threats today, as in the case of some types of export processing zones, commercial agricultural production practices, etc. Further, it can be argued that the forces of economic globalisation impact women at two broad levels. First, at the immediate experiential level such as lowered wages, reduced access to land and resources, less food, greater workload, etc. And second, at a more "structural" or strategic level, where impacts are not necessarily visible today, but which lead to a longer- term disempowerment of women. Gaps in Knowledge One of the biggest challenges of tracing and fully understanding the ways in which globalisation affects women is the absence of sex-disaggregated indicators and data in key sectors such as agricultural production and employment, services, and the informal sector. While independent researchers and institutions such as UNIFEM are gathering information and showing how women are affected by current economic trends, many of the indicators and methods used to monitor these trends are in and of themselves not gender sensitive. For example, internationally accepted indicators of income-related poverty do not provide information on the particular incidence of poverty among women (what is called the "feminisation of poverty"). While household surveys on consumption or spending can provide sex- disaggregated data, they cannot measure or take into consideration gender inequality within households, which is usually a significant factor in the manner and the degree to which women are affected by new opportunities and trends. The above gaps in information also have serious consequences for the development of women-friendly national and global economic and social policies, and in 30
  • 31. transforming the forces of economic globalisation to be beneficial rather than hostile to women. While there is plenty of "evidence" that liberalisation, privatisation and deregulation have disproportionately affected women negatively (particularly in lower income groups), this evidence is not accepted as valid by policy makers since it does not fit into their accepted frameworks and analytical practices. At the same time, the knowledge base that informs national and global policy making is blind not only to gender differences, but also to the political disadvantages that result from differences in race, class, culture and ethnicity. The full measure of impacts of economic globalisation on women, and the development of progressive policy measures to counter these measures will not receive the attention it deserves until this dominant knowledge base is challenged and reconstructed. Challenges, Pressures, Threats and Opportunities Change as a Way of Life The changes that have occurred in the post-World War II period have completely reshaped social and economic structures, bringing national governments into a global, knowledge-based economy and society. Governments recognize that these changes will continue and that the pace of change will continue to accelerate. Standing still, or trying to create a steady state, will mean falling behind and becoming uncompetitive in the global marketplace. A further complication of falling behind is the inability of governments to anticipate and recognize potential problems and opportunities, and to take appropriate action to protect their citizens and/or capitalize on the opportunities. Accelerating changes in the global economy are creating a new environment in which governments must operate and to which federal S&T must contribute. (For example, in Canada, R&D spending by industry is growing faster than in any other member countries of the Organisation for Economic Cooperation and Development (OECD). The change that this implies in the nature and dynamics of the Canadian innovation system means that the government S&T effort must be flexible and adaptable in order to keep pace). These changes are creating both opportunities and threats for governments and the S&T required to support them. Underlying this situation is a shift in the “policy environment” (including public expectations concerning what federal S&T can and should provide), making it significantly different from when the federal S&T system was established. 31
  • 32. This environment of continuous change is characterized by a number of factors that are shaping the global economy and the place of governments within it. These factors are outlined below. Globalization-Internationalization A key characteristic of the process of globalization is the accelerating integration of all markets, domestic and foreign. There are no longer any "safe" domestic markets, where firms are protected from competitors by tariff walls. The forces of globalization are also changing the context for government S&T activities. Policy decisions must be backed up with world-class science and technology. S&T is playing a more prominent role in trade disputes and their resolution. Pressures for global harmonization of standards and regulations require that national S&T activities meet international standards. In order for national governments to be able to enforce a unique national identity and economic sovereignty in the global marketplace, they must be able to back up their policies with internationally accepted science. In short, national S&T efforts, facilities and equipment need to be world-class in the academic, private sector and government arenas. Increased Public Expectations Canadians look to their governments for assurance that their interests are being addressed (i.e. health and safety, security, economic and social well-being, etc.). While the amount and quality of information available for independent decision making is better now than in the past, Canadians still look to the government to take action where the available information is incomplete, or is overwhelming in volume and/or complexity. Also, there are many areas where national decisions are required for which Canadians rely on the federal government to ensure the proper, fair functioning of the marketplace. They also look to their governments to provide other services in the public interest such as research, education, defence, a supportive business environment, social programs and infrastructure. These factors have raised public expectations concerning what government can and should be doing, as well as the level of involvement the public should have in government decision making. Increasingly, openness, transparency and internationally recognized excellence in both science and decision making are expected by citizens. Advances in Knowledge and Technological Change The pace of technological change and the rate of advancement in knowledge are unprecedented and appear likely to continue to accelerate. New products and 32
  • 33. technologies often require new types of regulatory responses or new needs for regulatory science. (Biotechnology is a prime example.) Governments need to be able to keep pace with these developments to ensure the safety of their citizens and the environment, and to ensure that commercial development is not adversely affected by government delays in product/process approvals. In some rapidly advancing, technology-intensive fields, government scientists need a level of expertise that often requires hands-on, continuing experience in leading-edge research to understand the results they are required to assess. Knowledge-based Economy and Society The central role of knowledge and S&T in economic growth and social progress is changing the dynamics of these processes and the role of governments in them. Increasingly, governments are focusing on the strategic role of innovation systems and the linkages between the players within them. With science and technology being basic components of most public policy issues, there are increased expectations and demands for a major contribution from federal S&T capabilities. A key characteristic of the knowledge-based economy and society is the growing functional identity and market value of knowledge. Knowledge-intensive goods and services tend to be higher value added, while less knowledge-intensive goods and services tend to be lower value added. Another key characteristic is that knowledge itself is the foundation of business competitiveness. Pressures to Control Government Spending Governments around the world are being pressured by their citizens to reduce government spending and to ensure top value for that spending. There is much stronger pressure to demonstrate clear needs for federal investments in S&T. Governments are under pressure to prioritize their spending on S&T and/or to try innovative approaches to meeting their S&T needs. Diversity of Options The rationale for performing S&T within government needs to be based on a demonstration that the work is relevant to specific needs of government; that it can be done more effectively and/or efficiently in government facilities than elsewhere; and that, if the government did not do it, it would either not get done, or else would be done in a manner or a time frame that is not suitable for responding to the needs of the government. Federal laboratories are no longer the primary sources of S&T facilities and expertise in Canada. With strong S&T capabilities available in universities and the 33
  • 34. private sector, decision makers have many more options for accessing the S&T knowledge they require. They can fund work in universities, contract it out to industry, or access it internationally, either from foreign laboratories, or, in some instances, over the Internet. Thus, the rationale for performing S&T within government needs to be based on a demonstration that the work is relevant to specific needs of government; that it can be done more effectively and/or efficiently in government facilities than elsewhere; and that, if the government did not do it, it would either not get done, or else would be done in a manner or a time frame that is not suitable for responding to the needs of the government. It is important to note that the federal government needs to have a degree of scientific and/or technological capacity to exercise the option of outsourcing the research. The government department or agency should have a clear understanding of its needs for the specific scientific or technology research and/or development. It also needs to have a capability for a clear understanding of the results of the S&T work, their implications for the required decisions, and their strengths and weaknesses. It must also have the ability to assess the quality of the work with reference to leading-edge standards. The International Experience It is interesting that all of the governments surveyed have this active in-house R&D function, including even the highly privatesector- oriented governments. Governments around the world are all experiencing the impacts of this changing knowledge-based context for governance. We commissioned a review of the international experience on this subject. It was clear from this review that different governments are taking different approaches in dealing with these challenges, based on their political systems and the historical development of their S&T systems. (For example, the United States system has a strong private sector orientation, while France’s central government performs a substantive amount of S&T work it believes to be needed either internally by the government or by its private sector clients). Another finding is that governments of all OECD countries (with the exception of New Zealand) have some in-house R&D capability. In smaller countries, this capability is a relatively important fraction of the overall national R&D system; in larger countries, in-house R&D is a relatively smaller fraction. However, it is interesting that all of the governments surveyed have this active in-house R&D function, including even the highly private-sector-oriented governments such as 34
  • 35. the United States. Globalization: The opportunities Jobs are being created as business opportunities increase with the reduction of trade barriers and the decentralization of production to take advantage of benefits specific to the location of their facilities (e.g., low-cost unskilled and skilled labour). The most striking is the case of export processing zones (EPZs), as described elsewhere. Other developments are the subcontracting of activities by companies, greater specialization and new forms of work organization. All have some positive direct and indirect effects on employment. The spread of subcontracting has generated at least 200 million jobs worldwide. New forms of work organization have been accompanied by a rise in non-standard forms of employment, with advantages for certain groups. Workers with family responsibilities, highly skilled professionals, migrants and adults undergoing some form of training have been able to opt for part-time, temporary, home-based and fixed-term employment. Greater specialization and the widespread application of advanced technologies have stimulated a rise in demand for skilled labour in fields such as information technology (IT), specialized financial and other business services, materials engineering and biotechnology. On the whole, job opportunities for women in high-growth sectors remain limited, mainly because of lack of required skills. Mixed experiences Available evidence suggests that as a group, women are lagging behind when it comes to the gains from globalization. What accounts for this? Certain structural factors, among others, help to explain: •Technological change and specialized production strategies tend to favor skilled and well-educated workers - a category in which women are severely under-represented •Investing in skills in those segments of the labour market in which women are predominant are considered to yield lower returns. Therefore, opportunities for skills upgrading at the enterprise level are fewer than those which exist for men •Whether they are in export-oriented or import-competing industries, women are in jobs which are more likely to be subcontracted, relocated abroad or 35
  • 36. eliminated by labour-saving technologies •Amid growing competitive pressures, new forms of work organization are being introduced by many enterprises as part of their efficiency-enhancing and cost-saving strategies. This leads to a rise in non-standard employment; i.e., lack of job security (certain enterprises do not give written employment contracts), limited possibilities for training and career advancement, and inadequate social security coverage in terms of old-age pensions, sickness insurance and maternity protection •The traditional gender disparities in wages appear to be widening in globalizing economies. This may be explained by the cumulative effects of persistent discriminatory practices, a deepening polarization of skilled and unskilled labour with women being caught in a "low-skilled/low-paid jobs trap", and low unionization rates which exclude them from the coverage of collective agreements which set basic pay rates and working conditions Policy responses Some degree of government intervention, with the involvement of the social partners, would seem justifiable in order to attain the twin goals of growth and equity. Measures may include: •Passing equality-promoting legislation to protect women against discriminatory practices with respect to recruitment, remuneration and promotion •Strengthening labour inspection services to monitor the implementation of national labour standards •Extending collective agreements to cover non-organized workers in specific sectors and industries where pay and working conditions compare unfavourably with those of organized workers in the same sectors and industries •Reforming social insurance systems to enable workers in non-standard employment to have better coverage •Improving social "safety nets" to guarantee minimum standards of protection for vulnerable groups such as the working poor, the long-term unemployed and single-parent households •Setting enrollment and graduation targets for girls and women in educational institutions at all levels, with a view to raising knowledge and skills which 36
  • 37. would enhance their employability •Instituting curriculum reforms, scholarship programmes and advisory services, to orient women to disciplines and training programmes in fields for which labour demand is forecast to grow •Encouraging social dialogue and active participation by employers' and workers' organizations in policymaking, and developing programmes which focus on: •Improving women's access to enterprise-based apprenticeship programmes and on-the-job training for workers •Targeting the retraining of women in non-traditional fields and providing various forms of assistance to those women wishing to set up their own businesses, paying particular attention to rural-based women who want to diversify into non-farm activities •Providing adequate child care and other services to facilitate women's employment and labour market re-entry after interruptions for family-related reasons Gender inequalities in the labour market and at the level of the workplace are not new, but the changes associated with globalization appear to be accentuating the effects of attitudinal, policy-related and structural factors which have long interacted to limit women's social and economic progress. The appropriate mix of policies for addressing these issues will necessarily differ across countries, but there are four "social pillars" which ought to underpin whatever measures may be taken to spread the gains from globalization among workers in general, and women workers in particular. Does globalization cause poverty? Many people who are concerned about the fate of the world's poor now attribute their plight to globalization. They argue that globalization has weakened the position of poor countries and exposed poor people to harmful competition. Their concern is understandable, especially since the gap between rich and poor has indeed become more glaring in recent decades. However, proving a direct link between economic globalization and poverty is a complex task for several reasons: Globalization as a single cause. Specifying how globalization affects the 37
  • 38. economic status of countries or individuals is not easy. The effects of "globalization" may be due to competition among workers, or foreign investment, or trade, or government borrowing. There is no single measure of integration into the world economy. Each aspect of integration can have variable effects. Poverty as a multidimensional phenomenon. Poverty can be measured in different ways-for example, relative to a country's average, by consumption capacity, or in terms of overall well-being. Many people in many places historically have been poor for many reasons. Attributing (increases in) poverty to globalization therefore requires proving that globalization has become a dominant factor in producing a new kind of poverty. Globalization and overall global poverty. By common consent, globalization has proceeded rapidly since the 1980s. Yet according to the recent Global Poverty Report, the proportion of the world population living in poverty has declined from 29% in 1988 to 26% in 1998. Moreover, social indicators for many poor countries also show improvement over several decades. Globalization and poverty in specific countries. If globalization causes poverty, then countries that become more economically integrated via trade and investment should do worse. But some that have become more integrated into the world economy, such as China, have made progress. Others, for example in sub-Saharan Africa, that have remained relatively isolated have experienced declines. Such overall differences do not settle the issue, since many other factors may be at work, but they do cast some doubt on the overall argument. Poverty vs. inequality. There is ample evidence that the gap between the richest and poorest countries, and between the richest and poorest groups of individuals in the world, has increased. But inequality may increase without an increase in poverty rates, for example if globalization increases opportunities for the wealthy more rapidly than for the poor. Since increasing wealth may be due to many causes, showing that the rich get richer because the poor get poorer is trickier than recording and lamenting the fact of inequality as such. Globalization as catchall. One characteristic of arguments linking globalization and poverty is the generalization from specific instances of impoverishment to grand global developments. When governments assume debt in private capital markets and declining world demand for their commodities depresses prices and they seek funds from the IMF to repay loans and they agree to conditions for internal reform and these conditions impose hardship on their people, it is tempting to conclude that therefore "globalization" causes poverty. 38
  • 39. Can globalization be controlled? The issue of controlling or regulating globalization concerns elite officials of states and intergovernmental organizations as well as opponents of neoliberalism in pursuit of global justice. They often share a sense that the current thrust of globalization may be irreversible and out of anyone's control. They have several good reasons to think so: •one of globalization's driving forces, technological innovation, is inherently unpredictable •globalization results from the interplay of many parties (economic and political), none of which exerts dominant influence •old regulatory agencies devised by states cannot control processes that exceed their territorial authority •apart from minimal rules of competition itself, the world lacks a single set of rules that serves to regulate transnational behavior This concern has given rise to a now-fashionable interest in "global governance," or the design of institutions that authoritatively manage and regulate actions, processes, and problems of global scope or effect. While some believe such governance is desirable but lacking, others think it is in fact emerging in the work of various international organizations and groups active in civil society. Though advocates of global governance portray it as enhancing democracy, defenders of traditional democratic values and state interests have questioned such claims. Challenges for Theological Education We have looked into some of the positive and negative aspects of globalization. It is a process that is inescapable and irreversible. We have to go through it. We have to transform it to meet a new future with hope. We need to be critical of the problems linked to the globalization process and affirm certain priorities while descerning God's purpose in this world. So much have been written in the area of globalization and theological education. Theological education have to move into new areas such as globalization, the 39
  • 40. ecological crisis, genetic engineering and ethnicity - all these areas have been outside of our traditional schemes of theological education, though they all impinge on our lives and relationships. Many of the theological educators, pastors, missionaries and Christian ministers are ill-equipped to meet the challenges of new technology and cyber culture. A theological education that does not take this issue into consideration will have no impact. We need to evolve a clear theological methodology and perspective to address this fast emerging challenge. Some of the challenges that we need to face seriously are: a) A perspectival change: An important area that theological educators have to face is the question of perspective in theological education. For any theological inquiry, we need to have a perspective. It matters what or whose perspective one had in doing theology. For too long an elitist perspective has been dominant. The perspective of subaltern groups like indigenous people and women and their struggle for new life has been overlooked in theological education. A very clear scripturally directed perspective is the subaltern perspective. An addition of one subject like feminist theology or indigenous people's theology in the existing courses of theological schools is not sufficient. Neither is organizing a few seminars and consultations sufficient. The study of gender justice must become a hermeneutical key to theology. Teaching theology from woman's perspective would help to challenge the present patriarchal culture and ideology in our religious-cultural, socio-political and economic structures. We should consciously integrate the perspective of the marginalized people in the whole process of theological education. In this effort, we should aim to discover an alternative view of life and vision of human bond to one another and to the earth. b) Curriculum: Theological schools must develop a curriculum that is contextual and expose globalization as driven by the motives of financial profit and just plain greed. We need a curriculum that supports the principle of Christian solidarity and the traditional values of community, family, respect of life and hospitality. Moreover, globalization has brought people of different religious faith closer to each other. Our response is to broaden our curriculum to include a greater focus on studying other religions. c) An inter-disciplinary approach: The present character of theological education is too much disciplinary and compartmentalized. This approach alone is not sufficient in a multi context like ours. The reality of our experience is complex and we need a confluence of tools to unravel its significance. We need an inter- disciplinary character of our study and research. In this process, the cultural and religious traditions of our people must be taken seriously. They are not just useful to supply an alternative vision of human bonding to one another and to earth alone, 40
  • 41. but they have to be taken seriously to support an alternative development paradigm. d) A transformative approach: Gaining new knowledge should help us in the transformation of our lives. It is unfortunate that theological education has fallen into the trap set by the philosophy of modern educational system. Education has become skill oriented. Theological education should not be reduced to mere skill orientation. Today theological education has been reduced to mere abstract and intellectual exercise leaving very little scope for action-reflection. We need to challenge this pattern of Theological education. Theological education has to be directed towards transformation. Praxis-thinking challenges us that, thinking that occurs apart from critical involvement ends up in construction of theories about existence that keep us away from the real world. We need rigorous theoretical reflection of the Word of God, but it should emerge from the practice that is directed to transformation. In order to do theological-praxis we need social and cultural analysis of our context. They should form an integral part of the theological curriculum. e) Protection of diversity: Plurality is an integral part of the Creator. No culture, no community is excluded from this God's structure of creation. All are unique in their own ways and, therefore, no one has the right to dominate and suppress the other. Life is protected and it can grow to its fullness only by affirming the beauty of diversity. Therefore, a perspectival change in theological education to understand and appreciate the diverse religious and cultural resources of human kind as the common property of humanity becomes crucial. A positive approach especially to the people of other faiths, culture and languages can provide a new paradigm of pedagogy to theological education. Conclusion We cannot find easy answer to these complex problems brought by the process of globalization. Theological education needs to help people to discern justice and speak for justice for the victims of globalization. It is important that the Word of God is constantly engage in helping people to search for an alternative vision of human bonding to one another and to the whole of God's creation. It is also important to recognize that an indispensable role of theological education in the context of globalization is to strengthen the prophetic ministry of the church so that it can become the salt, light and leaven against the ill effects of globalization. Impact of globalization on India: 41
  • 42. India opened up the economy in the early nineties following a major crisis that led by a foreign exchange crunch that dragged the economy close to defaulting on loans. The response was a slew of Domestic and external sector policy measures partly prompted by the immediate needs and partly by the demand of the multilateral organisations. The new policy regime radically pushed forward in favour of amore open and market oriented economy. Major measures initiated as a part of the liberalisation and globalisation strategy in the early nineties included scrapping of the industrial licensing regime, reduction in the number of areas reserved for the public sector, amendment of the monopolies and the restrictive trade practices act, start of the privatisation programme, reduction in tariff rates and change over to market determined exchange rates. Over the years there has been a steady liberalisation of the current account transactions, more and more sectors opened up for foreign direct investments and portfolio investments facilitating entry of foreign investors in telecom, roads, ports, airports, insurance and other major sectors. The Indian tariff rates reduced sharply over the decade from a weighted average of 72.5% in 1991-92 to 24.6 in 1996-97.Though tariff rates went up slowly in the late nineties it touched 35.1% in 2001-02. India is committed to reduced tariff rates. Peak tariff rates are to be reduced to be reduced to the minimum with a peak rate of 20%, in another 2 years most non-tariff barriers have been dismantled by march 2002, including almost all quantitative restrictions. India is Global: The liberalisation of the domestic economy and the increasing integration of India with the global economy have helped step up GDP growth rates, which picked up from 5.6% in 1990-91 to a peak level of 77.8% in 1996-97. Growth rates have slowed down since the country has still bee able to achieve 5-6% growth rate in three of the last six years. Though growth rates has slumped to the lowest level 4.3% in 2002-03 mainly because of the worst droughts in two decades the growth rates are expected to go up close to 70% in 2003-04. A Global comparison shows that India is now the fastest growing just after China. This is major improvement given that India is growth rate in the 1970’s was very low at 3% and GDP growth in countries like Brazil, Indonesia, Korea, and Mexico was more than twice that of India. Though India’s average annual growth rate almost doubled in the eighties to 5.9% it was still lower than the growth rate in China, Korea and Indonesia. The pick up in GDP growth has helped improve India’s global position. Consequently India’s position in the global economy has 42
  • 43. improved from the 8th position in 1991 to 4th place in 2001. When GDP is calculated on a purchasing power parity basis. Globalisation and Poverty: Globalisation in the form of increased integration though trade and investment is an important reason why much progress has been made in reducing poverty and global inequality over recent decades. But it is not the only reason for this often unrecognised progress, good national polices , sound institutions and domestic political stability also matter. Despite this progress, poverty remains one of the most serious international challenges we face up to 1.2 billion of the developing world 4.8 billion people still live in extreme poverty. But the proportion of the world population living in poverty has been steadily declining and since 1980 the absolute number of poor people has stopped rising and appears to have fallen in recent years despite strong population growth in poor countries. If the proportion living in poverty had not fallen since 1987 alone a further 215million people would be living in extreme poverty today. India has to concentrate on five important areas or things to follow to achieve this goal. The areas like technological entrepreneurship, new business openings for small and medium enterprises, importance of quality management, new prospects in rural areas and privatisation of financial institutions. The manufacturing of technology and management of technology are two different significant areas in the country. There will be new prospects in rural India. The growth of Indian economy very much depends upon rural participation in the global race. After implementing the new economic policy the role of villages got its own significance because of its unique outlook and branding methods. For example food processing and packaging are the one of the area where new entrepreneurs can enter into a big way. It may be organised in a collective way with the help of co-operatives to meet the global demand. Understanding the current status of globalisation is necessary for setting course for future. For all nations to reap the full benefits of globalisation it is essential to create a level playing field. President Bush’s recent proposal to eliminate all tariffs on all manufactured goods by 2015 will do it. In fact it may exacerbate the prevalent inequalities. According to this proposal, tariffs of 5% or less on all manufactured goods will be eliminated by 2005 and higher than 5% will be 43
  • 44. lowered to 8%. Starting 2010 the 8% tariffs will be lowered each year until they are eliminated by 2015. GDP Growth rate: The Indian economy is passing through a difficult phase caused by several unfavourable domestic and external developments; Domestic output and Demand conditions were adversely affected by poor performance in agriculture in the past two years. The global economy experienced an overall deceleration and recorded an output growth of 2.4% during the past year growth in real GDP in 2001-02 was 5.4% as per the Economic Survey in 2000-01. The performance in the first quarter of the financial year is5.8% and second quarter is 6.1%. Export and Import: India’s Export and Import in the year 2001-02 was to the extent of 32,572 and 38,362 million respectively. Many Indian companies have started becoming respectable players in the International scene. Agriculture exports account for about 13 to 18% of total annual of annual export of the country. In 2000-01 Agricultural products valued at more than US $ 6million were exported from the country 23% of which was contributed by the marine products alone. Marine products in recent years have emerged as the single largest contributor to the total agricultural export from the country accounting for over one fifth of the total agricultural exports. Cereals (mostly basmati rice and non-basmati rice), oil seeds, tea and coffee are the other prominent products each of which accounts fro nearly 5 to 10% of the countries total agricultural exports. Where does Indian stand in terms of Global Integration? India clearly lags in globalisation. Number of countries have a clear lead among them China, large part of east and far east Asia and eastern Europe. Lets look at a few indicators how much we lag. · Over the past decade FDI flows into India have averaged around 0.5% of GDP against 5% for China 5.5% for Brazil. Whereas FDI inflows into China now exceeds US $ 50 billion annually. It is only US $ 4billion in the case of India · Consider global trade – India’s share of world merchandise exports increased from .05% to .07% over the pat 20 years. Over the same period China’s share has tripled to almost 4%. · India’s share of global trade is similar to that of the Philippines an economy 6 times smaller according to IMF estimates. India under trades by 70-80% given its 44
  • 45. size, proximity to markets and labour cost advantages. · It is interesting to note the remark made last year by Mr. Bimal Jalan, Governor of RBI. Despite all the talk, we are now where ever close being globalised in terms of any commonly used indicator of globalisation. In fact we are one of the least globalised among the major countries – however we look at it. · As Amartya Sen and many other have pointed out that India, as a geographical, politico-cultural entity has been interacting with the outside world throughout history and still continues to do so. It has to adapt, assimilate and contribute. This goes without saying even as we move into what is called a globalised world which is distinguished from previous eras from by faster travel and communication, greater trade linkages, denting of political and economic sovereignty and greater acceptance of democracy as a way of life. Globalization and Indian women: Globalization has had negative implications for Indian women. Their plights are similar to those of women in other developing regions such as Africa and Asia. Globalization has made many international corporations richer by the billions. However, what most people are not aware of is that women in these developing countries are suffering enormously due to this expansion of corporate empires. According to estimates from World Development Indicators, “Women work two- thirds of the world’s working hours, produce half of the world’s food, but earn only ten percent of the world’s income, and own less than one percent of the world’s property (Tomlinson)”. According to Vandana Shivea, and Indian ecofeminist and scholar, globalization along with the support of organizations such as the World Bank and the International Monetary Fund, have created slave wages. These wages are not necessarily the result of “unjust” societies, but of the fact that global trade devalues the worth of people’s lives and work (Aujla). While globalization has brought jobs to rural, developing areas such as India where there was previously no employment, these jobs seem to be wolves in sheep’s clothing. The work available to women is almost always poorly paid, mentally and physically unhealthy, demeaning, or insecure. Women are suffering two fold. As women in developing countries move into the work force, their domestic responsibilities are not alleviated. Women work two full time jobs. One in a factory, where they are paid next to nothing, the second is in the home where they are paid nothing (Moghadam). According to Merlin A. Taber and Sushma Batra, editors of the book Social Strains of Globalization in India, development for poor women has meant the migration of men to cities, higher prices for commodities, poorer job opportunities. “The mixture of corporate 45
  • 46. capitalism and Western culture models is dissolving family and community social controls as witnessed by higher rates of family violence, rape, divorce, and family breakdown.” One example of women’s labor being exploited would be the Noida Export Processing Zone, which is 24 km from New Delhi. These “zones” prefer to hire women because they are “more docile and more productive in men.” In short, they are easier to control and less likely to retaliate against less than ideal working conditions, which are exactly what thousands of women encounter 12 hours a day. The zone is dangerous, hot, and unsanitary. Unnecessary body searches are routine. There are no maternity benefits and minimum wage is never enforced. Women who become pregnant or marry are immediately fired. Overtime is compulsory but women are paid lower rates than men. In order to avoid being fired, women turn to unsafe abortions performed by unqualified “doctors.” In the zone, “respiratory problems, pelvic inflammatory disease, and sever cases of dehydration and anemia are common.” (Rajalakshmi) Consequences: The implications of globalisation for a national economy are many. Globalisation has intensified interdependence and competition between economies in the world market. This is reflected in Interdependence in regard to trading in goods and services and in movement of capital. As a result domestic economic developments are not determined entirely by domestic policies and market conditions. Rather, they are influenced by both domestic and international policies and economic conditions. It is thus clear that a globalising economy, while formulating and evaluating its domestic policy cannot afford to ignore the possible actions and reactions of policies and developments in the rest of the world. This constrained the policy option available to the government which implies loss of policy autonomy to some extent, in decision-making at the national level. Effects of globalization Globalization has various aspects which affect the world in several different ways such as: · Industrial (alias trans nationalization) - emergence of worldwide production markets and broader access to a range of foreign products for 46
  • 47. consumers and companies. · Financial - emergence of worldwide financial markets and better access to external financing for corporate, national and subnational borrowers. · Economic - realization of a global common market, based on the freedom of exchange of goods and capital. · Political - political globalization is the creation of a world government which regulates the relationships among nations and guarantees the rights arising from social and economic globalization. · 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 telephony and Internet. · Cultural - growth of cross-cultural contacts; advent of new categories of consciousness and identities such as Globalism - which embodies cultural diffusion, the desire to consume and enjoy foreign products and ideas, adopt new technology and practices, and participate in a "world culture"; and also Transformation of culture · Ecological- the advent of global environmental challenges that can not be solved without international cooperation, such as climate change, cross- boundary water and air pollution, over-fishing of the ocean, and the spread of invasive species. Many factories are built in developing countries where they can pollute freely. Globalism and free trade interplay to increase pollution and accelerate it in the name of an ever expanding capitalist growth economy in a non-expanding world. The detriment is again to the poorer nations while the benefit is allocated to the wealthier nations. · Social - increased circulation by people of all nations with fewer restrictions. Provided that the people of those nations are wealthy enough to afford international travel, which the majority of the world's population is not. An illusory 'benefit' recognized by the elite and wealthy, and increasingly so as fuel and transport costs rise. · Transportation · International cultural exchange o Spreading of multiculturalism, and better individual access to cultural diversity. However, the imported culture can easily supplant the local 47
  • 48. culture, causing reduction in diversity through hybridization or even assimilation. The most prominent form of this is Westernization. o Greater international travel and tourism for the few who can afford international travel and tourism. o Greater immigration, including illegal immigration, except for those countries around the world including the UK, Canada, and the United States who have accelerated removal of illegal migrants and modified laws to increase the ease of removing those who have entered the country illegally, while ensuring that immigration policies allow those more favourable to the stimulation of economy to enter, primarily focusing on the capital that immigrants can move into a country with them. o Spread of local consumer products (e.g. food) to other countries (often adapted to their culture) including genetically modified organisms. A new and novel feature of the globalist growth economy is the birth of the licensed seed which will only be viable for one season and can not be replanted in a subsequent season - ensuring a captive market to a corporation. o World-wide 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. o World-wide sporting events such as FIFA World Cup and the Olympic Games. o Formation or development of a set of universal values - Homogenization of Culture · Technical o Development of a global telecommunications infrastructure and greater transborder data flow, using such technologies as the Internet, communication satellites, submarine fiber optic cable, and wireless telephones o Increase in the number of standards applied globally; e.g. copyright laws, patents and world trade agreements. · Legal/Ethical 48
  • 49. o The creation of the international criminal court and international justice movements. o Crime importation and raising awareness of global crime-fighting efforts and cooperation. o Sexual awareness – It is often easy to only focus on the economic aspects of Globalization. This term also has strong social meanings behind it. Globalization can also mean a cultural interaction between different countries. Globalization may also have social effects such changes in sexual inequality, and to this issue brought about a greater awareness of the different (often more brutal) types of gender discrimination throughout the world. o Increasing concentration of wealth in fewer and fewer hands. Media and other multinational mergers leading to fewer corporations controlling vaster segments of society and production. The decrease in the middle class, and the increase in poverty observed within Globalized and deregulated nations. Effects of globalization 1Enhancement in the information flow between geographically remote locations 2The global common market has a freedom of exchange of goods and capital 3There is a broad access to a range of goods for consumers and companies 4Worldwide production markets emerge 5Free circulation of people of different nations leads to social benefits 6Global environmental problems like cross-boundary pollution, over fishing on oceans, climate changes are solved by discussions 7More transborder data flow using communication satellites, the Internet, wireless telephones etc. 8International criminal courts and international justice movements are launched 9The standards applied globally like patents, copyright laws and world trade agreements increase 49
  • 50. 10Corporate, national and subnational borrowers have a better access to external finance 11Worldwide financial markets emerge 12Multiculturalism spreads as there is individual access to cultural diversity. This diversity decreases due to hybridization or assimilation 13International travel and tourism increases 14Worldwide sporting events like the Olympic Games and the FIFA World Cup are held 15Enhancement in worldwide fads and pop culture 16Local consumer products are exported to other countries 17Immigration between countries increases 18Cross-cultural contacts grow and cultural diffusion takes place 19There is an increase in the desire to use foreign ideas and products, adopt new practices and technologies and be a part of world culture 20Free trade zones are formed having less or no tariffs 21Due to development of containerization for ocean shipping, the transportation costs are reduced 22Subsidies for local businesses decrease 23Capital controls reduce or vanquish 24There is supranational recognition of intellectual property restrictions i.e. patents authorized by one country are recognized in another Advantages of Globalization Positive Aspects: There are many potentially positive aspects of globalization, if it is pursued for the common good, not just for the benefit of a few. Today globalization has led to the opening up of the national boundaries to international trade and global competition. Developments linked with globalization have opened up boundless 50
  • 51. possibilities for human development, enormous new opportunities and enhanced the quality of life for many people in the third world countries. For example, the production of goods for consumption on a massive scale has brought not only a better and more varied goods available to every citizen, but also has brought enormous change in people's value system. Those who have and are able to buy the goods have attained greater comfort, speedier communication and faster travel. Information technology has converted the world into a "global village". The events of far-off lands are easily accessible in our living rooms. This process has promoted exchange of ideas and customs between peoples of different countries. Today our ways of thinking and behaving are now challenged beyond accepted traditional patterns. The horizon of our perspectives has suddenly embraced the `the global village' beyond the confines of our homes. And this has been reciprocally beneficial. In addition, live communication of facts makes us partake instantaneously in the events of history. It also creates and promotes global concern. We now have the possibility of immediate worldwide attention to global issues, particularly to people in emergency situations. For this reason, it is irrational on our part to reject it outright; an uncritical attitude towards it is unwise. We need to affirm the positive side of this development and make use of the many opportunities it offers for our development. Globalization has several advantages on the economic, cultural, technological, social and some other fronts. Globalization means increasing the interdependence, connectivity and integration on a global level with respect to the social, cultural, political, technological, economic and ecological levels. Advantages of Globalization 1Goods and people are transported with more easiness and speed 2The possibility of war between the developed countries decreases 3Free trade between countries increases 4Global mass media connects all the people in the world 5As the cultural barriers reduce, the global village dream becomes more realistic 6There is a propagation of democratic ideals 7The interdependence of the nation-states increases 51
  • 52. 8As the liquidity of capital increases, developed countries can invest in developing ones 9The flexibility of corporations to operate across borders increases 10The communication between the individuals and corporations in the world increases 11Environmental protection in developed countries increases 12Increased free trade between nations 13Reduction of likelihood of war between developed nations 14Increased liquidity of capital allowing investors in developed nations to invest in developing nations 15Corporations have greater flexibility to operate across borders 16Global mass media ties the world together 17Increased flow of communications allows vital information to be shared between individuals and corporations around the world 18Greater ease and speed of transportation for goods and people 19Reduction of cultural barriers increases the global village effect 20Spread of democratic ideals to developed nations 21Greater interdependence of nation-states 22Increases in environmental protection in developed nation Advantages of globalization in the developing world It is claimed that globalization increases the economic prosperity and opportunity in the developing world. The civil liberties are enhanced and there is a more efficient use of resources. All the countries involved in the free trade are at a profit. As a result, there are lower prices, more employment and a better standard of life in these developing nations. It is feared that some developing regions progress at the expense of other developed regions. However, such doubts are futile as globalization is a positive-sum chance in which the skills and technologies enable to increase the living standards throughout the world. Liberals look at globalization as an efficient tool to eliminate penury and allow the poor people a firm foothold in 52
  • 53. the global economy. Limitations of globalization Negative Aspects While some economists and politicians approve these developments, many people look at this process with much apprehension. They look at the global village as an order or mechanism for greater economic exploitation and political oppression. Globalization has many dimensions: economic, technological, political, cultural, social, environmental, ideological, etc. Each of them affects the local either positively or negatively. Let us see some of its negative aspects: a) Economic aspect: The world market has emerged as the dominant economic force. While some nations have tremendous economic advantages, others have become more and more dependent. The main players in the present process of globalization are the governments of powerful nations (in particular the G7 ), transnational cooperation, the IMF, the World Bank and the WTO. The development of all third world countries has to be related to the world market. This is so because the overall control of the global economy is in the hands of the G7 countries. They control the monetary system and international trade. The multinationals and other institutions with the help of the state control all development processes. The foreign debt works as an instrument to control the development process in these countries. Terms and conditions on the loans are imposed on them, which make them almost impossible to develop on their own terms. The role of developing countries is simply to provide cheap labour to attract investors and to provide raw materials, which are at the mercy of fluctuating prices. They are to meet the needs of others as cheaply as possible. This unfettered growth of the multinationals and the emphasis on foreign trade are not conducive to a development pattern that is oriented to the basic needs of the people. The production needs and patterns are often determined by the market forces. It is unfortunate that they seldom take into consideration the basic needs of the people. The production of the goods for export or for the conspicuous consumption of the rich becomes the market force today. In the globalized free market, the only people who count are those who have goods to sell and those who have the money to buy. This in turn drives many to the margins of the economic life. The small entrepreneurs have very little chance of survival in this system. Only the stronger and successful competitors survive and thereby widening the gap between the rich and poor, both between countries and within country. One cannot deny that there has been a worldwide growth in poverty, inequality and the human misery. Social 53
  • 54. injustice is becoming an accepted reality. It is said that the top 20% has access to 82.7%, while the bottom 20% struggle to survive on 1.4%. The weak, the poor and the inexperienced ones are pushed to the outer rims of the society. Globalization works for the benefits of the rich while the poor become commodities since they are used as cheap labours. It is very clear that the present economic pattern no longer serves the interest of the majority of the people. It rather destroys the lives of many people due to its unjust distribution of wealth, exploitation and deprivation of basic needs. Indeed, it has created a situation of marginalization, exclusion and social disintegration. b) Political aspect: The development of the third world countries with the help of industrialized countries has many political implications. The process of globalization from the beginning was fraught with competition, conflict, domination and exploitation. The opening up of the national boundaries for free market has led to a neo-colonialism allowing not only economic domination, but also political domination over the poor nations. For example, the policies of liberalisation and withdrawal of subsidies, which are the conditions imposed by the IMF and the World Bank, have resulted in the curtailing of the state's power. Today, globalization is creating a government more committed to the protection of foreign investments and less to the protection of the citizens of the country. Many thirds world are forced to abandon its social responsibilities. This makes many people to ask whether the present process of globalization is compatible with democracy, social justice and the social welfare state. While the state is rendered relatively powerless, it has become a mere tool of the rich and the powerful. Its sole function is to suppress any organized resistance by oppressed people of the unjust system. c) Social aspect: The market ideology of globalization gives a notion that people who cannot afford goods and live in rural areas are considered uncivilized and backward. They feel isolated from the privileged groups. This wrong notion creates an inferiority complex among the poor rural masses that urges them to migrate to the cities and towns in search of employment and better living. It encourages migration not only within a country, but also encourages people to migrate to other countries. It is estimated that there are seventy million workers around the world. The migrant workers are the most exploited people. They suffer from insecurity and social exclusion. This social exclusion is deeper than the economic level. An ever-increasing economic pattern and the expansionary character of globalization leads to lowering of labour costs and wages. In the struggle to be 54
  • 55. more competitive, labour costs and wages are being driven down. Companies go in for `restructuring' and `downsizing' which creates redundancies. Permanent employment and skilled workforce is being replaced by the casual and part-time employment creating immense insecurity among the workers. While wages are being lowered, but working hours have been increased. Yet it is almost impossible for a poor worker to rebel against the company that employs him or her. Powerlessness is one of the consequences of globalization for so many people in the lower brackets of society.[3] All these lead the poor worker to involve in all sorts of anti-social activities. The profit-oriented free market has also let loose the present day social realities. Consumerism and materialism have overwhelmed modern society affecting every aspect of life. Society has become impersonal, mechanical and inhumane. The present society and its penchant for unprincipled living, selfishness, corruption, opportunism, and violence are the product of consumerism and materialism. d) Cultural aspect: Globalization means the export and import of cultures. Globalization involves cultural invasion. Technology is power. It becomes the carrier to those systems and ideologies (values and cultures) within which it has been nurtured. The whole idea of progress and development is decisively shaped by western life-style, worldview and its structures. A monoculture is fast emerging. When we say "mono-culture", it means the undermining of economic, cultural and ecological diversity and the acceptance of a technological culture developed in the West and the adoption of its inherent values. The tendency is to accept the efficiency with productivity without any concern for compassion or justice. In traditional societies, people maintained a very strong practice of community ownership of land and property. The accumulation of wealth by individual was not encouraged, but today wealth is increasingly regarded as belonging to individuals and not to the community. The slow erosion of traditional cultural values leads to lack of cohesion in societies. The indigenous culture and its potential to save human development and the earth from destruction are vastly ignored. e) Ecological aspect: Globalization involves environmental degradation and pollution. The pattern of development that we uphold today is capital-intensive. An ever-increasing economic pattern and the expansionary character of mechanization and massive industrialization of the economic world-order are reducing the non- human segments of creation to mere status of object without any intrinsic value. People simply analyze nature from the viewpoint of its usefulness to humans and they are all set to be exploited according to human's wishes. Forest and fishing resources are depleted for quick profits. Mining companies rape resources with little regard to the environmental and social costs. The sustaining power of the 55
  • 56. earth for nurturing life is being destroyed. The whole planet is at threat. Thus, the ecological catastrophe today is the direct product of modern industrial and technological growth, and the modern lifestyle. f) Impact upon indigenous people: With the accelerating deterioration of the global economic and political situation, the indigenous people face further marginalization and graver threats of continuity and sustainability. In many parts of the world, the indigenous people have become the victims of big reservoirs, mega projects, wild life sanctuaries, mines, industries, etc. An indigenous theologian from Pacific writes his experience as follows: The advertisement on our local TV demonstrates this concept very clearly. The ad begins with people living happily in a joyous environment where there is fun, plenty of food in the garden and an abundance of fish in the sea. Then the big ships came with big money, which they gave to the chiefs for the forests. The result is total displacement, impoverishment and ecological destablisation In the name of development, people are forcefully evicted from their ancestral land and the abode of the various spirits they worship using repressive measures and often without proper compensation. They are simply ignored, silenced and despised. For example, in India, 100,000 people are going to be displaced by the Sardar Savovar Project in Gujarat, 60-70% of whom are indigenous people. Around 130,000 are expected to be displaced by the Narmada Sagar Project in Madhya Pradesh of whom 65-70% are indigenous people. Likewise, in the name of development, the indigenous people who are already powerless and exploited are further reduced to powerlessness and bondage. It is disheartening to see that indigenous people are made environmental prisoners in their own land. g) Religious aspect: Threatened by the forces of globalization and the ideas of secularism, some sections in all religions assert a fundamentalist posture. Under the pretext of an identity struggle, the Fundamentalists, particularly in the majority community, want to achieve their dominance by controlling the political process through the militant organizations. Religion is used for political control. This process distorts both politics and religion. Moreover, the role of religion moves towards mere private affair, without accepting any social responsibility. Indeed, faith has lost its community anchorage. There is a subtle connection between globalization and the revival of religious fundamentalism. The main disadvantages of globalization are 1. Increased flow of skilled and non-skilled jobs from developed to developing 56
  • 57. nations as corporations seek out the cheapest labor. 2. Increased likelihood of economic disruptions in one nation effecting all nations. 3. Corporate influence of nation-states far exceeds that of civil society organizations and average individuals. 4. Threat that control of world media by a handful of corporations will limit cultural expression . 5. Greater chance of reactions for globalization being violent in an attempt to preserve cultural heritage. 6.Greater risk of diseases being transported unintentionally between nations 7. Spread of a materialistic lifestyle and attitude that sees consumption as the path to prosperity 8. International bodies like the World Trade Organization infringe on national and individual sovereignty. 9. Increase in the chances of civil war within developing countries and open war between .developing countries as they vie for resources. 10. Decreases in environmental integrity as polluting corporations take advantage of weak regulatory rules in developing countries. Factors for Globalization of R&D Cost Factor: As the business environment changed in 1990’s due to increasing global trade. To maintain competitiveness companies increased their R&D spending. R&D is expensive, it needs large investments in equipment and highly skilled scientists. In 2000, US companies spent about $180 billion on R&D activities. A high investment led to concentration of R&D activities in one location to prevent duplication of resources. However, with globalization there is a need to locate R&D centers in strategic countries and availability of skilled scientists in other countries is driving businesses to spread their R&D efforts. Globally distributed R&D network helps firms to benefit for lower wages abroad and at the same time allows them to tap into a wider pool of talent which helps to speed up 57
  • 58. innovation, thus lowering the overall costs of R&D. Market Factors: The concept of a global product was not viable in many sectors. Consumers in other countries demanded products which suits their tastes and started to refuse products designed for other markets. (For example, cell phone users in China wanted phones which displays Chinese script and Indian cell phone users wanted ring tones which is similar to Indian music). The need for localization or customization of global products is driving firms to have R&D centers close to the major markets. E.g. Nokia has established R&D center in US to enable them to respond quickly to American needs. Competitive Factors: Companies need to be concerned if their competitors pursue a global R&D strategy. Companies that conduct their R&D activity primarily in their home country will risk losing out competitive advantage when their competitors setup global R&D centers. The ability to obtain technical expertise and enhancing the scale of R&D operations adds to the competitiveness of a company. Companies can gain by having a R&D center in the lead markets by scanning for information on customer requirements and competitor's capability and competitor's activity. For example, Phillips, a large consumer electronics firm has R&D centers in Europe ,US & Japan. Phillips had very capable R&D centers in US & Europe, but the management wanted another R&D center in Japan to enable them to access to Japanese development. Phillips has hired Japanese scientists and made contacts with Japanese companies, universities and government labs. Phillips gains by learning from highly demanding Japanese customers and from collaborative R&D with Japanese firms. Government Factors: Government rules and regulations makes it necessary to have R&D centers in other countries. For example, complex and lengthy drug approval process in US makes a R&D center in US beneficial to get approval for new drugs. Having a local R&D presence will help to better understand technical specifications and regulations. Additionally, governments encourage technology transfer into their country. Having a local R&D in other countries will improve the bargaining power for the companies with the local governments. Technology Factors: New and cheaper communication technologies like Internet, dedicated fiber-optic lines and satellite communication now allows companies to transfer huge amounts of data across the world for faster information sharing. This communication revolution was the key enabler for globalization of R&D. Telecommunication is enabling firms to establish and manage a global R&D network. Selecting R&D Location 58
  • 59. Location for R&D centers is based on strategic factors such as: •Presence of highly skilled and/or low cost R&D staff •Lead markets and highly demanding customers •Encouraging government policies and availability of required support infrastructure Trends in Global R&D Some of the notable trends are : R&D spending abroad by global companies is rising much faster than in their home country. More than one third of R&D in global companies are now done abroad. Technical alliances with other companies and universities abroad are being increasingly used for R&D. Example, GE has an alliance with IIT Delhi, Intel has an alliance with Barcelona university, BOSH has tie-up with Motorola. Companies have established R&D units in North America, Europe, Japan, China and India. Companies now recruit researchers from anywhere in the world based on their skills rather than their nationality. Companies are willing to setup R&D centers closer the talent rather than relocate researchers. There is an increasing external and cross-border sourcing of technology among multinationals through various means. The links between university research and industrial R&D are no longer dependent on the nationality of the firm and the university. R&D centers with in a company are increasing their collaboration for joint product development. This decreases product development cycles and lowers cost. R&D Builds Competitive strengths Companies rely on R&D for competitive advantage in high tech business. The underlying technical skills of the business plays a bigger role on the success of a particular product. This id forcing companies develop core technical skills to remain competitive. Developing technical skills is not easy, it requires steady 59
  • 60. investment over a period of time. On the product side, the product life cycles are becoming shorter. In such a situation, the product is the intermediary between the company's technical skills and the market it serves. Rather than being the focus of corporate activity, products are actually transient mechanisms by which the market derives value from a company's skill-base while the company derives value from the market. The high tech companies are therefore asking `what skills, capabilities and technologies should we build up?' rather than the stereotype question `which markets should we enter, and with which products?' To acquire new skills and remain world class in all the core competencies, companies need to increase their R&D investments. The pressure on the top management to maximize share holder value places a pressure to minimize all expenditure, including R&D expenditure. Therefore it becomes imperative for companies to explore ways to lower R&D costs while retaining competitive advantages. One direct effect of this is that companies have become very selective on the R&D projects that they are willing to develop in house and are increasingly in favor of a strategic alliance with other companies who have complementary technologies. This allows both the companies to trade their technologies and remain competitive. The other method to lower R&D costs is to source R&D from other countries which have lower labor costs. Both these techniques are currently being used. For developing countries, this trend has helped them catch up in technology with developed countries thus leading to an accelerated technology leveling among countries. In other words, technology innovation is no longer limited to a particular country, instead the innovation is shared by multiple countries. Challenges with Global R&D Global R&D offers companies several advantages and benefits, but these gains are not without challenges. Having worked at Intel R&D, the main challenge for a successful global R&D can summarized as : Communication barriers. Communication barriers exists in two forms Differences in time zones & work hours makes it tough to communicate in real time. Different levels of technical skills and different standards of measurement between countries will impair smooth communication. Often there is misunderstanding of what is being said and what was understood 60
  • 61. Differences in implementation of intellectual property rights. Different countries have different policies and implementation levels of intellectual property rights. As a result companies are reluctant to share critical technology with their own R&D centers located in other countries. Embargo’s and Government policies hinder technical collaboration Often countries have some sort of embargo or sanctions against other countries. For example US had imposed a ban on exporting high tech computers to India, US currently prohibits transfer of several technologies to China. These sanctions were imposed for political reasons, but R&D center located in US must comply with those rules. Cultural Differences plays a havoc Differences in culture plays as a big spoil sport while working in joint ventures or collaborations. Cultural differences are not easy to overcome and takes a while for all parties to understand each other’s culture. When quick product development is needed, cultural differences can hamper the project. Personally, I have observed that it takes a couple of projects for all the parties to understand each others culture. Once the cultural barrier is crossed, then communication becomes smooth & the joint development produces better results than a stand alone centers. •Global coordination and Management of R&D Often R&D centers would have developed as a stand alone unit. The concept of joint development with another R&D center is new and may not be welcome by the staff. There will friction between R&D centers arising from communication challenges. Global coordination of R&D is a management challenge. Creating a cohesive network of coordinated R&D centers requires dedicated efforts from top management, Human resources Department and R&D staff. In addition to the above challenges, the other factors which undermine global R&D are ethnocentric and parochial attitude of the management. The belief that people in other countries cannot match their technical skills, “our way is the best way” attitudes prevents the company from reaping the full benefits of the global R&D. 61
  • 62. Maximizing benefits Maximizing benefits in a complex environment spread across different countries is a tough task. Difficulty arises due the factors mentioned above. However there are means to solve those issues. In my opinion, the key factors to maximizing benefits are: Common understanding of goals and objectives. Full commitments from all groups to these goals. The goals must be well defined to avoid misunderstanding in overall Vs local priorities. Establish a common language, common terminologies & common corporate language to avoid misunderstandings. E-mail addresses, phone numbers of all members must be available to all members of the team. This enables faster communication. Provide easy access to e-mail, phone, cross site meetings, video conferencing etc.. for better communication between sites. IT/Computer infrastructures across sites must be comparable to get the maximum benefits of improved communication. The main project manager must have very skillful people skills and must be capable of establishing a creative and positive environment. Team members must be committed to solve problems quickly to prevent damage to the project schedules or objectives. Project leader must be capable of resolving any cross-site issues and disputes quickly and equitably. If disputes are not resolved quickly, it may soon escalate thus forcing a costly intervention from the top management. The project manager is responsible for setting up the hierarchy of the Joint R&D organization. Having a clear line of command is vital to the smooth functioning of the joint teams. The project manager must be empowered to handle any organizational issues. Establish trust between different R&D teams. If the teams are from different countries or locations, companies must arrange for a face-to-face meetings early on in the project. Such meetings help to build trust between R&D centers, breakdown small fiefdoms and increase productivity. Team rotation between sites should be encouraged during the project to build better co-operation and overcome cultural differences. This also removes any ethnocentric or parochial view held by both sides. It must be noted that cultural differences are difficult to overcome. Experience has shown that increasing contact between cultures reduces cultural differences as people understand other cultures better. In a global R&D project, increasing face- to-face contact either by meetings or by team rotations, companies can minimize 62
  • 63. the impact of cultural differences. Requirement gathering must be done with great care. R&D teams must work closely with marketing and other departments to document a detailed project requirements ahead of starting the project. Project requirement specifications must be circulated to all members and explained clearly to avoid any misunderstanding arising from different interpretations. However, it is impossible to document all the requirements and issues do arise during the project. To mitigate this, regular meeting must be held with marketing to resolve any new issues. In my experience, I have seen that having at least one person per site who understands the requirements completely helps resolve issues. Marketing department must closely work with R&D teams during the life of the project. Often it is necessary to have weekly or bi-weekly meetings with marketing to resolve any issues with the project requirements. Establish a strong change request system. Any changes to the requirements must go through the change request system. The change request must be reviewed by a committee within a reasonable time frame and their opinions must be clearly communicated. As companies become global corporations, all their operations become global. Until recently, all R&D activities was concentrated in the home country of the MNC. Companies like Microsoft, Oracle, Intel, HP etc... had all their R&D done in US while their sales, manufacturing & other operations were global. Traditionally companies were reluctant to globalize their R&D, partly due to the fear of losing out their competitive advantage, partly due to non-availability of talent in other countries & partly due to ethnocentrism. This attitude started changing in 1990’s when companies realized the need to customize their products to the local markets and when companies gained confidence in using research talent found abroad. By late 1990’s, most companies had R&D centers abroad to attract local scientific talent, to lower costs of R&D, to better respond to local markets and to meet regulatory requirements. Closing thoughts Global market place requires global R&D. Internet & fast communication technologies opens the possibility for global R&D. Although the project management on a global scale has its challenges and specific problems, experience shows that R&D activity serves end markets best when the activity is also located in those markets. Global R&D strategy needs to consider: 63
  • 64. The need to tap into sources of knowledge and information where ever they might be located on the globe. The need to transfer that knowledge to other R&D centers and other parts of the organization. The need to coordinate activities between various R&D centers to ensure that knowledge is used appropriately. The need to balance the allocation of priorities and resources globally based on strategic need rather than proximity. The need to develop global products with customization to meet local markets. Globalization and Future of Poor Countries By M. Monwarul Islam Words have power and some words, such as freedom and democracies, evoke in our mind emotional images that far outweigh their practical meanings. To many of us globalization sounds like a great idea. One may be forgiven for thinking that globalization would bring about the end of narrow nationalism, selfish isolationism and the reckless pursuit of commercial and economic interests. A whole array of multilateral institutions, think tanks and the prevailing media have been fostering the notion that globalization is the way of the future and the there can be no return to the old order. In fact, even though we may not have realized it, we are already part of the globalization process. It is thus natural to ask what the future holds for us. Like poor relations it is also natural for us to wonder if what our rich relations of the so called global village tell us about sharing and caring for each other is the whole truth. Close linkages and relationships are fine, but by themselves they mean nothing. One must ask what these relationships are, who drives the process and to what extent the sharing of the benefit is fair and equitable to all, large and small, rich and poor. Global trade, exchange and networking are not new phenomena. However, in the last three decades, several developments have provided powerful impetus to the acceleration of the process and all of these have their origin in the rich countries of the industrialized world. First the spurt in technological progress raised productivity in the west at a time when their markets had become saturated. The population had. aged and the working population started to decline. The economy stagnated. It was clear that markets had to be found abroad. Naturally, the urge was 64
  • 65. felt most immediately by large corporations who started by trading abroad, but soon followed up with local manufacturing. Second, the developed economies, with high level of savings, generated enormous funds that were looking for investment opportunities all over the world. A huge and complex network of banks and financial institutions came into being to facilitate the global flow of private capital. Third, revolutionary progress in Information Technology, with microprocessors, communication satellites, fiber optics etc., made it increasingly practical to establish global business, manufacturing, financial and technology networks and to manage them effectively from a central command center. The age of globalization had arrived. The process itself and the speed at which it has spread were facilitated by a parallel development of multilateral agreements on international trade rules aimed at opening up markets abroad. Economic theory, based on certain simplistic assumptions, says that the freer the trade the greater will be the gains for the partners each of whom can export the products in which they have a competitive edge. Many developed countries experiencing unemployment, inflation and low growth were convinced that the key to addressing these problems was a more open trading system. This explains why the Tokyo Round (1979) and the Uruguay Round (1994) were negotiated. From our point of view the crucial difference between the two is the inclusion of services (for example financial and telecommunication services), investment and intellectual property in the latter. Negotiations were aimed to reduce tariff and non-tariff barriers to trade on a reciprocal basis and. agreements could be reached when at last the parties felt they had received comparable concessions from each other. It goes without saying that such negotiations can be meaningful only among equals or near equals. In reality, agreements were reached first among developed countries. The developing countries were presented with a near final agreement The two concessions they wanted most, greater market access for clothing and labor services, were ignored. There was no dismantling of the restrictions on the import of textiles and clothing in the developed country markets nor did the developed countries agree to the free movement of labour. On the contrary, developing countries that signed up had to agree to open up their markets for almost everything of export interest to the rich nations. We may draw some important conclusions from this brief review of the world trading system that now promotes the globalization process. first the system is highly biased in favor of the rich countries in whose interest it is really designed. For the foreseeable future it is this group of countries that will be exporting high value products, services, capital and technology for which developing countries will provide a lucrative market. In the meantime, developing countries will have 65
  • 66. the markets for their labor intensive products effectively restricted. Pledges by the developed countries to phase out the MFA (Multi-fiber Agreement) over a few years have fallen by the wayside. Instead new barriers are being erected to market entry by far-fetched regulations in the name of technical specifications, inspection procedures, health issues, environmental hazards and labor standards. In recent years such regulations have proliferated, aimed at curbing exports from poor countries. Again and again the developed countries invoke the safeguard and antidumping clauses of the WTO Agreement to limit the import of items in which developing countries happen to show signs of competitive advantage. There is a dispute resolution mechanism in the WTO and an aggrieved country can submit complaints to this office. However, this is a complex, protracted and expensive process. A major reason for the helplessness of the poor countries is their lack of leverage. They are in no position to impose retaliatory measures. Many poor countries affected by such arbitrary action of the rich have neither the technical expertise nor money to mount an effective challenge. The present world trading system is fair in its shape and unfair in its impact, because it makes no marked distinction among its members in terms of their ability to play the game. Many reputable economists have lent their voice to the call for a more open trade as the best way for poor countries to generate a higher rate of growth. The literature on how trade can act as the engine of growth is still expanding. But it is often forgotten that when trade is constrained by declining terms of trade, quotas, non-tariff walls of the kind we have seen and administrative regulations of powerful nations little can be expected in terms of the benefit of trade for the poor. Empirical evidence is cited to show how some countries have attained a higher rate of growth when they opened their market. I have two comments on these cases. First, even if it were true for some countries it cannot be automatically relevant for others caught up in a different situation, Second, one can also point to many countries that have historically attained very high rates of growth without throwing open their market for all manner of import. The prime examples are Japan, and South Korea. It may be misleading to focus exclusively on the ratio of trade to GDP. It is also necessary to look at the level and composition of exports and imports separately in order to come to a sense of what is happening to savings, investment and structural change in the economy. We will revert to the issue of trade liberalization in poor countries at a later stage. We have noted that the core players in the globalization process are the large corporations of the rich countries. They alone have a global reach because of the technical and financial resources available to them. They direct their investment in 66
  • 67. developing countries principally in consideration of the market, security and profitability. Naturally, the lion’s share of the foreign direct investment has gone to countries that meet these criteria including China, Brazil, India, Chili and Mexico. It is estimated that the Least Developed Countries (LDC), numbering about 50, mainly in sub-Saharan Africa, receive less than 2 per cent of foreign direct investment in developing countries. It is common knowledge that the bulk of the foreign direct investment in the LDCs, who have a small domestic market, is in the extraction of natural resources such as oil, gas, minerals, timber and fishery. Not much processing or local value addition is involved in these undertakings, with consequently little contribution to national income and employment. On the other hand, they deplete the resource base and degrade the environment. The LDCs thus face a serious dilemma. They badly need investment that brings in capital and technology. But despite every conceivable incentive and concession foreign investment flows in a trickle and ‘goes to activities that undermine long- term sustainable development. The trade in services, growing rapidly and amounting to USS 1.4 trillion in 2001, is again another area where developed countries have an overwhelming edge. Large corporations and financial giants of the rich countries have targeted the banking, insurance and telecommunication services in the developing world. Poor countries are being persuaded to privatize these sectors and open them to foreign investment. Although these measures will likely bring in more capital and better technology, improve efficiency and reduce cost, it would require a substantial deregulation of the foreign exchange market with unpredictable risks. Given the recent experience of financial crisis in several Asian and Latin American countries it is doubtful if poor countries with weak and fragile economic base can withstand the shocks transmitted through the freely operating global financial network. In the face of opposition by financial giants who operate this network with trillions of dollars it may not be feasible to impose even a modicum of discipline on the so- called hot money. Perhaps more ominous are the pressures being brought by large corporations on poor countries to withdraw any preferential treatment of national enterprises in the sectors where the corporations are interested. ‘This is often done indirectly through their governments or multilateral financial institutions in the name of structural adjustment or non-discriminatory treatment as agreed in the W70 agreement. The call for a level playing field for everybody sounds so convincing as to make us often forget that a fair game in a level playing field can only be held among comparable players, and not between giants and dwarfs. 67
  • 68. The pressures are all arbitrary and one sided. Poor countries are persuaded to withdraw subsidies on agricultural inputs and on the export of non-traditional products while rich countries do not just subsidize agricultural production but also export, thus taking away poor countries’ potential markets. Rich countries erect tariff and non- tariff barriers on whatever excuse is found convenient. Poor countries are endlessly pressed to remove trade barriers and expose their market to ruthless competitors from all over the world. If this kills their small and weak agriculture and industry It is to be taken as the process of structural adjustment to a market economy. Never mind the staggering adjustment cost in terms of mounting unemployment and social distress. Where will these people go? Where are the fresh capital and skills to be found? How can any sector be safe from the vicious capture of the market by the large corporations? Agricultural subsidies paid out to farmers by the United States and the European Union cost the poor countries more than US$ 250 billion a year in lost market or more than five times the sum of all the aid they receive. Yet in the recently held United Nations Aid Conference in Monterrey, Mexico, it was said that if the United States was to open its wallet, poor nations must open their markets. The question is, how can the poor nations open their markets and face the competition of the rich nations in agriculture when subsidies and other support to farming in the rich nations amount to about US$ I billion a day? And yet the poor nations are told they would lose aid if they fail to remove the subsidy on fertilizer needed to boost production and possibly achieve an exportable surplus. Highly subsidized farm exports from the rich countries have led to long term damage to agriculture in poor nations. Onions from France have swamped Senegal. Corn from Iowa has damaged the market in Mexico. Milk powder from the European Union has sealed the prospects of the dairy industry in Asia and Africa. Many African cities now increasingly depend on imported wheat and corn from the rich nations while the traditional African food crops, Cassava and Yam, steadily recede from the market. The food scarcity syndrome in poor nations is symptomatic of the growing impoverishment and inequality within these countries as globalization spreads. Just as globalization is widening the gap between rich and poor nations it is also increasing social inequality within each nation. Relatively speaking, the poor everywhere are becoming poorer. That is why we witness so many protests and demonstrations against globalization in rich and poor countries alike, spearheaded by those who are losing out in the great game of the twenty first century. We are on the threshold of a knowledge-driven age. The globalization of the 68
  • 69. knowledge industry appears to be a boon for all. In this area some developing countries, such as India, have done remarkably well. Software export from India amounts to billions of dollars. But whether others can follow India’s example depends on what they do with their knowledge industry. Many poor nations are unable to make the necessary investment and will slide back in the global race. Globalization of the culture of the rich, marked by extravaganza and lack of social commitments, is deeply troubling for the future of the poor. The mirage of an amoral, cynical and affluent lifestyle, constantly beamed and wired to the world, is fast destroying the moral fabric of economically poor, but culturally rich societies and endangering the peaceful advancement of human civilization. So what does the future hold? What will be the result of the increasingly interconnected state of the world’s nations? While there are many opinions, there is only one source that can give us the true answer—the Holy Bible. In it, God accurately foretold the rise and fall of the major nations throughout history, including the Babylonian, Medo-Persian, Greek and Roman empires He even prophesied the sudden rise of the American and British people to world prominence. And God has foretold today’s fast-paced interconnected world and its matchless advances in science and technology: “But you, O Daniel, shut up the words, and seal the book, even to the time of the end: many shall run to and fro, and knowledge shall be increased” The Bible states that, in the future, a union of ten nations (or groups of nations) will arise, and replace America as the dominant world power. It will attack and defeat America and Britain, taking the survivors into captivity. This political, economic and military combine will be backed by a universal false church. It will become a world-leading trading bloc, possessing vast riches and trading all over the world in every product imaginable—even human beings! This politically influential religious entity, led by a charismatic figure, will usher in a temporary period of great wealth. Globalization will thrive during its reign to levels unseen in human history—prosperity will flourish, but not for all. However, shortly after the rise of this ten-nation union, it will be replaced by a world-ruling supergovernment that will usher in lasting peace, prosperity and security for all . Upon His triumphant Return, Jesus Christ will take over all the governments of men, and administer His government—the kingdom of God— throughout the earth. At that time, the world will become truly “one”—one with God. 69
  • 70. True globalization will occur, but according to God’s just standards. No more inequality. No more poverty. No more exploitation. Peace will abound. What a wonderful picture—soon to become a reality BIBLIOGRAPHY Newspapers and Magazines:  Economic Times  Indian Express  India Today  Business India Books: • Beneria, Lourdes: Gender and the Construction of Global Markets, New York, March 1999. • Elson, Diane: Gender Budget Initiative: Background Papers, June, 1999 • Ghosh, Jayathi: Women and Trade in the Asia-Pacific Region, New Delhi, May 1998 70
  • 71. • Shiva, Vandhana: Food security, women, and rural communities in South and Southeast Asia: implications of the post-Uruguay Round, Bangkok, 1996. Websites  Sebi  Wikipedia  WWW.GOOGLE.COM  WWW.WIKIPEDIA.COM 71
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