In this Assignment I have gone through the detailed of how de - globalization is taking place in this 21 century where most of the student are talking about globalization. this is the another part of the picture, we have focused about de - globalization.
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UNIVERSITY OF LUCKNOW
DEPARTMENT OF BUSINESS
ADMINISTRATION
INTERNATIONAL TRADE & GEOPOLITICS
SUBMITTED BY: SUBMITTED TO:
DEEPAK KUMAR DR. AJAI PRAKASH
SEM-IV (IB)
ROLL NO - 17001000060
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Acknowledgement
I would like to express my special thanks of gratitude to my teacher Dr.Ajai Prakash who
gave me the golden opportunity to do this wonderful project, which helped me in doing a lot
of research and I came to know about so many new things I am really thankful to them.
Secondly, I would also like to thank my parents and friends who helped me a lot in finalizing
this project within the limited time frame.
DEEPAK KUMAR
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De- Globalization: An Introduction
Globalization refers to the economic, social, and political integration of nations. Economic
globalization can be seen in the exchange of goods. It can also be seen in the rising
movement of people and capital around the world.
However, Globalization is under attack these days from all quarters. It is becausethe race of
globalization has left majority of the world's population far behind. According to UNICEF,
the richest 20 per cent of the population gets 83 per cent of global income, while the poorest
quintile has just 1 per cent. This trend is getting worse. A new UNDP report called
"Humanity Divided" estimates that 75 per cent of the population lives in societies where
income distribution is less equal now than it was in the 1990s, although global GDP
ballooned from $22 trillion to $72 trillion.
Also the fundamental challenge posed bythe increasing reach of global markets is that
global markets are inherently dis-equalizing, making rising inequality in developing
countries more rather than less likely. This is due to following reasons:
First, the tremendous economic gains associated with deeper and more efficient global
markets are not equally shared. Markets, after all, reward those who have the right assets -
financial capital, human capital, entrepreneurial skills.
A second reason why globalization is dis-equalizing is that global markets are far from
perfect. They fail in many domains. The classic example of a market failure is that of
pollution, where the polluter captures the benefits of polluting without paying the full costs.
At the global level, high greenhouse gas emissions of the US are imposing costs on poor
countries. Similarly with global financial crises; the financial crisis was due to policy errors
in few countries. But a healthy portion can be blamed on the panic that periodically plagues
all financial markets.
Finally, global markets tend to be dis-equalizing because trade, migration, and intellectual
property regimes at the global level naturally reflect the greater market power of the rich.
In developing countries inequality is economically destructive; it interacts with
underdeveloped markets and ineffective government programs to slow growth - which in
turn slows progress in reducing poverty. Economic theory suggests why: weak credit
markets and inadequate public education mean only the rich can exploit investment
opportunities. Middle income and poorhouseholds cannot borrowand miss out on
potentially high returns on their own farms and small business ventures for example - often
higher returns than the rich are getting on their capital. The most able children of the less rich
miss out on the education and skills that would maximize their own economic prospectsand
their countries' own growth.
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Due to this, the trend has started to reverse to deglobalization. Several prominent countries
including the UK resisted globalization by rising tariffs. Far-right parties in Europe gained
popularity in this atmosphere of financial weakness and supporting deglobalisation.
What are the indicators of de - Globalization?
Apart from rise of right wing parties across globe, which is political manifestation of de-
globalization, economic indicators show that post2008 economic slowdown de-globalization
is becoming the norm.
Trade:With global demand weak, and many nations erecting import barriers, trade is
slumping. Measured as a share of global gross domestic product, trade doubled from 30
percent in 1973 to a high of 60 percent in 2008. But it faltered during the crisis and has since
dropped to 55 percent.
The flow of capital - mainly bank loans - is retreating even faster. Frozen by the financial
crisis and squeezed afterward by new regulations, capital flows have since slumped to just
under 2 percent of G.D.P. from a peak of 16 percent in 2007.
The flow of people - Despite the flood of refugees into Europe, net migration from poorto
rich countries decreased to 12 million between 2011 and 2015, down by four million from
the previous five years.
What are the Reasons forthis new Trend?
There are several reasons behind this trend today. Some of them are:
Unequal distribution of benefits of globalization, rising inequalities, job especially in
developed countries.
MNCs across the countries and workers from developing countries benefited the most
leading to perception that workers from developing countries have stolen jobs from
developed countries. This led to demands of sticker visa regime and relocated of
industries.
Global slowdown exacerbated the above mentioned situation and led to increase in
demand for protectionist measures across globe.
Rise of ISIS, increased instances of terrorist attacks and emerging security threats
across globe. Immigration crisis further accentuated the security situation and as it is
happening at the time of economic slowdown thus leading to anti - immigration stand.
Rise of populist leaders globally re – enforces the trend.
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Concept of De – Globalization
According to Walden Bello and Focus on the Global South, who coined the term
"deglobalisation", the objective is not to withdraw from the global economy, but rather to
trigger a process ofrestructuring the world economic and political system so as to strengthen
local and national economies instead of weakening them.
De-globalisation questions the integration process dominated by the logic of capital and the
supposed rationality of the economy that erodes the decision-making capacity of the people
and States. Deglobalising means starting to think and build an integration process based on
the needs of peoples, nations, communities and ecosystems.
Deglobalisation does not opposetrade nor the exchange of products or services, but proposes
that trade is not done at the expense of the communities, the local and national economies
and the diversity of its products whether agricultural or industrial.
The one size fit all policy of structural adjustment programs pushing countries to only remain
producers of particular cash crops or goods, destroys that country's ability to satisfy people's
needs, diversify and more importantly, be self-reliant in its ability to feed its people.
Deglobalisation embraces the principle of subsidiarity that affirms that all political or
economic decisions must be adopted by the level of government that is closest to the
problem. The ones who know the most about the local situation and will be the first to suffer
the consequences of a decision must be the first to give their opinion and state their position.
A political or economic decision that affects a local area must fundamentally be made at this
level and only when it is truly necessary should this decision-making power be transferred to
the national, regional or global level.
Currently, trade rules cannot be the same for all countries. Trade and investment rules must
be asymmetrical so as to favour the smallest economies and countries whose economies and
agricultural sectorwere weakened by transnational capital, colonialism and the
interventionism of the superpowers. Trade policies - such as quotas, tariffs and subsidies -
must be used to protect local economies from imported goods subsidised by large
corporations that set prices at artificially low rates.
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Why we need De – globalization
Weakness of International Governance Structure.
A General Trend of of Reducing Trust between people, between people and leaders,
and between people and institutions.
The impact of the crisis.
Increasing Environmental Threats & Economic and Social Inequalities.
Principles of De-globalization by Walden Bello
Production for the domestic market rather than production for export markets must
again become the center of gravity of the economy.
The principle of subsidiarity should be enshrined in economic life by encouraging
production of goods at the level of the community and at the national level if this can
be done at reasonable costin order to preserve community.
Trade policy - that is, quotas and tariffs - should be used to protect the local economy
from destruction by corporate-subsidized commodities with artificially low prices.
Industrial policy - including subsidies, tariffs, and trade - should be used to revitalize
and strengthen the manufacturing sector.
Long-postponed measures of equitable income redistribution and land redistribution
(including urban land reform) must be implemented to create a vibrant internal market
that would serve as the anchor of the economy and producelocal financial resources
for investment.
De-emphasizing growth, emphasizing upgrading the quality of life, and maximizing
equity will reduce environmental disequilibrium.
The power and transportation systems must be transformed into decentralized systems
based on renewable sources.
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A healthy balance must be maintained between the country's carrying capacity and the
size of its population.
Environmentally congenial technology must be developed and diffused in both
agriculture and industry.
A gender lens must be applied in all areas of economic decision making so as to
ensure gender equity.
Strategic economic decisions must not be left to the market or to technocrats. Instead,
the scopeof democratic decision-making in the economy should be expanded so that
all vital economic issues - such as which industries to develop or phase out, what
proportion of the government budget to devote to agriculture, etc. - becomesubject to
democratic discussionand choice. This will entail the demystification of economics
and a return to its origins as political economy and moral economy.
Civil society must constantly monitor and supervise the private sectorand the state, a
process that should be institutionalized.
The property complex should be transformed into a "mixed economy" that includes
community cooperatives, private enterprises, and state enterprises, and excludes
transnational corporations.
Centralized global institutions like the IMF and the World Bank should be replaced
with regional institutions built not on free trade and capital mobility but on principles
of cooperation that, to use the words of Hugo Chavez in describing the Bolivarian
Alternative for the Peoples of Our Americas (ALBA), "transcend the logic of
capitalism."
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