Globalisation

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Globalisation can have different meanings for different people. Some, for example see globalisation as real and beneficial to everyone; others see it as politically and economically negative.

While there is no one ‘true’ way to interpret globalisation, power does play a role. In this context it is the powerful institutions and groups associated with neoliberalism that monopolise the meaning of globalisation.

Neoliberalism’ is a particular view of freedom, where money and goods can move about the globe totally unhindered and mostly unregulated. This frees money and business, the ‘markets’ from their social contexts and obligations. It gives more influence to them than many national governments and states. It is implemented mostly through economic programmes that favour:

  • free trade;
  • unregulated investment;
  • the removal of the state from the economy (through privatisation,for example);
  • an increased influence of business in the provision of goods and services, including in such areas as education, health, electricity and water ; and
  • increased business influence in government decision-making.

These policies are usually implemented in developing countries at the insistence, and with the assistance, of international organisations.

In some cases, these policies can have positive effects, such as increased economic growth and expanded and diversified exports. For most developing countries, however, which have implemented these policies growth was much higher during the 1960s and 1970s, when governments invested heavily in industry, which was sheltered behind protective taxes against imports. Most income from exports goes out of the developing countries as payment of the international debt or as repatriated profits by TNCs. Furthermore, international trade is heavily weighted in favour of the rich countries, restricting the ability of developing countries to earn more for their products.

According to UNCTAD in 20 of the 50 least developed countries which implemented neoliberal programmes:

  • Economic growth was minimal or fell;
  • Those living on less than $1-a-day rose from 51% to 53% of the population;
  • Those living on less than $2 a day went up from 83% to 84%.

Exports did rise but not enough to encourage sustainable development and consisted of mostly low priced unprocessed commodities such as coffee. The total share of LDCs in total world trade remains tiny, accounting for only 0.42% in 1999.


Globalisation policies have also led to job insecurity and casualisation:

  • Millions work in the informal sector with little or no job protection and very low wages;
  • Social welfare and health, amongst other services, have been reduced or privatised in many countries, making it harder for the poor and those on low incomes to access them;
  • Inflation has been controlled but prices are high, wages are low and the gap between the poor and the rich – income inequality – has increased;
  • Furthermore, these negative effects of neoliberalism often hit the most vulnerable groups disproportionately, such as women, children and ethnic minorities or indigenous groups.

The result of this has been increasingly unstable and unpopular government in developing countries, as populations become increasingly frustrated with the lack of improvement in their living situations. Most of these governments are unable or unwilling to challenge the international financial institutions or the larger world powers, such as the US, and so in effect have little power in their own countries.

Jump-through-hoops-1

Neoliberal globalisation therefore has, in general:

  • increased inequality;
  • failed to reduce overall poverty levels; and
  • decreased sovereignty in decision-making for states.

This has made development much more difficult and led to less power for national governments to pursue independent policies.

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