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ON SOME PROBLEMS OF THE ECONOMIC GLOBALIZATION

ON SOME PROBLEMS OF THE ECONOMIC GLOBALIZATION
Rezo Manvelidze , доктор экономических наук, профессор

Tamila Turmanidze , студент

Батумский государственный университет им. Ш. Руставели, Грузия

Участник первенства: Национальное первенство по научной аналитике - "Грузия";

 

UDC 33+330+3+327+341

The study of the present paper is the problem with economic globalization that it has not gone far enough. Major barriers to trade remain in key sectors of export interest to developing countries such as agriculture and textiles and clothing, and trade remedy actions (antidumping, countervail, and safeguards) have proliferated (often directed at developing countries), in many cases replacing prior tariffs. Indeed, tariffs facing developing country exports to high-income countries are, on average, four times those facing industrial country exports for manufactured goods and much higher again for agricultural products. Agricultural subsidies in developed countries further restrict effective market access by developing countries. Economic estimates have found that the costs of protection inflicted on developing countries by developed countries negate most or all of the entire value of foreign aid in recent years.
Key Words: Economic globalization,global economy, the process of globalization, the world market, international economic and financial organizations.

Исследованием представленной статьи является проблема с экономической глобализации, что он не зашел слишком далеко. Основные барьеры на пути торговли остаются в ключевых секторах, представляющих экспортный интерес для развивающихся стран, таких как сельское хозяйство, текстиль и одежда, и торговля средство действия (антидемпинговые, компенсировать и гарантий) получили широкое распространение (часто направлены на развивающиеся страны), во многих случаях заменить предварительныетарифы.Действительно, тарифы, с которыми сталкиваются развивающиеся страны экспорта в страны с высокими доходами, в среднем, четыре раза тех, кто приговорен экспорта промышленной продукции страны на промышленные товары и гораздо выше, снова на сельскохозяйственную продукцию. Сельскохозяйственные субсидии в развитых странах еще больше ограничить эффективный доступ к рынкам развивающихся стран. Экономические оценки показали, что расходы на защиту нанесены развивающимся странам со стороны развитых стран отрицает большую часть или всю стоимость всей иностранной помощи в последние годы.  
Ключевые слова:Экономическая глобализация,мировая экономика, процесс глоба­лизац­ии, мировой рынок, международные экономические и финансовые организации.

Introduction

As is generally known, while economic globalization has helped some people attain higher standards of living, it has marginalized and impoverished many others and has resulted in environmental degradation and the depletion of natural resources. The benefits of economic globalization have been inequitably distributed and have not reached many people around the world. Our vision of the world as an interconnected web challenges us to turn from self-serving individualism toward a relational sense of ourselves in a global community, and toward practices that help create economic structures designed to serve the common good. We are called to bring our Unitarian Universalist Principles to our understanding of economic globalization and to help mitigate its adverse effects.       

Chapter I – Economic Globalization as an Irreversible Trend

Economic globalization refers to the increasing interdependence of world economies as a result of the growing scale of cross-border trade of commodities and services, flow of international capital and wide and rapid spread of technologies. It reflects the continuing expansion and mutual integration of market frontiers, and is an irreversible trend for the economic development in the whole world at the turn of the millennium. The rapid growing significance of information in all types of productive activities and marketization are the two major driving forces for economic globalization. In other words, the fast globalization of the world’s economies in recent years is largely based on the rapid development of science and technologies, has resulted from the environment in which market economic system has been fast spreading throughout the world, and has developed on the basis of increasing cross-border division of labor that has been penetrating down to the level of production chains within enterprises of different countries.

The advancement of science and technologies has greatly reduced the cost of transportation and communication, making economic globalization possible. Today’s ocean shipping cost is only a half of that in the year 1930, the current airfreight 1/6, and telecommunication cost 1%. The price level of computers in 1990 was only about 1/125 of that in 1960, and this price level in 1998 reduced again by about 80%. This kind of ‘time and space compression effect’ of technological advancement greatly reduced the cost of international trade and investment, thus making it possible to organize and coordinate global production. For example, Ford’s Lyman car is designed in Germany, its gearing system produced in Korea, pump in USA, and engine in Australia. It is exactly the technological advancement that has made this type of global production possible. Moreover the development of the networking-based economy has given birth to a large group of shadow enterprises, making the concept of national boundaries and distance for certain economic activities meaningless. If technological advancement and IT development were assumed as the technological driving force for economic globalization, then the market-oriented reform carried out throughout the world should be regarded as the institutional driving force for this trend. Under the framework of GATT and WTO, many countries have gradually cut down their tariff and non-tariff barriers, more and more countries open up their current accounts and capital accounts. All of these have greatly stimulated the development of trade and investment. Moreover the transition of the former centralized planned economies to market economies has made it truly possible to for the world’s economies to integrate into a whole. Multinational corporations (MNCs) have become the main carriers of economic globalization. They are globally organizing production and allocating resources according to the principle of profit maximization. And their global expansions are reshaping macroeconomic mechanisms of the operation of the world economies. In 1996, there were altogether only more than 44,000 MNCs in the whole world, which had 280,000 overseas subsidiaries and branch offices. In 1997, the volume of the trade of only the top 100 MNCs already came up to 1/3 of the world’s total and that between their parent companies and their subsidiaries took up another 1/3. In the US$ 3,000 billion balance of foreign direct investment at the end of 1996, MNCs owned over 80%. Furthermore, about 70% of international technological transfers were conducted among MNCs. This type of cross-border economic activities within same enterprises has posed a challenge for the traditional international trade and investment theories.

Globalization of the financial sector has become the most rapidly developing and most influential aspect of economic globalization. International finance came into being to serve the needs of international trade and investment activities. However, along with the development of economic globalization, it has become more and more independent. Compared with commodity and labor markets, the financial market is the only one that has realized globalization in the true sense of ‘globalization’. Since 1970’s, cross-border flow of capital has been rapidly expanding. In 1980, the total volume of cross-border transactions of stocks and bonds of major developed countries was still less than 10% of their GDP. However, this figure had far surpassed 100% in 1995. The value of the average daily transactions of foreign exchanges has grown from US$ 200 billion in the middle of 1980’s to the present US$ 1,200 billion, which is 85% of the foreign exchange reserves of all the countries in the world and 70 times as large as the value of the daily export of commodities and services. Developed countries have been playing a dominant role in the process of economic globalization. In 1996, the total volume of exports of developed countries was US$ 4,057 billion, accounting for 81.7% of the world’s total value of international trade. In 1995, the foreign direct investment by 10 major developed countries including the G7, Switzerland, Sweden and the Netherlands took up 85.1% of the total value of foreign direct investment in the whole world. The dominant role of developed countries in the process of economic globalization is also reflected in the fact that it is they that determine the rules for international economic exchanges. Although current rules of game for international economic activities have the good aspect of being in keeping with socialized mass production, they are generally laid down under the dominance of developed countries. International economic and financial organizations are under the control of the United States and other western countries. They have been using these advantages to promote and dominate the development of globalization. At the same time, they are the largest beneficiaries of economic globalization. In November of last year, China and the United States reached an agreement on the China’s accession to WTO. With this, China made a decisive step forward on its way to becoming a member country of WTO. The signing of this agreement shows the determination of the Chinese government to firmly speed up the reform of its economic system and further integrate itself into the process of economic globalization  (Narula,1999:109-114).It is a win-win agreement. On one hand, the United States can increase its exports of goods and services to China, thus creating more employment opportunities. While on the other hand, China can boost its economic growth by increasing its share of the US market. In addition, more advanced technologies, management experience and capital can be introduced from developed countries. And the pressure international competition will become a driving force for the reform and opening toward the outside world.

Chapter II – A Unitarian Universalist Response to Economic Globalization

As people of faith, we are challenged to find ways to promote global economic fairness while maintaining the dynamism of the marketplace. As Unitarian Universalists, we affirm and promote:

The acceptance of one another and encouragement to spiritual growth, and a free and responsible search for truth and meaning: We are called to better understand the complexities of economic globalization, mindful that deeper global awareness enriches our individual and communal spirituality. We must resist the arrogance of supposing that our own experience of truth is universal. We affirm the value of congregational study groups devoted to a cyclical process of study, action, and reflection that includes monitoring our investments, the products and services we consume, the ways we consume them, the costs we bear to secure them, and the burdens we place on others in so doing. We must commit ourselves to actions that support and assist rural cultures that provide sustainable livelihoods adapted to the possibilities and limitations of the natural resource base. We must resist those who push unwanted globalization, industrial farming, or commodity agreements on nations and communities that wish to safeguard sustainable rural livelihoods and traditions.

The goal of world community with peace, liberty, and justice for all, and justice, equity, and compassion in human relations: Wealthy countries need to open their markets to agricultural goods, textiles, and other products from developing countries. We must become more effective advocates for increased funding of international economic, environmental, and humanitarian assistance as well as the expansion of educational opportunity. Existing debt of the poorest nations should be forgiven as part of a strategy under which such countries become self-sustaining. Certain public goods like water and education should remain under the protection of the state for the benefit of all citizens. We need to work to ensure that intellectual property provisions in international trade agreements take into account the rights of all people to medications, seed, fertilizer, and pest control.

The right of conscience and the use of the democratic process within society at large: We must commit to participate in local, state, and national affairs regarding economic globalization, and to partner with other progressive community organizations to advocate for just economic policies and laws. We need to hold our political and corporate leaders accountable for their policies and actions. We advocate the increased use of socially screened investment policies and participation in shareholder accountability initiatives. Trade agreements, such as The North American Free Trade Agreement (NAFTA) and the Free Trade Area of the Americas (FTAA), should safeguard democratically decided public policies, statutes, and regulations that protect children, labor, and the environment of all parties (Dunning & Lundan, 2008:314). The International Monetary Fund, the World Bank, the World Trade Organization, and other international financial and trade institutions must become transparent and democratic and support self-determination for communities and countries. The inherent worth and dignity of every person: We are called to participate in the work of organizations that advocate for human rights, fair employment standards, and environmental justice. Countries are responsible for requiring foreign and domestic companies to pay fair taxes, ensure their workers a locally defined living wage, provide a healthy and safe work environment, and respect the right of their workers to bargain collectively in independent labor unions and to engage in strikes and other job actions when necessary. The standards of the International Labor Organization of the United Nations should be incorporated in all trade agreements. We advocate measuring the success of an economy not only by fiscal performance but also by quality-of-life indicators such as child mortality rates and literacy and education levels. We recognize that developed nations, such as ours, need to reduce consumption of resources. Respect for the interdependent web of all existence of which we are a part: We open our minds and hearts to the ideas, ideals, and dreams of others pursuing a more equitable, sustainable, and environmentally sound global community. We advocate for trade agreements and other international accords that safeguard the environment, and we must monitor their enforcement. We need to hold corporations, as well as governments, accountable for the damage they do to the environment by their policies and practices. We need to guide our investments and consumption toward companies that produce, provide, and purchase goods and services that are in accord with environmental, health and safety, and fair wage standards. We acknowledge our own responsibility to refrain from disproportionately consuming natural resources or transforming resources into waste and pollution.

Chapter III – Critiquing the Critics of Economic Globalization

As is known, globalization is the great buzz-word of our times, although it lacks any common or agreed definition. It could mean as many different things as globalization of human rights values through United Nations Declarations and Covenants, the creation of War Crimes Tribunals, the International Criminal Court and the Land Mines Treaty, or the globalization of core labor standards through the International Labor Organization (ILO), or the globalization of environmental values through the Kyoto Protocol, but typically this is not what the so-called anti-globalists have in mind. Rather, they fundamentally object to the process of international trade and investment liberalization (economic globalization) that has occurred in the post-war years as reflected in the following summary numbers: from 1950 to 1999 the average annual growth rate of world real Gross Domestic Product (GDP) was 3.8 per cent; the average annual growth rate in the trade of goods over this period was 6.2 per cent; from 1980 to 1999 the average annual growth rate in the trade of services was 7.0 per cent; from 1982 to 1999 the average annual growth rate in the stock of foreign direct investment (FDI) was 13 per cent (Chesnais& Ietto-Gillies, 2000:248).

The public perturbations leading up to and surrounding the Seattle Ministerial meetings of the World Trade Organization (WTO) in late 1999, and subsequent civil disturbances in Washington, Quebec City, and Genoa, confirmed dramatically, unambiguously, and probably irreversibly that trade negotiations and trade disputes have moved out of the quiet and obscure corners of trade diplomacy and become matters of ‘high politics’. Despite these disturbances, it is important to bring some measure of rigorous detachment to the evaluation of the criticisms that have been widely and vehemently directed at the WTO, especially by the non-governmental organization community. The WTO and international trade liberalization generally are accused of creating a global monoculture, increasing inequality, harming the environment, health and safety, and human rights, and leading society (undesirably) away from self-sufficiency. Another common allegation is that the WTO is undemocratic and unaccountable and improperly constrains domestic political sovereignty.

In this paper we will argue that these objections are mostly unfounded. Most of these critiques exhibit two broad themes: they focus both on inherent properties of international trade and on the institutional characteristics of the international trade governance regime.

Conclusions

Economic globalization, broadly understood, is the growing global integration not only of markets but also of systems of finance, commerce, communication, technology, and law that bypass traditional national, cultural, ethnic, and social boundaries.

Proponents of economic globalization argue that it leads to more efficient division of labor, greater specialization, increased productivity, higher standards of living and wealth, and ultimately the end of poverty. Proponents also argue that recent economic growth has greatly contributed to the high standard of living enjoyed by many within the developed world and raised living standards of many people formerly living in abject poverty. Many others have not made such gains.

Opponents argue that economic globalization detaches markets from essential regulations meant to protect national sovereignty, the democratic process, human rights, labor rights, and the environment. Opponents also argue that the policies and practices of industrialized countries and transnational corporations drive the market forces of economic globalization. There is no effective global regulatory system controlling economic globalization.

The rules governing economic globalization have been created through trade agreements, international law, and institutions dominated by industrialized countries. These rules favor those with access to capital, legitimizing measures such as dropping tariffs, eliminating capital controls, enforcing intellectual property rights, privatizing public services, and weakening regulations that protect labor, health and safety, and the environment. Economic globalization is increasingly perceived by the rest of the world as American economic imperialism. Many Americans, accustomed to an individualistic and competitive culture, are insensitive to the realities of abject poverty, cultural erosion, and environmental degradation. As a result, systematic exploitation of labor and the environment goes unnoticed as do coercive monopolistic pricing of goods and services, criminal evasion of local legal controls, growing debt among developing countries, widening economic disparities, and devastation of traditional cultures. Unitarian Universalists are concerned about the concentration of power and wealth in the hands of a corporate elite who are dictating the terms of major economic and social parameters throughout the world. Together these factors generate profound anger and despair that fuel ideological and religious fundamentalism, increasing violence, and international terror.

We are challenged by the reality that many of us work for the very institutions driving economic globalization. We acknowledge our fears and resistance to change as we benefit from the global economic processes that foster inequity. The transformation we experience as we move from ignorance to knowledge and from speech to action is not easy. Nonetheless, we are called to become competent advocates. Seeing the world as an interconnected web challenges us to turn from self-serving individualism toward a relational sense of ourselves in a global community, and toward practices that help create economic structures designed to serve the common good.

References:

1.    Fran?ois Chesnais, Grazia Ietto-Gillies, Roberto Simonetti, European Integration and Global Corporate Strategies, Publishing HouseRoutledge, 2000.
2.    John H. Dunning, Sarianna M. Lundan, Multinational Enterprises and the Global Economy, Edward Elgar Publishing, Publishing House “Routledge, 2008.
3.    Rajneesh Narula, Multinational Investment and Economic Structure: Globalization and Competitiveness, London: Publishing House “Routledge”, 1999.

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Самбурская Наталия Ивановна

Доклад имеет научную ценность. Следует отметить комплексное исследование вопроса с учетом политических, экономических, социальных и технологических факторов. Было бы хорошо внести предложения для решения этой проблемы непосредственно в Грузии, но это задание авторы перед собой не ставили.

Хачпанов Гия Вячеславович

Статья интересная, отражает реали современного мира, миропонимания и восприятия. Проведена аналитика изменений во времени экономической глобализации.

Романович Людмила Геннадьевна

Исследование посвящено важным проблемам, порожденным экономической глобализацией. Тема представленной работы является актуальной и представляет значительный интерес, как с научной, так и с практической точки зрения. Авторы представили интересный аналитический материал, выразили свою точку зрения. Работа грамотно структурирована и содержательная. На наш взгляд, было бы целесообразным, авторам сформулировать по результатам исследования комплекс предложений, направленных на решение исследуемых проблем.
Комментарии: 3

Самбурская Наталия Ивановна

Доклад имеет научную ценность. Следует отметить комплексное исследование вопроса с учетом политических, экономических, социальных и технологических факторов. Было бы хорошо внести предложения для решения этой проблемы непосредственно в Грузии, но это задание авторы перед собой не ставили.

Хачпанов Гия Вячеславович

Статья интересная, отражает реали современного мира, миропонимания и восприятия. Проведена аналитика изменений во времени экономической глобализации.

Романович Людмила Геннадьевна

Исследование посвящено важным проблемам, порожденным экономической глобализацией. Тема представленной работы является актуальной и представляет значительный интерес, как с научной, так и с практической точки зрения. Авторы представили интересный аналитический материал, выразили свою точку зрения. Работа грамотно структурирована и содержательная. На наш взгляд, было бы целесообразным, авторам сформулировать по результатам исследования комплекс предложений, направленных на решение исследуемых проблем.
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