21st century globalisation: New links emerging?

Updated: May 01, 2010, 15:53 PM IST

Arani Basu

While writing on the significance of exclusion in terms of economic globalisation, I am sometimes perplexed as to what is not globalisation. The magnanimity of the word ‘globalisation’ is such that it is a heavy task to explain its trajectory, let alone its impacts. While identifying consequences of economic globalisation on different parts of the world, I take recourse to the term ‘exclusion’. ‘Exclusion’ is one of the analytics to study the differential impact of economic globalisation on countries. Exclusion cannot be absolute; if certain section of the population is denied access to resources then a logical inference is that the rest of the section is included and shares the benefit of globalisation.

The last wave of globalisation has primarily been an economic phenomenon; as it was market mediated, finance oriented, commodity based and consumption related. There has been high visibility of the economy and finance related issues, processes, rules and institutions. It was followed by commodity, technology, information and labour related globalisation.

North-South Divide?

There are limits to economic globalisation in terms of fairness, inclusiveness and sustainability capacity. Firstly, it is a capitalist design against the working classes or peasants; secondly, it is rooted in the agenda of the US unilateralism, which hopes to establish a global hegemony; thirdly, it is promoting clashes of civilizations; fourthly, it is destroying the national sovereignty of the post-colonial nation-states and promoting power of the multinational and transnational corporations; fifthly, it is causing identity crisis through decline and fragmentation of the ‘national identity’; and finally, it is deepening disparities within and between nation-states. Moreover, there are several structural and systemic gaps inherent in globalisation, which provide preferential treatment for a minority section of the world population at the cost of deliberate ignorance for the rest.

As a result, globalisation has brought uneven development for the world – the North and the South have been affected differentially. According to critics, economic globalisation perpetuates ‘exclusion’; that the global South is completely excluded from the advantages of the process as the North stands the sole ‘gainer’. In this reflection the focus is on differences in analysing and representing global conditions between the North and the South.

Exclusion and Interdependence

For some, exclusion is too crude a term to describe the actual situation. The term exclusion ignores the many ways in which developing countries are included in global process; they are subject to global financial discipline and part of global markets. Thus it would be more accurate to speak of asymmetrical inclusion or hierarchical integration. Thus the people in the South are within the reach of global mass communications and advertising, within the reach of the message but not necessarily the action. In Western Europe, the viewers experience ‘long-distance suffering’ and engage in schizophrenic behavior – making limited or vague gestures of solidarity, while finding shelter in the ‘chauvinism of prosperity’ that is being sustained by institutions and the media. Electoral politics in many advanced countries exclude ‘terrorists’ and marginalizes welfare recipients.

North-South inequality runs very deep, though poverty does not have a marked territory. Of course, the South is in the North and North is in the South, and privilege and poverty are no longer neatly geographically divided. In demographic terms they are the minority world and the majority world. They are “worlds” because they make up complete life-worlds. The division simply does not run between the middle class and the underclass. Thus, the middle class in the South shares many of the majority’s economic, political and geographical frustrations. The poor majority and the middle class in the South suffer domestic political incompetence and corruption, western double standards, superpower geopolitics and geo-economics, and share national and regional destinies.
Therefore, perhaps along with ‘exclusion’ we need another analytic namely ‘interdependence’ to understand the deeper consequences of globalisation especially in the 21st century.

East-South and South-South Link

The new century momentum of globalisation is markedly different from twentieth century globalisation. Slowly the axis of globalisation is turning from North-South to East-South relations. This poses a major question: Is the rise of Asia and the newly industrialized economies (NIEs) just another episode in the rise and decline of nations, another reshuffling of capitalism, without affecting the ‘logic’ of accumulation? What is the relationship between the zones of accumulation and the modes of regulation and what are the ramifications for global inequality?

Answers to such questions are yet to arrive and nor can they be expected to be simple. Globalisation in the past was a profoundly “unequalising process”, yet today the process is rapidly turning on its head. The South is growing faster than the North. Leading the charge is a new generation of Southern multinationals -- from China, Korea, India, Latin America and South Africa. So the old ‘core-periphery’ relations no longer hold. In development policies, East and Southeast Asian models have long overtaken western development examples. South-South cooperation heralded as an alternative to dependence on the West ever since the meeting of the Non-Aligned Movement in 1955, is now taking shape. Already 43 percent of the South’s global trade comes from intra-South trade.

This optimistic assessment counts economic changes – but it does not address social questions. The net financial drain from the South is still ongoing, poorer nations sustain American over-consumption and the overvalued dollar. About cutting-edge globalisation there are two big stories to tell. One is the rise of Asia and the accompanying growth of East-South trade, energy, financial and political relations. The other is the challenges faced by emerging societies in agriculture and wealth distribution.

Inequality Persists

The trend is that overall inequality between advanced economies and emerging economies is narrowing while inequality in emerging societies is increasing. The pattern of rising inequality in neoliberal economies (the US, the UK and New Zealand) continues and has begun to extend to Australia, Japan and South Korea. International migration has become a major flashpoint and produces growing conflicts and dilemmas around multiculturalism and migration in many countries.

Rising human development indices, urbanization and growing social and communication densities are producing a general ‘skill revolution’. However, the flipside of technological change and knowledge economies is that with rising skill levels come widening skill differentials and urban-rural disparities. The second general cause of growing inequality is unfettered market forces promoted by multinational corporations, international institutions and business media. The third general cause of inequality is financialisation because its employment base is much narrower than in manufacturing, and income differential are much steeper. A fourth case of inequality in developing countries are fast-growth policies that reflect middle class and urban bias and aggravate rich-poor and urban-rural gaps.

Practically, all emerging economies face major rural and agricultural crises. In China this takes the form of pressure on land, deepening rural poverty, pollution, village-level corruption and urban migration. These are classic problems of modernisation. What is the relationship between celebrating growth and deepening poverty? In addition to the rural crisis, the emerging powers face profound urban poverty.

A Speculative Conclusion

The crisis, in one reading, can be seen as an expression of global imbalance. That neoliberalism is unsustainable has long been argued. The crisis illustrates the combined effects of deregulation and financialisation, two features of the neoliberal era. The third component of neoliberalism, the exploitation of right-less labour and the concentration of power at the top is yet to be confronted. While throughout the global South it is a cliché that neoliberalism does not work, the international financial markets continue business as usual. Now emerging economies follow neoliberal policies (in the sense of fiscal conservatism) to escape from neoliberalism (in the sense of the vagaries of the free market).

Discussions in emerging societies are about rehabilitating the developmental state, one that is democratic, inclusive and innovative. The call is also for a global civil society to accommodate the ‘virtues’ of globalisation for establishing a ‘harmonious world’. However, is a global civil society possible? What would be its scopes in terms of global governance with inclusive policies through intervention of individual nation-states? Last but not the least, can a civil society at the global level be really just and egalitarian, bringing in collective good for the ‘Whole Man’? We are yet to have definite answers to such questions. So should we say that ‘exclusion’ and ‘interdependence’ are not exhaustive enough as analytical tools for understanding the impacts of economic globalisation on us, and we need to look elsewhere? With these questions lingering, I put my pen down.