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    Challenge of globalization to agriCulturein the asian and PaCifiC region

    Jung-Sup ChoiProfessor, Food Resource Economics

    Yeongnam University214-1 Dae-dong Gyeongsan

    Gyeong Sangbuk-do 712-749 Korea

    Email: jsupchoi@naver.com

    ABSTRACT

    Globalization mostly implies neither borders nor nations. The concept stresses the globe or the world as a whole. In the ASPAC region, the most evident form of market openings take place as a result of multilateral and bilateral trade negotiations. The development of IT is also an additional blow to lower the national borders. Agricultural production and marketing sectors suffer direct impacts of globalization in the forms of seed purchasing and international trade of agricultural products. Consumers and manufacturers in the domestic food chain are influenced by globalization and these are transmitted to the agricultural sector. This discusses the major impacts of globalization to agriculture in the ASPAC region and its corresponding government policy implications, especially where it concerns food security and livelihood of consumers.

    Keywords: globalization, international trade, world trade organization

    INTRODUCTION

    Globalization defined

    Globalization, at current scale, is rather a recent trend in the long history of mankind, even though there are some scholars arguing that globalization started with the sailings of Christopher Colombus and Vasco da Gama in the late 15th century1. With the development of transportation, and followed by the explosive advancement of information and communication technologies, globalization came to be one of the most powerful trends in history. Globalization is an on-going phenomenon, leaving no single human being without being exposed directly or indirectly. Since globalization is proceeding with such a massive scale, there exists as many definitions as the number of students on globalization. In this paper, I would like to follow some economists definition of globalization, rather than adding my own to the already abundant jargon. I will use the concept of economic globalization and it means the lowering of economic borders of nations. To

    the sociologists, it seems that globalization is more ambiguous than to the economists2 :

    Economists seem to have succeeded in reaching more or less a commonly accepted definition of globalization, namely, as international economic integration that can be pursued through policies of openness, the liberalization of trade, investment and finance, leading to an open economy.

    More precisely, the term globalization encompasses a wide range of phenomena, including: 1) The cross-border integration of wholesale

    and retail financial markets; 2) Increased global-scale market competition

    and wholesale and retail trade; 3) Increased foreign direct investment; 4) Increased cross-border contracting and

    global-scale production networks; and 5) The formation of international joint

    ventures and strategic alliances for R&D3. It is worth describing the term internationalization which prevailed before

    1 ORourke, Kevin H. and Jeffrey G. Williamson, When Did Globalization Begin?, March 2000 (Mimeo).2 Van Der Bly, Martha C. E., Globalization: A Triumph of Ambiguity, Current Sociology, November 2005, Vol. 53(6): 875893.3 Sturgeon, Timothy J., How Do We Define Value Chains and Production Networks? Background Paper Prepared for the Bellagio

    Value Chains Workshop, September 25 October 1, 2000, Rockefeller Conference

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    globalization. Internationalization stresses closer relationship and freer trade among the nations by lowering the borders. In contrast, globalization mostly implies neither borders nor nations. The concept stresses the globe or the world as a whole. The internet, through which messages and information move freely without charge, is a well-known example of globalization. One of the indices that measures the level of globalization is the KOF index by the Swiss Federal Institute of Technology (Table 1). The index measures economic, social and political globalization. Belgium is listed at the top of the

    combined globalization index followed mostly by European countries. Only two ASPAC countries, namely Singapore and New Zealand, are listed on the top 20 globalized countries. To many Asians, globalization was encountered in the form of political globalization, or in other words, imperialism, about a little more than 100 years ago. Globalization in the ASPAC region started historically in the form of expansion of the European countries followed by the Japanese influence, and the consequent spreading power of the United States. After the economic reform and market opening in 1978, China appears to be

    Table 1. KOF Index of globalization, 20104

    Globalization Economic Social PoliticalCountry Index Country globalization Country Globalization Country Globalization

    1. Belgium 92.95 1. Singapore 97.48 1. Switzerland 94.94 1. France 98.442. Austria 92.51 2. Ireland 93.93 2. Austria 92.77 2. Italy 98.173. Netherlands 91.90 3. Luxembourg 93.57 3. Canada 90.73 3. Belgium 98.144. Switzerland 90.55 4. Netherland 92.40 4. Belgium 90.61 4. Austria 96.855. Sweden 89.75 5. Malta 92.26 5. Netherland 88.99 5. Sweden 96.276. Denmark 89.68 6. Belgium 91.94 6. Denmark 88.01 6. Spain 96.147. Canada 88.24 7. Estonia 91.66 7. United Kingdom 87.05 7. Netherlands 95.778. Portugal 87.54 8. Hungary 90.45 8. Germany 85.97 8. Switzerland 95.099. Finland 87.31 9. Sweden 89.42 9. Sweden 85.95 9. Poland 94.6310. Hungary 87.00 10. Austria 89.33 10. France 85.84 10. Canada 94.4011. Ireland 86.92 11. Bahrain 89.32 11. Portugal 85.59 11. Portugal 94.3612. Czech 86.87 12. Denmark 88.58 12. Norway 85.30 12. Germany 94.21 Republic13. France 86.18 13. Czech 88.43 13. Finland 84.89 13. Denmark 93.96 Republic14. Luxembourg 85.84 14. Cyprus 87.77 14. Slovak 83.90 14. United States 93.85 Republic 15. Spain 85.71 15. Finland 87.33 15. Czech 83.54 15. Egypt, 93.39 Republic Arab Rep.16. Slovak 85.07 16. Slovak 87.25 16. Australia 82.96 16. Argentina 93.38 Republic Republic 17. Singapore 84.58 17. Chile 87.14 17. Spain 82.52 17. Greece 93.1118. Germany 84.16 18. Israel 85.15 18. Luxembourg 81.60 18. Turkey 93.1119. Australia 83.82 19. Portugal 85.03 19. Hungary 80.79 19. Brazil 92.9520. Norway 83.53 20. Bulgaria 84.10 20. Liechtenstein 80.11 20. India 92.6921. Cyprus 82.45 21. Latvia 83.67 21. Singapore 79.84 21. Romania 92.4222. Italy 82.26 22. Switzerland 82.87 22. Cyprus 79.65 22. Hungary 91.6723. Poland 81.26 23. New Zealand 82.82 23. Ireland 78.75 23. Australia 91.4524. United 80.18 24. Slovenia 82.55 24. Italy 78.37 24. Finland 91.11 Kingdom25. New Zealand 79.56 25. Spain 82.11 25. United States 78.29 25. Norway 90.63

    http://globalization.kof.ethz.ch/static/pdf/rankings_2010.pdf (Accessed March 18, 2010).

    4Dreher, Axel (2006), Does Globalization Affect Growth? Evidence from a new Index of Globalization, Applied Economics 38, 10: 1091-1110. Updated in Dreher, Axel, Noel Gaston and Pim Martens (2008), Measuring Globalisation Gauging its Consequences (New York: Springer).

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    Fig. 1. Economic globalization of Asia by KOF index, 1970-2007

    http://globalization.kof.ethz.ch/aggregation/display (Accessed March 18, 2010)

    Fig. 2. Composition of geographical regions (WTO)

    http://www.wto.org/english/res_e/statis_e/its2009_e/its09_world_maps_e.htm(Accessed on 30 January 2010)

    increasing its influence in the wave of globalization in this region. According to the KOF index, the level of economic globalization in Asian countries is relatively low. The level, however, is increasing

    continuously since 1970 (Fig. 1). In the late 1990s, the index increased rapidly. The slowing-down of globalization in the early 2000s was followed by recent rapid increase.

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    A BRIef RevIew Of ASPAC RegION ANDITS AgRICUlTURe

    Geographically, the World Trade Organization (WTO) defines the Asia and the Pacific (ASPAC) region as the area in which China and Mongolia to the North, Pacific Island countries to the East, New Zealand and Australia to the South, and Afghanistan and Pakistan to the West (Fig. 2). The International Monetary Fund (IMF) classifies Asia into advanced and developing countries5. Among the 182 countries that compose the world, the IMF names 33 countries as advanced economies. Five Asian countries belong to this category: Hong Kong, Japan, Korea, Singapore, and Taiwan6. Japan belongs to the major advanced economies, so called G7, and other four countries belongs to the newly industrialized Asian economies. The Developing Asia is composed of 26 countries: Afghanistan, Republic of, Bangladesh, Bhutan, Brunei Darussalam, Cambodia, China, Fiji, India, Indonesia, Kiribati, Lao People's Democratic

    Republic, Malaysia, Maldives, Myanmar, Nepal, Pakistan, Papua New Guinea, Philippines, Samoa, Solomon Islands, Sri Lanka, Thailand, Timor-Leste, Democratic Republic of, Tonga, Vanuatu, and Vietnam. The United Nations (UN) Economic and Social Commission for Asia and the Pacific (ESCAP) maintains a more comprehensive definition of the ASPAC region: East and North-East Asia (7 countries), South-East Asia (11 countries), South and South-West Asia (10 countries), North and Central Asia (9 countries), and the Pacific (21 countries). In total, there are 4.08 billion people living in 58 ASPAC countries in 2007, according to the ESCAP statistics (Please refer to the attached Appendix Table). The population of ASPAC region is 61% of the world population. It is no surprise since the region involves two most populous countries in the world __ China and India. The average per capita GDP of ASPAC regions in 2007 was US$2,603, which is about half of the w