Date: November 14, 2011

Date: November 14, 2011

An Articleon

Caught by Globalization: Ways to respond

Submitted toProf Dr. Rashed Uz. ZamanCourse Instructor Globalization and International Organization (Paper 540)Department of General and Continuing EducationNorth South University

Submitted by Raju Sharma Student ID: 1030020085 Master’s in Public Policy and Governance Program Department of General and Continuing Education North South University

In partial fulfillment for the requirementof the Course On

Globalization and International Organization (Paper 540)

Abstract

Globalization as a process of increased interaction among different cultures (social), ideologies (political)

and products (economic) has been a reality too big to ignore. With its rapid pace and extensive

coverage, many contend that some aspects of life has already been shrunk, in space and time

dimensional both. It affects material aspects of life and also affects non material aspects of life

like sovereignty, freedom and identity.

Globalization has changed the roles, jurisdictions, and power of a nation in being able to control

its own destiny. With a globalized world, countries are learning ever more dependent nature of

their existence with each other, although, some learn the hard way. Different countries have

responded globalization issue differently, which this paper seeks to discuss, based on analysis of

their history, development and institutional capacity. It also looks into relation between

globalization and a nation and recommends a path based on existing power structure in the

world and irreversibility of globalization phenomenon.

After highlighting factors which matter while responding to globalization, the paper goes on to

recommends some way forward to how nations should deal with globalization. It argues that

running away from globalization would hurt more than getting integrated. The issue is not

whether globalization should be responded or not, instead, the issue is how best to respond to

globalization. States that are unable to adapt itself to globalization will find themselves

increasingly marginalized and irrelevant in the globalized world. Moreover, there are policy

options that allow states to play central roles in this globalized state of affairs. Based on the

institutional capacity and international standing, some countries should work to preserve

globalization’s pace while other should try to maximize their benefits from globalization.

Table of Contents

Abstract

1. Background............................................................................................................................................1

2. Introduction............................................................................................................................................3

3. Globalization and Nation-States............................................................................................................5

4. Factors Which Affect Responses to Globalization....................................................................................8

4.1 Economic history...............................................................................................................................8

4.2 State orientation/Basis/Principles on which the state is created.........................................................9

4.3 Level of Openness/Preparedness.....................................................................................................10

4.4 Public Opinion.................................................................................................................................11

5. Globalization: Taming or Harnessing It..............................................................................................12

5.1 Strategy 1: Tame Globalization.......................................................................................................13

5.2 Strategy 2: Harness Globalization....................................................................................................15

6. Conclusion...........................................................................................................................................16

References

1.

2. Background

A French farmer attacks an American multinational food chain construction sites in August

1999. He is highlighted as a National Hero who spoke about the need of preserving French

culture and not let forces of globalization erode it. It is taken as a symbolic protest to

globalization. In India, Krishna works in a call centre. He leaves late in the evening for work,

becomes John when he enters his office, acquires a new accent and speaks a different language

than he does at home to communicate with his clients who are living thousands of miles away.

He works all night, which is actually day time for his overseas customers. Krishna renders

service to somebody who in all probability he is never likely to meet physically. His holidays also

do not correspond to the Indian calendar but to those of his clients who happen to be from the

US. Globalization has caused it.

A colourful lantern called fawanis, used during Ramadan in Egypt is manufactured in China

which has caused local Egyptian fawanis maker to run out of business (Friedman, 2005).

Chinese made fawanis are cheap are made from plastic for durability, making fawanis available

to those Egyptians who previously could not afford fawanis. This is also linked with

Globalization.

The SARS was transferred from one person in Hongkong to 4000 people around the world with

an estimated cost of USD 30 billion. Globalization is working. The extremists, who are against

globalization, use high speed internet technology to relay their messages to the world. As

much State-actor is being empowered by technological development so are the terrorists. The

violence unleashed by hundreds of thousands of members of youth gangs or “maras” in Central

America is a source of alarm for political leaders and civil society organizations, which have

failed to come up with effective solutions to curb the growing phenomenon. Social scientists

report that Central America’s maras are branches of gangs in the U.S.--a combined effect of

globalization and the poverty and social marginalization that reign in this region

(http://www.educationforjustice.org).

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Prime Minister of Malaysia Dr Mahathir criticizes globalization and bigger players of

globalization like IMF, World Bank, and WTO, the west and urges to look east for value-based-

development in an international platform (global forum) which is another indicator of

globalization. A Nepali national, Sarika is a first generation learner who has done remarkably

well throughout her school and college life by working very hard. She now has an opportunity

to take on a job and begin an independent career, which the women of her family had never

dreamt of earlier. While some of her relatives are opposed, she finally decides to go ahead

because of the new opportunities that have been made available to her generation. People in a

remote district of Nepal, where the only possible means of transport is walking, and who know

nothing of globalization, wear footwear made in China. These facts point towards a reified 1

concept in social sciences - Globalization.

The term is as much hated as it is loved. It has helped certain aspects of life related to economic

prosperity, technological diffusion, overcome geographical barriers and health consciousness

etc. It is argued to have caused detrimental effects to environment, culture, and economies of

certain countries. Scholars like Francis Fukuyama and Samuel Huntington reveal aspects of

globalization when they used terms The End of History2 and Clash of civilizations3 respectively

while World Systems Theorists like Samir Amin and Immanuel Wallenstein also touch

globalization in developing the World System theory4 and dependency theory5.

1 Reification: making [some idea] into a thing" "objectification" or, regarding something as a separate business matter, is the consideration of an abstraction, relation or object as if they had living existence and abilities.

2 Frank Fukuyama's 1992 book The End of History and the Last Man had profound and lasting impact with its declaration that science and technology, the growing global economy, and liberal democracy are leading history in a quite different direction than Marx and Hegel imagined.3 The article suggested the world was returning to a civilization dominated world where future conflicts would originate from clashes between 'civilizations'.4 World-system refers to the international division of labor, which divides the world into core countries, semi-periphery countries and the periphery countries. Core countries focus on higher skill, capital-intensive production, and the rest of the world focuses on low-skill, labor-intensive production and extraction of raw materials.

5 Dependency theory is a body of social science theories predicated on the notion that resources flow from a "periphery" of poor and underdeveloped states to a "core" of wealthy states, enriching the latter at the expense of the former. It is a central contention of dependency theory that poor states are impoverished and rich ones enriched by the way poor states are integrated into the "world system."

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3. Introduction

The term globalization has, as is often the case in the social sciences, many very different

accepted usages. Globalization means the establishment of a global market for goods and

capital and the progression towards a global system of production. In its broadest sense

globalization refers to the existence of relations between the different regions of the world and,

as a corollary, the reciprocal influence that societies exert upon one another (Samir Amin,

1996). This process is considered ever growing through trade, extension of social relationships,

migration, terrorism, technological development, and numerous environmental problems.

Globalization refers to the process of the intensification of economic, political, social and

cultural relations across international boundaries (Akindele, 2003). Globalization seems to

promote a basic set of concepts with it related to free-market economics, liberal democracy,

good governance, gender equality and environmental sustainability among other holistic values

for the people of the member states. Many contend that Globalization is the compression of

time and space (James Mittelman, 1996 and David Harvey, 1989, cited in Guillen, 2001),

increased perception of world’s unification and interweaving of national economies; as well as

the global diffusion of practices, technologies and values. Globalization means that from now

on no activity in the world is locally limited, but all inventions, victories and catastrophes can

affect the whole world and [people] have to realign and reorganize their lives, actions,

organizations and institutions along a ‘local-global’ axis (Sphar, 2008).

Globalization is a multidimensional concept. It has political, economic and cultural

manifestations, and these must be adequately distinguished. It affects material aspects of life

and also affects nonmaterial aspects of life like sovereignty, freedom and identity. Globalization

involves changes in both the super-structures of a nation/community and the micro-structures

of a person’s dispositions and identity. It extends deep into the core of the self and its

dispositions, facilitating the creation of new individual and collective identities by the

intensifying relations between the individual and the globe.

Historically, international transfer of ideas, cultural elements, technical inventions, human

capital, goods and services has been the most prominent aspect in the creation of what has

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now come to be called global society. Such transfer has been going on for centuries in certain

quarters, except that now it is much more frequent, rapid, and widespread. Globalization has

been variously named as Market globalism (Neoliberals), justice globalism (political left) and

jihadist globalism. Market globalism seeks to endow ‘globalization’ with free-market norms and

neoliberal meanings. Justice globalism constructs an alternative vision of globalization based on

egalitarian ideals of global solidarity and distributive justice. Jihadist globalism struggles against

both market globalism and justice globalism as it seeks to mobilize the global umma (Muslim

community of believers) in defense of allegedly Islamic values and beliefs that are thought to be

under severe attack by the forces of secularism and consumerism (Steger, 2003).

There are debates regarding globalization’s affect on state. Scholars such as Anthony Giddens

and Martin Wolf (quoted in Putzel, 2005) argue that the ability of government to do what they

do has decreased. All over the world, the old ‘welfare state’ is now giving way to a more

minimalist state that performs certain core functions such as the maintenance of law and order

and the security of its citizens. However, it withdraws from many of its earlier welfare functions

directed at economic and social well-being. In place of the welfare state, it is the market that

becomes the prime determinant of economic and social priorities. The entry and the increased

role of multinational companies all over the world lead to a reduction in the capacity of

governments to take decisions on their own. However, globalization does not always reduce

state capacity. Developed countries have carefully guarded their borders with visa policies to

ensure that citizens of other countries cannot take away the jobs of their own citizens.

While globalization has led to similar economic policies adopted by governments in different

parts of the world, this has generated vastly different outcomes in different parts of the world.

An important question is how nations should respond to reap benefits from globalization. This

paper deals with the issue of responding to globalization. Rather than submitting to the

recommendations of RTB6 theories or World Systems theories, this paper analysis relationship

6 A Race To the Bottom (RTB) is a concept that is argued to occur between countries as an outcome of regulatory competition, progressive taxation policies and social welfare spending. When competition becomes fierce between nations over a particular area of trade and production, countries are given increased incentive to dismantle currently existing regulatory standards.

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between globalization and a nation and recommends a path based on existing power structure

in the world and irreversibility of globalization phenomenon.

4. Globalization and Nation-States

The merger of authority and solidarity that the nation-state accomplished for about 200 years is

now threatened by the winds of globalization (Reis, 2004). The statement introduces an

important debate about the role of state in globalization. The origins of the modern nation-

state system can be traced back to seventeenth-century political developments in Europe. In

1648, the Peace of Westphalia7 formulated principles of sovereignty and territoriality, to model

states which challenged the prevailing concept of nation in which political power tended to be

subordinated to a larger imperial authority. It strengthened a new conception of international

law based on the principle that all states had an equal right to self-determination. According to

political scientist David Held8, the Westphalian model contained the following essential points:

The world consists of, and is divided into, sovereign territorial states which recognize no

superior authority. The processes of law-making, the settlement of disputes, and law

enforcement are largely in the hands of individual states. International law is oriented to the

establishment of minimal rules of co-existence; the creation of enduring relationships is an aim,

but only to the extent that it allows state objectives to be met. Responsibility for cross-border

wrongful acts is a ‘private matter’ concerning only those affected.

During the 1970s, it became clear that the international society of separate states was rapidly

turning into a global web of political interdependencies that challenged the sovereignty of

7 The Peace Treaty of Westphalia marked the end of the Holy Roman Empire as an effective institution and inaugurated the modern European state system in 1648.

8 David Held “Democracy: From City-states to a Cosmopolitan Order?” [Selections from: Robert E. Goodin and Philip Pettit, (eds.) Contemporary Political Philosophy: An Anthology, Oxford: Blackwell Publishers, 1997. First appeared in Political Studies, 1992.]

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nation-states. The concept of sovereignty as spelled in the Westphalian treaty changed into

sovereignty, in the light of cooperation, among nation- states. In the development discourse, a

phrase “poverty anywhere is a threat to prosperity everywhere” also showed that a country

cannot but has to get involved in other’s country’s affairs, even for its own security.

Consequently terms such as new world order9, ‘demise of nation-state’ and world without

borders10 and global village11 were increasingly used in the discourses related to Sociology,

International Relations and Public Policy.

States continue to remain important. The primacy of the state continues to be the

unchallenged basis of political community. The state continues to discharge its essential

functions (law and order, national security) and consciously withdraws from certain domains

from which it wishes to. The role of state in liberalizing their economies also provides hints

about the interaction among nation- state and globalization because the rapid expansion of

global economic activity can be reduced to political decisions to lift restrictions. After all,

economic forms of interdependence are set into motion by political decisions, but these

decisions are nonetheless made in particular economic contexts. Governments can still take

measures to make their economies more or less attractive to global investors. In addition,

nation-states have retained control over education, infrastructure, and, most importantly,

population movements. Indeed, immigration control, together with population registration and

monitoring, has often been cited as the most notable exception to the general trend toward

global integration. In some respects state capacity has received a boost as a consequence of

globalization, with enhanced technologies available at its disposal, state collect information

about its citizens. With this information, the state is better able to rule, not less. Thus, states

9 New World Order connotes disparate meanings related to strengthening role of UN, International cooperation on a range of North-South economic and security problems and nuclear disarmament.

10 World Without Borders is a phrase implying greater connectivity among individuals where universal values are emerging leading to the national borders being blurred/faint.

11 Global Village is a term closely associated with Marshall McLuhan. McLuhan described how the globe has been contracted into a village by electric technology and the instantaneous movement of information from every

quarter to every point at the same time.

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become more powerful than they were earlier as an outcome of the new technology. Finally,

series of drastic national security measures that are implemented worldwide as a response to

the terrorist attacks of 9/11 are proof that challenges predictions of a borderless world without

states. There are chances that states might impose restrictions on the freedom of movement

and assembly. At the same time, however, the activities of global terrorist networks have

revealed the inadequacy of conventional national security structures based on the modern

nation-state system, thus forcing national governments to engage in new forms of international

cooperation.

The biggest impact on the functioning of the state has, therefore, been in how states rearrange

themselves in light of pressures from international institutions and demands from local

community groups and separatists. The integration of regional economies into a single

economic community and international organizations charged with responsibility to oversee/

conduct rules-of-game at the international level are all done by the state. Here again the state

is a major actor in promoting global governance by providing ample space for voluntary civil

society organizations. It must also be reinforced, that the state jurisdictions has been curtailed

by the emergence of for-profit and not-for-profit organizations at the local, regional and

international level. This shows the role of state has changed but not receded. State, at present,

has to deal with many factors while making policy decisions than it would have done previously.

The global threat to collective prosperity also calls up for a strong role of state.

4. Factors Which Affect Responses to Globalization

4.1 Economic history

Although the pressures from globalization on Nations are similar, the responses given by

each nation are various. Among other things the responses have depended upon the

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economic history of the nation. It also corresponds to the fact that a nation history is the

single most determinant factor because history is a composite fable of country legal,

institutional and cultural attainments (Cardoso, 2009). Britain’s ability to prosper was

facilitated by sea route, inside and outside Great Britain as against Africa which despite

having natural resources could not prosper. Jim Tomlinson (2010) shows how Dundlee, a

city in Britain, was able to benefit from globalization by carrying out its heritage of linen

industry and changing into jute industry after cheap raw materials were brought about

from Calcutta in India. Dundee’s ability to reap benefits from globalization was as much

based on its economic history as it was based on its political leadership and easy sea

routes for trade.

Jeffrey Sachs opines that Britain was able to reap huge benefits from first wave of

globalization because of being an island economy close to continental Europe and North

America. Britain has navigable rivers ways for internal trade also. Likewise those parts of

Africa have higher per capita GDP which have access to sea route, meaning those

countries related to the globalized worlds through trade, are more prosperous.

Singapore is another case at hand. Many believe that Singapore developed after 1950s

but the important infrastructure like sea ports, system of trade, easy sea route- ports,

assertive bureaucracy were laid in the early part of the 20th century. During its initial

days of becoming a nation, Nepal favoured complete closing of its border and putting

stringent control on trade with china and India to provide protection to its industries.

Successively Nepal was closed for foreign trade for a century from 1800s to 1900s (Bista,

2004). The present economic structure of Nepal with few industries and limited market

provided ample space for Indian goods to invade the Nepali market after Nepal opened

its boundary during 1950s. Such massive was the flow of goods into Nepal that almost

90% products in Nepal have Indian origin and a substantial percentage of Nepali primary

products find their market in India.

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4.2 State orientation/Basis/Principles on which the state is created

Another important factor is State Orientation. Those countries which have personal

freedom as their core principles and others which value equality and collective solidarity

as their core principles. This distinction can also be correlated with development of neo-

liberals ideology and socialism respectively. Those state which idealize collective

freedom and guidance of state are wary of globalization than state which base their

ideals as individual freedom. The promise of relief to the populace has been used in

these countries where culture has emphasized responsibility of Patron to take care and

guide the lives of majority (Financial Times, Oct 1, 2006). Political figures in countries

like France, Cuba, Venezuela, China, Africa, and Singapore have been cautioning their

citizens about globalization and have responded differently then countries like USA, UK

and Australia and Canada (Behrman, 2008).

In France, where people traditionally look to the state for guidance and protection,

French politicians have felt obliged to address globalization in their political programs

and pronouncements. While only the extremes of the political spectrum have called for

the process (somehow) to be halted, mainstream politicians have argued for measures

to regulate and temper some of its perverse effects. Both socialist Prime Minister Lionel

Jospin and conservative president Chirac often speak of the need for alternatives to

unregulated markets of goods, money, and people and demand more “rules” to govern

globalization (Gordon et al, 2001). Lionel Jospin, a left-wing politician, continued to

liberalize and privatize large sections of the French economy but urged on the necessity

of “controlling market forces and globalization” while Chirac, on the political Right,

stressed the state’s role in ensuring social protection and help for the least advantaged

members of society.

During its formation years in 1800s, Nepal also favored state as patron of the citizens

and state responsibility towards the under-privilege. This thoughts coupled with

religious fatalism (Bista, 2001) much explains the less integration of Nepal with the

international economic order. Cardoso (2009) shows that a country with fewer

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alternatives for economic diversification have adopted a policy of anti-globalization after

discovering that they have not gained from the globalization process. The ensuing

political crises have led to the rise of a leadership with indigenous roots strongly

influenced by the negativism typical of the anti-globalization reaction in countries like

Bolivia, Ecuador and Venezuela.

4.3 Level of Openness/Preparedness

The way a country responds to globalization by muddling through or deregulating or

hoping for a fair playing ground at the international level is depended upon the level of

openness. Those countries which have well established contract system, strong

bureaucracy, private property rights, developed manufacturing sector and stable

political environment are more open to globalization than countries which lack these

conditions. Certain pre conditions exist without which mere opening of economy will

not bring benefits to the country. For a country which has yet to develop institutions

related to contract system and private property rights, the benefits from globalization

tends to be minimum no matter even if they adopt liberalization policy. The results of

Structural Adjustment Programs in developing countries provide ample evidence.

Countries such as China, Singapore and Malaysia have benefitted from inflow of Foreign

Direct Investment because of strong bureaucracy; export oriented manufacturing sector

and highly educated human resources and availability of basic infrastructure. The

introduction of globalization through liberal policies of Structural Adjustment Programs

to developing countries have neither provided them opportunities for increased global

investment nor provide protection for their infant industries to grow strength to

compete at the international level. David Harvey provides important evidence that

states which maintain a balance between the state and the market and organize on

corporatist principles, like Singapore and Taiwan, have done relatively well in this era

where the free market ideology is more the norm within the capitalist globalization

process (Pinder, 2007). A successful case can be mentioned of Malaysia in its efforts to

manage the 1997 Asian Financial Crisis. Malaysia rejected IMF prescription on how to

manage the financial crises and became successful. As Harvey mentions the state

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market relation was based on corporatist principles and strong state. The asymmetry of

power and interests of the member states of the global village, as well as the

lopsidedness in the rules of the game there-in, have not benefitted weak countries

(Akindele, 2002).

4.4 Public Opinion

The responses of a nation to globalization are a political issue and here comes

importance of public opinion. The orientation of the parties running government also

affects the responses to globalization. The parties frame public opinion and advocate for

stringent measures to counter globalization. From the United States to Japan, from

Brazil to India, substantial sections of public opinion and key government leaders are

now seriously questioning the effects of globalization and looking for ways to control it.

The Seattle protest 12and the consequent flow of social movements against capitalism

oriented globalization have caused public opinion to be shift from pure laissez faire

economy to active role of state in the economy.

Of course there are people who favor for minimum government intervention and letting

the market decide everything. Their views in the general discourse have been limited. In

America some aspects of globalization related to the migration of people are strictly

regulated by the government. In France spread of American soft drink gave rise to the

concept of ‘coca- colonization13’ which was considered against French culinary culture.

Adherence to the national culture also determines how a country responds to the global

forces. Under influence of globalization long established traditions and belief system

have come to contradict with values ingrained by globalization. Globalization generally

promotes value of democracy, liberal traditions, personal freedom, and outward

orientation. The public reacts to these values and different countries accept different

12 Protest activity surrounding the WTO Ministerial Conference of 1999, aimed to launch a new millennial round of trade negotiations, occurred on November 30, 1999 when the World Trade Organization convened in Seattle, Washington. The negotiations were quickly overshadowed by massive and controversial street protests outside the venue and this became the anti-globalization movement in the United States. 13 Coca-colonization - a reference to the aggressively marketed American soft drinks domination in France.

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aspects of globalization. The consequent result is the change in original culture of a

country. A large inflow of Spanish speaking people in the USA has led to many cultural

changes in the culinary traditions, habits, and linguistics of American life.

5. Globalization: Taming or Harnessing It

There is no running away from globalization. One has to respond to it. Ideas like freedom,

autonomy, justice and democracy have permeated state boundary and resulted into the huge

social movements to bring about democracy and freedom in all countries of the world. Likewise

globalization with its tentacles is bound to affect or permeate any national boundary. The

development of communication systems at present have provided ample space to consolidate

support and organize protests though facebook and other internet applications, as was seen in

Egypt protests.

Although very few percentages of people are connected this way but the pace of globalization

is such that it will, in course of time, reach out to millions more people. The tremendous

technological development in transport and communication system has shrunken the world.

According to the World Bank Data 2009, 27.1% of the humanity are connected via internet and

the almost 70% people have access to the cellular communication systems

(http://data.worldbank.org/indicator/). Such linking of people has not happened anytime in

human civilization. This provides optimism for the continued growth of globalization.

Although Scholars claim that globalization process has been set back or slowed by wars and

economic depressions, it is not just about economics to remain constrained by wars. The

political and social and cultural aspects of globalization will continue to permeate the national

boundaries even with persistent wars. Jagdish N. Bhagwati14, begins his newest book, In 14 An eminent international trade scholar, Bhagwati has advised the United Nations Secretary General on globalization and the General Agreement on Tariffs and Trade secretariat in the Uruguay Round trade negotiations that gave rise to the creation of the WTO. He is a university professor at Columbia University in New York and a senior fellow in international economics at the Council on Foreign Relations in New York City, USA.

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Defense of Globalization, dramatically by arguing that, first, globalization has improved the lot

of humanity; that second, in part because of that improvement, the world must sustain, even

deepen globalization; that third, globalization is still relevant. At the World Economic Forum

concluded in New York, President Kaspar Villiger of Switzerland noted that globalization was

inevitable, and that “whoever disengages themselves from it, loses”. He added “that two-thirds

of the world’s population had yet to reap the benefits of such globalization, and that ‘in order

to solve worldwide problems, we need to harness the growth potential of globalization.’

(Quoted in Frank et al, p. 372). So there remains no option for countries but to respond to

globalization. Some countries can Tame it while others Harness it.

5.1 Strategy 1: Tame Globalization

A country should adhere to one of the above strategy based on its existing institutional capacity

and international standings. Taming globalization would require a country to have more

economic power and political/diplomatic influences around the world. This condition is

available to few countries in the north and east. These countries have long been exposed to the

globalization waves. They created it and they expanded it. Countries like Britain, France, and

Germany and lately USA had adhered to capitalism in the 17th and 18th century which have

provided these countries to expand their markets and be a global partner to trade. These

countries have been able to draw upon resources from their colonies and achieved a huge rise

in productivity. The increase in productivity led to surplus capital accumulation, some parts of

which were invested in the technological development through investment in education and

health. Consequently these countries raised the productivity of their labours and also provide

ample space for its scholars to invent new technologies like Telegraph, telephone, electricity

bulbs, Cars etc. The development of these material resources aided them in their quest for

suppressing uprisings in the colonies as well as set some rudimentary infrastructural

development in some of the colonies to extract more raw materials.

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They have also institutionalized many international agencies specialized in trade, human rights,

Development which they have been able to manipulate such that they benefit. Due to their

economic history and diplomacy, they are obviously in position to command international

trade. These countries mobilize both national and international financial resources, opening the

path for foreign investment in developing nations, utilizing trade in the development process,

lessening the debt burden, increasing financial assistance as well as technological assistance for

development.

Taming globalization does not mean taking advantages of globalization such that other nations

face severe disadvantages. Taming means to let the globalization process take place in smooth

manner without any Backlash. The Backlash of globalization would be as dreadful to countries

that should Tame globalization as those countries which aspire to harness benefits from

Globalization. The issue is not how much globalized a country has become; the real issue is how

much it has been benefitting from globalization. Poorer countries have benefitted from the

rapid development of technologies, particularly in the communication, transportation and

health sectors. Some countries have escaped several stages of development by diffusion of

technology and skills. Jeffrey Sachs (2005) points out that china has almost achieved economic

development at as faster rate of growth of around 10% than USA, to reach at the same level of

trade. The annual growth rate of USA economy from 1857 to 1957 was 1.7% annually. So we

can say that china, although a late entrant to global economy has nevertheless achieved a stage

of development at a faster rate and with less investment in building technologies required for

achieving such growth. These facts highlights that countries should now assess their

international ranking in terms of benefits they derive from global trade and take responsibility

to maintain globalization pace.

5.2 Strategy 2: Harness Globalization

Likewise other countries can attempt to harness benefits from globalization to increase

prosperity of the world. Harnessing means taking existing benefits from the global system

rather than running away from it. It is argued by scholars such as Frank Paul Le Veness and

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Marilynn Fleckenstein that developing countries possesses economic conservatism15 which

hinders their participation at the international trade. In writing of Africa, Nicolas van der Walle

(2000) suggests that poor economic performance has been caused principally by the failure to

attract extra-African investment, strong protectionism with regard to imports (although the

continent relies heavily on trade), a heavy dependence upon foreign aid and lack of investment.

He further notes that African trade consists of less than 2% of the totality of world trade which

clearly appears to represent a figure far below what might have been expected to have been

achieved.

Developing countries need to identify their areas of comparative advantage and then

participate in globalization. The range of feasible strategies depends on factors that differ from

country to country, such as the local capacity, presence of foreign direct investment,

participation of the public sector in production, capacity of the leadership, prevailing ideologies,

and so forth. In other words, there are alternative paths but all paths lead towards

globalization. Simultaneously investment in education, transportation, communication must be

done so that the level of living standard continuously rises through the efficient use of

resources gained though participation at the global trade. One strategy for the developing

countries to benefit from globalization is to invest in the growth of service sectors rather than

concentrate on producing primary products which have very low prices as against prices of

manufacturing and service sectors.

Based on comparative advantage developing countries like Nepal could open tourism sector for

international players to come in. The partnership model between a foreign affiliate and national

government or local partner benefits national government with help in financing all or some

parts of tourism sector. The gains in tourism could be used to promote education,

infrastructure etc in Nepal. Though a country adopting this strategy might find it difficult to deal

with the internal political turmoil, in the long run the country would be benefitted though

increased trade.

15 Economic Conservatism characteristically strive to show that existing economic and political inequalities are well justified and that the existing order is about as close as is practically attainable to an ideal order.

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6. Conclusion

Globalization is too much big a reality to ignore or to run away from. This analysis is about

globalization as it affects countries in terms of techno-economic and cultural trends and

responses of countries towards globalization. Most discussions of globalization are one sided in

that they either talk about global economy as providing either a panacea for all or a

exploitative medium for capital accumulation at the center to the detriment at the periphery.

This dialogue is generally influenced by the type of thinking which modernization theorists or

world system theorists use in their analysis of globalization. It is suggested in this study that

globalization is neither of these exclusively. Globalization has transcended certain spatial,

cultural and socio-political boundary that the term bears an objective reality which deeply

affects the subjective realm also. It is now running on its own momentum. It may affect

different nations differently depending more upon national politics and policies and interests

and decisions of independent actors and organizations than the conspiracy run by the advanced

countries.

Although the present wave of globalization is a result of colonialism past, its character and

operations are vastly different. This system is based on a network of interdependent financial

institutions, markets, technologies, peoples, ideas, and cultures, although the playing field is far

from being level for all the players in it, But this is the most leveled field so far achieved by

human civilization. The achievements of previous civilizations were constrained by geo-political

factors to travel to other parts of the globe. Now with the speed of transportation and

communication, innovation in any aspect of life anywhere in the world cannot remain within its

political or cultural boundary. It is not only that multinationals are invading local markets. Local

products have also crossed national boundaries. A simple search on internet about cottage

industry products reveals thousands of small and cottage industry operatives who are

marketing their products worldwide. Countries are participating in the globalization process not

necessarily because they love it but because it is here to stay despite resistance by those who

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consider it truly evil. It is, as well, not clear what would it would mean for a country to have

alternative to globalization. Scholars have not pointed out how a country can remain un-

attached in an attached world.

As this essay has sought to demonstrate, a state that is unable to adapt itself to these altered

circumstances will find itself increasingly marginalized and irrelevant in the globalized world. It

has further shown that there are policy options that would allow the state to play a central role

in the transition towards this globalized state of affairs. Based on the institutional capacity and

international standing, some countries should work to preserve globalization’s pace while other

should try to maximize their benefits from globalization.

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