GLOBALISATION CHALLENGES AND

ITS ADVANTAGES

Globalization
Globalization has come to be a principal characteristic feature of the new
millennium and it has become an inescapable reality in today's society. No
community and society can remain isolated from the forces of globalization.
The cyber society has come with a bang. The computer culture is spreading
rapidly. Even in a poor country, coca-cola, cars, cosmetics and clothes seen in
the cities and towns hide the reality of poverty and suffering of the people. We
have almost reached a point to believe that "We cannot reverse the trend; we
can only go forward!" We need to ask: What is the role and priorities of
theological education in this fast changing situation.

What is Globalization?
Globalization is a new contemporary stage of development of capitalism over the
world. It is a process of social change in which geographical and cultural barriers
are reduced. This break down of barriers is the result of transportation,
communication and electronic communication. It also involves a process by which
economies of different countries are oriented to a global market and are controlled
by multinational and global financial institutions. It is not merely an economic
process, it is also a cultural process. It creates, by the help of media, a monoculture - a culture of rich and powerful. It is no longer a theoretical concept; it is a
glaring reality, impinging upon almost every aspect of human existence economic, political, environmental, and cultural and the like.
Globalization can be described as a widening, deepening and speeding up of
worldwide interconnectedness in all aspects of contemporary social life, from
the cultural to the criminal, the financial to the spiritual.

Globalization in its literal sense is the process of transformation of local or regional

things or phenomena into global ones. It can also be used to describe a process by
which the people of the world are unified into a single society and function
together. This process is a combination of economic, technological, sociocultural
and political forces.
Globalization is often used to refer to economic globalization, that is, integration of
national economies into the international economy through trade, foreign direct
investment, capital flows, migration, and the spread of technology.
Tom G. Palmer of Cato Institute defines "globalization" as "the diminution or
elimination of state-enforced restrictions on exchanges across borders and the
increasingly integrated and complex global system of production and
exchange that has emerged as a result."
Thomas L. Friedman "examines the impact of the 'flattening' of the globe", and
argues that globalized trade, outsourcing, supply-chaining, and political forces
have changed the world permanently, for both better and worse. He also argues that
the pace of globalization is quickening and will continue to have a growing impact
on business organization and practice.
Noam Chomsky argues that the word globalization is also used, in a doctrinal
sense, to describe the neoliberal form of economic globalization.
Herman E. Daly argues that sometimes the terms internationalization and
globalization are used interchangeably but there is a slight formal difference. The
term "internationalization" refers to the importance of international trade, relations,
treaties etc. International means between or among nations. "Globalization" means
erasure of national boundaries for economic purposes; international trade
(governed by comparative advantage) becomes inter-regional trade (governed by
absolute advantage).

History
The term "globalization" has been used by economists since the 1980s although it
was used in social sciences in the 1960s; however, its concepts did not become
popular until the latter half of the 1980s and 1990s. The earliest written theoretical
concepts of globalization were penned by an American entrepreneur-turnedminister Charles Taze Russell who coined the term 'corporate giants' in 1897.
Globalization is viewed as a centuries long process, tracking the expansion of
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human population and the growth of civilization, that has accelerated

dramatically in the past 50 years. Early forms of globalization existed during the
Roman Empire, the Parthian empire, and the Han Dynasty, when the Silk Road
started in China, reached the boundaries of the Parthian empire, and continued
onwards towards Rome. The Islamic Golden Age is also an example, when
Muslim traders and explorers established an early global economy across the
Old World resulting in a globalization of crops, trade, knowledge and technology;
and later during the Mongol Empire, when there was greater integration along the
Silk Road. Globalization in a wider context began shortly before the turn of the
16th century, with Spain and Portugal. Portugal's global explorations in the 16th
century, especially, linked continents, economies and cultures to a massive extent.
A wave of global trade, colonization, and enculturation reached all corners of
the world. Global integration continued through the expansion of European trade in
the 16th and 17th centuries, when the Portuguese and Spanish Empires expanded
to the Americas, followed eventually by France and Britain. Globalization has had
a tremendous impact on cultures, particularly indigenous cultures, around the
world.
In the 17th century, globalization became a business phenomenon when the
Dutch East India Company, which is often described as the first multinational
corporation, was established. Because of the high risks involved with
international trade, the Dutch East India Company became the first company in the
world to share risk and enable joint ownership of companies through the issuance
of shares of stock: an important driver for globalization.
Globalisation was also achieved by the British Empire (the largest empire in
history) due to its sheer size and power. British ideals and culture were imposed on
other nations during this period.
The 19th century is sometimes called "The First Era of Globalization." It was a
period characterized by rapid growth in international trade and investment between
the European imperial powers, their colonies, and, later, the United States. It was
in this period that areas of sub-saharan Africa and the Island Pacific were
incorporated into the world system. The "First Era of Globalization" began to
break down at the beginning of the 20th century with the first World War, and
later collapsed during the gold standard crisis in the late 1920s and early 1930s.

Historical Development
Globalization has been a historical process with ebbs and flows. During the Pre3

World War I period of 1870 to 1914, there was rapid integration of the economies
in terms of trade flows, movement of capital and migration of people. The growth
of globalization was mainly led by the technological forces in the fields of
transport and communication. There were less barriers to flow of trade and people
across the geographical boundaries. Indeed there were no passports and visa
requirements and very few non-tariff barriers and restrictions on fund flows. The
pace of globalization, however, decelerated between the First and the Second
World War. The inter-war period witnessed the erection of various barriers to
restrict free movement of goods and services. Most economies thought that they
could thrive better under high protective walls. After World War II, all the leading
countries resolved not to repeat the mistakes they had committed previously by
opting for isolation. Although after 1945, there was a drive to increased
integration, it took a long time to reach the Pre-World War I level. In terms of
percentage of exports and imports to total output, the US could reach the pre-World
War level of 11 per cent only around 1970. Most of the developing countries
which gained Independence from the colonial rule in the immediate Post-World
War II period followed an import substitution industrialization regime. The Soviet
bloc countries were also shielded from the process of global economic integration.
However, times have changed. In the last two decades, the process of globalization
has proceeded with greater vigour. The former Soviet bloc countries are getting
integrated with the global economy. More and more developing countries are
turning towards outward oriented policy of growth. Yet, studies point out that
trade and capital markets are no more globalized today than they were at the end of
the 19th century. Nevertheless, there are more concerns about globalization now
than before because of the nature and speed of transformation. What is striking in
the current episode is not only the rapid pace but also the enormous impact of new
information technologies on market integration, efficiency and industrial
organization. Globalization of financial markets has far outpaced the integration of
product markets.

Modern globalization
Globalization in the era since World War II is largely the result of planning by
economists, business interests, and politicians who recognized the costs associated
with protectionism and declining international economic integration. Their work
led to the Bretton Woods conference and the founding of several international
institutions intended to oversee the renewed processes of globalization, promoting
growth and managing adverse consequences.

These institutions include the International Bank for Reconstruction and

Development (the World Bank), and the International Monetary Fund.
Globalization has been facilitated by advances in technology which have reduced
the costs of trade, and trade negotiation rounds, originally under the auspices of the
General Agreement on Tariffs and Trade (GATT), which led to a series of
agreements to remove restrictions on free trade.
Since World War II, barriers to international trade have been considerably lowered
through international agreements - GATT. Particular initiatives carried out as a
result of GATT and the World Trade Organization (WTO), for which GATT is
the foundation, have included:

Promotion of free trade:

o Reduction or elimination of tariffs; creation of free trade zones with
small or no tariffs
o Reduced transportation costs, especially resulting from development
of containerization for ocean shipping.
o Reduction or elimination of capital controls
o Reduction, elimination, or harmonization of subsidies for local
businesses

Restriction of free trade:

o Harmonization of intellectual property laws across the majority of
states, with more restrictions.
o Supranational recognition of intellectual property restrictions (e.g.
patents granted by China would be recognized in the United States

The use of the term globalization (in the doctrinal sense), in the context of these
developments has been analysed by many including Noam Chomsky who states
" That enhances what's called "globalization," a term of propaganda used
conventionally to refer to a certain particular form of international integration that
is (not surprisingly) beneficial to its designers: Multinational corporations and the
powerful states to which they are closely linked."
Critics have observed that the term's contemporary usage comprises several
meanings, for example Noam Chomsky states that:
The term "globalization," like most terms of public discourse, has two meanings:
5

its literal meaning, and a technical sense used for doctrinal purposes. In its literal
sense, "globalization" means international integration. Its strongest proponents
since its origins have been the workers movements and the left (which is why
unions are called "internationals"), and the strongest proponents today are those
who meet annually in the World Social Forum and its many regional offshoots. In
the technical sense defined by the powerful, they are described as "antiglobalization," which means that they favor globalization directed to the needs and
concerns of people, not investors, financial institutions and other sectors of power,
with the interests of people incidental. That's "globalization" in the technical
doctrinal sense.

Pro-globalization (globalism)
Globalization advocates such as Jeffrey Sachs point to the above average drop in
poverty rates in countries, such as China, where globalization has taken a strong
foothold, compared to areas less affected by globalization, such as Sub-Saharan
Africa, where poverty rates have remained stagnant.
Generally, the ideas of free trade, capitalism, and democracy are widely believed
to facilitate globalization. Supporters of free trade claim that it increases economic
prosperity as well as opportunity, especially among developing nations, enhances
civil liberties and leads to a more efficient allocation of resources. Economic
theories of comparative advantage suggest that free trade leads to a more efficient
allocation of resources, with all countries involved in the trade benefiting. In
general, this leads to lower prices, more employment, higher output and a higher
standard of living for those in developing countries
One of the ironies of the recent success of India and China is the fear that... success
in these two countries comes at the expense of the United States. These fears are
fundamentally wrong and, even worse, dangerous. They are wrong because the
world is not a zero-sum struggle... but rather is a positive-sum opportunity in
which improving technologies and skills can raise living standards around the
world.

Libertarians and proponents of laissez-faire capitalism say that higher degrees of

political and economic freedom in the form of democracy and capitalism in the
developed world are ends in themselves and also produce higher levels of material
wealth. They see globalization as the beneficial spread of liberty and capitalism.
Supporters of democratic globalization are sometimes called pro-globalists. They
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believe that the first phase of globalization, which was market-oriented, should be
followed by a phase of building global political institutions representing the will of
world citizens. The difference from other globalists is that they do not define in
advance any ideology to orient this will, but would leave it to the free choice of
those citizens via a democratic process

Income inequality for the world as a whole is diminishing. Due to

definitional issues and data availability, there is disagreement with regards to
the pace of the decline in extreme poverty. As noted below, there are others
disputing this. The economist Xavier Sala-i-Martin in a 2007 analysis
argues that this is incorrect, income inequality for the world as a whole has
diminished. . Regardless of who is right about the past trend in income
inequality, it has been argued that improving absolute poverty is more
important than relative inequality
Life expectancy has almost doubled in the developing world since World
War II and is starting to close the gap between itself and the developed
world where the improvement has been smaller. Even in Sub-Saharan
Africa, the least developed region, life expectancy increased from 30 years
before World War II to about a peak of about 50 years before the AIDS
pandemic and other diseases started to force it down to the current level of
47 years. Infant mortality has decreased in every developing region of the
world.
Democracy has increased dramatically from there being almost no nations
with universal suffrage in 1900 to 62.5% of all nations having it in 2000.
Feminism has made advances in areas such as Bangladesh through
providing women with jobs and economic safety.
The proportion of the world's population living in countries where per-capita
food supplies are less than 2,200 calories (9,200 kilojoules) per day
decreased from 56% in the mid-1960s to below 10% by the 1990s.
Between 1950 and 1999, global literacy increased from 52% to 81% of the
world. Women made up much of the gap: female literacy as a percentage of
male literacy has increased from 59% in 1970 to 80% in 2000.
The percentage of children in the labor force has fallen from 24% in 1960 to
10% in 2000.
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 There are increasing trends in the use of electric power, cars, radios, and
telephones per capita, as well as a growing proportion of the population with
access to clean water.
The book The Improving State of the World also finds evidence for that
these, and other, measures of human well-being has improved and that
globalization is part of the explanation. It also responds to arguments that
environmental impact will limit the progress.

Anti-globalization (mundialism)
Anti-globalization is a term used to describe the political stance of people and
groups who oppose the neoliberal version of globalization.
Anti-globalization" may involve the process or actions taken by a state in order to
demonstrate its sovereignty and practice democratic decision-making. Antiglobalization may occur in order to put brakes on the international transfer of
people, goods and ideology, particularly those determined by the organizations
such as the IMF or the WTO in imposing the radical deregulation program of free
market fundamentalism on local governments and populations. anti-globalism
can denote a single social movement that encompasses a number of separate
social movements such as nationalists and socialists. Participants stand in
opposition to the unregulated political power of large, multi-national corporations,
as the corporations exercise power through leveraging trade agreements which
damage in some instances the democratic rights of citizens, the environment
particularly air quality index and rain forests, as well as national governments
sovereignty to determine labor rights including the right to unionize for better pay,
and better working conditions, or laws as they may otherwise infringe on cultural
practices and traditions of developing countries.
Most people who are labeled "anti-globalization" consider the term to be too vague
and inaccurate Podobnik states that "the vast majority of groups that participate in
these protests draw on international networks of support, and they generally call
for forms of globalization that enhance democratic representation, human rights,
and egalitarianism."

Critiques of the current wave of economic globalization typically look at both the
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damage to the planet, in terms of the perceived unsustainable harm done to the
biosphere, as well as the perceived human costs, such as increased poverty,
inequality, miscegenation, injustice and the erosion of traditional culture which, the
critics contend, all occur as a result of the economic transformations related to
globalization. They point to a "multitude of interconnected fatal consequences-social disintegration, a breakdown of democracy, more rapid and extensive
deterioration of the environment, the spread of new diseases, increasing poverty
and alienation"which they claim are the unintended but very real consequences of
globalization.
The terms globalization and anti-globalization are used in various ways. Noam
Chomsky states that
The term "globalization" has been appropriated by the powerful to refer to a
specific form of international economic integration, one based on investor rights,
with the interests of people incidental. That is why the business press, in its more
honest moments, refers to the "free trade agreements" as "free investment
agreements" (Wall St. Journal). Accordingly, advocates of other forms of
globalization are described as "anti-globalization"; and some, unfortunately, even
accept this term, though it is a term of propaganda that should be dismissed with
ridicule. No sane person is opposed to globalization, that is, international
integration. Surely not the left and the workers movements, which were founded
on the principle of international solidarity - that is, globalization in a form that
attends to the rights of people, not private power systems.
Critics argue that:
o Poorer countries are sometimes at disadvantage: While it is true
that globalization encourages free trade among countries on an
international level, there are also negative consequences because some
countries try to save their national markets. The main export of poorer
countries is usually agricultural goods. It is difficult for these
countries to compete with stronger countries that subsidize their own
farmers. Because the farmers in the poorer countries cannot compete,
they are forced to sell their crops at much lower price than what the
market is paying.
o Exploitation of foreign impoverished workers: The deterioration of
protections for weaker nations by stronger industrialized powers has
resulted in the exploitation of the people in those nations to become
cheap labor. Due to the lack of protections, companies from powerful
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industrialized nations are able to offer workers enough salary to entice

them to endure extremely long hours and unsafe working conditions,
though economists question if consenting workers in a competitive
employers' market can be decried as "exploitation". The abundance of
cheap labor is giving the countries in power incentive not to rectify
the inequality between nations. If these nations developed into
industrialized nations, the army of cheap labor would slowly
disappear alongside development. It is true that the workers are free to
leave their jobs, but in many poorer countries, this would mean
starvation for the worker, and possible even his/her family if their
previous jobs were unavailable.
o The shift to service work: The low cost of offshore workers have
enticed corporations to move production to foreign countries. The laid
off unskilled workers are forced into the service sector where wages
and benefits are low, but turnover is high. This has contributed to the
widening economic gap between skilled and unskilled workers. The
loss of these jobs has also contributed greatly to the slow decline of
the middle class which is a major factor in the increasing economic
inequality . Families that were once part of the middle class are forced
into lower positions by massive layoffs and outsourcing to another
country. This also means that people in the lower class have a much
harder time climbing out of poverty because of the absence of the
middle class as a stepping stone.
o Weak labor unions: The surplus in cheap labor coupled with an ever
growing number of companies in transition has caused a weakening of
labor unions. Unions lose their effectiveness when their membership
begins to decline. As a result unions hold less power over corporations
that are able to easily replace workers, often for lower wages, and
have the option to not offer unionized jobs anymore.
The critics of globalization typically emphasize that globalization is a process that
is mediated according to corporate interests, and typically raise the possibility of
alternative global institutions and policies, which they believe address the moral
claims of poor and working classes throughout the globe, as well as environmental
concerns in a more equitable way.
The movement is very broad, including church groups, national liberation factions,
peasant unionists, intellectuals, artists, protectionists, anarchists, those in support
of relocalization and others. Some are reformist, (arguing for a more humane form

10

of capitalism) while others are more revolutionary (arguing for what they believe
is a more humane system than capitalism) and others are reactionary, believing
globalization destroys national industry and jobs.
One of the key points made by critics of recent economic globalization is that
income inequality, both between and within nations, is increasing as a result of
these processes.
A chart that gave the inequality a very visible and comprehensible form, the socalled 'champagne glass' effect, was contained in the 1992 United Nations
Development Program Report, which showed the distribution of global income
to be very uneven, with the richest 20% of the world's population controlling
82.7% of the world's income.

+ Distribution of world GDP, 1989

Quintile of Population

Income

Richest 20%

82.7%

Second 20%

11.7%

Third 20%

2.3%

Fourth 20%

1.4%

Poorest 20%

1.2%

Globalization of the Economy

Advances in communication and transportation technology, combined with freemarket ideology, have given goods, services, and capital unprecedented mobility.
Rich countries want to open world markets to their goods and take advantage of
abundant, cheap labor in the Poor countries, policies often supported by elites in
11

Poor countries. They use international financial institutions and regional trade
agreements to compel poor countries to "integrate" by reducing tariffs, privatizing
state enterprises, and relaxing environmental and labor standards. The results have
enlarged profits for investors but offered pittances to laborers, provoking a strong
backlash from civil society.

General Analysis on Globalization of the Economy

With international trade, financial transfers, and foreign direct investment, the
economy is increasingly internationally interconnected. Analyzes economic
globalization, and examines how it might be resisted or regulated in order to
promote sustainable development.

International Trade and Development

Trade Agreements, such as the FTAA, NAFTA, and CAFTA facilitate international
trade, thereby strongly impacting people at all levels of the economy. They make
trade "free" for Northern exports, without prohibiting the rich countries'
protectionist measures that harm Southern competitors. Such agreements tend to
slow development in poor countries and pull them deeper into poverty.

Trade Agreements
Trade Agreements, such as the FTAA, NAFTA, and CAFTA facilitate international
trade, thereby strongly impacting people at all levels of the economy. Rich
countries often manage to prioritize their own interests in such agreements, which
tend to harm development of poor countries.

Multilateral Agreement on Investment and Related Initiatives

In May 1995, the Organization of Economic Co-operation and Development
committed itself to the immediate start of negotiations aimed at reaching a
Multilateral Agreement on Investment (MAI).

Transnational Corporations
Transnational corporations have become some of the largest economic entities in
the world, surpassing many states. Their continuous push for liberalization has
driven globalization while challenging environmental, health, and labor standards
in many countries.

Export Processing Zones

Export Processing Zones, sometimes known as maquiladoras or Special Economic
Development Zones, are usually exempt from national taxes, tariff duties and a
wide range of regulations, including those on wages, working conditions, health
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protection, environmental safety and trade union rights. Governments have set up
these zones in the hope of attracting investments and creating jobs. But in so doing,
they turn over sovereignty to corporate investors and seriously undermine national
tax and regulatory systems.

Foreign Direct Investment

Transnational corporations and private individuals invest more money abroad than
ever before; foreign direct investment has increased tenfold over the last 20 years.
While many poor countries see foreign capital as a tool for growth, it has often
increased instability and inequality as well.

World Trade Organization

This intergovernmental organization sets and enforces the rules of international
trade. It has become a target of civil society's criticism over its opaque,
undemocratic operating procedures and neo-liberal ideology.

World Bank
The World Bank's mission is to erradicate poverty by loaning poor countries
money for economic development, but these loans often come with demands of
economic liberalization.

International Monetary Fund

The IMF was orginally envisoned as a "lender of last resort" for countries
experiencing economic crises. Now, however, the IMF conditions assistance on
neo-liberal reforms that exacerbate poverty.

Global Taxes
This explores the different ways to implement global taxes, the need for
democratic oversight and control, the policy shaping effects, the distributive
effects, and the possible use of such taxes to fund the UN, its agencies, and other
programs for worldwide human security and development.

Dollarization
In many countries, the US dollar has become the national currency. In others, the
national currency has been pegged to the US dollar. In still others, major
transactions like real estate usually take place using the dollar. Dollarization
eliminates the possibility of independent national monetary policy and it exposes
countries to policies set in Washington.

Who

profits

from

economic

globalisation?

What

are

its
13

advantages/disadvantages?
Katie Bayly - Suzi Hall - Carolyn Kolasinski - Jacqueline Lawson - Rie Nakazawa
Phil Lawn defined economic globalisation as the integration of many national
economies into one single economy through free trade and free capital movement.
Like the first phase of globalisation (from the mid 19th century to 1914), the
second phase has been characterised by rapid advances in communications and
transportation technology, travel and trade; and by a greater consciousness of the
world as a single place, highlighted by global environmental concerns, more
widespread demands for participatory democracy, concerns about a race to the
bottom in labour standards and wages and increased class stratification between
and within countries.
Economic globalisation has provided new opportunities for those with capital to
increase it, creating greater concentration of wealth in the hands of minority elites.
Most international trade and investment takes place within the triad of the US, EU
and Japan, and it is the multinational corporations based in these countries which
have benefited the most from the free trade rules enforced by the WTO, and the
deregulation of financial markets, that have brought financial instability, and hence
exacerbated political corruption and instability, in parts of the world (such as South
East Asia).
Integration with the global economy, measured as an increase in trade relative to
GDP, is not a one-size-fits-all recipe for economic development. This is not just
because economic globalisation sometimes cannot benefit the poorest countries
(and sectors of society) who lack sufficient capital, technology and sound
institutions to underpin economic growth and development. There are many valid
routes to economic growth.
But there are limits to the planets capacity to absorb all this so-called growth.
In the pursuit of economic growth and corporate profits, the natural environment is
often sacrificed and not considered in government policies.

Free trade and economic development

International financial institutions and organisations like the OECD have pushed
the idea that globalisation is an engine of world growth in economic terms. They
continue to promote it as a means of economic development for the poorest
countries. But the new augmented Washington Consensus laid out by the IMF
14

may be misguided. It still operates within a narrow rich-country mindset, serving

the interests of those most in control of it, with an eye to further global economic
integration.
In its 2002 report, Globalization, Growth and Poverty, the World Bank implies that
integration with the global economy has been the main cause of the rapid economic
growth and poverty reduction seen in those developing countries with the highest
increase in ratio of trade to GDP between the 1970s and the 1990s. These
countries the Bank calls new globalizers.Joseph Stiglitz claims that the battle
is... to enable more poor countries to integrate into the world economy in ways that
reduce, not increase, inequality and poverty.
Dollar and Kraay present that the "new globalizers" had the highest GDP per capita
growth rate in the world during the 1990s (an average of 5 percent) but this may
only show that countries which have managed to grow rapidly and reduce poverty,
through various and often idiosyncratic means, have also, perhaps as a
consequence, tended to become more integrated into the global economy, spurring
further economic growth. This is one more illustration of the fact that economic
globalisation gives those who already have the necessary capital, skills and
products new opportunities to increase profits and expand.

Measuring globalization
Globalization has had an impact on different cultures around the world.
Looking specifically at economic globalization, it can be measured in different
ways. These center around the four main economic flows that characterize
globalization:

Goods and services, e.g. exports plus imports as a proportion of national

income or per capita of population

Labor/people, e.g. net migration rates; inward or outward migration flows,

weighted by population

Capital, e.g. inward or outward direct investment as a proportion of national

income or per head of population

Technology, e.g. international research & development flows; proportion of

populations (and rates of change thereof) using particular inventions
(especially 'factor-neutral' technological advances such as the telephone,
motorcar, broadband)
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As globalization is not only an economic phenomenon, a multivariate approach to

measuring globalization is the recent index calculated by the Swiss think tank
KOF.According to the index, the world's most globalized country is Belgium,
followed by Austria, Sweden, the United Kingdom and the Netherlands. The
least globalized countries according to the KOF-index are Haiti, Myanmar the
Central African Republic and Burundi.
A.T. Kearney and Foreign Policy Magazine jointly publish another Globalization
Index. According to the 2006 index, Singapore, Ireland, Switzerland, the U.S.,
the Netherlands, Canada and Denmark are the most globalized, while Egypt,
Indonesia, India and Iran are the least globalized among countries listed.

GLOBALIZATION AND DEMOCRACY

Many people now believe that the advance of globalization is inevitable. Arthur
Schlesinger, Jr. has gone so far as to exclaim, "Globalization is in the saddle and
rides mankind." Hyperbole aside, the critical question is: What are the
implications of globalization for political and economic rights in particular and for
democracy in general? World opinion is sharply divided about the correct answer
to that question.
Those who view globalization negatively argue that it has political and economic
ramifications which will prove detrimental to democracy. Whereas the Industrial
Revolution created more jobs than it destroyed, the Technological Revolution
threatens to destroy more jobs than it creates. Further, it will erect new and rigid
class barriers between the well-educated and the ill-educated. Huge transfers of
wealth from lower-skilled middle class workers to the owners of capital assets and
to a new technological aristocracy will exacerbate the income disparities which
already are evident in developed counties. In less developed countries such a
transfer of wealth, and with it political power, could be devastating, and it could
preclude progress toward democracy.
One strident critic of what he considers to be runaway global capitalism is,
perhaps, a surprising critic. George Soros contends that the "uninhibited pursuit of
self-interest" results in "intolerable inequities and instability.... Although I have
made a fortune in the financial markers, I now fear that the untrammeled
intensification of laissez-faire capitalism and the spread of market values into all
areas of life is endangering our open, democratic society."
Similar worries are voiced by Arthur Schlesinger, Jr. who writes:
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The Computer Revolution offers wondrous new possibilities for creative

destruction. One goal of capitalist creativity is the globalized economy. Oneunplanned-candidate for capitalist destruction is the nation-state, the
traditional site of democracy. The computer turns the untrammeled market
into a global juggernaut crashing across frontiers, enfeebling national
powers of taxation and regulation, undercutting national management of
interest rates and exchange rates, widening disparities of wealth both within
and between nations, dragging down labor standards, degrading the
environment, denying nations the shaping of their own economic destiny,
accountable to no one, creating a world economy without a world polity.
Cyberspace is beyond national control. No authorities exist to provide
international control. Where is democracy now?
Those who take a pessimistic view of globalization also argue that it is responsible
for a withdrawal from modernity, the resurgence of identity politics and a retreat
from democracy. They allege that when people believe that powerful forces, such
as globalization, are beyond their comprehension and/or control, they retreat into
familiar, comprehensible, and protective units. They congregate in ethnic, tribal, or
religious enclaves. Globalization through the creation of international,
multinational or regional trade and economic institutions can lead to a feeling of
loss of political power by groups within states. The sense of loss of power, in turn,
leads to a fostering of "tribalism and other revived or invented identities and
traditions which abound in the wake of the uneven erosion of national, identities,
national economies and national state policy capacity." The upsurge of religious
fundamentalism is one case in point. The hostility of fundamentalism to freedom of
expression and belief has ominous implications for democracy.
Globalism does have its defenders and they tend to see its potential for
strengthening and extending democracy. Walter Wriston, former Chief Executive
Officer of Citicorp and Chairman of the Economic Policy Advisory Board in the
Reagan administration, is among them. He believes that we are living in the midst
of the third great revolution in human history, the Information Revolution. Like the
Agricultural and Industrial Revolutions which preceded it, this revolution was
sparked by changes in technology. With the invention of computers and advances
in telecommunications, time and distance have been obliterated. However, "instead
of validating Orwell's vision of Big Brother watching the citizen, the third
revolution enables the citizen to watch Big Brother. And so the virus of freedom,
for which there is no antidote, is spread by electronic networks to the four corners
of the Earth."
William Meyer of the University of Delaware who has developed a quantitative
17

model which attempts to measure the level of enjoyment of civil and political
rights in developing countries has come to a conclusion akin to Wriston's. He
concluded that the technologies of communication and transportation that have
made economic globalization possible also make it possible for the human rights
ethos to spread and take root in all sectors of global civil society. "Universal human
rights represent nothing less than the ethical dimension of the emerging global
culture."
Another argument advanced to support the contention of a positive relationship

Globalization as Ideology
Globalization is just one of an array of concepts and arguing points that have been
mobilized to advance the corporate agenda. Others have been deregulation and
getting government off our backs, balancing the budget, cutting back entitlements
(non-corporate), and free trade.
Like free trade, globalization has an aura of virtue. Just as "freedom" must be
good, so globalization hints at internationalism and solidarity between countries, as
opposed to nationalism and protectionism, which have negative connotations. The
possibility that cross-border trade and investment might be economically damaging
to the weaker party, or that they might erode democratic controls in both the
stronger and weaker countries, is excluded from consideration by mainstream
economists and pundits.[fn 1] It is also unthinkable in the mainstream that the
contest between free trade and globalization, on the one hand, and "protectionism,"
on the other, might be reworded as a struggle between "protection"--of
transnational corporate (TNC) rights--versus the "freedom" of democratic
governments to regulate in the interests of domestic non-corporate constituencies.
As an ideology, globalization connotes not only freedom and internationalism, but,
as it helps realize the benefits of free trade, and thus comparative advantage and
the division of labor, it also supposedly enhances efficiency and productivity.
Because of these virtues, and the alleged inability of governments to halt
"progress," globalization is widely perceived as beyond human control, which
further weakens resistance

Modernity in its political and social forms refers to increasing specialisation of

18

societal institutions like political systems, law, economic management, and

education in isolation from religion. Unlike social life in the pre-modern era, in
modernity these functions are carried out free from the overarching influence of
religion. From this perspective, religious fundamentalism - in the sense of a return
to a purist past - is a problem produced by the encounter between modernity and
the Muslim ummah in all its diversity and cultural hybridity. Although the strength
of fundamentalism varies according to the intensity of attitudes towards these
features, it is clear that in a globalising world diversity and cultural crossovers will
become a matter of routine. Instead of eliminating hybridity, this may in fact
transform different Islamic countries and regions into autonomous cultural
systems, thus posing a challenge to the conventional categorical oppositions of 'us'
and 'them', 'Muslim' and 'others'.
This type of development would have far-reaching implications for the Muslim
ummah. Islamic countries in different parts of the world could be transformed into
unique religious and cultural systems, each claiming acceptance and recognition as
authentic traditions of Islam. This transformation may lead to the 'decentering' of
the Muslim world from its supposed cultural and religious centre in the Arabic
Middle East to a multi-centered world. Five such centres of the Islamic world can
already be identified, namely, Arabic Middle Eastern Islam, African Islam, Central
Asian Islam, Southeast Asian Islam and the Islam of the Muslim minorities in the
West.

The Bible and Globalization

What principles of the Bible should bear on our choice of an economic structure?
Can the holding of wealth and living in plenty be morally justified? It is right that a
tiny percentage should enjoy wealth and conform, while a vast majority people life
in misery and poverty? Does the Bible justify exploitation of earth's resources for
the benefit of few people? The Biblical perspective is global: the grand vision of
God unfolded in the creation of heaven and earth culminating in the creation of
humankind in God's own image (Gen. 1:26). Similarly, the Bible ends with the
universal vision of new heaven and new earth (Rev. 21-22). However, the same
Bible plays into the hands of the vested interests to satisfy their unbridled thirst for
power and pleasure at the expense of the right of fellow humans and the earth. A
very powerful biblical teaching is that any economic system that relegates or
marginalizes human life falls short of the divine standards. Each person is created
in God's image and thus worth and valuable for the Creator. Therefore, in
economic life, "any individual, class, caste, nature, gender and community, should
19

not be regarded as an object whose value is determined by the fundamental of the

market and who may be bought and sole or dispensed with a whim or will of those
who possess economic power, he or she is not to be treated as a means but as an
end."[5] The central preaching of Jesus is the Kingdom of God, a symbol with
universal or global repercussions. It embraces the message that all are brothers and
sisters in the one family of God and demands special concern for the marginalized
people and justice for all. It demands a more equitable distribution of the world's
resources, not the accumulation in the hands of a few. Globalization is definitely
not the way of the Kingdom because it uses human beings as cheap labourers and
does not respect them as person. This value is contrary to the biblical teaching of
Kingdom's value. The Bible upholds a community where justice is expressed in
equality and sharing and affirms a community economic system with reciprocal
sharing and hospitality.
The biblical principle of the use of land and its resources is based on "the earth is
the Lord's and the fullness thereof" (Ps. 24:1). In the biblical principle of the divine
ownership, human beings are stewards and co-workers and not absolute owner.
Human's responsibility is to preserve and `exploit' the earth's fullness judiciously
and wisely for both the present and future generations. Globalization also brings
destruction to the earth. Nature is not to be exploited. It is not an object, but it is
sacred and holy. It is an integral part of the people to be treated with respect and
honour.

Globalization destroys society

The media are saturated with reports of violent crimes of all kinds. Some TV
cameras morbidly play their images over the cadavers and blood of the victims.
The frequency of violent crimes and armed robberies has become a plague in
Salvadoran society. But El Salvador is not an exception. Criminal behavior
worldwide has been growing much faster than the population. Only in Japan is
there a diminishing tendency, perhaps thanks to their preventive programs.
Everywhere else, the rise in violent crime is a characteristic of all societies on the
planet. This assertion, which takes us beyond our narrow borders, is not made in
order to console ourselves with the woes of others, but rather in order to
comprehend a universal social phenomenon of which we obviously are a part.
The rise in criminal activity is linked to another universal phenomenon, which is
the globalization of social and economic relations. The forward progress of
markets which favor the few and marginalize the immense majority of humanity is

20

tearing apart societies and generating new inequalities. Unchecked consumerism

and extreme individualism, unleashed by the marketplace, have considerably
weakened the influence of the family, the community, churches, associations and
even the State on individual citizens. Today, individuals are much more
independent, but what they have gained in independence they have lost in terms of
principles, values and vital reference points for human coexistence. Independence
brings along a conviction that everything is permitted and everything is possible. It
is the freedom of the marketplace taken to its final consequences, which are
turning out to be fatal. The market has unleashed forces which are devouring its
sponsors.
Crime is linked to unemployment, since those who lack a steady job will steal to
feed their families. Thus, crime is closely linked to poverty. As wealth becomes
more concentrated, criminal activity increases. The nations which enjoy a high
GNP, and which have the best-trained and -equipped police in the world (U.S.,
Canada, Australia, Germany) are also suffering some of the highest crime rates.
But that is not all. People also steal out of frustration.
Inequality and the lack of opportunities feed resentment, to such an extent that
frustration is a more powerful motive for stealing than hunger itself. In this way,
crimes against property serve a double function: to redistribute wealth and as social
revenge. Crime not only allows low-income homes to have access to goods usually
only enjoyed by higher-income neighbors, but also gives vent to frustration and
resentment around the lack of opportunities, around inequality and injustice. Thus,
the more skewed a nation's distribution of wealth, the greater the crime rate.
The majority of crimes are committed by urban youth. Furthermore, criminal
activity has increased along with urban areas. Youth emigrate to the cities with the
hope of finding a steady, well-paid job, but their illusions are soon shattered. So,
pressured by hunger, the yearning to find an opportunity and the changes
happening around them, they are inexorably pushed toward crime. Frustration
feeds profound resentments, which helps explain why youths reject education,
church and community, political and social organizations. However, these youth do
not remain isolated, but instead regroup and create subcultures which offer them an
alternative to the society which rejects them and denies them opportunities, but
which at the same time promote a life of crime.
When a young person joins a gang [mara], it means that he or she acknowledges
that other options have been closed off or that those which remain are not
attractive. Street gangs offer youth an environment which fosters criminal activity,
but it is also a space for them to show off their skills, make contacts and find some

21

sort of mutual protection. Some of these groups operate like informal associations,
but others are very well organized, and follow military, sports, monastic or police
models.
Society tends to consider these people criminals, not only because of their conduct,
but also because of the way in which the authorities, politicians and the media react
to them. The police, in particular, consider their lifestyle as the precursor to a life
of crime. In fact, a confrontational attitude is the most obvious way to encourage
them to behave like criminals.
The use of violence to repress criminal activity is not a good solution. Repressive
violence will not put an end to violent crime. Politicians tend to demand repressive
violence in order to win prestige, to be seen as hard-line and intolerant of violent
crime. It is a highly popular issue, and it has a low political cost. Increasing police
capabilities and improving the administration of justice could be helpful in
investigating and punishing crimes that have already been committed, but they
won't wipe out crime. By the same token, the army also represents no solution
whatsoever. Eradicating violent crime means attacking its causes and not its
effects.
The globalization of capital, investment and the marketplace has resulted in the
universalization of violent crime. As wealth becomes evermore concentrated and
the ranks of the poor swell, as attractive opportunities for the slip out of the grasp
of the majority, and as community, religious and institutional links begin to break
with the expansion of individualism, consumerism and freedom, the door opens
wider to violent crime. If we choose to continue with globalization we must be
prepared to coexist with violent crime. The accumulation of wealth in few hands
will produce countless victims, among them even the very same privileged
individuals who benefit from globalization. The principal enemy of a State of law
is globalization. That ideal cannot become a reality as long as the majority of the
people are marginalized and impoverished.

How does globalization affect women?

Many critics fear that globalization, in the sense of integration of a country into
world society, will exacerbate gender inequality. It may harm women-especially in
the South--in several ways:
Economically, through discrimination in favor of male workers,
marginalization of women in unpaid or informal labor, exploitation of
22

women in low-wage sweatshop settings, and/or impoverishment though loss

of traditional sources of income.
Politically, through exclusion from the domestic political process and loss of
control to global pressures.
Culturally, through loss of identity and autonomy to a hegemonic global
culture.
At the same time, globalization affects different groups of women in different
ways, creates new standards for the treatment of women, and helps women's
groups to mobilize. In situations where women have been historically repressed or
discriminated under a patriarchal division of labor, some features of globalization
may have liberating consequences. While in many countries women remain at a
significant disadvantage, the precise role of globalization in causing or
perpetuating that condition is in dispute.

Women "missing" the world--Evangeline Anderson-Rajkumar

The impact of globalization on women in informal sectors

The emergence of a global market, with its associated policies of privatization,
"stabilization", and liberalization, has led to the setting up of smaller new
industries with highly flexible organization and simple infrastructure in developing
countries. Closely related to this "informalization" of work is the feminization of
work. Labour-intensive industries move to developing countries where women are
the preferred labour force, because they can be hired at a low wage. Jobs become
available for women, but only as unorganized labourers with no right to form
unions or fight for their basic rights: the situation of women working in the
garment industry is a case in point. Low-skilled jobs with low wages, long hours of
work and lack of job security are typical of the feminization of labour in
unorganized sectors. The state generally supports the management and ignores any
violation of the labour laws.
It is clear that the women are being exploited, but they may not raise their voices not even against the sexual harassment they may face in the work place.

23

Beauty pageants and globalization

Patriarchy introduces new enemies within one's own territory using definitions of
ideal femininity/womanliness. Women are asked to compare their beauty with one
another: "Mirror, mirror on the wall, who is the fairest of them all?" Indian women,
for whom the beauty pageant was once an alien concept, are today successfully
drawn into the globalized capitalist system, which convinces them that it is a
matter of freedom and choice and not a gender issue. Such is the power of
patriarchy that anyone who recognizes the face of the demon and attempts to
exorcize it, calling it by name, risks being condemned as a deviant, destructive
element in society.
A woman is identified in terms of her body. Globalization and its impact through
the media have defined the ideal body of a "universal" and a "world" woman in
India. One of the characteristics of globalization is fragmentation. The cosmetic
industry will be helped only if the beauty of a woman is fragmented into her hair,
teeth, skin, toe-nails etc. The concept of beauty is standardized as slim, tall, fair,
blonde, blue-eyed, etc. An ideal feminine body is defined in terms of its slender
shape. "Beauty can never be celebrated by the new global culture. It can only be
vulgarized."
Global watchers and feminist critics say that there is a direct link between the 1991
announcement by the then finance minister, Manmohan Singh, that India would
open its markets to the outside world and the victories of Aishwarya Rai as Miss
World and Sushmita Sen as Miss Universe in 1994. The two beauty queens were
indeed the ambassadors to welcome the giants of the global economy to India. If
there were only five cosmetics products to choose from before the opening,
suddenly there was an influx of cosmetics companies. The excise on cosmetics was
lowered from 120 per cent to 40 per cent in three years, while the tariffs on water,
electricity and fuel shot up. Women in the villages were also searching for "fair,
ever fair and lovely". The craving for "whiteness" became an obsession.
The newspapers and other marriage bureaux also reveal the discriminatory gender
slant in announcing the need for a bride or a groom. A girl who is "fair" in
complexion stands more to gain than one who is "dark". Advertisements for
cosmetics also promise the buyer that constant use of certain cosmetics would
make the women look "fair and lovely". Thus there is a practice of apartheid of a
different kind within Indian society where white/fair skin is celebrated, preferred
against the dark/black skin. There is no formal law (yet) that punishes those guilty

24

of discrimination based on skin colour.

In the United States, this commodification of the woman's body extends to children
as well. "The little girls strut their stuff in lipstick and tight dresses, even pull out
their baby teeth to win big bucks and fame... Eating disorders and depression particularly if the girls don't grow up to be beauties - are among the most common
ailments that plague pre-teen pageant contestants... There are some 500 pre-teen
pageants a year in the United States and some of the bigger state-wide contests pay
out over a million dollars in prizes". The unethical values connected with this
commodification of the body are clear in the case of young Jon Benet Ramsey, a
"Little Miss Colorado", who was murdered after sexual assault. She was six years
old!
Nelia Sancho of the Philippines, who was crowned as beauty queen of Asia-Pacific
a few years ago, has words of pain and caution to all women:
"After being crowned "Queen of the Pacific" in an international beauty contest
held in Australia, I was thrown into a dizzying world of travel and excitement. But
also of drudgery and humiliation. As I went from one place to another and met
different kinds of people, it became more and more evident that people only
expected me to smile and look pretty; nobody expected me to have any intelligence
at all, and after the preliminary greetings, nobody tried to have any sort of
intelligent conversation with me. That was when I began to see that people saw me
as nothing more than a pretty object to beautify a room or add atmosphere to a
gathering or event. The most eye-opening experience of all is the way in which I
had to promote one product after another which made me start to question the
whole woman-product equation. After my reign, I began to more fully study the
link between the market economy and the profit motive behind beauty pageants
with the objectification of women. Women in a global market economy set-up are
just another commodity to be bought and sold at a price."
Today, Nelia is one of the prominent voices calling women to challenge these
forces of exploitation.

Differential Impacts on Women

The impact of economic globalisation on women needs to be assessed in light of
womens multiple roles as productive and reproductive labour in their families, as
well as their contributions towards overall community cohesion and welfare, and
maintaining the social fabric. Because of deep-rooted differences in gender roles
25

and socio-cultural expectations, the impacts of economic globalisation are felt

quite differently by women and men. While economic class, race and culture are
also extremely important factors in determining the nature and extent of impacts,
by and large, the very same policies and trends are likely to have quite different
implications for women and men. I will restrict my observations to Asia.
Research in the 1980s and 1990s showed that structural adjustment policies
promoted by the World Bank and IMF affected women much more deeply than
men. The elimination of public subsidies for health, education and other social
services resulted in a transference of the "welfare" function of the state onto
families, and by extension onto girls and women. This trend became entrenched as
governments continued to cut back on social spending, thus increasing the burden
of caring for vulnerable community members (such as children, the aging, disabled
persons or those with illness) on families. Because of womens traditional roles in
most societies in Asia as care-givers, this burden has been disproportionately borne
by women than men.
In many countries, when public hospitals are privatised or the cost of professional
health care goes up, middle to low income families rely more on informal or
traditional forms of care. This is usually provided by the female members of
households and communities because of womens traditional roles as service
providers in the home.
If basic education is privatised or if families cannot afford the rising costs of
education, it is more often girls who drop out of school than boys because of
beliefs that boys need formal education more than girls to prepare them for their
future social roles. This has further implications for the type of employment that
women are able to find when they move into the wage labour market. With lower
levels of education, women will tend to be concentrated in the lower rungs of the
labour market and in jobs that require less formal training or education. The
replacement of manual labour with machines and new technology usually displaces
more women than men since women have a larger education gap to cross
compared with men (in the same class) in order to learn how to use new
technologies.
Similarly, increases in the prices of food, fuel and essential services such as water
and electricity place extra burdens on females in low income households since
women are usually responsible for managing domestic food and water
consumption, as well as ensuring the overall health of their families. Female
children are generally expected to perform more housework than male children and
in poor families, the labour of girls in cooking, cleaning, child care, and caring for

26

the elderly or sick family members is essential for household maintenance, and
also to free up the time of older women who need to find wage labour.
Trade liberalisation has also been shown to have differential impacts on women
and men. An essential aspect of trade liberalisation is export competitiveness and
much of this competitiveness in Asian countries has come from the labour of
women. The development of export processing zones in the 1980s and 1990s in
developing countries eager to industrialise was premised on the availability of
cheap, docile, unskilled labour that would be willing to work at low wages for long
hours. Given a longer history of mens involvement in industrialised production,
union organising and political negotiations in the labour market, these export
processing zones targeted women as the primary work-force, relying on local
cultural and social values as domesticating forces.
Research shows that no country in Asia has been able to expand its manufacturing
capacity without pulling an increasing proportion of women into industrial waged
employment. In the early 1990s, women accounted for more than 43 percent of the
manufacturing work force in Indonesia, Malaysia, Philippines, Singapore and
Thailand. The manufacturing sector in itself accounted for more than 20 percent of
GDP in these countries. In the Thai export sector, women accounted for 90 per cent
of the workforce in the canned seafood industry and 85 percent in the garment and
accessory industry.
In the transition countries of Cambodia, Lao PDR and Vietnam, womens labour is
considered a significant element of their "comparative advantage" in export
oriented manufacturing, as gvernments invite investors to establish manufacturing
bases in their countries in an order to integrate with regional and global economies.
While export industries offer women opportunities for employment and income,
the unregulated and competitive nature of these trade regimes also means that
womens labour is often unprotected and dispensable. Few governments have, or
are willing to enforce legislation that ensures women workers in this sector with
fair living wages, benefits, occupational safety and opportunities for upgrading
skills.
Another area where women have made significant contributions to local and
national economies is through the informal sector. A significant portion of
economic activity in Asian countries is not fully counted and does not show up in
national census or survey figures, since it is conducted by women in their homes or
in small community level production units. These activities range from the sale of
vegetables, locally processed food and other goods (artificial flowers, accessories,
etc.) to piece work for factories, and the provision of services such as cleaning,

27

cooking, caring for the elderly, childcare, etc. It is important to note that in many
Asian countries (e.g., Thailand, Lao PDR, Phillipines, Sri Lanka, India and
Pakistan), a large portion of informal sector activities are commercialised or
"marketised" versions of womens traditional skills of maintaining and reproducing
the family and community spheres.
While some of these activities are self-owned or self-regulated (i.e., women have
reasonable control over production conditions), many are under sub-contract
arrangements in which women are at the mercy of brokers who determine
production and compensation rules. This is particularly the case in sub-contracted
production for the manufacturing sector, which is generally organised around
contracting agents who receive production contracts from larger agents and then
sub-contract the work to the women workers. These workers would then perform
the work in their homes, or in small production units set up by the principle
contractor. A distinguishing feature of such work is that for both cultural and
economic reasons, workers cannot and do not organise themselves in unions or
associations to protect their rights as workers. Principle contractors are often
people known and respected in the community, and take on the persona of
"patrons" who bestow favours on community members through economic
opportunities, etc. On the other hand, contractors may be from outside the
neigbourhood or community, and will simply go elsewhere if workers decide to
organise and negotiate as a group.
Many researchers argue that there is a growing "informalisation" of labour in the
export manufacturing sector, and that this informalisation taps into womens needs
to balance their productive and reproductive responsibilities. Economic
opportunism and profits are served by local culture and tradition, which serve as
domesticating forces and ensure a supply of cheap and manageable labour. Further,
the expansion of this type of sub-contracted production has increased with the
globalisation of production, and trade and investment liberalisation. On one hand,
the informal sector has provided women with much needed income, which in some
instances also enhances their status in their families and communities. But at the
same time, the inability to organise as a group in such employment makes it
extremely difficult for women to negotiate better compensation, working
conditions and labour protection for themselves.
The liberalisation of the agriculture sector has also affected women in a variety of
ways, from losing access to local markets for their products to dislocation from
traditional forms of livelihood, outward migration and re-settlement. Under trade
liberalisation agreements (such as in the WTO) developing countries are bound to
import a percentage of agriculture and food products for domestic consumption.
28

The developing countries of Asia are primarily rural economies where at least 50
percent of agriculture and food production is done by women. Local and national
food security is dependant on domestic production, which in turn ensures
livelihood security for rural families. Obligatory imports of agricultural (especially
food) products, accompanied by reduction in tariffs on imported goods and the
removal of price controls creates pressure on making local goods "competitive"
with imported goods (which are often subsidised in their countries of origin). This
has negative impacts on food and livelihood security for domestic producers,
leading to increased economic hardship for rural families and a gradual weakening
of rural, self-reliant economic structures. Again, because of womens dual roles as
productive and reproductive labour, this burden is borne more heavily by women
than men.
Another crucial area that is affected by trade liberalisation and privatisation
regimes is natural resources, particularly in relation to bio-diversity and traditional
knowledge. A huge proportion of rural communities in Asia are subsistence
producers who live off common lands and resources, and rely on traditional
knowledge of local forests, plants, animals and fish for food and income. In these
communities, women are usually responsible for meeting the familys daily food
and livelihood needs, and are veritable storehouses of knowledge about local biodiversity and traditional extraction practices. But with commercial harvesting of
natural resources for value added production, increase in plantation and monocropping for export markets, and transference of land, water and resource rights to
private companies, both bio-diversity and environmental quality are seriously
threatened, and local communities are alienated from the resource base they
depend upon..
The loss of local plant and animal species is a serious blow to women since they
rely on seasonal diversity and variation to ensure food, income and health for their
families. When communities are displaced or relocated from traditional lands to
make way for commercial enterprises, women are particularly disempowered since
their sphere of activity is usually limited to local forests, rivers and common lands.
Reduced access to these lands and resources, and reduced availability of local
foods increases womens work-load of family maintenance. The introduction of
new resource tenure systems often marginalises women from access to and control
over all types of resourcesnatural, economic and political.
Bio-piracy and the patenting of women traditional knowledge of biodiversity and
production processes by private corporations also disempowers women in very
particular ways. Not only are womens intellectual contributions to science,
technology and modern know-how not recognised, but also, they are compelled to
29

pay for the very resources that they have nurtured and protected for generations as
these resources enter markets in the form of medicines and processed foods.
While women in such situations face the danger of losing ownership and control
over their indigenous resources through trade liberalisation, they do not necessarily
gain access to new resources. Patents on products derived from local bio-diversity
do not involve royalty payments to women and their communities who have
stewarded and built a store of knowledge about these resources. Nor are women
compensated for the "opportunity" costs of losing access to their primary sources
of food and livelihood. The introduction of new, valued adding production
technologies does not necessarily benefit rural women since they usually have
neither the required capital nor the base of education and skills required to take
advantage of these changes. Unless accompanied by deliberate measures to transfer
new technologies and know how to women, the introduction of new technologies
often displaces them from traditional areas of autonomy and control
The above are just some examples of how women are affected by economic
globalisation. The range of impacts is both vast and complex, and these impacts
vary across countries, social and economic status, culture, and also across time.
What were considered opportunities ten years ago may be considered threats today,
as in the case of some types of export processing zones, commercial agricultural
production practices, etc. Further, it can be argued that the forces of economic
globalisation impact women at two broad levels. First, at the immediate
experiential level such as lowered wages, reduced access to land and resources,
less food, greater workload, etc. And second, at a more "structural" or strategic
level, where impacts are not necessarily visible today, but which lead to a longerterm disempowerment of women.

Gaps in Knowledge
One of the biggest challenges of tracing and fully understanding the ways in which
globalisation affects women is the absence of sex-disaggregated indicators and data
in key sectors such as agricultural production and employment, services, and the
informal sector. While independent researchers and institutions such as UNIFEM
are gathering information and showing how women are affected by current
economic trends, many of the indicators and methods used to monitor these trends
are in and of themselves not gender sensitive. For example, internationally
accepted indicators of income-related poverty do not provide information on the
particular incidence of poverty among women (what is called the "feminisation of

30

poverty"). While household surveys on consumption or spending can provide sexdisaggregated data, they cannot measure or take into consideration gender
inequality within households, which is usually a significant factor in the manner
and the degree to which women are affected by new opportunities and trends.
The above gaps in information also have serious consequences for the development
of women-friendly national and global economic and social policies, and in
transforming the forces of economic globalisation to be beneficial rather than
hostile to women. While there is plenty of "evidence" that liberalisation,
privatisation and deregulation have disproportionately affected women negatively
(particularly in lower income groups), this evidence is not accepted as valid by
policy makers since it does not fit into their accepted frameworks and analytical
practices. At the same time, the knowledge base that informs national and global
policy making is blind not only to gender differences, but also to the political
disadvantages that result from differences in race, class, culture and ethnicity.
The full measure of impacts of economic globalisation on women, and the
development of progressive policy measures to counter these measures will not
receive the attention it deserves until this dominant knowledge base is challenged
and reconstructed.

Challenges, Pressures, Threats and Opportunities

Change as a Way of Life
The changes that have occurred in the post-World War II period have completely
reshaped social and economic structures, bringing national governments into a
global, knowledge-based economy and society. Governments recognize that these
changes will continue and that the pace of change will continue to accelerate.
Standing still, or trying to create a steady state, will mean falling behind and
becoming uncompetitive in the global marketplace. A further complication of
falling behind is the inability of governments to anticipate and recognize potential
problems and opportunities, and to take appropriate action to protect their citizens
and/or capitalize on the opportunities.
Accelerating changes in the global economy are creating a new environment in
which governments must operate and to which federal S&T must contribute. (For
example, in Canada, R&D spending by industry is growing faster than in any other
member countries of the Organisation for Economic Cooperation and Development
(OECD). The change that this implies in the nature and dynamics of the Canadian
31

innovation system means that the government S&T effort must be flexible and
adaptable in order to keep pace). These changes are creating both opportunities and
threats for governments and the S&T required to support them. Underlying this
situation is a shift in the policy environment (including public expectations
concerning what federal S&T can and should provide), making it significantly
different from when the federal S&T system was established.
This environment of continuous change is characterized by a number of factors
that are shaping the global economy and the place of governments within it. These
factors are outlined below.

Globalization-Internationalization
A key characteristic of the process of globalization is the accelerating integration
of all markets, domestic and foreign. There are no longer any "safe" domestic
markets, where firms are protected from competitors by tariff walls. The forces of
globalization are also changing the context for government S&T activities. Policy
decisions must be backed up with world-class science and technology. S&T is
playing a more prominent role in trade disputes and their resolution. Pressures for
global harmonization of standards and regulations require that national S&T
activities meet international standards. In order for national governments to be able
to enforce a unique national identity and economic sovereignty in the global
marketplace, they must be able to back up their policies with internationally
accepted science. In short, national S&T efforts, facilities and equipment need to
be world-class in the academic, private sector and government arenas.
Increased Public Expectations
Canadians look to their governments for assurance that their interests are being
addressed (i.e. health and safety, security, economic and social well-being, etc.).
While the amount and quality of information available for independent decision
making is better now than in the past, Canadians still look to the government to
take action where the available information is incomplete, or is overwhelming in
volume and/or complexity.
Also, there are many areas where national decisions are required for which
Canadians rely on the federal government to ensure the proper, fair functioning of
the marketplace. They also look to their governments to provide other services in
the public interest such as research, education, defence, a supportive business
environment, social programs and infrastructure. These factors have raised public
expectations concerning what government can and should be doing, as well as the
level of involvement the public should have in government decision making.
32

Increasingly, openness, transparency and internationally recognized excellence in

both science and decision making are expected by citizens.
Advances in Knowledge and Technological Change
The pace of technological change and the rate of advancement in knowledge are
unprecedented and appear likely to continue to accelerate. New products and
technologies often require new types of regulatory responses or new needs for
regulatory science. (Biotechnology is a prime example.) Governments need to be
able to keep pace with these developments to ensure the safety of their citizens and
the environment, and to ensure that commercial development is not adversely
affected by government delays in product/process approvals. In some rapidly
advancing, technology-intensive fields, government scientists need a level of
expertise that often requires hands-on, continuing experience in leading-edge
research to understand the results they are required to assess.
Knowledge-based Economy and Society
The central role of knowledge and S&T in economic growth and social progress is
changing the dynamics of these processes and the role of governments in them.
Increasingly, governments are focusing on the strategic role of innovation systems
and the linkages between the players within them. With science and technology
being basic components of most public policy issues, there are increased
expectations and demands for a major contribution from federal S&T capabilities.
A key characteristic of the knowledge-based economy and society is the growing
functional identity and market value of knowledge. Knowledge-intensive goods
and services tend to be higher value added, while less knowledge-intensive goods
and services tend to be lower value added. Another key characteristic is that
knowledge itself is the foundation of business competitiveness.
Pressures to Control Government Spending
Governments around the world are being pressured by their citizens to reduce
government spending and to ensure top value for that spending. There is much
stronger pressure to demonstrate clear needs for federal investments in S&T.
Governments are under pressure to prioritize their spending on S&T and/or to try
innovative approaches to meeting their S&T needs.
Diversity of Options
The rationale for performing S&T within government needs to be based on a
demonstration that the work is relevant to specific needs of government; that it
33

can be done more effectively and/or efficiently in government facilities than

elsewhere; and that, if the government did not do it, it would either not get done,
or else would be done in a manner or a time frame that is not suitable for
responding to the needs of the government.
Federal laboratories are no longer the primary sources of S&T facilities and
expertise in Canada. With strong S&T capabilities available in universities and the
private sector, decision makers have many more options for accessing the S&T
knowledge they require. They can fund work in universities, contract it out to
industry, or access it internationally, either from foreign laboratories, or, in some
instances, over the Internet. Thus, the rationale for performing S&T within
government needs to be based on a demonstration that the work is relevant to
specific needs of government; that it can be done more effectively and/or
efficiently in government facilities than elsewhere; and that, if the government did
not do it, it would either not get done, or else would be done in a manner or a time
frame that is not suitable for responding to the needs of the government.
It is important to note that the federal government needs to have a degree of
scientific and/or technological capacity to exercise the option of outsourcing the
research. The government department or agency should have a clear understanding
of its needs for the specific scientific or technology research and/or development. It
also needs to have a capability for a clear understanding of the results of the S&T
work, their implications for the required decisions, and their strengths and
weaknesses. It must also have the ability to assess the quality of the work with
reference to leading-edge standards.
The International Experience
It is interesting that all of the governments surveyed have this active in-house
R&D function, including even the highly privatesector- oriented governments.
Governments around the world are all experiencing the impacts of this changing
knowledge-based context for governance. We commissioned a review of the
international experience on this subject. It was clear from this review that different
governments are
taking different approaches in dealing with these challenges, based on their
political systems and the historical development of their S&T systems. (For
example, the United States system has a strong private sector orientation, while
Frances central government performs a substantive amount of S&T work it
believes to be needed either internally by the government or by its private sector
clients).
34

Another finding is that governments of all OECD countries (with the exception of
New Zealand) have some in-house R&D capability. In smaller countries, this
capability is a relatively important fraction of the overall national R&D system; in
larger countries, in-house R&D is a relatively smaller fraction. However, it is
interesting that all of the governments surveyed have this active in-house R&D
function, including even the highly private-sector-oriented governments such as the
United States.

Globalization: The opportunities

Jobs are being created as business opportunities increase with the reduction of
trade barriers and the decentralization of production to take advantage of benefits
specific to the location of their facilities (e.g., low-cost unskilled and skilled
labour). The most striking is the case of export processing zones (EPZs), as
described elsewhere.
Other developments are the subcontracting of activities by companies, greater
specialization and new forms of work organization. All have some positive direct
and indirect effects on employment. The spread of subcontracting has generated at
least 200 million jobs worldwide. New forms of work organization have been
accompanied by a rise in non-standard forms of employment, with advantages for
certain groups. Workers with family responsibilities, highly skilled professionals,
migrants and adults undergoing some form of training have been able to opt for
part-time, temporary, home-based and fixed-term employment.
Greater specialization and the widespread application of advanced technologies
have stimulated a rise in demand for skilled labour in fields such as information
technology (IT), specialized financial and other business services, materials
engineering and biotechnology. On the whole, job opportunities for women in
high-growth sectors remain limited, mainly because of lack of required skills.
Mixed experiences
Available evidence suggests that as a group, women are lagging behind when it
comes to the gains from globalization. What accounts for this? Certain structural
factors, among others, help to explain:
Technological change and specialized production strategies tend to favor
skilled and well-educated workers - a category in which women are severely
under-represented

35

 Investing in skills in those segments of the labour market in which women

are predominant are considered to yield lower returns. Therefore,
opportunities for skills upgrading at the enterprise level are fewer than those
which exist for men
Whether they are in export-oriented or import-competing industries, women
are in jobs which are more likely to be subcontracted, relocated abroad or
eliminated by labour-saving technologies
Amid growing competitive pressures, new forms of work organization are
being introduced by many enterprises as part of their efficiency-enhancing
and cost-saving strategies. This leads to a rise in non-standard employment;
i.e., lack of job security (certain enterprises do not give written employment
contracts), limited possibilities for training and career advancement, and
inadequate social security coverage in terms of old-age pensions, sickness
insurance and maternity protection
The traditional gender disparities in wages appear to be widening in
globalizing economies. This may be explained by the cumulative effects of
persistent discriminatory practices, a deepening polarization of skilled and
unskilled labour with women being caught in a "low-skilled/low-paid jobs
trap", and low unionization rates which exclude them from the coverage of
collective agreements which set basic pay rates and working conditions
Policy responses
Some degree of government intervention, with the involvement of the social
partners, would seem justifiable in order to attain the twin goals of growth and
equity. Measures may include:
Passing equality-promoting legislation to protect women against
discriminatory practices with respect to recruitment, remuneration and
promotion
Strengthening labour inspection services to monitor the implementation of
national labour standards
Extending collective agreements to cover non-organized workers in specific
sectors and industries where pay and working conditions compare
unfavourably with those of organized workers in the same sectors and
industries

36

 Reforming social insurance systems to enable workers in non-standard

employment to have better coverage
Improving social "safety nets" to guarantee minimum standards of protection
for vulnerable groups such as the working poor, the long-term unemployed
and single-parent households
Setting enrollment and graduation targets for girls and women in educational
institutions at all levels, with a view to raising knowledge and skills which
would enhance their employability
Instituting curriculum reforms, scholarship programmes and advisory
services, to orient women to disciplines and training programmes in fields
for which labour demand is forecast to grow
Encouraging social dialogue and active participation by employers' and
workers' organizations in policymaking, and developing programmes which
focus on:
Improving women's access to enterprise-based apprenticeship programmes
and on-the-job training for workers
Targeting the retraining of women in non-traditional fields and providing
various forms of assistance to those women wishing to set up their own
businesses, paying particular attention to rural-based women who want to
diversify into non-farm activities
Providing adequate child care and other services to facilitate women's
employment and labour market re-entry after interruptions for family-related
reasons
Gender inequalities in the labour market and at the level of the workplace are not
new, but the changes associated with globalization appear to be accentuating the
effects of attitudinal, policy-related and structural factors which have long
interacted to limit women's social and economic progress. The appropriate mix of
policies for addressing these issues will necessarily differ across countries, but
there are four "social pillars" which ought to underpin whatever measures may be
taken to spread the gains from globalization among workers in general, and women
workers in particular.

37

Does globalization cause poverty?

Many people who are concerned about the fate of the world's poor now attribute
their plight to globalization. They argue that globalization has weakened the
position of poor countries and exposed poor people to harmful competition. Their
concern is understandable, especially since the gap between rich and poor has
indeed become more glaring in recent decades. However, proving a direct link
between economic globalization and poverty is a complex task for several reasons:
Globalization as a single cause. Specifying how globalization affects the
economic status of countries or individuals is not easy. The effects of
"globalization" may be due to competition among workers, or foreign investment,
or trade, or government borrowing. There is no single measure of integration into
the world economy. Each aspect of integration can have variable effects.
Poverty as a multidimensional phenomenon. Poverty can be measured in different
ways-for example, relative to a country's average, by consumption capacity, or in
terms of overall well-being. Many people in many places historically have been
poor for many reasons. Attributing (increases in) poverty to globalization therefore
requires proving that globalization has become a dominant factor in producing a
new kind of poverty.
Globalization and overall global poverty. By common consent, globalization has
proceeded rapidly since the 1980s. Yet according to the recent Global Poverty
Report, the proportion of the world population living in poverty has declined from
29% in 1988 to 26% in 1998. Moreover, social indicators for many poor countries
also show improvement over several decades.
Globalization and poverty in specific countries. If globalization causes poverty,
then countries that become more economically integrated via trade and investment
should do worse. But some that have become more integrated into the world
economy, such as China, have made progress. Others, for example in sub-Saharan
Africa, that have remained relatively isolated have experienced declines. Such
overall differences do not settle the issue, since many other factors may be at work,
but they do cast some doubt on the overall argument.
Poverty vs. inequality. There is ample evidence that the gap between the richest
and poorest countries, and between the richest and poorest groups of individuals in
the world, has increased. But inequality may increase without an increase in
poverty rates, for example if globalization increases opportunities for the wealthy
more rapidly than for the poor. Since increasing wealth may be due to many
causes, showing that the rich get richer because the poor get poorer is trickier than
38

recording and lamenting the fact of inequality as such.

Globalization as catchall. One characteristic of arguments linking globalization
and poverty is the generalization from specific instances of impoverishment to
grand global developments. When governments assume debt in private capital
markets and declining world demand for their commodities depresses prices and
they seek funds from the IMF to repay loans and they agree to conditions for
internal reform and these conditions impose hardship on their people, it is tempting
to conclude that therefore "globalization" causes poverty.

Can globalization be controlled?

The issue of controlling or regulating globalization concerns elite officials of states
and intergovernmental organizations as well as opponents of neoliberalism in
pursuit of global justice. They often share a sense that the current thrust of
globalization may be irreversible and out of anyone's control. They have several
good reasons to think so:
one of globalization's driving forces, technological innovation, is inherently
unpredictable
globalization results from the interplay of many parties (economic and
political), none of which exerts dominant influence
old regulatory agencies devised by states cannot control processes that
exceed their territorial authority
apart from minimal rules of competition itself, the world lacks a single set of
rules that serves to regulate transnational behavior
This concern has given rise to a now-fashionable interest in "global governance,"
or the design of institutions that authoritatively manage and regulate actions,
processes, and problems of global scope or effect. While some believe such
governance is desirable but lacking, others think it is in fact emerging in the work
of various international organizations and groups active in civil society. Though
advocates of global governance portray it as enhancing democracy, defenders of
traditional democratic values and state interests have questioned such claims.

39

Challenges for Theological Education

We have looked into some of the positive and negative aspects of globalization. It
is a process that is inescapable and irreversible. We have to go through it. We have
to transform it to meet a new future with hope. We need to be critical of the
problems linked to the globalization process and affirm certain priorities while
descerning God's purpose in this world.
So much have been written in the area of globalization and theological education.
Theological education have to move into new areas such as globalization, the
ecological crisis, genetic engineering and ethnicity - all these areas have been
outside of our traditional schemes of theological education, though they all
impinge on our lives and relationships. Many of the theological educators, pastors,
missionaries and Christian ministers are ill-equipped to meet the challenges of new
technology and cyber culture. A theological education that does not take this issue
into consideration will have no impact. We need to evolve a clear theological
methodology and perspective to address this fast emerging challenge. Some of the
challenges that we need to face seriously are:
a) A perspectival change: An important area that theological educators have to
face is the question of perspective in theological education. For any theological
inquiry, we need to have a perspective. It matters what or whose perspective one
had in doing theology. For too long an elitist perspective has been dominant. The
perspective of subaltern groups like indigenous people and women and their
struggle for new life has been overlooked in theological education. A very clear
scripturally directed perspective is the subaltern perspective. An addition of one
subject like feminist theology or indigenous people's theology in the existing
courses of theological schools is not sufficient. Neither is organizing a few
seminars and consultations sufficient. The study of gender justice must become a
hermeneutical key to theology. Teaching theology from woman's perspective
would help to challenge the present patriarchal culture and ideology in our
religious-cultural, socio-political and economic structures. We should consciously
integrate the perspective of the marginalized people in the whole process of
theological education. In this effort, we should aim to discover an alternative view
of life and vision of human bond to one another and to the earth.
b) Curriculum: Theological schools must develop a curriculum that is contextual
and expose globalization as driven by the motives of financial profit and just plain
greed. We need a curriculum that supports the principle of Christian solidarity and
the traditional values of community, family, respect of life and hospitality.
Moreover, globalization has brought people of different religious faith closer to
40

each other. Our response is to broaden our curriculum to include a greater focus on
studying other religions.
c) An inter-disciplinary approach: The present character of theological education
is too much disciplinary and compartmentalized. This approach alone is not
sufficient in a multi context like ours. The reality of our experience is complex and
we need a confluence of tools to unravel its significance. We need an interdisciplinary character of our study and research. In this process, the cultural and
religious traditions of our people must be taken seriously. They are not just useful
to supply an alternative vision of human bonding to one another and to earth alone,
but they have to be taken seriously to support an alternative development
paradigm.
d) A transformative approach: Gaining new knowledge should help us in the
transformation of our lives. It is unfortunate that theological education has fallen
into the trap set by the philosophy of modern educational system. Education has
become skill oriented. Theological education should not be reduced to mere skill
orientation. Today theological education has been reduced to mere abstract and
intellectual exercise leaving very little scope for action-reflection. We need to
challenge this pattern of Theological education. Theological education has to be
directed towards transformation. Praxis-thinking challenges us that, thinking that
occurs apart from critical involvement ends up in construction of theories about
existence that keep us away from the real world. We need rigorous theoretical
reflection of the Word of God, but it should emerge from the practice that is
directed to transformation. In order to do theological-praxis we need social and
cultural analysis of our context. They should form an integral part of the
theological curriculum.
e) Protection of diversity: Plurality is an integral part of the Creator. No culture,
no community is excluded from this God's structure of creation. All are unique in
their own ways and, therefore, no one has the right to dominate and suppress the
other. Life is protected and it can grow to its fullness only by affirming the beauty
of diversity. Therefore, a perspectival change in theological education to
understand and appreciate the diverse religious and cultural resources of human
kind as the common property of humanity becomes crucial. A positive approach
especially to the people of other faiths, culture and languages can provide a new
paradigm of pedagogy to theological education.
Conclusion
We cannot find easy answer to these complex problems brought by the process of
globalization. Theological education needs to help people to discern justice and
41

speak for justice for the victims of globalization. It is important that the Word of
God is constantly engage in helping people to search for an alternative vision of
human bonding to one another and to the whole of God's creation. It is also
important to recognize that an indispensable role of theological education in the
context of globalization is to strengthen the prophetic ministry of the church so that
it can become the salt, light and leaven against the ill effects of globalization.

Impact of globalization on India:

India opened up the economy in the early nineties following a major crisis that led
by a foreign exchange crunch that dragged the economy close to defaulting on
loans. The response was a slew of Domestic and external sector policy measures
partly prompted by the immediate needs and partly by the demand of the
multilateral organisations. The new policy regime radically pushed forward in
favour of amore open and market oriented economy.
Major measures initiated as a part of the liberalisation and globalisation strategy in
the early nineties included scrapping of the industrial licensing regime, reduction
in the number of areas reserved for the public sector, amendment of the
monopolies and the restrictive trade practices act, start of the privatisation
programme, reduction in tariff rates and change over to market determined
exchange rates.
Over the years there has been a steady liberalisation of the current account
transactions, more and more sectors opened up for foreign direct investments and
portfolio investments facilitating entry of foreign investors in telecom, roads, ports,
airports, insurance and other major sectors.
The Indian tariff rates reduced sharply over the decade from a weighted average of
72.5% in 1991-92 to 24.6 in 1996-97.Though tariff rates went up slowly in the late
nineties it touched 35.1% in 2001-02. India is committed to reduced tariff rates.
Peak tariff rates are to be reduced to be reduced to the minimum with a peak rate of
20%, in another 2 years most non-tariff barriers have been dismantled by march
2002, including almost all quantitative restrictions.

India is Global:
The liberalisation of the domestic economy and the increasing integration of India
with the global economy have helped step up GDP growth rates, which picked up
from 5.6% in 1990-91 to a peak level of 77.8% in 1996-97. Growth rates have
slowed down since the country has still bee able to achieve 5-6% growth rate in
42

three of the last six years. Though growth rates has slumped to the lowest level
4.3% in 2002-03 mainly because of the worst droughts in two decades the growth
rates are expected to go up close to 70% in 2003-04. A Global comparison shows
that India is now the fastest growing just after China.
This is major improvement given that India is growth rate in the 1970s was very
low at 3% and GDP growth in countries like Brazil, Indonesia, Korea, and Mexico
was more than twice that of India. Though Indias average annual growth rate
almost doubled in the eighties to 5.9% it was still lower than the growth rate in
China, Korea and Indonesia. The pick up in GDP growth has helped improve
Indias global position. Consequently Indias position in the global economy has
improved from the 8th position in 1991 to 4th place in 2001. When GDP is
calculated on a purchasing power parity basis.

Globalisation and Poverty:

Globalisation in the form of increased integration though trade and investment is
an important reason why much progress has been made in reducing poverty and
global inequality over recent decades. But it is not the only reason for this often
unrecognised progress, good national polices , sound institutions and domestic
political stability also matter.
Despite this progress, poverty remains one of the most serious international
challenges we face up to 1.2 billion of the developing world 4.8 billion people still
live in extreme poverty.
But the proportion of the world population living in poverty has been steadily
declining and since 1980 the absolute number of poor people has stopped rising
and appears to have fallen in recent years despite strong population growth in poor
countries. If the proportion living in poverty had not fallen since 1987 alone a
further 215million people would be living in extreme poverty today.
India has to concentrate on five important areas or things to follow to achieve this
goal. The areas like technological entrepreneurship, new business openings for
small and medium enterprises, importance of quality management, new prospects
in rural areas and privatisation of financial institutions. The manufacturing of
technology and management of technology are two different significant areas in
the country.
There will be new prospects in rural India. The growth of Indian economy very
much depends upon rural participation in the global race. After implementing the
new economic policy the role of villages got its own significance because of its
43

unique outlook and branding methods. For example food processing and packaging
are the one of the area where new entrepreneurs can enter into a big way. It may be
organised in a collective way with the help of co-operatives to meet the global
demand.
Understanding the current status of globalisation is necessary for setting course for
future. For all nations to reap the full benefits of globalisation it is essential to
create a level playing field. President Bushs recent proposal to eliminate all tariffs
on all manufactured goods by 2015 will do it. In fact it may exacerbate the
prevalent inequalities. According to this proposal, tariffs of 5% or less on all
manufactured goods will be eliminated by 2005 and higher than 5% will be
lowered to 8%. Starting 2010 the 8% tariffs will be lowered each year until they
are eliminated by 2015.

GDP Growth rate:

The Indian economy is passing through a difficult phase caused by several
unfavourable domestic and external developments; Domestic output and Demand
conditions were adversely affected by poor performance in agriculture in the past
two years. The global economy experienced an overall deceleration and recorded
an output growth of 2.4% during the past year growth in real GDP in 2001-02 was
5.4% as per the Economic Survey in 2000-01. The performance in the first quarter
of the financial year is5.8% and second quarter is 6.1%.

Export and Import:

Indias Export and Import in the year 2001-02 was to the extent of 32,572 and
38,362 million respectively. Many Indian companies have started becoming
respectable players in the International scene. Agriculture exports account for
about 13 to 18% of total annual of annual export of the country. In 2000-01
Agricultural products valued at more than US $ 6million were exported from the
country 23% of which was contributed by the marine products alone. Marine
products in recent years have emerged as the single largest contributor to the total
agricultural export from the country accounting for over one fifth of the total
agricultural exports. Cereals (mostly basmati rice and non-basmati rice), oil seeds,
tea and coffee are the other prominent products each of which accounts fro nearly 5
to 10% of the countries total agricultural exports.

Where does Indian stand in terms of Global Integration?

India clearly lags in globalisation. Number of countries have a clear lead among
them China, large part of east and far east Asia and eastern Europe. Lets look at a
44

few indicators how much we lag.

Over the past decade FDI flows into India have averaged around 0.5% of GDP
against 5% for China 5.5% for Brazil. Whereas FDI inflows into China now
exceeds US $ 50 billion annually. It is only US $ 4billion in the case of India
Consider global trade Indias share of world merchandise exports increased
from .05% to .07% over the pat 20 years. Over the same period Chinas share has
tripled to almost 4%.
Indias share of global trade is similar to that of the Philippines an economy 6
times smaller according to IMF estimates. India under trades by 70-80% given its
size, proximity to markets and labour cost advantages.
It is interesting to note the remark made last year by Mr. Bimal Jalan, Governor of
RBI. Despite all the talk, we are now where ever close being globalised in terms of
any commonly used indicator of globalisation. In fact we are one of the least
globalised among the major countries however we look at it.
As Amartya Sen and many other have pointed out that India, as a geographical,
politico-cultural entity has been interacting with the outside world throughout
history and still continues to do so. It has to adapt, assimilate and contribute. This
goes without saying even as we move into what is called a globalised world which
is distinguished from previous eras from by faster travel and communication,
greater trade linkages, denting of political and economic sovereignty and greater
acceptance of democracy as a way of life.

Globalization and Indian women:

Globalization has had negative implications for Indian women. Their plights are
similar to those of women in other developing regions such as Africa and Asia.
Globalization has made many international corporations richer by the billions.
However, what most people are not aware of is that women in these developing
countries are suffering enormously due to this expansion of corporate empires.
According to estimates from World Development Indicators, Women work twothirds of the worlds working hours, produce half of the worlds food, but earn only
ten percent of the worlds income, and own less than one percent of the worlds
property (Tomlinson). According to Vandana Shivea, and Indian ecofeminist and
scholar, globalization along with the support of organizations such as the World
Bank and the International Monetary Fund, have created slave wages. These wages
are not necessarily the result of unjust societies, but of the fact that global trade
devalues the worth of peoples lives and work (Aujla). While globalization has
45

brought jobs to rural, developing areas such as India where there was previously no
employment, these jobs seem to be wolves in sheeps clothing. The work available
to women is almost always poorly paid, mentally and physically unhealthy,
demeaning, or insecure.
Women are suffering two fold. As women in developing countries move into the
work force, their domestic responsibilities are not alleviated. Women work two full
time jobs. One in a factory, where they are paid next to nothing, the second is in
the home where they are paid nothing (Moghadam). According to Merlin A. Taber
and Sushma Batra, editors of the book Social Strains of Globalization in India,
development for poor women has meant the migration of men to cities, higher
prices for commodities, poorer job opportunities. The mixture of corporate
capitalism and Western culture models is dissolving family and community social
controls as witnessed by higher rates of family violence, rape, divorce, and family
breakdown.
One example of womens labor being exploited would be the Noida Export
Processing Zone, which is 24 km from New Delhi. These zones prefer to hire
women because they are more docile and more productive in men. In short, they
are easier to control and less likely to retaliate against less than ideal working
conditions, which are exactly what thousands of women encounter 12 hours a day.
The zone is dangerous, hot, and unsanitary. Unnecessary body searches are routine.
There are no maternity benefits and minimum wage is never enforced. Women who
become pregnant or marry are immediately fired. Overtime is compulsory but
women are paid lower rates than men. In order to avoid being fired, women turn to
unsafe abortions performed by unqualified doctors. In the zone, respiratory
problems, pelvic inflammatory disease, and sever cases of dehydration and anemia
are common. (Rajalakshmi)

Consequences:
The implications of globalisation for a national economy are many. Globalisation
has intensified interdependence and competition between economies in the world
market. This is reflected in Interdependence in regard to trading in goods and
services and in movement of capital. As a result domestic economic developments
are not determined entirely by domestic policies and market conditions. Rather,
they are influenced by both domestic and international policies and economic
conditions. It is thus clear that a globalising economy, while formulating and
evaluating its domestic policy cannot afford to ignore the possible actions and

46

reactions of policies and developments in the rest of the world. This constrained
the policy option available to the government which implies loss of policy
autonomy to some extent, in decision-making at the national level.

Effects of globalization
Globalization has various aspects which affect the world in several different ways
such as:

Industrial (alias trans nationalization) - emergence of worldwide

production markets and broader access to a range of foreign products for
consumers and companies.

Financial - emergence of worldwide financial markets and better access to

external financing for corporate, national and subnational borrowers.

Economic - realization of a global common market, based on the freedom of

exchange of goods and capital.

Political - political globalization is the creation of a world government

which regulates the relationships among nations and guarantees the rights
arising from social and economic globalization.

Informational - increase in information flows between geographically

remote locations. Arguably this is a technological change with the advent of
fibre optic communications, satellites, and increased availability of
telephony and Internet.

Cultural - growth of cross-cultural contacts; advent of new categories of

consciousness and identities such as Globalism - which embodies cultural
diffusion, the desire to consume and enjoy foreign products and ideas, adopt
new technology and practices, and participate in a "world culture"; and also
Transformation of culture

Ecological- the advent of global environmental challenges that can not be

solved without international cooperation, such as climate change, crossboundary water and air pollution, over-fishing of the ocean, and the spread
of invasive species. Many factories are built in developing countries where
they can pollute freely. Globalism and free trade interplay to increase
pollution and accelerate it in the name of an ever expanding capitalist
growth economy in a non-expanding world. The detriment is again to the

47

poorer nations while the benefit is allocated to the wealthier nations.

Social - increased circulation by people of all nations with fewer restrictions.

Provided that the people of those nations are wealthy enough to afford
international travel, which the majority of the world's population is not. An
illusory 'benefit' recognized by the elite and wealthy, and increasingly so as
fuel and transport costs rise.

Transportation

International cultural exchange

o Spreading of multiculturalism, and better individual access to cultural
diversity. However, the imported culture can easily supplant the local
culture, causing reduction in diversity through hybridization or even
assimilation. The most prominent form of this is Westernization.
o Greater international travel and tourism for the few who can afford
international travel and tourism.
o Greater immigration, including illegal immigration, except for those
countries around the world including the UK, Canada, and the United
States who have accelerated removal of illegal migrants and modified
laws to increase the ease of removing those who have entered the
country illegally, while ensuring that immigration policies allow those
more favourable to the stimulation of economy to enter, primarily
focusing on the capital that immigrants can move into a country with
them.
o Spread of local consumer products (e.g. food) to other countries (often
adapted to their culture) including genetically modified organisms. A
new and novel feature of the globalist growth economy is the birth of
the licensed seed which will only be viable for one season and can not
be replanted in a subsequent season - ensuring a captive market to a
corporation.
o World-wide fads and pop culture such as Pokmon, Sudoku, Numa
Numa, Origami, Idol series, YouTube, Orkut, Facebook, and
MySpace. Accessible to those who have Internet or Television,
leaving out a substantial segment of the Earth's population.
o World-wide sporting events such as FIFA World Cup and the
Olympic Games.
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o Formation or development of a set of universal values Homogenization of Culture

Technical
o Development of a global telecommunications infrastructure and
greater transborder data flow, using such technologies as the Internet,
communication satellites, submarine fiber optic cable, and wireless
telephones
o Increase in the number of standards applied globally; e.g. copyright
laws, patents and world trade agreements.

Legal/Ethical
o The creation of the international criminal court and international
justice movements.
o Crime importation and raising awareness of global crime-fighting
efforts and cooperation.
o Sexual awareness It is often easy to only focus on the economic
aspects of Globalization. This term also has strong social meanings
behind it. Globalization can also mean a cultural interaction between
different countries. Globalization may also have social effects such
changes in sexual inequality, and to this issue brought about a greater
awareness of the different (often more brutal) types of gender
discrimination throughout the world.
o

Increasing concentration of wealth in fewer and fewer hands. Media

and other multinational mergers
leading to fewer corporations
controlling vaster segments of society and production. The decrease in
the middle class, and the increase in poverty observed within
Globalized and deregulated nations.

Effects of globalization
1 Enhancement in the information flow between geographically remote
locations
2 The global common market has a freedom of exchange of goods and capital
3 There is a broad access to a range of goods for consumers and companies
49

4 Worldwide production markets emerge

5 Free circulation of people of different nations leads to social benefits
6 Global environmental problems like cross-boundary pollution, over fishing
on oceans, climate changes are solved by discussions
7 More transborder data flow using communication satellites, the Internet,
wireless telephones etc.
8 International criminal courts and international justice movements are
launched
9 The standards applied globally like patents, copyright laws and world trade
agreements increase
10 Corporate, national and subnational borrowers have a better access to
external finance
11 Worldwide financial markets emerge
12 Multiculturalism spreads as there is individual access to cultural diversity.
This diversity decreases due to hybridization or assimilation
13 International travel and tourism increases
14 Worldwide sporting events like the Olympic Games and the FIFA World Cup
are held
15 Enhancement in worldwide fads and pop culture
16 Local consumer products are exported to other countries
17 Immigration between countries increases
18 Cross-cultural contacts grow and cultural diffusion takes place
19 There is an increase in the desire to use foreign ideas and products, adopt
new practices and technologies and be a part of world culture
20 Free trade zones are formed having less or no tariffs
21 Due to development of containerization for ocean shipping, the
transportation costs are reduced
22 Subsidies for local businesses decrease

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23 Capital controls reduce or vanquish

24 There is supranational recognition of intellectual property restrictions i.e.
patents authorized by one country are recognized in another

Advantages of Globalization
Positive Aspects:
There are many potentially positive aspects of globalization, if it is pursued for the
common good, not just for the benefit of a few. Today globalization has led to the
opening up of the national boundaries to international trade and global
competition. Developments linked with globalization have opened up boundless
possibilities for human development, enormous new opportunities and enhanced
the quality of life for many people in the third world countries. For example, the
production of goods for consumption on a massive scale has brought not only a
better and more varied goods available to every citizen, but also has brought
enormous change in people's value system. Those who have and are able to buy the
goods have attained greater comfort, speedier communication and faster travel.
Information technology has converted the world into a "global village". The events
of far-off lands are easily accessible in our living rooms. This process has
promoted exchange of ideas and customs between peoples of different countries.
Today our ways of thinking and behaving are now challenged beyond accepted
traditional patterns. The horizon of our perspectives has suddenly embraced the
`the global village' beyond the confines of our homes. And this has been
reciprocally beneficial. In addition, live communication of facts makes us partake
instantaneously in the events of history. It also creates and promotes global
concern. We now have the possibility of immediate worldwide attention to global
issues, particularly to people in emergency situations. For this reason, it is
irrational on our part to reject it outright; an uncritical attitude towards it is unwise.
We need to affirm the positive side of this development and make use of the many
opportunities it offers for our development.
Globalization has several advantages on the economic, cultural, technological,
social and some other fronts.
Globalization means increasing the interdependence, connectivity and integration
on a global level with respect to the social, cultural, political, technological,
economic and ecological levels.

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Advantages of Globalization
1 Goods and people are transported with more easiness and speed
2 The possibility of war between the developed countries decreases
3 Free trade between countries increases
4 Global mass media connects all the people in the world
5 As the cultural barriers reduce, the global village dream becomes more
realistic
6 There is a propagation of democratic ideals
7 The interdependence of the nation-states increases
8 As the liquidity of capital increases, developed countries can invest in
developing ones
9 The flexibility of corporations to operate across borders increases
10 The communication between the individuals and corporations in the world
increases
11 Environmental protection in developed countries increases
12 Increased free trade between nations
13 Reduction of likelihood of war between developed nations
14 Increased liquidity of capital allowing investors in developed nations to
invest in developing nations
15 Corporations have greater flexibility to operate across borders
16 Global mass media ties the world together
17 Increased flow of communications allows vital information to be shared
between individuals and corporations around the world
18 Greater ease and speed of transportation for goods and people
19 Reduction of cultural barriers increases the global village effect
20 Spread of democratic ideals to developed nations
21 Greater interdependence of nation-states
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22 Increases in environmental protection in developed nation

Advantages of globalization in the developing world

It is claimed that globalization increases the economic prosperity and opportunity
in the developing world. The civil liberties are enhanced and there is a more
efficient use of resources. All the countries involved in the free trade are at a profit.
As a result, there are lower prices, more employment and a better standard of life
in these developing nations. It is feared that some developing regions progress at
the expense of other developed regions. However, such doubts are futile as
globalization is a positive-sum chance in which the skills and technologies enable
to increase the living standards throughout the world. Liberals look at globalization
as an efficient tool to eliminate penury and allow the poor people a firm foothold in
the global economy.

Limitations of globalization
Negative Aspects
While some economists and politicians approve these developments, many people
look at this process with much apprehension. They look at the global village as an
order or mechanism for greater economic exploitation and political oppression.
Globalization has many dimensions: economic, technological, political, cultural,
social, environmental, ideological, etc. Each of them affects the local either
positively or negatively. Let us see some of its negative aspects:
a) Economic aspect: The world market has emerged as the dominant economic
force. While some nations have tremendous economic advantages, others have
become more and more dependent. The main players in the present process of
globalization are the governments of powerful nations (in particular the G7 ),
transnational cooperation, the IMF, the World Bank and the WTO. The
development of all third world countries has to be related to the world market. This
is so because the overall control of the global economy is in the hands of the G7
countries. They control the monetary system and international trade. The
multinationals and other institutions with the help of the state control all
development processes. The foreign debt works as an instrument to control the
development process in these countries. Terms and conditions on the loans are
imposed on them, which make them almost impossible to develop on their own
terms. The role of developing countries is simply to provide cheap labour to attract
investors and to provide raw materials, which are at the mercy of fluctuating
53

prices. They are to meet the needs of others as cheaply as possible. This unfettered
growth of the multinationals and the emphasis on foreign trade are not conducive
to a development pattern that is oriented to the basic needs of the people. The
production needs and patterns are often determined by the market forces. It is
unfortunate that they seldom take into consideration the basic needs of the people.
The production of the goods for export or for the conspicuous consumption of the
rich becomes the market force today. In the globalized free market, the only people
who count are those who have goods to sell and those who have the money to buy.
This in turn drives many to the margins of the economic life. The small
entrepreneurs have very little chance of survival in this system. Only the stronger
and successful competitors survive and thereby widening the gap between the rich
and poor, both between countries and within country. One cannot deny that there
has been a worldwide growth in poverty, inequality and the human misery. Social
injustice is becoming an accepted reality. It is said that the top 20% has access to
82.7%, while the bottom 20% struggle to survive on 1.4%. The weak, the poor and
the inexperienced ones are pushed to the outer rims of the society. Globalization
works for the benefits of the rich while the poor become commodities since they
are used as cheap labours. It is very clear that the present economic pattern no
longer serves the interest of the majority of the people. It rather destroys the lives
of many people due to its unjust distribution of wealth, exploitation and
deprivation of basic needs. Indeed, it has created a situation of marginalization,
exclusion and social disintegration.

b) Political aspect: The development of the third world countries with the help of
industrialized countries has many political implications. The process of
globalization from the beginning was fraught with competition, conflict,
domination and exploitation. The opening up of the national boundaries for free
market has led to a neo-colonialism allowing not only economic domination, but
also political domination over the poor nations. For example, the policies of
liberalisation and withdrawal of subsidies, which are the conditions imposed by the
IMF and the World Bank, have resulted in the curtailing of the state's power.
Today, globalization is creating a government more committed to the protection of
foreign investments and less to the protection of the citizens of the country. Many
thirds world are forced to abandon its social responsibilities. This makes many
people to ask whether the present process of globalization is compatible with
democracy, social justice and the social welfare state. While the state is rendered
relatively powerless, it has become a mere tool of the rich and the powerful. Its
sole function is to suppress any organized resistance by oppressed people of the
unjust system.
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c) Social aspect: The market ideology of globalization gives a notion that people
who cannot afford goods and live in rural areas are considered uncivilized and
backward. They feel isolated from the privileged groups. This wrong notion creates
an inferiority complex among the poor rural masses that urges them to migrate to
the cities and towns in search of employment and better living. It encourages
migration not only within a country, but also encourages people to migrate to other
countries. It is estimated that there are seventy million workers around the world.
The migrant workers are the most exploited people. They suffer from insecurity
and social exclusion. This social exclusion is deeper than the economic level.
An ever-increasing economic pattern and the expansionary character of
globalization leads to lowering of labour costs and wages. In the struggle to be
more competitive, labour costs and wages are being driven down. Companies go in
for `restructuring' and `downsizing' which creates redundancies. Permanent
employment and skilled workforce is being replaced by the casual and part-time
employment creating immense insecurity among the workers. While wages are
being lowered, but working hours have been increased. Yet it is almost impossible
for a poor worker to rebel against the company that employs him or her.
Powerlessness is one of the consequences of globalization for so many people in
the lower brackets of society.[3] All these lead the poor worker to involve in all
sorts of anti-social activities.
The profit-oriented free market has also let loose the present day social realities.
Consumerism and materialism have overwhelmed modern society affecting every
aspect of life. Society has become impersonal, mechanical and inhumane. The
present society and its penchant for unprincipled living, selfishness, corruption,
opportunism, and violence are the product of consumerism and materialism.
d) Cultural aspect: Globalization means the export and import of cultures.
Globalization involves cultural invasion. Technology is power. It becomes the
carrier to those systems and ideologies (values and cultures) within which it has
been nurtured. The whole idea of progress and development is decisively shaped
by western life-style, worldview and its structures. A monoculture is fast emerging.
When we say "mono-culture", it means the undermining of economic, cultural and
ecological diversity and the acceptance of a technological culture developed in the
West and the adoption of its inherent values. The tendency is to accept the
efficiency with productivity without any concern for compassion or justice. In
traditional societies, people maintained a very strong practice of community
ownership of land and property. The accumulation of wealth by individual was not
encouraged, but today wealth is increasingly regarded as belonging to individuals
and not to the community. The slow erosion of traditional cultural values leads to
55

lack of cohesion in societies. The indigenous culture and its potential to save
human development and the earth from destruction are vastly ignored.
e) Ecological aspect: Globalization involves environmental degradation and
pollution. The pattern of development that we uphold today is capital-intensive. An
ever-increasing economic pattern and the expansionary character of mechanization
and massive industrialization of the economic world-order are reducing the nonhuman segments of creation to mere status of object without any intrinsic value.
People simply analyze nature from the viewpoint of its usefulness to humans and
they are all set to be exploited according to human's wishes. Forest and fishing
resources are depleted for quick profits. Mining companies rape resources with
little regard to the environmental and social costs. The sustaining power of the
earth for nurturing life is being destroyed. The whole planet is at threat. Thus, the
ecological catastrophe today is the direct product of modern industrial and
technological growth, and the modern lifestyle.
f) Impact upon indigenous people: With the accelerating deterioration of the
global economic and political situation, the indigenous people face further
marginalization and graver threats of continuity and sustainability. In many parts of
the world, the indigenous people have become the victims of big reservoirs, mega
projects, wild life sanctuaries, mines, industries, etc. An indigenous theologian
from Pacific writes his experience as follows:
The advertisement on our local TV demonstrates this concept very clearly.
The ad begins with people living happily in a joyous environment where
there is fun, plenty of food in the garden and an abundance of fish in the sea.
Then the big ships came with big money, which they gave to the chiefs for
the forests. The result is total displacement, impoverishment and ecological
destablisation
In the name of development, people are forcefully evicted from their ancestral land
and the abode of the various spirits they worship using repressive measures and
often without proper compensation. They are simply ignored, silenced and
despised. For example, in India, 100,000 people are going to be displaced by the
Sardar Savovar Project in Gujarat, 60-70% of whom are indigenous people.
Around 130,000 are expected to be displaced by the Narmada Sagar Project in
Madhya Pradesh of whom 65-70% are indigenous people. Likewise, in the name of
development, the indigenous people who are already powerless and exploited are
further reduced to powerlessness and bondage. It is disheartening to see that
indigenous people are made environmental prisoners in their own land.
g) Religious aspect: Threatened by the forces of globalization and the ideas of
56

secularism, some sections in all religions assert a fundamentalist posture. Under

the pretext of an identity struggle, the Fundamentalists, particularly in the majority
community, want to achieve their dominance by controlling the political process
through the militant organizations. Religion is used for political control. This
process distorts both politics and religion. Moreover, the role of religion moves
towards mere private affair, without accepting any social responsibility. Indeed,
faith has lost its community anchorage. There is a subtle connection between
globalization and the revival of religious fundamentalism.

The main disadvantages of globalization are

1. Increased flow of skilled and non-skilled jobs from developed to developing
nations as corporations seek out the cheapest labor.
2. Increased likelihood of economic disruptions in one nation effecting all nations.
3. Corporate influence of nation-states far exceeds that of civil society
organizations and average individuals.
4. Threat that control of world media by a handful of corporations will limit
cultural expression .
5. Greater chance of reactions for globalization being violent in an attempt to
preserve cultural heritage.
6.Greater risk of diseases being transported unintentionally between nations
7. Spread of a materialistic lifestyle and attitude that sees consumption as the path
to prosperity
8. International bodies like the World Trade Organization infringe on national and
individual sovereignty.
9. Increase in the chances of civil war within developing countries and open war
between .developing countries as they vie for resources.
10. Decreases in environmental integrity as polluting corporations take advantage
of weak regulatory rules in developing countries.

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Factors for Globalization of R&D

Cost Factor: As the business environment changed in 1990s due to increasing
global trade. To maintain competitiveness companies increased their R&D
spending. R&D is expensive, it needs large investments in equipment and highly
skilled scientists. In 2000, US companies spent about $180 billion on R&D
activities. A high investment led to concentration of R&D activities in one location
to prevent duplication of resources. However, with globalization there is a need to
locate R&D centers in strategic countries and availability of skilled scientists in
other countries is driving businesses to spread their R&D efforts. Globally
distributed R&D network helps firms to benefit for lower wages abroad and at the
same time allows them to tap into a wider pool of talent which helps to speed up
innovation, thus lowering the overall costs of R&D.
Market Factors: The concept of a global product was not viable in many sectors.
Consumers in other countries demanded products which suits their tastes and
started to refuse products designed for other markets. (For example, cell phone
users in China wanted phones which displays Chinese script and Indian cell phone
users wanted ring tones which is similar to Indian music). The need for localization
or customization of global products is driving firms to have R&D centers close to
the major markets. E.g. Nokia has established R&D center in US to enable them to
respond quickly to American needs.
Competitive Factors: Companies need to be concerned if their competitors pursue
a global R&D strategy. Companies that conduct their R&D activity primarily in
their home country will risk losing out competitive advantage when their
competitors setup global R&D centers. The ability to obtain technical expertise and
enhancing the scale of R&D operations adds to the competitiveness of a company.
Companies can gain by having a R&D center in the lead markets by scanning for
information on customer requirements and competitor's capability and competitor's
activity. For example, Phillips, a large consumer electronics firm has R&D centers
in Europe ,US & Japan. Phillips had very capable R&D centers in US & Europe,
but the management wanted another R&D center in Japan to enable them to access
to Japanese development. Phillips has hired Japanese scientists and made contacts
with Japanese companies, universities and government labs. Phillips gains by
learning from highly demanding Japanese customers and from collaborative R&D
with Japanese firms.
Government Factors: Government rules and regulations makes it necessary to
have R&D centers in other countries. For example, complex and lengthy drug
approval process in US makes a R&D center in US beneficial to get approval for
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new drugs. Having a local R&D presence will help to better understand technical
specifications and regulations. Additionally, governments encourage technology
transfer into their country. Having a local R&D in other countries will improve the
bargaining power for the companies with the local governments.
Technology Factors: New and cheaper communication technologies like Internet,
dedicated fiber-optic lines and satellite communication now allows companies to
transfer huge amounts of data across the world for faster information sharing. This
communication revolution was the key enabler for globalization of R&D.
Telecommunication is enabling firms to establish and manage a global R&D
network.

Selecting R&D Location

Location for R&D centers is based on strategic factors such as:

Presence of highly skilled and/or low cost R&D staff

Lead markets and highly demanding customers

Encouraging government policies and availability of required support

infrastructure

Trends in Global R&D

Some of the notable trends are :
R&D spending abroad by global companies is rising much faster than in their
home country. More than one third of R&D in global companies are now done
abroad.
Technical alliances with other companies and universities abroad are being
increasingly used for R&D. Example, GE has an alliance with IIT Delhi, Intel has
an alliance with Barcelona university, BOSH has tie-up with Motorola.
Companies have established R&D units in North America, Europe, Japan, China
and India.
Companies now recruit researchers from anywhere in the world based on their
skills rather than their nationality. Companies are willing to setup R&D centers
closer the talent rather than relocate researchers.

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There is an increasing external and cross-border sourcing of technology among

multinationals through various means.
The links between university research and industrial R&D are no longer dependent
on the nationality of the firm and the university.
R&D centers with in a company are increasing their collaboration for joint product
development. This decreases product development cycles and lowers cost.

R&D Builds Competitive strengths

Companies rely on R&D for competitive advantage in high tech business. The
underlying technical skills of the business plays a bigger role on the success of a
particular product. This id forcing companies develop core technical skills to
remain competitive. Developing technical skills is not easy, it requires steady
investment over a period of time. On the product side, the product life cycles are
becoming shorter. In such a situation, the product is the intermediary between the
company's technical skills and the market it serves. Rather than being the focus of
corporate activity, products are actually transient mechanisms by which the market
derives value from a company's skill-base while the company derives value from
the market. The high tech companies are therefore asking `what skills, capabilities
and technologies should we build up?' rather than the stereotype question `which
markets should we enter, and with which products?'
To acquire new skills and remain world class in all the core competencies,
companies need to increase their R&D investments. The pressure on the top
management to maximize share holder value places a pressure to minimize all
expenditure, including R&D expenditure. Therefore it becomes imperative for
companies to explore ways to lower R&D costs while retaining competitive
advantages. One direct effect of this is that companies have become very selective
on the R&D projects that they are willing to develop in house and are increasingly
in favor of a strategic alliance with other companies who have complementary
technologies. This allows both the companies to trade their technologies and
remain competitive. The other method to lower R&D costs is to source R&D from
other countries which have lower labor costs. Both these techniques are currently
being used. For developing countries, this trend has helped them catch up in
technology with developed countries thus leading to an accelerated technology
leveling among countries. In other words, technology innovation is no longer
limited to a particular country, instead the innovation is shared by multiple
countries.

Challenges with Global R&D

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Global R&D offers companies several advantages and benefits, but these gains are
not without challenges. Having worked at Intel R&D, the main challenge for a
successful global R&D can summarized as :
Communication barriers.
Communication barriers exists in two forms
Differences in time zones & work hours makes it tough to communicate in real
time.
Different levels of technical skills and different standards of measurement between
countries will impair smooth communication. Often there is misunderstanding of
what is being said and what was understood
Differences in implementation of intellectual property rights.
Different countries have different policies and implementation levels of intellectual
property rights. As a result companies are reluctant to share critical technology
with their own R&D centers located in other countries.
Embargos and Government policies hinder technical collaboration
Often countries have some sort of embargo or sanctions against other countries.
For example US had imposed a ban on exporting high tech computers to India, US
currently prohibits transfer of several technologies to China. These sanctions were
imposed for political reasons, but R&D center located in US must comply with
those rules.
Cultural Differences plays a havoc
Differences in culture plays as a big spoil sport while working in joint ventures or
collaborations. Cultural differences are not easy to overcome and takes a while for
all parties to understand each others culture. When quick product development is
needed, cultural differences can hamper the project.
Personally, I have observed that it takes a couple of projects for all the parties to
understand each others culture. Once the cultural barrier is crossed, then
communication becomes smooth & the joint development produces better results
than a stand alone centers.

Global coordination and Management of R&D

Often R&D centers would have developed as a stand alone unit. The concept of
61

joint development with another R&D center is new and may not be welcome by
the staff. There will friction between R&D centers arising from communication
challenges. Global coordination of R&D is a management challenge. Creating a
cohesive network of coordinated R&D centers requires dedicated efforts from top
management, Human resources Department and R&D staff.
In addition to the above challenges, the other factors which undermine global R&D
are ethnocentric and parochial attitude of the management. The belief that people
in other countries cannot match their technical skills, our way is the best way
attitudes prevents the company from reaping the full benefits of the global R&D.

Maximizing benefits
Maximizing benefits in a complex environment spread across different countries is
a tough task. Difficulty arises due the factors mentioned above. However there are
means to solve those issues. In my opinion, the key factors to maximizing benefits
are:
Common understanding of goals and objectives. Full commitments from all
groups to these goals. The goals must be well defined to avoid misunderstanding in
overall Vs local priorities. Establish a common language, common terminologies &
common corporate language to avoid misunderstandings. E-mail addresses, phone
numbers of all members must be available to all members of the team. This enables
faster communication.
Provide easy access to e-mail, phone, cross site meetings, video conferencing etc..
for better communication between sites. IT/Computer infrastructures across sites
must be comparable to get the maximum benefits of improved communication.
The main project manager must have very skillful people skills and must be
capable of establishing a creative and positive environment. Team members
must be committed to solve problems quickly to prevent damage to the project
schedules or objectives. Project leader must be capable of resolving any cross-site
issues and disputes quickly and equitably. If disputes are not resolved quickly, it
may soon escalate thus forcing a costly intervention from the top management.
The project manager is responsible for setting up the hierarchy of the Joint R&D
organization. Having a clear line of command is vital to the smooth functioning of
the joint teams. The project manager must be empowered to handle any
organizational issues.

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Establish trust between different R&D teams. If the teams are from different
countries or locations, companies must arrange for a face-to-face meetings early on
in the project. Such meetings help to build trust between R&D centers, breakdown
small fiefdoms and increase productivity. Team rotation between sites should be
encouraged during the project to build better co-operation and overcome cultural
differences. This also removes any ethnocentric or parochial view held by both
sides.
It must be noted that cultural differences are difficult to overcome. Experience has
shown that increasing contact between cultures reduces cultural differences as
people understand other cultures better. In a global R&D project, increasing faceto-face contact either by meetings or by team rotations, companies can minimize
the impact of cultural differences.
Requirement gathering must be done with great care. R&D teams must work
closely with marketing and other departments to document a detailed project
requirements ahead of starting the project. Project requirement specifications must
be circulated to all members and explained clearly to avoid any misunderstanding
arising from different interpretations. However, it is impossible to document all the
requirements and issues do arise during the project. To mitigate this, regular
meeting must be held with marketing to resolve any new issues.
In my experience, I have seen that having at least one person per site who
understands the requirements completely helps resolve issues. Marketing
department must closely work with R&D teams during the life of the project. Often
it is necessary to have weekly or bi-weekly meetings with marketing to resolve any
issues with the project requirements.
Establish a strong change request system. Any changes to the requirements must go
through the change request system. The change request must be reviewed by a
committee within a reasonable time frame and their opinions must be clearly
communicated.
As companies become global corporations, all their operations become global.
Until recently, all R&D activities was concentrated in the home country of the
MNC. Companies like Microsoft, Oracle, Intel, HP etc... had all their R&D done in
US while their sales, manufacturing & other operations were global. Traditionally
companies were reluctant to globalize their R&D, partly due to the fear of losing
out their competitive advantage, partly due to non-availability of talent in other
countries & partly due to ethnocentrism. This attitude started changing in 1990s
when companies realized the need to customize their products to the local markets
and when companies gained confidence in using research talent found abroad. By
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late 1990s, most companies had R&D centers abroad to attract local scientific
talent, to lower costs of R&D, to better respond to local markets and to meet
regulatory requirements.

Closing thoughts
Global market place requires global R&D. Internet & fast communication
technologies opens the possibility for global R&D. Although the project
management on a global scale has its challenges and specific problems, experience
shows that R&D activity serves end markets best when the activity is also located
in those markets. Global R&D strategy needs to consider:
The need to tap into sources of knowledge and information where ever they
might be located on the globe.
The need to transfer that knowledge to other R&D centers and other parts of the
organization.
The need to coordinate activities between various R&D centers to ensure that
knowledge is used appropriately.
The need to balance the allocation of priorities and resources globally based on
strategic need rather than proximity.
The need to develop global products with customization to meet local markets.

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Globalization and Future of Poor Countries

By M. Monwarul Islam
Words have power and some words, such as freedom and democracies, evoke in
our mind emotional images that far outweigh their practical meanings. To many of
us globalization sounds like a great idea. One may be forgiven for thinking that
globalization would bring about the end of narrow nationalism, selfish isolationism
and the reckless pursuit of commercial and economic interests. A whole array of
multilateral institutions, think tanks and the prevailing media have been fostering
the notion that globalization is the way of the future and the there can be no return
to the old order. In fact, even though we may not have realized it, we are already
part of the globalization process. It is thus natural to ask what the future holds for
us. Like poor relations it is also natural for us to wonder if what our rich relations
of the so called global village tell us about sharing and caring for each other is the
whole truth. Close linkages and relationships are fine, but by themselves they mean
nothing. One must ask what these relationships are, who drives the process and to
what extent the sharing of the benefit is fair and equitable to all, large and small,
rich and poor.
Global trade, exchange and networking are not new phenomena. However, in the
last three decades, several developments have provided powerful impetus to the
acceleration of the process and all of these have their origin in the rich countries of
the industrialized world. First the spurt in technological progress raised
productivity in the west at a time when their markets had become saturated. The
population had. aged and the working population started to decline. The economy
stagnated. It was clear that markets had to be found abroad. Naturally, the urge was
felt most immediately by large corporations who started by trading abroad, but
soon followed up with local manufacturing. Second, the developed economies,
with high level of savings, generated enormous funds that were looking for
investment opportunities all over the world. A huge and complex network of banks
and financial institutions came into being to facilitate the global flow of private
capital. Third, revolutionary progress in Information Technology, with
microprocessors, communication satellites, fiber optics etc., made it increasingly
practical to establish global business, manufacturing, financial and technology
networks and to manage them effectively from a central command center. The age
of globalization had arrived.
The process itself and the speed at which it has spread were facilitated by a parallel
development of multilateral agreements on international trade rules aimed at
opening up markets abroad. Economic theory, based on certain simplistic
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assumptions, says that the freer the trade the greater will be the gains for the
partners each of whom can export the products in which they have a competitive
edge. Many developed countries experiencing unemployment, inflation and low
growth were convinced that the key to addressing these problems was a more open
trading system. This explains why the Tokyo Round (1979) and the Uruguay
Round (1994) were negotiated. From our point of view the crucial difference
between the two is the inclusion of services (for example financial and
telecommunication services), investment and intellectual property in the latter.
Negotiations were aimed to reduce tariff and non-tariff barriers to trade on a
reciprocal basis and. agreements could be reached when at last the parties felt they
had received comparable concessions from each other. It goes without saying that
such negotiations can be meaningful only among equals or near equals. In reality,
agreements were reached first among developed countries. The developing
countries were presented with a near final agreement The two concessions they
wanted most, greater market access for clothing and labor services, were ignored.
There was no dismantling of the restrictions on the import of textiles and clothing
in the developed country markets nor did the developed countries agree to the free
movement of labour. On the contrary, developing countries that signed up had to
agree to open up their markets for almost everything of export interest to the rich
nations.
We may draw some important conclusions from this brief review of the world
trading system that now promotes the globalization process. first the system is
highly biased in favor of the rich countries in whose interest it is really designed.
For the foreseeable future it is this group of countries that will be exporting high
value products, services, capital and technology for which developing countries
will provide a lucrative market. In the meantime, developing countries will have
the markets for their labor intensive products effectively restricted. Pledges by the
developed countries to phase out the MFA (Multi-fiber Agreement) over a few
years have fallen by the wayside. Instead new barriers are being erected to market
entry by far-fetched regulations in the name of technical specifications, inspection
procedures, health issues, environmental hazards and labor standards. In recent
years such regulations have proliferated, aimed at curbing exports from poor
countries. Again and again the developed countries invoke the safeguard and
antidumping clauses of the WTO Agreement to limit the import of items in which
developing countries happen to show signs of competitive advantage.
There is a dispute resolution mechanism in the WTO and an aggrieved country can
submit complaints to this office. However, this is a complex, protracted and
expensive process. A major reason for the helplessness of the poor countries is
their lack of leverage. They are in no position to impose retaliatory measures.
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Many poor countries affected by such arbitrary action of the rich have neither the
technical expertise nor money to mount an effective challenge. The present world
trading system is fair in its shape and unfair in its impact, because it makes no
marked distinction among its members in terms of their ability to play the game.
Many reputable economists have lent their voice to the call for a more open trade
as the best way for poor countries to generate a higher rate of growth. The
literature on how trade can act as the engine of growth is still expanding. But it is
often forgotten that when trade is constrained by declining terms of trade, quotas,
non-tariff walls of the kind we have seen and administrative regulations of
powerful nations little can be expected in terms of the benefit of trade for the poor.
Empirical evidence is cited to show how some countries have attained a higher rate
of growth when they opened their market. I have two comments on these cases.
First, even if it were true for some countries it cannot be automatically relevant for
others caught up in a different situation, Second, one can also point to many
countries that have historically attained very high rates of growth without throwing
open their market for all manner of import. The prime examples are Japan, and
South Korea. It may be misleading to focus exclusively on the ratio of trade to
GDP. It is also necessary to look at the level and composition of exports and
imports separately in order to come to a sense of what is happening to savings,
investment and structural change in the economy. We will revert to the issue of
trade liberalization in poor countries at a later stage.
We have noted that the core players in the globalization process are the large
corporations of the rich countries. They alone have a global reach because of the
technical and financial resources available to them. They direct their investment in
developing countries principally in consideration of the market, security and
profitability. Naturally, the lions share of the foreign direct investment has gone to
countries that meet these criteria including China, Brazil, India, Chili and Mexico.
It is estimated that the Least Developed Countries (LDC), numbering about 50,
mainly in sub-Saharan Africa, receive less than 2 per cent of foreign direct
investment in developing countries. It is common knowledge that the bulk of the
foreign direct investment in the LDCs, who have a small domestic market, is in the
extraction of natural resources such as oil, gas, minerals, timber and fishery. Not
much processing or local value addition is involved in these undertakings, with
consequently little contribution to national income and employment.
On the other hand, they deplete the resource base and degrade the environment.
The LDCs thus face a serious dilemma. They badly need investment that brings in
capital and technology. But despite every conceivable incentive and concession

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foreign investment flows in a trickle and goes to activities that undermine longterm sustainable development.
The trade in services, growing rapidly and amounting to USS 1.4 trillion in 2001,
is again another area where developed countries have an overwhelming edge.
Large corporations and financial giants of the rich countries have targeted the
banking, insurance and telecommunication services in the developing world. Poor
countries are being persuaded to privatize these sectors and open them to foreign
investment. Although these measures will likely bring in more capital and better
technology, improve efficiency and reduce cost, it would require a substantial
deregulation of the foreign exchange market with unpredictable risks. Given the
recent experience of financial crisis in several Asian and Latin American countries
it is doubtful if poor countries with weak and fragile economic base can withstand
the shocks transmitted through the freely operating global financial network. In the
face of opposition by financial giants who operate this network with trillions of
dollars it may not be feasible to impose even a modicum of discipline on the socalled hot money.
Perhaps more ominous are the pressures being brought by large corporations on
poor countries to withdraw any preferential treatment of national enterprises in the
sectors where the corporations are interested. This is often done indirectly through
their governments or multilateral financial institutions in the name of structural
adjustment or non-discriminatory treatment as agreed in the W70 agreement. The
call for a level playing field for everybody sounds so convincing as to make us
often forget that a fair game in a level playing field can only be held among
comparable players, and not between giants and dwarfs.
The pressures are all arbitrary and one sided. Poor countries are persuaded to
withdraw subsidies on agricultural inputs and on the export of non-traditional
products while rich countries do not just subsidize agricultural production but also
export, thus taking away poor countries potential markets. Rich countries erect
tariff and non- tariff barriers on whatever excuse is found convenient. Poor
countries are endlessly pressed to remove trade barriers and expose their market to
ruthless competitors from all over the world. If this kills their small and weak
agriculture and industry It is to be taken as the process of structural adjustment to a
market economy. Never mind the staggering adjustment cost in terms of mounting
unemployment and social distress. Where will these people go? Where are the
fresh capital and skills to be found? How can any sector be safe from the vicious
capture of the market by the large corporations?
Agricultural subsidies paid out to farmers by the United States and the European

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Union cost the poor countries more than US$ 250 billion a year in lost market or
more than five times the sum of all the aid they receive. Yet in the recently held
United Nations Aid Conference in Monterrey, Mexico, it was said that if the United
States was to open its wallet, poor nations must open their markets. The question
is, how can the poor nations open their markets and face the competition of the rich
nations in agriculture when subsidies and other support to farming in the rich
nations amount to about US$ I billion a day? And yet the poor nations are told they
would lose aid if they fail to remove the subsidy on fertilizer needed to boost
production and possibly achieve an exportable surplus.
Highly subsidized farm exports from the rich countries have led to long term
damage to agriculture in poor nations. Onions from France have swamped Senegal.
Corn from Iowa has damaged the market in Mexico. Milk powder from the
European Union has sealed the prospects of the dairy industry in Asia and Africa.
Many African cities now increasingly depend on imported wheat and corn from the
rich nations while the traditional African food crops, Cassava and Yam, steadily
recede from the market.
The food scarcity syndrome in poor nations is symptomatic of the growing
impoverishment and inequality within these countries as globalization spreads. Just
as globalization is widening the gap between rich and poor nations it is also
increasing social inequality within each nation. Relatively speaking, the poor
everywhere are becoming poorer. That is why we witness so many protests and
demonstrations against globalization in rich and poor countries alike, spearheaded
by those who are losing out in the great game of the twenty first century.
We are on the threshold of a knowledge-driven age. The globalization of the
knowledge industry appears to be a boon for all. In this area some developing
countries, such as India, have done remarkably well. Software export from India
amounts to billions of dollars. But whether others can follow Indias example
depends on what they do with their knowledge industry. Many poor nations are
unable to make the necessary investment and will slide back in the global race.
Globalization of the culture of the rich, marked by extravaganza and lack of social
commitments, is deeply troubling for the future of the poor. The mirage of an
amoral, cynical and affluent lifestyle, constantly beamed and wired to the world, is
fast destroying the moral fabric of economically poor, but culturally rich societies
and endangering the peaceful advancement of human civilization.

So what does the future hold? What will be the result of the increasingly
interconnected state of the worlds nations?
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While there are many opinions, there is only one source that can give us the true
answerthe Holy Bible. In it, God accurately foretold the rise and fall of the
major nations throughout history, including the Babylonian, Medo-Persian, Greek
and Roman empires He even prophesied the sudden rise of the American and
British people to world prominence.
And God has foretold todays fast-paced interconnected world and its matchless
advances in science and technology: But you, O Daniel, shut up the words, and
seal the book, even to the time of the end: many shall run to and fro, and
knowledge shall be increased The Bible states that, in the future, a union of ten
nations (or groups of nations) will arise, and replace America as the dominant
world power. It will attack and defeat America and Britain, taking the survivors
into captivity. This political, economic and military combine will be backed by a
universal false church. It will become a world-leading trading bloc, possessing vast
riches and trading all over the world in every product imaginableeven human
beings! This politically influential religious entity, led by a charismatic figure, will
usher in a temporary period of great wealth. Globalization will thrive during its
reign to levels unseen in human historyprosperity will flourish, but not for all.
However, shortly after the rise of this ten-nation union, it will be replaced by a
world-ruling supergovernment that will usher in lasting peace, prosperity and
security for all . Upon His triumphant Return, Jesus Christ will take over all the
governments of men, and administer His governmentthe kingdom of God
throughout the earth. At that time, the world will become truly oneone with
God.
True globalization will occur, but according to Gods just standards. No more
inequality. No more poverty. No more exploitation. Peace will abound. What a
wonderful picturesoon to become a reality

BIBLIOGRAPHY
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Newspapers and Magazines:

Economic Times
Indian Express
India Today
Business India

Books:
Beneria, Lourdes: Gender and the Construction of Global Markets,
New York, March 1999.
Elson, Diane: Gender Budget Initiative: Background Papers, June,
1999
Ghosh, Jayathi: Women and Trade in the Asia-Pacific Region, New
Delhi, May 1998
Shiva, Vandhana: Food security, women, and rural communities in
South and Southeast Asia: implications of the post-Uruguay Round,
Bangkok, 1996.

Websites
Sebi
Wikipedia
WWW.GOOGLE.COM
WWW.WIKIPEDIA.COM
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