Article 111

Coping with globalisation

by Sharif M. Shuja
THE world was undergoing tremendous change even before the horrors of 11 September. Both democracy and the market economy have proliferated globally since the collapse of communism, and revolutionary developments in communication and information technology have helped trigger an increasing interdependence between countries at an unprecedented pace. Further, the end of the Cold War signalled the displacement of ideological obstinacy in favour of a heated pursuit towards economic advancement and competition for resources and technology. Economic statecraft, whereby nations use trade, loans, grants and investment to influence the action of other states, is now becoming more important. Globalisation and the triumph of the market are the economic consequences of the victory of democracy. The global market will give economic freedom to billions of consumers and producers in the same way that political freedom has given millions of individuals new rights. And it is tempting to see nationalism, ethnicity, fragmentation, and now terrorism as obstacles to that bright global future. The dynamic transfer of people, information, capital and goods is progressing on a worldwide scale. Globalisation and an expansion of information technology have given rise to a new wave of changes in international relations. In this global era, people from numerous countries and civilizations will be blessed with the opportunity to work together. Globalisation thus offers opportunities for international and competitive economies, but also brings challenges for political and economic management. It has profound implications for trade and economic policy. It blurs the division between foreign and domestic policy, increases competitive pressures in markets, and makes globally-based trade rules and disciplines even more important. On the one hand the impact of globalisation is forcing vulnerable states to become more transparent in their political and economic habits, hence potentially relieving the stresses of crony capitalism and undemocratic practices; on the other, individual efforts are also required to maintain an ethical universe. Greater cooperation between nation states, multi-national corporations, the international institutions, the global business community 1 and the NGOs are now needed to maintain the world order values, such as peace, economic equity, ecological balances, democratic participation, utilization of knowledge etc. More than ever, world problems require careful thinking, creative research, fresh ideas, and practical approaches, if they are to be solved.

Globalisation and Americanisation

The global economy can work only if the world is a predictable place in which individuals and corporations know their rights and can enforce them. In other words, the apolitical world of globalisation can prosper only under the aegis of a political entity, its guarantor, the United States. That is why globalisation is increasingly understood to be a synonym of Americanisation. The attack on the World Trade Center was an attack on what was a symbol of that globalisation. This identification between globalisation and Americanisation deserves further analysis because it is a source of ambiguities, misunderstandings, and resentment. What is globalisation, and is it really global? Does it mean that globalisation is an instrument of U.S. power, a new ideology that supports an imperial design, just as communism supported Soviet ambitions? In developing countries, as well as in a rich country like France, many people harbour this suspicion, and they resent what they see as a U.S. imperialism that threatens the identity of existing communities. The Americanisation of the world often seems to result from a reaction to external events or a spillover of domestic forces rather than a projection of power and political will. It is important to discover that the American empire depends upon the support of its citizens, and that support, when it is forthcoming, is given for very domestic reasons, because the United States, having become an empire unknowingly, does not see itself as an empire. Actually its foreign policy looks increasingly like the sum of the special interests promoted by specific internal groups, and the transnational nature of its influence and power means that its links with the rest of the world are increasingly formed through those particular groups. This may strengthen these links and prevent U.S. isolation, but it

Article 111. Coping with globalisation also presents an obstacle to any global vision. Washington may be the capital of a global empire, but it is an empire without an emperor. Yet much of the rest of the world perceives that an American empire is indeed being built, and watches it with a mixture of envy and resentment. These feelings exist in spite of the absence of any grand design on the part of the United States. How can one reconcile the fact of globalisation, which ignores borders and destroys the old social structures that mediate between the individual and the global marketplace, with this other reality, the American nation, which seems to resist globalisation better than most communities? The answer probably lies in the unique history of the United States, which sees itself not as an inherited community but as a community of choice, built on a contract. The Asia Pacific region is undergoing extensive and unprecedented change and the trend today is towards greater integration, democratization, and deregulation. Owing to the development of economic and trade ties, connections between countries have become closer and closer. But because of the different interests of various countries and the existence of a Cold War mentality, international relations have worsened from time to time, affecting the international situation. Market forces have become the instruments of change and transformation in international relations and nowhere more so today than in the Asia Pacific region. The forces for global change are economic in origin, but they operate within particular political systems and deeply rooted cultures that will modify and condition their effect. The impact of global change upon the many disparate cultures and political systems of the Asia Pacific region is one of the most important issues of international relations today. Is globalisation a set of processes dominated by Western countries to their own advantage? This question is not easy to answer, but the implication is that globalisation refers to a complex of changes rather than a single one. No single country, or group of countries, controls any one of them. Economic globalisation, of course, has been and is shaped by U.S. foreign and domestic policy. Globalisation will not have the same effect in the Asia Pacific region as in North America or Europe, and it would be senseless to imagine that the impact would be similar, or that the results of globalisation would be uniform and comparable for all regions and cultures, as Leszek Buszynski, Dean of the Graduate School of International Relations at the International University of Japan, put it. At this stage we need to look at this globalisation issue more closely. mogenisation will intensify the struggle for diversity, autonomy and heterogeneity. Dr Samuel M. Makinda of Murdoch Universitys School of International Politics in Current Affairs Bulletin (April/May 1998) argues: The question of how to reconcile differences with uniformity, universalism with particularism, and globalisation with fragmentation, will remain central to policy makers at the national, regional and global levels. Political leaders will continue to determine policies that facilitate or frustrate globalisation, taking into account domestic and external pressures. But, at the same time, transnational forces will continue to lobby the states, regional organisations and the UN to try to influence those policies. It is this inter-subjective relationship between the policy-makers and the transnational forces that determines the character of globalisation. However, the assumption that the real driving forces are the markets suits many political leaders. Government officials will, often try to blame globalisation for their policy failures. They will claim that they were powerless to do much for their countries in the face of globalising forces. But, as always, they will claim credit for any positive results from globalisation. In an interview with Asia Week on 24 November 2000, South Korean President, Kim Dae Jung, who won the Nobel Peace Prize recently, said: Globalisation is a historically inevitable path. The entire world will become one market, and nations will cooperate while competing. Economic activities of all nations will be aimed at producing the best but cheapest goods and services and supplying them to the rest of the world, while buying the best and cheapest products from other countries. Any nation will face defeat if it goes against globalisation. Globalisation, no doubt, brings us into contact with one another, but it also strengthens profound divisions and fractures in terms of societies and income, and most importantly in our capacity to generate and utilize knowledge. There is a real risk of two civilizations emerging, with two ways of viewing and relating to the world: one based on the capacity to generate and utilize knowledge; the other passively receiving knowledge from abroad and deprived of the ability to modify it. The world now faces the prospect of this Knowledge Divide. The huge income gap between rich and poor is being exacerbated by a North-South digital divide between those who have access to computers and the Internet and those who do not. Although there have been tremendous advances in science and technology over the last few decades, the developing world is still far behind in the technological race. The world has seen a revolution, the third industrial revolution in technological know-how during 2

Globalisation and the Knowledge Divide

There is every indication that globalisation will increase. Western powers and the Western-based NGOs are likely to continue to promote the universalisation of values, rules and institutions. However, the pressure for ho-

ANNUAL EDITIONS the last thirty years, which has raised peoples expectations to new levels. This revolution, based on the information age and the rapid introduction of new technology into all facets of human life, is changing the world into a global one. Paradoxically, this globalisation, far from creating a homogeneous global society, is subjecting societies to a logic of disintegration. It has created growing gaps and antagonisms between the rich and poor, and dominant and oppressed ethnicities. Now that globalisation has reached the furthest corners of the planet, the world is said to have been globalised either for better, as some argue, or for worse according to the critics. The age of globalisation is in fact an age of information. Enormous wealth is being created. However, most benefits are enjoyed by advanced nations. The globalisation of information must be linked to the globalisation of benefits. Otherwise, world peace will suffer, and rampant and indiscriminate development in poor nations will damage the environment. Many view globalisation as a technology-driven global order that has led to an intensification of interconnectedness among nations. This, however, is merely one facet of globalisation, and does not presuppose the ideological homogenisation or the rapid retrenchment of the welfare state that is currently underway. As Professor Kidane Mengisteab of Pennsylvania State University put it: The dispute over globalisation is not about the intensification of global interconnectedness. Rather, it is over the vision of the global system that globalisation projects. This vision entails a global economic system with identifiable rules of behaviour in trade, finance, taxation, investment policy, intellectual property rights, and currency convertibility, all of which are crafted along neoliberal principles with minimal governmental regulation. As the political economist Ellen Wood perceptively notes, this vision of a global system represents a new phase of capitalism which is more universal, more unchallenged, more pure and more unadulterated than ever before. For many critics, globalisation is essentially an antidemocratic process that excludes the interests of a wide range of groups. But the process is not shaped by market forces alone. Governments in developing countries are often said to be unable to stand up to globalisation without incurring severe costs. The government of Pakistan, for example, could be punished by capital flight if it insists on implementing its agenda of social reform. The masses of Pakistan, however, are likely to sustain heavier costs if the government abandons its reforming mandate. Faced with such a dilemma, governments have generally selected the side of capital for a simple reason: as the economist Paul Krugman has noted, the collapse of communism has taken the heart out of opposition to capitalism. 3 The list of problems caused by globalisation is long. In low-income countries, the peoples plight has been particularly severe. Opponents of globalisation are addressing genuine problems. But it is uncertain whether they will succeed in reversing globalisation or even in mitigating its adverse impacts. Globalisation has become thus a battle ground for two radically opposed groups. There are the anti-globalists who fear globalisation and seek therefore powerful interventions aimed at taming it. Then there are the globalists who celebrate globalisation instead, emphasise its upside, while seeking only to ensure that its few rough edges be handled through appropriate policies that serve to make globalisation yet more attractive. A leading international trade theorist, Professor Jagdish Bhagcoati of Columbia University, in an article in The UNESCO Courier (September 2000) argues that free markets and integration into the world economy are key to making a dent on poverty. He comments: As for inequality among nations, it is precisely those countries that embraced integration into the world economy, i.e. the Far Eastern Four and then the ASEAN countries, which raced ahead with dramatic growth rates whereas several countries of Africa, Latin America and Asia that looked inwards failed to deliver growth and also made little dent on poverty. The anti-globalists however have created a kind of international opposition movement made up of previously fragmented groups. Though their backgrounds, demands and actions are radically different, these critics, including U.S. environmental activists, Philippine and other ethnic minorities and indigenous groups in Ecuador, have joined to attack the same targets and support the same aspiration: a new notion of citizenship that balances the might of business with a much stronger political realm. Sharing experience and capitalising on knowledge have thus become key elements in their strategy. British historian Professor Paul Kennedy, in his contribution to the 21st Century Talks in Paris on 6 November 1999 said: If we want to work towards a knowledge-based society in the coming century, over at least the next ten years, we need to make a concerted effort to bring poorer societies into the system of electronic communication. If we do nothing, then the growing gap between haves and havenots will lead to widespread discontent and threaten any prospect of global harmony and international understanding. That is the most significant challenge we face. The most obvious example is the wild scenes that erupted in Seattle, Melbourne and Davos. Anger was demonstrated by thousands of protesters. Similar ugly incidents also erupted in the Czech capital during the re-

Article 111. Coping with globalisation cent meetings by the G-7 ministers, World Bank and the TMF and at the G-8 meeting in a strongly policed Genoa. The Internet gives users immediate and huge access to knowledge, and the knowledge explosion is at the heart of the modernization and globalisation of world society. The Internet may have more influence than any single medium upon global educational and cultural developments in this century. According to a recent UN Human Development Report, industrialised countries, with only 15 per cent of the worlds population, are home to 88 per cent of all Internet users. South Asia, with 23 per cent of the worlds population, has less than 1 per cent of the worlds Internet users. In Southeast Asia, only one person in 200 is linked to the Internet. In the Arab states, only one person in 500 has Internet access. The situation is even worse in Africa. With 739 million people, there are only 14 million phone lines. Thats fewer than in places such as Manhattan or Tokyo. But moves now are underway to put high-tech to use for the worlds poor. But awareness of these problems has sharpened and solutions exist. We need the international community to return to the basic principles of international cooperation and introduce the idea that a minimum level of science and technological capability, including access to the Internet, is an absolute necessity for developing countries, and should be the subject of international solidarity. And greater co-operation between nation states, multinational corporations, the NGOs and the global business community is needed in meeting these challenges. Unless this occurs, we may all end up living in an increasingly denuded and unnatural world, a world of irresponsible pragmatism and expediency, a world where the quality of human life is unduly subordinated to the chimera of economic growth. Territorial containment becomes meaningless in the world of globalisation. Diseases, weapons, and people can move freely. We will find relatively high-tech weaponry in low-tech countries and low-tech poor people in high-tech countries. Furthermore, the globalisation of information means that we can no longer pretend to ignore what is happening in those areas of anarchy. Yet the events of 11 September will have a great impact at least in the short term on globalisation. As one prominent Wall Street analyst said, Globalisation is going to be at a standstill for a while until this high level of uncertainty diminishes (The New York Times, 14 November). Especially in this time of crisis the more advanced parts of the world must be proactive if the dynamics of globalisation and fragmentation are to be managed in a positive way. The risks of such proactive policies will be accepted only if they are broadly shared. A truly multipolar but integrated system would be able to accommodate differences and varying degrees of involvement among its component parts. But this useful diversity must find its limits in the understanding that all actors share some fundamental interests, and thus should engage in an organized and continuous negotiation and abstain from unilateral actions. This would require political habits rooted in a tradition of cooperation that has to be built gradually over time.
Sharif M. Shuja is an academic staff member of the Asian studies department at the University of Southern Queensland, Australia.

From Contemporary Review, November 2001. Copyright 2001 by Contemporary Review Company Ltd. Reprinted with permission.