Globalization—The Hopes and the Fears

“Globalisation is the great economic event of our era. . . . It is now bringing unprecedented opportunities to billions of people throughout the world.”—MARTIN WOLF, FINANCIAL COLUMNIST.

“We, the people of the Earth, are one large family. The new epoch offers new challenges and new global problems, such as environmental catastrophes, exhaustion of resources, bloody conflicts and poverty.”—EDUARD SHEVARDNADZE, PRESIDENT OF GEORGIA.

IN December 1999, a meeting of the World Trade Organization held in Seattle, U.S.A., was interrupted by a riot. Police used tear gas, rubber bullets, and pepper spray to restore order. Finally, they arrested hundreds of protesters.

What provoked the so-called Battle of Seattle? A whole litany of concerns about job security, the environment, and social injustice. However, to put it simply, the demonstrators feared globalization—its effect on people and on the planet.

Their fears have not abated. Since 1999, antiglobalization demonstrations have escalated in size and intensity. In some cases, world leaders now endeavor to hold their summits in isolated areas where protesters will be hard-pressed to disrupt the proceedings.

Not everyone, of course, sees globalization as a threat. While some condemn it as the mother of the world’s ills, others hail it as the panacea for most of the world’s problems. True, this ongoing debate may seem irrelevant to the majority of mankind, many of whom have only a hazy idea of what globalization is all about. But whatever your viewpoint, globalization does affect you already, and it will probably affect you even more in the future.

What Exactly Is Globalization?

“Globalization” is the term some use to describe the growing worldwide interdependence of people and countries. This process has accelerated dramatically in the past decade or so, largely because of huge advances in technology. (See box on page 5.) During this time, the divisive blocs of the Cold War have virtually disappeared, trade barriers have come down, the world’s major financial markets have been integrating, and travel has been cheaper and easier.

This growing worldwide integration has produced a whole series of consequences—economic, political, cultural, and environmental. Unfortunately, some of these consequences can be negative. The United Nations publication Human Development Report 1999 explained: “People’s lives around the globe are linked more deeply, more intensely, more immediately than ever before. This opens many opportunities, giving new power to good and bad.” Like many human achievements, globalization has both an upside and a downside.

Hopes for a More Prosperous World

Globalization “has enriched the world scientifically and culturally and benefited many people economically as well,” claims Nobel Prize winner in economics, Amartya Sen. The Human Development Report 1999 likewise points out that globalization “offers enormous potential to eradicate poverty in the 21st century.” The reason for this optimism is the dramatic increase in prosperity that globalization has brought in its wake. The average family in the world today has three times more income than it did 50 years ago.*

Some analysts see another advantage to economic integration: They feel it will make countries more reluctant to go to war. Thomas L. Friedman, in his book The Lexus and the Olive Tree, asserts that globalization “increases the incentives for not making war and it increases the costs of going to war in more ways than in any previous era in modern history.”

More interaction among people also has the potential for improving global solidarity. Some human rights organizations have been able to tap the resources of the Internet to promote their causes effectively. The 1997 international treaty outlawing land mines, for example, was achieved in part by using electronic mail to mobilize diverse support groups throughout the world. This grass-roots approach was hailed as “a new way of conducting international diplomacy, with governments and civil society working together closely to tackle a global humanitarian crisis.”

Despite these positive results, many people still fear that the harmful effects of globalization outweigh its benefits.

Fears of a More Divided World

Probably the greatest concern about globalization is the way it has widened the gulf between the haves and the have-nots. While global wealth has undoubtedly increased, it has become concentrated in fewer hands and fewer countries. The net worth of the 200 richest people on earth now exceeds the combined income of 40 percent of the people who live on the planet—some 2.4 billion people. And while wages continue to rise in wealthy countries, 80 impoverished countries have actually seen a decline in average income over the past ten years.

Another basic worry involves the environment. Economic globalization has been fueled by market forces that have much more interest in profits than in the protection of the planet. Agus Purnomo, head of the World Wide Fund for Nature in Indonesia, explains the dilemma: “We are in a constant race with development. . . . I’m worried that in a decade, we’ll all be environmentally aware, but there’ll be nothing left to defend.”

People also fret about their jobs. Both jobs and income have become more precarious, as global mergers and intense competition pressure companies into streamlining their operations. Hiring and firing workers according to the current needs of the market makes sense for a company concerned with increasing its profit, but it plays havoc with people’s lives.

The globalization of money markets has introduced another destabilizing factor. International investors may sink huge sums of money into developing countries but later withdraw their sums suddenly when the economic outlook worsens. Such massive withdrawals can plunge one country after another into economic crisis. The monetary crisis in East Asia during 1998 caused 13 million people to lose their jobs. In Indonesia, even those workers who kept their jobs saw their real wages cut in half.

Understandably, then, globalization engenders fears as well as hopes. Do you have reason to fear globalization? Or can you expect it to make your life more prosperous? Has globalization given us reason to be optimistic about the future? Our following article will address these questions.

[Footnote]

Averages, especially worldwide averages, can be misleading, however. In many areas, families have seen no increase at all in their income in the past 50 years, while the wages of others have multiplied several times over.

[Blurb on page 3]

The net worth of the 200 richest people on earth exceeds the combined income of 40 percent of the world’s population

[Box/Pictures on page 5]

THE TECHNOLOGY BEHIND GLOBALIZATION

  Technology has revolutionized communication during the past decade. Access to people and information—practically anywhere in the world—has become quicker, cheaper, and easier.

TELEVISION Most people in the world now have access to a television, even if they don’t own one. By 1995, there were 235 TV sets for every 1,000 people worldwide, almost double the number in 1980. Just a small satellite dish can enable people who live in remote areas to receive broadcasts from around the world. “Today, no country can ever truly cut itself off from the global media,” points out Francis Fukuyama, a professor of political economy.

INTERNET Some 300,000 new users get connected to the Internet every week. In 1999 it was estimated that 700 million people were expected to come on line by the year 2001. “The result,” explains author Thomas L. Friedman, “is that never before in the history of the world have so many people been able to learn about so many other people’s lives, products and ideas.”

TELEPHONE Fiber-optic cables and satellite networks have slashed telephone costs. The cost of a three-minute call from New York to London fell from $245 in 1930 to $.35 cents in 1999. Wireless networks have made the mobile phone as commonplace as the computer. By the end of the year 2002, there will be an estimated one billion people using mobile phones, and many of these users will be able to use their phones to access the Internet.

MICROCHIP All the above resources, which are being upgraded constantly, depend on microchips. Over the past 30 years, the computing power of microchips has doubled every 18 months. Never before has so much information been stored in so little space.