University for Tourism and Management - Skopje

University for Tourism and Management Skopje Faculty for Tourism

English Language 4

Theme: Globalization and princip of Global Village

Zdravko Cacanoski Vidova 10050

Lecturer: Katerina

2011 Winners and Losers

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Globalization has drawn attention to itself as a consequence of its rapid acceleration. The spread and integration of people, commerce, knowledge and culture across the planet has advanced since the dawn of civilization. It is only over the most recent generation that, driven by the wonders of microchip technology and the efficiency of container shipping, the intensity of globalization has delivered controversial results. The pace of change is most apparent in high and middle income countries. Most everyday household goods and clothing are imported from a single country, China; simple enquiries about banking or insurance may involve a call centre in India; a globetrotting executive can sustain family intimacy through social media tools. These illustrations of globalisation are broadly positive in their effect on individuals, creating space for personal fulfilment, stimulating wealth and encouraging cross-cultural experience. At national level, the economic opportunities presented by globalisation have been responsible in part for the success of countries such as China, Vietnam and Brazil in achieving significant poverty reduction. But most low income countries have been less fortunate and there is rising concern that the global poor have been left behind in the slipstream. Whereas sharply rising volumes of foreign trade and investment over the last twenty years have transformed standards of living in industrialised countries, the number of sub-Saharan Africans living in extreme poverty has risen. Whereas internet technology has revolutionised our capacity for knowledge and interaction, swathes of South Asia and Africa provide no electricity, let alone computers. Whereas the global supply chains of our supermarket culture deliver exotic year-round affordable foods, over 900 million people in the developing world experience hunger. Contemporary globalisation is therefore linked with widening global inequality. The continuing postcolonial search for an effective development model for the losers of globalisation reflects the anxiety of the winners. Washington Consensus The sequence of major wars and economic depression that marked the first half of the 20th century induced a profile of inward-looking states with closed economies. The relative stability that evolved after 1945 boosted confidence. By the 1980s, most of the wealthier western economies had lifted capital controls, enabling foreign ownership of business assets. Strong leadership of US president Reagan and UK prime minister Thatcher shaped the emerging ideology of economic management. This favoured a diminished role for government through privatisation of state-owned enterprises and English Language 4

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deregulation of barriers to foreign trade, investment and capitalist enterprise. These principles of neoliberal or open market economics became known as the Washington Consensus. The collapse of the Berlin Wall in 1989 added countries of the former Soviet Union to the western template, its greatest moment of triumph. Even the major surviving communist regimes in China and Vietnam had by then introduced doi moi (open door) policies as a gesture to market discipline. Within this short space of time, the worlds major corporations had been presented with what they desire above all else a massive increase in the size of the market. Integration of the global economy therefore became the driving force of globalisation. Many industrial and financial corporations quickly became larger entities than the developing countries with which they were involved. Exclusion from Globalisation Such was the dominance of the Washington Consensus that it was imposed on the poorest countries through the 1980s as a condition for World Bank and IMF support. As an economic template for development, the Consensus proved to be a disaster. Government spending on health and education was curtailed, institutions coordinating state support for agriculture and nascent industries were dismantled and utilities were privatised without recognising the needs of poorer customers. Into the new millennium, the results were painfully clear. Whilst developed economies gorged on booming international trade and investment, global poverty remained trapped in a parallel expanding universe. Economic growth in Africa has been relatively strong but has tended to create urban elites, whilst rural livelihoods remain primitive. India too has had very considerable success as a participant in the globalised economy, yet over a third of the worlds extreme poverty remains located in that country. If Chinas success in poverty reduction is removed from global figures for the period 1990 to 2005, the number of people living below the international poverty line of $1.25 per day has risen. This is a poor advertisement for globalization. Those who describe our world as a global village, in which we can understand and support each other in our increasingly common lifestyles, overlook the exclusion of many countries from the opportunities of globalization. A more accurate representation is of an interconnected world in which the actions, and more especially the excesses, of a consumer culture impact unjustly on those unable to enjoy its rewards. The three major contemporary crises of global recession, food insecurity and climate change can each be interpreted in these terms.

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In Search of a Development Model Embarrassed by the global divide, world leaders signed up to the Millennium Development Goals, targets-based promises to direct new policy to the cause of poverty reduction. Whilst the neoliberal Washington Consensus has been rejected for poor countries, no clear economic model of development has taken its place. Developing countries must build capacity for industrial and agricultural production. Ideally they should identify potentially competitive sectors for export and support them with subsidies and protective tariffs. This approach mirrors the historical development model for most of the worlds major industrialised countries. The grievance of todays developing nations is that global regulations for trade and investment deny them this critical policy space. In practice, globalization reinforces the monopolistic patterns of big business, erecting high barriers to entry. The development model permitted by contemporary regulations seeks to attract foreign investment through the creation of special economic zones, regions ring-fenced with business incentives such as streamlined bureaucracy and low rates of tax. The price of inclusion in globaliszation by this means can be high; foreign investment has limited value to a developing country if no tax is paid, if no skills are transferred to local workers, if domestic businesses are forced to close and if no intellectual property rights are gained. Loss of national sovereignty is the undertone of globalization. New jobs created by this model can be compromised by pressure to drive down wage levels, labour conditions and environmental standards. Corporate social responsibility departments of large western companies are much exercised in vetting their production chains for sweathshop labour or environmental abuse. Governance of Economic Globalization The obstructive framework impeding the search for a development model is the product of unrepresentative global governance. Whilst economic integration powered by private capital has advanced at lightning speed, political globalization moves at snails pace. In more than twenty years since the fall of the Berlin Wall, governance structures of the World Bank, IMF and the World Trade Organization (WTO) have remained largely unchanged. Amendments to voting rights of the Bank and the IMF boards advanced during 2010 have negligible effect. Governance is therefore driven by economic power rather than democratic principles. If the international rules for conduct of a globalised economy are created by the dominant participants, they are likely to prejudice those yet to gain a foothold. Trade, investment and intellectual property rights are the principal examples. In practical terms African governments have been largely excluded from the latest crisis discussions on international banking regulations. English Language 4

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International Migration An alternative for the global poor is to seek work abroad. Globalization has commoditised labor migration, notably in many Middle Eastern countries which are totally dependent on Asian migrants for the dirty, dangerous and difficult jobs rejected by nationals. Airlines construct their schedules to serve the routes taken by migrants; the receiving countries build infrastructure not just to accommodate foreign labor but also to create an appropriate cultural environment. Payments, known as remittances, that are sent home by international migrants have become an important measure of the performance of a globalized world economy. In 2009, remittances exceeded $300 billion, almost three times total foreign aid disbursements. Opportunities for migrant workers can therefore be viewed as a positive characteristic of globalization. Many economists go further in advocating that free movement of labor would be the most effective means of reducing global inequality. However, the ideological passion for free movement of goods and capital extolled by many of the richer countries is not extended to people. Most rich countries impose strict regulations on labor migration. The unacceptable branch of international migration is human trafficking. This has grown in parallel with economic globalization, perhaps as a consequence of it. As extreme poverty and cross-border mobility are the drivers of sex trafficking and other bonded labour, the suggestion of cause and effect is inevitable. Environmental Limits Inequality is not the only weakness of neoliberal economics that has been globalized. Failure of the global chain of production to internalize environmental costs means that globalization is accelerating our headlong rush towards the limits. Future generations will search in vain for rational explanations of why our common household goods are transported half way around the world from China, not just once but a second time, in the reverse direction for the purpose of recycling. Shipping and aviation are the engines of globalization. Although they contribute less than 5% of current greenhouse gas emissions, future projections rise sharply whilst other sources fall. Unfortunately, there are no obvious green substitutes for kerosene, nor for the dirty bunker fuel used for shipping. Economic globalization also has less explicit implications for climate change and resource depletion. Until emissions trading schemes extend their reach, the manufacturing process in most parts of the English Language 4

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world incurs no costs for carbon dioxide emissions or use of water. Rich countries with legal obligations to reduce greenhouse gas emissions therefore have incentives to outsource their production to developing nations such as China. Globalization also moves virtual water around the world, often from countries which can ill afford its loss. Globalization is not itself responsible for these failures of open market economics. Indeed, if we could identify an alternative and sustainable economic model, then its globalization would become desirable. Meanwhile, poorer countries will tend to be the losers when confronted with scarcity of food, water and natural resources. Such scenarios also elevate the risk of violent conflict. Good governance of globalization is once again the only avenue for equitable management of its risks. The current track record of UN institutions is not particularly inspiring. For example, the urgency of tackling climate change is not reflected so far in the outcome of negotiations to renew the Kyoto Protocol. Anti-globalisation The 1990s slide towards greater poverty and environmental breakdown, together with the dilution of powers of developing countries to manage their own affairs, led to a strong public reaction against global bodies deemed to be responsible. For many activists, globalization had lost its broader meaning and become synonymous with the advance of capitalism. Others went further and perceived globalization as Americanization, a new form of cultural imperialism. The term anti-globalization therefore embraces a broad range of causes and is often associated with activists who target meetings of G8 or G20 leaders, or international financial institutions. Antiglobalization campaigners unite around the belief that world governance is influenced too strongly by corporate interests. The World Social Forum (WSF) was created in 2001 as a counterweight to the World Economic Forum, an influential network of government and big business. Participants in the WSF strive to articulate that another world is possible, a vision which puts people before profits. A paradox of anti-globalization campaigns is their adoption of the same tools and techniques that drive economic integration. International activism has been galvanized by smart use of new communications technologies. Successful campaigns for aid and debt relief leading up to the Edinburgh G8 summit in 2005 were associated with synchronized world concerts and branding of the globally recognizer white band. Globalisation in Retreat

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The 2008 financial crisis has proved to be an unlikely ally of the anti-globalization movement. No greater damage could be done to the creed of globalization than the extensive state ownership of western banks that now prevails. World leaders convey a sense of fear of losing control of the sheer complexity of the interdependent world created by globalization. Labour migration rules are being tightened in many countries. American supremacy has softened considerably and unemployment in that country has engendered a backlash against the free trade mantra. These hints of protectionism will undermine the further attempt during 2011 to complete the so-called Doha development agenda. This round of trade negotiations facilitated by the WTO aims to increase global trade through agreement to relax trade tariffs and quotas. Failure would be another signal of globalization in retreat. Despite all these setbacks, globalization appears to be staggering back to its feet, having narrowly avoided a knockout punch. No credible alternative global economic model emerged, even when the world's investment banks were at the mercy of public opinion. It seems possible that the anti-globalization movement has missed its golden opportunity. If this is so, then the planets major problems urgently depend on a new vision of globalization, recalibrated to address the mistakes of the past. Global Village As we know, the term Global Village is used to describe a situation where all the World is equal as a village with 100 people. According to the data there, situation in the world is very clear. But, some analysts made a different calculating with 1000 people, so the differences between some parts in the religion or nationality is more specified. For example, if the world was village of 100 people, It would be like this: Nationality 59 would be Asian 14 ---------- African 12 ---------- European 9 ------------ Latin American 5 ------------ North American 1 ------------ South Pacific Gender 52 would be Female 48 would be Male Age 70 would be adult 30 would be children English Language 4

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Skin color 30 would be Caucasian 70 would be non-Caucasian Sex orientation 90 would be heterosexual 10 would be homosexual Literacy 86 would be able to read 14 wouldn't be able to read Education 1 would have a collage education 99 haven't collage education Electricity 76 would have electricity (mostly will use it for light at night) 24 haven't

Freedom of speech 52 can speak free 48 can't speak free (afraid for their life if they speak free) Births/Deaths (in one year) 2 will be born 1 will die Fear factor 80 don't fear about their lives 20 live in fear for their lives (from bombing, terrorist attacks, natural disasters) Water 83 will have clean water 17 don't have Air 68 breath clean air 32 breath polluted air Money 6 own 59% from the money (all from USA) 74own 39% from the money English Language 4

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20 own 2% from the money FOOD Starvation 1 is dying of starvation 15 is overweight Source 50 don't have reliable resource of food 30 always have enough to eat 20 are undernourished Computers (with Internet) 7 have computers 93 don't have computers HIV 1 have HIV 99 don't have HIV Energy 20consume 80% of the energy 80 consume 20% of the energy Religion 33 would be Christians 21 Muslims 15 Hindus 6 Buddhists 5 Animists 6 other religions 14 without religion or atheists Language 15 speak Chinese (Mandarin) 7 English 6 Hindi 5 Russian 4 Arabic 3 Bengal 3 Portuguese 51 would speak some other language like Indonesian, Japanese, German, French ... Sanitation 56 have access to sanitation 44 don't have English Language 4

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The other, more accurate calculation, is the World Village 1000. This is represented like this: If the world were a village of 1000 people: 584 would be Asians 123 would be Africans 95 would be East and West Europeans 84 Latin Americans 55 Soviets (still including for the moment Lithuanians, Latvians, Estonians, etc.) 52 North Americans 6 Australians and New Zealanders

The people of the village would have considerable difficulty communicating: 165 people would speak Mandarin 86 would speak English 83 Hindi/Urdu 64 Spanish 58 Russian 37 Arabic That list accounts for the mother-tongues of only half the villagers. The other half speak (in descending order of frequency) Bengali, Portuguese, Indonesian, Japanese, German, French, and 200 other languages. In the village there would be: 300 Christians (183 Catholics, 84 Protestants, 33 Orthodox) 175 Moslems 128 Hindus 55 Buddhists 47 Animists 210 all other religions (including atheists) One-third (330) of the people in the village would be children. Half the children would be immunized against the preventable infectious diseases such as measles and polio. Sixty of the thousand villagers would be over the age of 65. Just under half of the married women would have access to and be using modern contraceptives. Each year 28 babies would be born. Each year 10 people would die, three of them for lack of food, one from cancer. Two of the deaths would be to babies born within the year. One person in the village would be infected with the HIV virus; that person would most likely not yet have developed a full-blown case of AIDS. With the 28 births and 10 deaths, the population of the village in the next year would be 1018.

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In this thousand-person community, 200 people would receive three-fourths of the income; another 200 would receive only 2% of the income. Only 70 people would own an automobile (some of them more than one automobile). About one-third would not have access to clean, safe drinking water. Of the 670 adults in the village half would be illiterate. The village would have 6 acres of land per person, 6000 acres in all of which: 700 acres is cropland 1400 acres pasture 1900 acres woodland 2000 acres desert, tundra, pavement, and other wasteland. The woodland would be declining rapidly; the wasteland increasing; the other land categories would be roughly stable. The village would allocate 83 percent of its fertilizer to 40 percent of its cropland -- that owned by the richest and best-fed 270 people. Excess fertilizer running off this land would cause pollution in lakes and wells. The remaining 60 percent of the land, with its 17 percent of the fertilizer, would produce 28 percent of the foodgrain and feed 73 percent of the people. The average grain yield on that land would be one-third the yields gotten by the richer villagers. If the world were a village of 1000 persons, there would be five soldiers, seven teachers, one doctor. Of the village's total annual expenditures of just over $3 million per year, $181,000 would go for weapons and warfare, $159,000 for education, $132,000 for health care. The village would have buried beneath it enough explosive power in nuclear weapons to blow itself to smithereens many times over. These weapons would be under the control of just 100 of the people. The other 900 people would be watching them with deep anxiety, wondering whether the 100 can learn to get along together, and if they do, whether they might set off the weapons anyway through inattention or technical bungling, and if they ever decide to dismantle the weapons, where in the village they will dispose of the dangerous radioactive materials of which the weapons are made.

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