Chapter 3 A globalizing world: Descriptions and theoretical guides
3.1 A globalizing world
3.1.1 Economic globalization
There are many different attempts to identify when economic globalization began. Some argue that it can be traced as far back as when the first voyages of ‘discovery’ sailed across the seas to colonize and develop trade.13 For Thomas Friedman it was the fall of the Berlin wall or the end of the Cold War that enabled the world “to come together as a single, integrated, open plain.” 14 Beck summarized a number of these accounts as stating that
11
Richard Falk, “The making of global citizenship” in Jeremy Brecher, John Brown Childs, and Jill Cutler (eds), Global visions: beyond the new world order (Montreal: Black Rose, 1993), p.39.
12
Held and others, p. 12.
13
Danilo Anton, Diversity, globalization and the ways of nature (Ottawa: International Development Research Centre, 1995), p. 2.
14
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… many date the ‘capitalist world-system’ (Immanuel Wallerstien) back to the beginning of colonialism in the sixteenth century; others to the emergence of international corporations. Still others consider that globalization started with the ending of the fixed exchange rates or the Eastern bloc.15
Vandana Shiva, on the other hand identified three waves of globalization.
The first wave was the colonization of the Americas, Africa, Asia and Australia by European powers over a period of five hundred years. The second wave was the imposition of the West’s idea of ‘development’ on non- Western cultures in the post-colonial era of the past five decades. The third wave of globalization was unleashed approximately five years ago as the era of ‘free trade’, which for some commentators an end to history but for us in the Third World is a repeat of history through recolonization.16
This debate only further confirms the complex multi-causal nature and the even more contextual impact of economic globalization; however there seems to be some greater agreement with regards to the factors that have contributed to this contemporary phenomenon. Friedman identified three fundamental changes, namely “changes in how we communicate, how we invest and how we learn about the world.”17 He described these changes as having resulted in
… the inexorable integration of markets, nation-states and technologies to a degree never witnessed before – in a way that is enabling individual, corporations and nation-states to reach around the world farther, faster, deeper, cheaper than ever before, and in a way that is enabling the world to reach into individuals, corporation and nation-states farther, faster, deeper, cheaper than ever before.18
15
Beck, p. 20.
16
Vanda Shiva, “Ecological balance in an era of globalization” in Nicholas Low (ed), Global Ethics and Environment (London: Routledge, 1999), p. 48.
17
Friedman, p. 5.
18
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This rapid spread of economic globalization has been possible due to other globalizing forces, such as the development of technology, in particular communications technology. The monumental growth of information technology and telecommunications has facilitated the storage and instantaneous transfer of huge amounts of information across the globe. More specifically, it has also facilitated the creation of a round-the-clock global financial market where defined national or state boundaries are blurred and integrated into a new system through international process and transactions. This situation has made it more difficult for national governments to regulate their own currencies and has encouraged the growth of the practice of trade liberalization.
Friedman called these two developments as the “democratization of technology”19 and the “democratization of information.”20 These democratizations were to be facilitated by the Internet, which has managed to help establish links across the world. However, according to the 1999 United Nations Human Development Report, access to the Internet in 1998 was is limited to only 19 percent of the world’s population, 91 percent of whom live in OECD countries.21 Lalage Bown further highlights this discrepancy.
What information and communication technology access can you have if you do not have a telephone? … The African Development Bank has calculated that of all the people living in the world today half have never made a telephone call – and never will.22
Furthermore, Friedman in 2000 noted` that 80 percent of the Web sites are in English, which is part of the growing concern of the dominance of a single culture, a
19 Friedman, p. 46. 20 Friedman, p. 60. 21 Friedman, p. 319. 22
Lalage Bown, “Dialogue across frontiers: Perspectives from the developing world”, Adult Education and Development, no. 52 (1999), pp. 153-54.
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North American culture, on the information superhighway.23 Danilo Anton supports the notion that
… the complex processes of globalization have promoted the development of a mainstream standardized culture that includes not only wide-spread homogenization of production and consumption systems and patterns but also greater cultural uniformity.24
But in the same token he argues that within this mainstream culture will be micro-, meso- and even subcultures, hence people will be “more homogenous on one level, but increasingly heterogeneous on another.”25
In the Philippines, globalization is often described as a mere continuation of the country’s colonial history, only that it is “a more potent form of neo-colonialism.”26 This colonial link, specifically to America, is evident from Satur Ocampo’s definition of globalization as
… world-wide economic integration under capitalism or market economy dominated by transnational corporations and political elites, is a scheme evolved and pushed by American imperialism since the mid-1970s.27
Nicanor Perlas calls it “elite globalization”28, which he described as
23 Friedman, p. 319 24 Anton, p. 7. 25 Anton, p. 8. 26
Nicanor Perlas, “Associative Economics: Responding to the challenge of economic globalization”,
CADI Monograph (March 1996), p. 1.
27
Satur Ocampo, Globalization: Its implications to the people’s struggle (QC: Initiatives for International Dialogue, July 1996), p. 4.
28
Nicanor Perlas, Shaping globalization: Civil society, cultural power and threefolding (QC: CADI, 1999), p.21.
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… a distorted form of global economic integration, powered by and benefiting only a few, [that] is unleashing a dangerous blend of economic, ecological, cultural and political crises. [It is] facilitated by radical, one-sided and often imposed economic ‘liberalization’ policies [and] is moving very rapidly. 29
Former President Fidel Ramos’ vision called Philippines 2000 is closely associated with elite globalization. Perlas criticized Philippines 2000, saying that “for all its good intentions, [it] feeds Filipinos and the Philippines spirit directly into the globalization machine.”30 The globalization machine is often associated in the Philippines with the General Agreement on Tariff and Trade (GATT) and the World Trade Organization (WTO) as the “institutional base for the promotion of globalization.”31
Other programs that have been closely identified with elite globalization in the Philippines are the structural adjustment programmes (SAPs) of the International Monetary Fund (IMF) and the World Bank (WB) or the Bretton Woods institutions. These programmes were formulated in response to the inability of developing countries to repay foreign debts, hence involved austerity measures that were supposed to help generate foreign exchange to assist them in paying and specified conditionalities had to be followed before further financial assistance was provided.
Their objective is to improve a country’s foreign investment climate by eliminating trade and investment regulations, boosting foreign exchange earnings through the promotion of exports, and reducing deficits by cutting spending. This has meant cutbacks and the gradual dismantling of health, education and social programmes; massive layoffs in the public sector and wage suppression; promotion of exports and reduction of imports; currency
29
Perlas, Shaping globalization…, p. 21.
30
Perlas, CADI Monograph, p. 4.
31
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devaluation; privatization of government held enterprises; high interest rates; and trade liberalization.32
The Philippines’ foreign debt in 2000 was US $57 billion.33 The country’s main source of foreign currency comes from the export not of raw materials but of its people. Millions of Filipinos working overseas sending money home to their families continue to be the main source of foreign currency needed to repay this foreign debt. This debt often was the result of loans for projects that were supposed to bring development, such as the Bataan Nuclear Power Plant (BNPP), which was constructed by Westinghouse Corporation, built during the Marcos regime near an earthquake fault.
This insane project cost $2.2 billion, double the normal price. … Although this white elephant has never generated one watt of electricity and probably never will, the government will be paying $326,000 per day on interest alone until the year 2004.34
Liberalization, on the other hand, forces a country to open its markets to the entry of foreign investments, companies and products. A recent example of liberalization was the enactment of the Philippine Mining Act of 1995 (Republic Act No. 7942) that was “formulated to regulate and revitalize the mining industry, by providing a positive and competitive climate for mining investments.”35
The Environmental Science for Social Change (ESSC), publication described the Mining Act as “difficult to fault … from a technical point of view…. [and] sets out to promote sustainable mining”36
32
Janet Bruin, “Root causes of the global crisis”, Institute of Political Economy Journals, no. 2 (March 1996), p. 8.
However, the ESSC also identified some of the issues
33
“Philippines, Economic Indicators”,
[http://www.financeasia.com/countryhomepage/philippines.cfm] (14 February 2002).
34
Bruin, p. 25.
35
ESSC, Mining revisited: Can an understanding of perspectives help? (QC: ESSC, 1999), p. 23.
36
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of concern, such as the provision to the contractors of auxiliary mining rights. These auxiliary rights included timber rights, water rights, easement rights (relocation of indigenous peoples), the right to poses explosives, arbitration rights and arbitration methods to settle disputes, and upon payment of just compensation, entry into private lands and concession areas. The ESSC noted that
… these auxiliary rights have serious implications for land and water use, agriculture and agroforestry programs, national parks, other reserve areas, and biodiversity in general. These implications have to be clarified in great detail to ensure that the rights of the people and other national policy efforts are not being surreptitiously eroded.37
However, the more controversial provision of the Mining Act was that it allowed, through a Financial or Technical Assistance Agreement (FTAA), 100 percent foreign ownership for large-scale exploration, development and utilization of mineral resources. Calling it a financial or technical assistance was seen as an attempt to circumvent the 60-40 ratio of foreign to Filipino investment stipulated in the Philippine Constitution and the Foreign Investments Act.38
While the Philippine government creates policies that favor trade liberalization to attract investments to help repay its foreign debt, the developed nations continue to ignore the rules they have formulated.
There was an agreement for the elimination of subsidies for agricultural exports in 1995, but the US, Britain and Europe spent $18 billion dollars in supporting their farm exports, (even as) they warned the Philippines against giving incentives to exporters because that violates world trade rules.39
37
ESSC, p. 79.
38
Tina Urag, “Globalization, Philippines 2000 and the Philippine Mining Industry”, Watershed: Ideas on environment and society, vol. 2 (1996), p. 22.
39
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At the grassroots level Perlas gives an example of how under GATT the cheaper products, which externalize the social and environmental costs, undermine products that are grown based on sustainable agriculture principles that fully internalize these costs.
This can be clearly seen in the case of a corn farmer in Mindanao who produces corn at a cost of P6.00 per kilo in contrast to imported corn, which can cost only less than P5.00 per kilo including freight and handling charges.40
Clearly, the promises of economic globalization have not been equitably distributed. Friedman identifies a complex host of reasons that have contributed to the widening income gap between the “have and have-nots” in developed countries.
These include massive demographic shifts from rural to urban areas, rapid technological changes that increasingly reward the knowledge workers over the less skilled, the decline of unions, rising immigration into developed countries which drives down certain wages and the shift in manufacturing from high- to low-wage countries, which also holds down salaries.41
All these have helped him conclude that a major reason behind this widening gap is that the current global market place is all about the phenomenon of “winners take all”.42
Colin Hines43 cites a study that concluded that the WTO’s operations have in fact
… undermined health, safety and environmental standards, human rights advocacy efforts and democratic accountability in policy making worldwide.
40
Perlas, CADI Monograph, p. 6.
41
Friedman, p. 307.
42
Friedman, p. 306.
43
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At the same time the vaunted economic benefits have failed to materialize for the majority.44
As the international economic disparities widen within this economic paradigm, Anton observes that the resulting poverty continues to place pressure on the environment. However, he argues that
… not all environmental problems are the result of poverty. Many (perhaps the most acute and wide-ranging problems) result from economic affluence and indiscriminate consumption.45
The previous discussions have highlighted the emphasis of economic globalization on trade liberalization and how liberalization has not resulted in the promised development. Instead it has widened the income gap between the rich and the poor in both the developed and developing worlds. The following section examines further the impact of economic globalization on the environment.