Globalisation – What are the negative impacts?
By Andrew Colgan, Auckland
What is Globalisation?
Globalisation is the buzz word on everybody’s lips in the 21st century. But what does it mean? It basically means the world is getting smaller in just about every sense, except for geographically. Exchange is becoming more rapid, travel more feasible, communication faster and more accessible, advertising and media more widespread and movement of money more free-flowing.
Globalisation’s winners and losers
But globalisation is causing huge problems. Those who appear to be in control of the process (transnational corporations (TNCs), multilateral institutions and governments of wealthy industrialised nations) don’t seem to have the interests of everybody in mind. Consequently, economic and financial globalisation is happening at a rate disproportionate to all other developments. Economists and world leaders speak in terms of revenue, exchange, capital movement, structural adjustment and interest. Such concepts as emotion, cultural identity equality, environmental protection and social benefit seem to be foreign and are left out of the equation.
Some problems caused by Globalisation
The resulting problems are huge, and hit women, children and those on the periphery (especially in poorer countries) the hardest. These problems include:
- Exploitation in employment – as well as appalling wages and working conditions, in many cases women and children are abducted and forced to work in oppressive factories or as sex workers.
- The rise of the HIV / AIDS pandemic, displacement and longer working hours resulting in the orphaning and abandonment of children.
- Neglect of the sick, illiterate, disabled and elderly as governments’ priorities shift towards economic growth and servicing of public debt.
The role of International institutions
The fate of many poorer or “developing” nations lies in the hands of the International Monetary Fund (IMF), the World Bank and the World Trade Organisation (WTO). Claims that Structural Adjustment Programs (SAPs) are in the best interest of those poorer nations, and not simply for the benefit of the wealthy creditors of these International Financial Institutions (IFIs), are dubious at best. The liberalisation of trade by the WTO has meant a removal of tariffs. Now only governments which can afford to pay subsidies can protect their producers. The complexity of international trade often makes it difficult to understand how huge disparities come about. Some excellent examples are given in a Christian Aid video called “Nuts”.
The problems with Transnational Corporations
Transnational corporations (TNCs) are quietly gaining dangerously unaccountable political power in both rich and poor countries. For example:
- Finland is home of the mobile phone company Nokia. This company is so big that it accounts for 2/3 of the stock exchange, 1/5 of all exports, a significant proportion of the country’s tax revenue and employs over 22,00 Finns. By threatening to remove production to another country, Nokia effectively holds the Finnish government to ransom and so has a great influence in its political decision making.
- Wal-mart is a huge American department store. Its clothing range is produced in factories in Bangladesh, taking advantage of the fact that there are no minimum wage laws there. Wal-mart is 55 times the size of the entire Bangladesh economy. By threatening to remove production to another impoverished (and therefore cheap) country, it has negotiated a deal with the government so it no longer pays a single cent of taxes.
The widening gap between the rich and poor
Despite extensive plundering of the world’s natural resources, this wealth has been shared less and less equally and extreme poverty remains. The gap between rich and poor is growing on a local and an international level:
- The richest 20% of the world’s population enjoy 86% of its resources while the poorest 20% must survive with a little over 1%.
- The 225 richest people in the world have the equivalent income to the poorest 2.25 billion.
- The world’s 3 richest people have fortunes equivalent to the Gross Domestic Product (GDP) of the world’s poorest 36 countries.
- 200 million children never start school (3/4 of these are girls). The amount needed to send these children to school each year is less than the amount spent on cosmetics in the USA and less than half the amount spent on ice-cream in Europe.
The Homogenisation of a Global Youth Culture
The growth of advertising and the entertainment media is contributing to the rising of a homogenous global youth culture. In New Zealand it is now estimated that we see on average over 3000 advertisements every day. Young people are made to feel insecure through “image advertising” and then told consumption is the answer to their insecurities. The result is a rise in individualism and a lack of compassion and care for others. People are encouraged to care more about money and image than family and community. Perhaps this plays a part in the high youth suicide rate in New Zealand. The other adverse effect of this global youth culture is that we are seeing people all around lose their unique cultural identities in pursuit of a branded western culture. In many ways, diversity is fighting a losing battle against globalisation.
Learn more:
Try googling any of these subjects and you’ll find heaps of articles and discussion – but here’s a selection to start you off…
Sweatshops
Corporation Watch – exposing sweatshops
Article in A World Connected
The feminist perspective
Child labour
Human Rights Watch
UNICEF
Trafficking
Human Rights Watch
United Nations report
HIV and AIDS – stats, info, aid agencies etc
Young People and AIDS
UN Report (June 2005) on the impact on young people
International Financial Institutions (IFIs)
Watching the IFIs
US Network for Economic Justice
Debt
Jubilee Debt Campaign
Article in Global Issues on Debt
Corporations
Corporation Watch – holding corporations accountable
Corporate Watch
Take Action
Read an article on this by the same author, Andrew Colgan : Youth Response to Globalisation
