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1-Page Summary of Making Globalization Work
What’s Wrong with Globalization?
Globalization is a concept that’s been around for years. It promises to improve the lives of people in developing nations by increasing communication, trade and commerce. However, many countries have protested against globalization because they feel it has made their lives worse off instead of better off. The problem isn’t with globalization itself but how it’s being managed.
Many people who have been affected by globalization – workers in the US whose jobs were taken away by cheap labor, farmers in developing countries who can’t compete with subsidized crops from Western countries, health care advocates fighting skyrocketing drug prices, conservationists and indigenous peoples struggling to maintain their resources and cultures – agree on five points.
The rich nations have set the rules in their favor, so much so that poorer nations may be worse off than they were before globalization. Globalization promotes material values over environmental or human concerns, and has undermined democracy in some cases.
Globalization has negative effects on developing and developed countries. For example, Western practices have led to hostility in some cultures.
Reform
To make globalization work, there are six areas that need to be reformed. These include poverty reduction and better trade policies. In 2006, more than 2.5 billion people were living on less than $2 a day; since 1981 the number of people in this situation has increased by 36%. The United Nations’ Millennium Summit wanted to reduce this number by half by 2015. The IMF also supports reducing poverty through development aid or other means such as fair trade practices.
In 2006, developing countries had a debt of about $1.5 trillion. In some countries, debt service was as much as half the government spending or foreign currency earnings, money that could be spent on building infrastructure and services. Recognizing this burden, industrialized nations started offering more aid in grants instead of loans to help these countries build their infrastructures and provide better services for their people.
The World Trade Organization (WTO) is an international organization that regulates trade between countries. However, the WTO has rules that are unfair to developing countries as developed countries have higher tariffs on goods from developing nations than they do with other advanced states. Also, Western agricultural subsidies lead to lower commodity prices and impoverish people in developing countries. Furthermore, there are limitations for privatization and deregulation which can be harmful to economic growth in these regions.
The environment is a global issue that includes contamination and inadequate conservation. It also involves the neglect of global warming. The West dominates international economic institutions, which gives developing countries less say in how they’re run. This lack of democracy weakens these agencies’ efficiency and authority, particularly when they tell poorer nations to adopt democratic practices.
Regional Successes and Failures
Globalization has had a different effect on various developing countries. East Asian countries, among them China and Vietnam, have benefited from globalization in many ways, including economic growth that was almost 6% per year for the last 30 years. However, they also learned some lessons from this experience. They believe that “market fundamentalism” is one of the failures of globalization because it led to speculation and recession in 1997 when these countries opened their markets to volatile overseas capital flows.
