Friday, October 1, 2010

Globalization- opportunites or dangers - a reflection

I feel delighted that my first official class in LSE was by Dr David Held, co-director, Center for the study of Global Governance, LSE & author of "Global Transformations" on September 28, 2010 and there couldn’t have been a better way to start my studies in LSE.
David started by pointing out that even though Globalization and global policies have been talked about for decades now, the first dedicated journal in global policy came out only very recently . It’s being brought out by Global Public Policy Network (GPPN) – a joint collaboration of LSE, Columbia University, the Lee Kuan Yee School of Public Policy in University of Singapore and Sciences Po, Paris. The 3rd issue of the journal is under process. The first two issues have interesting compilations of articles in the field of World Economy, Health & Social Policy, Population & migration, International Law & Justice, Conflict & Security, Environment & poverty among others. It is highly recommended to those interested in global public policy.
Some of the interesting bits, based on our interactions with Prof David Held during the session are placed in this note.
Globalization, simply defined, is stretching all kind of human activities across space and time. However, globalization is not something of a recent phenomenon. Spread of empires, religion and diseases are all signs of globalization. However, in recent times, the forms of controls have changed. Until recently, Prof David mentioned that the West has, by and large, determined the rules of the game on the global stage. During the last century, Western countries presided over a shift in world power – from control via territory to control via the creation of governance structures created in the post 1945 era. From the United Nations Charter and the formation of the Bretton-Woods institutions to the Rio Declaration on the environment and the creation of the World Trade Organization, international agreements have invariably served to entrench a well-established international power structure. The division of the globe into powerful nation-states, with distinctive sets of geopolitical interests, and reflecting the international power structure as it was understood in 1945, is still embedded in the articles and statutes of leading intergovernmental organizations, such as the UN, the IMF and the World Bank. Voting rights are distributed largely in relation to individual financial contributions, and geo-economic strength is integrated into decision-making procedures (from Prof David Notes).

What’s however missing is the accountability. This was dominance based on a ‘club’ model of global governance and legitimacy. Policy at the international level was decided by a core set of powerful countries, above all the G1, G5 and G7, with the rest excluded from the decision-making process.

Today, however, that picture is changing. The trajectory of Western dominance has come to a clear halt with the failure of dominant elements of western global policy over the last few decades. At the same time, Asia is on the ascent. A situation thus is emerging where G1,G5 and G7 have now led to G20 which seems to be the appropriate forum.
There are clauses and conditions in multilateral agreements which supposedly form the basis of globalization aimed at benefitting few such nations and others, realizing the folly have refused to be a part of such agreements be it Doha round or Washington consensus. Countries which didn’t succumb to the pressures of such inter-governmental dictate such as India and China did well and the impact of depression, as a result was minimal in these countries. A situation is fast emerging in rebalancing of world economy with centre of gravity is being shifted in easterly directions. David says
The trajectory of change is towards a multipolar world, where the West no longer holds a premium on geopolitical or economic power. Moreover, different discourses and concepts of governance have emerged to challenge the old Western orthodoxy of multilateralism and the post-war order. At the same time, complex global processes, from the ecological to the financial, connect the fate of communities to each other across the world in new ways, requiring effective, accountable and inclusive problem-solving capacity. How this capacity can be ensured is another matter.
In our increasingly interconnected world, these global problems cannot be solved by any one nation-state acting alone. They call for collective and collaborative action – something that the nations of the world have not been good at.
Prof David gave an interesting take on growing militarization. Total global military expenditure in 2008 is estimated to have totalled $1.464 trillion, representing an increase of 4 per cent in real terms compared to 2007, and of 45 per cent over the 10-year period 1999–2008. * To put this in perspective, it is:
- 2.4% of global GDP, or $217 for every person on the planet
- 13 times the total spent on all types of development aid.
- 700 times the total amount spent on global health programs.
- Roughly the same as the combined total GDP of every country in Africa.
- Only the total cost of the financial crisis, 8 times as large, dwarfs it.
* Stockholm International Peace Research Institute, SIPRI Yearbook 2009, Oxford, Oxford University Press, 2009, p. 179

The United States accounts for the majority of the global increase - representing 58 per cent of the global increase over the last 10 years, largely due to the wars in Iraq and Afghanistan, which have cost around a trillion dollars thus far.
The ‘war on terror’ was flawed and was for personal gains of the few in which an Authoritarian State (Iraq) was converted into a ‘failed state’ at the cost of thousands of lives. It fundamentally has weakened the UN and a sense of decay can be felt in UN resulting in shift in geo-political power.
To conclude, there is a newfound recognition that global problems cannot be solved by any
one nation-state acting alone, nor by states just fighting their corner in regional blocs. As demands on the state have increased, a whole series of policy problems have arisen which cannot be adequately resolved without cooperation with other states and nonstate actors. There is a growing recognition that individual states are no longer the only appropriate political units for either resolving key policy problems or managing a broad range of public functions.

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