The most easily measured impact of
globalisation is in the area of economics and the world
economy.
Figures in the
United Nations Development Report 1999 show that there has been a substantial widening of the gap between the world
richest and it’s
poorest inhabitants – since the
1970’s the
income gap between the world’s richest fifth, and it’s poorest fifth, has doubled to a ratio of 74:1. For those in the highest 20% of earnings the share of
foreign direct investment is 68%, for the poorest 20% it is only 1%. Around eighty countries have had no improvement in their
per capita income levels since 1990, and around fifty have shown a decline. Clearly, these countries and their people are not the winners of globalisation, and, even more apparent, the world has, in an economic sense, taken a
turn for the worst in
equality in the
past thirty years.
However, it is not all bad news – the report also details a growth of more than 4% per capita for 40 countries, initiatives for the
‘Heavily Indebted Poor Countries’ (H.I.P.C’s) to regain control of their downward economic trajectory, and various
summits that include poorer nations in high-level
trade talks (For example, the current
W.T.O round in Doha is called ‘development talks’).
Global interactions in the world today have more far-reaching
repercussions than ever before. Since the era of new globalisation the biggest crisis faced by the world economy has been the
Asian Financial Crisis in
1998. It demonstrates the interconnectedness of the world economy when a financial crisis that began in the finance houses of
Thailand, rushed headlong into the
Russian manufacturing and raw materials industries (decimating the whole economy), and, within two months, swept through
North American,
European and
Australian investment brokers and businesses with devastating consequences. This occurred mainly through the
speculative currency and
investment processes that rule most of the global
financial markets today. In fact, it is these speculations made on
developing nations currencies by richer nations that can account for much of the imbalance and
inequality in the current system.
A particularly
controversial issue in the world today is the
economic aid given to poorer nations. Many argue that this aid is simply
a short-term solution to inequality of the new world system, and that it promotes less
self-sufficiency. However, the
World Bank report, ‘Assessing Aid’, shows that for every 1% of assistance in GDP, a corresponding 1% decline in
poverty and
infant death occurs.
Perhaps the most unique aspect of this new world is the rise of
information technology and the
Internet. Today, the process of globalisation has taken a medium sized world – shrunk already from the previous era of
transportation and technology breakthroughs – and turned it into a micro-world. This process can enable developing countries to make major advances in technology, and create
jobs and
markets for
specialist manufacturing, as in the case of both
China and
South Korea. It can also allow the
Non-Government Organisations (NGO’s) who
lobby for a turn around and re-assessment of the globalisation process to gain support and keep in contact. These organisations (such as
S-11) have grown in size and effectiveness as the
Internet has expanded into more and more countries. Their ‘wins’ in the recent
publicity (good and bad) from disruptions to trade talks have been gained largely through
effective Internet communications.
It may be that the only route to saving many regions is the further opening of
trade mechanisms, further lifting of
tariffs, and further aid in the form of
infrastructure advice and
development.
It is obvious that global
interactions have been a force for equality as well as a cause of
inequities. The latest wave of globalisation has created a world where one
pebble in the pool can create ripples that touch every corner of the
globe.
Make your own mind up about each aspect of globalisation, but don't
write it off altogether - it may not be perfect but it can provide benefits to all if controlled and monitored effectively.