Reinventing globalization

Reinventing globalization

Yanuar Nugroho
Director
The Business Watch Indonesia

If there is one word that has been the most frequently mentioned
by people around the world over the past three to five years, it
has been globalization. Leaders would have less confidence if
they did not include or address globalization in any of their
speeches. Newspapers and magazines would have less pride if they
did not denote globalization in their articles. Most people are
more than willing to be regarded as global people rather than as
locals, and that they are forcing themselves to deal with
globalization's hallmarks; i.e., a global lifestyle.

Having global meals at McDonald's with a Coca-Cola, enjoying
global entertainment by watching Hollywood movies and music
videos on MTV, tuning in to global channels, such as CNN and BBC,
installing PCs with global applications, such as Microsoft
Windows or Lotus SmartSuite, communicating with global devices,
such as mobile phones and through the Internet are new ways of
life embedded within the process of globalization. Of course,
going beyond this is possessing a global spirit to be rich or
financially secure. This has penetrated deeply into the
consciousness of most people around the world -- young and old,
male and female, urban and rural, rich and poor.

It is also within this framework of globalization that the
mantra "deregulation, liberalization and privatization" seems to
have divine power in directing economic -- and even the political
development of many countries around the world. As a consequence
many state-owned enterprises (SMEs) are being privatized. It also
has become a global trend for governments of developing countries
to be pushed into following the International Monetary Fund's
(IMF) Structural Adjustment Programs (SAPs) and The World Bank's
macroeconomic and financial policies, which shift the control of
public goods and essential services provision, such as water,
energy and health care, from public agencies to being privatized.

But globalization is not only about that. When addressing the
gap between the rich and the poor -- both within and between
countries -- some facts are too painful to digest. In 1960, one-
fifth of the world's people living in the richest countries had
30 times more income than one-fifth of those living in the
poorest countries.

Thanks to globalization, by 1997 this income gap had more than
doubled to 74:1 (Ellwood, 2001). One-fifth of the world's people
living in high-income countries had 86 percent of the world's
gross domestic product (GDP), whereas one-fifth of those in poor
countries received only 1 percent. The average income of a person
in one of the richest 20 countries is 37 times more than a person
living in one of the 20 poorest. This ratio has doubled over the
past 40 years, mainly because of a lack of growth in the poorest
countries. About half of the world's population lives on less
than US$2 a day. Two-thirds of the world's illiterate adults are
women, who bear the brunt of the world's economic and social
crisis (UNDP, 2002).
Table 1

Over $1.5 trillion is exchanged every day in currency markets
around the world. About 95 percent of this total represents
speculative transactions that fail to benefit the world's poorest
countries.

The real beneficiaries of globalization seem to be the
transnational corporations. Of the top 100 economies, 51 are
transnational corporations. The combined sales of the world's top
200 companies surpass the combined economies of 182 countries
(Hertz, 2001).

These facts have shown us that globalization -- just like
everything else under the sun -- is inherently ambivalent. On the
one hand, it brings prosperity, comfort, convenience in the form
of economic growth, technological advancement, more open and
democratic governance, and so forth. But on the other hand, there
are vast amounts of casualties from its progress.
Environmentally, it can also be said it is hazardous.

The soil is being eroded -- nearly 2 million hectares of land
worldwide are eroding and some areas face sharp losses in
productivity. Forests are being destroyed -- one-fifth of all
tropical forests have been cleared, reaching a total loss of
nearly 200 million hectares between 1980 and 1995. Biodiversity
is disappearing: one-third of all terrestrial biodiversity,
accounting for 1.4 percent of the Earth's surface, are in
vulnerable hot spots and threatened with complete loss in the
event of natural disasters or further human encroachment. And the
world's fish stock has been declining: 58 percent of the world's
coral reefs and 34 percent of all fish species are at risk from
human activities, 70 percent of the world's commercial fisheries
are fully exploited or overexploited and experiencing declining
yields (The World Bank, 2002).

In view of these facts, the promises made by globalization
seem hollow and subject to question. Joseph Stiglitz (2002) said
that our current conditions reflect the "broken promises of
globalization", in which we are urged to rethink what we
understand about globalization, how it works and where it will
lead humanity. And these are not easy quests.

First of all, what is the very central idea of globalization?
It is the "ism" in neo-liberalism, which believes in two ideas.
One, that all humans are homo economicus, the economic motive in
human life is not only one of other motives, but the only motive
that drives human livelihood. Two, that the free capital movement
is the sundering of financial capital from its intrinsic link
with the survival process of a community to seek and accumulate
profit.

Second, globalization is manifested into three areas of
quests. Addressing the "what", globalization is basically a wide
area of transnational business practices. Thus, the "who" will
point out the transnational corporations, that -- in practice --
are backed up by international bodies and authorities, such as
the World Bank, the IMF, multilateral development banks (MDBs)
and other international financial institutions (IFIs). And the
quest of "how" explains that the underlying ideology to keep
business practices in their roles is consumerism.

Table 2

Third, while the exhibits of transnational business practices
are fostered and supported by international regulations and/or
agreements -- which are also called newly made rules -- such as
the General Agreements on Tariffs & Trade (GATT), the General
Agreements on Trade in Services (GATS), Trade-Related
Intellectual Property Rights (TRIPs), Trade-Related Investment
Measures (TRIMs), etc., the consumerism ideology is propelled by
the immense power of advertisements in the form of logos, brands
and labels. This implants the criteria of the "pleasure,
prestige, status and luxury" principle in individuals. Thus, it
will be easily understood that as the newly made rules are
imposing nations to adopt deregulation, liberalization and
privatization policies, the advertised global lifestyle, culture
and identity is spreading all over the world.

Therefore, we can grasp the idea that globalization finally
enters our shared-life mainly in the way our public needs should
be provided: through public policies and individual preferences,
which are based on the belief that the common good is best served
by the uninhibited pursuit of profit. This is the so-called
market system, which is basically a reproduction of all societal
relationships into a basic profit-and-loss interaction. This is
the arena of the current struggle. The whole process of
globalization has shown that market power has become so immense
that it is endangering our societal life since it has undermined
public agencies and communities. Why is it that the power of
business practices within the globalization process is simply out
of our discourse on accountability and democracy?

Initially, it might be started from our inability to
distinguish the intended action from the unintended consequences.
We usually mistake the unintended (ex post) for the intended (ex
ante).

While some measure of such confusion is inevitable in human
affairs, there is a serious danger of not being aware of its
grave risks. The working of the neo-liberal principle is entirely
based on claiming that the unintended is no different from the
intended. How is that?

This problem involves the following line of logic: If we start
from the premise that the highest value of social life brought by
globalization is growth, then malpractice or non-malpractice is
irrelevant. If growth can only be achieved by letting the mal-
exercise of power happen, so be it. The destruction of the
environment and the widening gap between the rich and the poor
seem to be only the unintended consequences of globalization. In
this case, democracy is also irrelevant, for any type of power
exercise that seems to bring about growth, even if it is
unintentional, will then be justifiable. Of course, the
proponents of this perspective will shout endlessly about the
need for law enforcement and legal certainty. But in fact these
are immaterial.

After all, there might be a serious cognitive lag -- the
inability to understand the reality because of being entrapped in
the old-fashionedness of analytical reflection, which is when
reality has run ahead and left our analytical reflection behind.
It is a fact that the locus of power in society is neither
unitary nor monolithic so that it can no longer be assumed that
the power over society belongs only to the state apparatus. This
discourse on globalization would make little sense unless the
dramatic rise of business power as a shaping force of society is
not considered, whether it is for the better or otherwise.

So, if democracy is a movement to make any socially
consequential exercise of power accountable, we have to revise
the existing notion of it to include the socially consequential
exercise of business power. This outdated notion seems to count
too much on the assumption that its goal can only be achieved
with the state power being made democratically accountable, but
what escapes from this notion is the status of business power.

This discourse on globalization should go beyond the pros and
the cons as globalization might now have become inevitable. What
we can control to reinvent it is the sensitivity toward its logic
and process. This means that the provision of any public need in
our shared life, which is now being overwhelmed by the euphoria
of globalization, in its very heart, should never confuse
consumership with citizenship as well as market with shared-life.
Welcome to 2003, a new start for reinventing our globalized
world.

The writer is also a lecturer at Sahid University in Surakarta
and a researcher at the Social Democrat Union in Jakarta.