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.