“Globalization is a process of interaction and integration among the people, companies, and governments of different places. A process driven by world wide trade and investment and aided by information technology” (“Globalization”, 2015). It establishes closer contacts of people which in the process changes communication, technology, ideals, laws, commodities, and so forth. Globalization progresses each day and has dramatically increased in the 20th and 21st century (“Globalization”, 2015). That is because the of time-space convergence with the developments of technology. With globalization comes interconnectedness and interdependness which influences the economy on a grander scale.
Depending on where a person is on the scale either helps them or hurts them in the process. Because globalization has uneven development it caused many arguments over if it helps most 3rd/2nd world countries or hurts them. Peruvian economist Hernando de Soto as well as Australian-British journalist John Pilger, exemplifies the differences between the two.
Hernando de Soto believes globalization has produced unprecedented prosperity in the last 60 years but still remains largely untapped by developing countries.
He believes the root cause of the problem is that they can’t integrate into the system because of political oppression and legal procedures. De Soto believes the developing world is going through the same kind of legal and social revolution that the West has undergone back in the 1800’s like New York City. De Soto has shown that the world’s poor actually control a vast storehouse of assets and resources. With their entrepreneurship he believes they have a chance to integrate into the system and become successful.
John Pilger on the other hand analyzes the new global economy and believes that the divisions between the rich and poor have never been greater with two thirds of the world’s children living in poverty.
John Pilger claims the wealthy elite, IMF, World Trade Organization, and World Bank destroys the livelihood of people and cripple them economically. To him globalization is a process in which “The rich, who get richer, and the poor, who get poorer, and the rich get richer on the backs of the poor.” Transnational corporations “have investments and activities that span into different countries around the world. They account for 11% of the world Gross Domestic Produce and one third of the world exports” (2.1/The Third World and Neocolonialism Pg 50, 2012). Because of their enormous power they have been central to changes happening in developing countries. Their motives are questionable as they usually bring in poor people to work in factories but they aren’t paid well and the benefits go directly to the company. In most places this impacts the local place negatively in the long run. Foreign Direct Investment is “the sum of equity capital as shown the balance of payments. Through FDI newly industrializing countries acquire category of stocks that relate to producing goods used in construction and manufacturing” (FDI & Developing Countries, Role of World Bank,2013). This helps a country change from semi periphery to periphery to core leading to a better economic standing if development was a linear progression.
International financial institutions provide financial support for economic and social development activities in developing countries around the world. They believe the growth follows a linear path that leads to success, so when a country does poorly economically their solution is to loan money to the nation which adds more debt. Some countries that have been provided financial support, usually by world bank or IMF, have been devastated in the process. That is because it has conditions that multinational corporations desire like eliminating tariff or increase interest rates since they hold the structural power (“World Bank/IMF Fact Sheet”, 2015). The film Globalization at the Crossroads relate to the theory of World System with globalization being a central theme. De Soto believes the way to integrate into the World System is to be a part of a legal system and have an identification system. That way the person won’t be out of the system and equity and profit can flow better. That country can then benefit from globalization instead of suffer.
That is why developed countries are the core and the 3rd world countries remain periphery. An example demonstrated would be Dar Es Saalam, Tanzania a peripheral region that is characterized by disadvantageous trading relations and undeveloped economy. The ILD found that “98% businesses are informally thus remaining disconnected from globalization and 89% all property in Tanzania are extralegally”. All sales happen with cash or trade under the law. This is mercantilism and it could lead to a successful capitalism. It needs a unified law system since the high levels of productivity are there. That is how a country like Tanzania can develop. John Pilger on the other hands shows Jakarta, Indonesia a example of being victim to globalization. Where conditions living in the factories of wealthy transnational corporations is deplorable. “Workers are paid the equivalent of one American dollar a day which is acknowledged as only just over half a living wage”-John Pilger. In the developmentalism model they would be in the take-off but can’t overcome the gap into maturity stage. That is because of the structural power in globalization where the rules are set in favored to core regions.
In a bind the country would try to loan money via IMF and World Bank because they believe it leads to a linear progression. This creates a huge debt and dependency on core countries. It is a vicious cycle that ensures the country never develops. Often citizens in core countries do not know about this because they are ignorant of the situation that takes place outside of their home country. America is a good example of this, however lately this is being changed slightly due to commodity chains. Where a material or good process is tracked down step by step. The two videos do show a common idea which is Cochrane and Pain globalization ideas. That is the stretching of social relations across space is demonstrated. Whether it is a developing area having international economic relations or a place being dominated by a core region. The networks of interaction and intensification of flows is shown in both videos in different ways.
For the video Globalization at the Crossroads this is shown by networks of interaction via legal procedures. How money flows in a system and if a person was to integrate into it the more intense the flow would be. In The New Rulers Of The World the intensification of flows is shown by factories in developing nations but have impacts that are negative to the growth of the nation. The increasing interpenetrations of these economic and social practices can be shown in good or bad. In De Soto video it is shown as good and have high potential. In John Pilger video it is shown as detrimental for the nations and become to dependent like Indonesia. They also show the emergence of a global institutional infrastructure in these countries in the same way but not in the same effect. In my personal opinion I believe globalization can be a good thing. However the economy is dominated by the wealthy elite who are greedy. Globalization is a system that remains untapped because the people at the top try to lock it inaccessible. Undoubtedly if it was to be unlocked the economic potential of the peripheral countries would explode. This would shift the economy of other countries and shaken their control however.
Which the transnational corporations can’t have happening because that means their assets are lowered. What should be done is level the playing field by adding rules that are favorable to developing countries and neutral to developed ones. That way the developed countries are more open to accept it. However the rules that clearly favor only the top head of the transnational corporations should be removed if it impacts the economy of developing nations negatively. De Soto and Pilger highlights globalization good and bad sides and if we were to take their ideas into account then perhaps globalization would change most national economies for the better instead of for the worst.
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