Globalization Under Attack

«
It
 is
 said
 that
 Globalization
 is
 under
 attack.
 Discuss
 the
 drivers
 of
 globalization
 and the
challenges
that
it
is
facing
at
the
moment.
»


Given
 the
 relatively
 broad
 aspects
 of
 globalization,
 this
 essay
 will
 cover
 those
 directly
 and
 indirectly related
 to
 the
 economy
 but
 at
 the
 same
 time
 trying
 not
 to
 lose
 sight
 of
 the
 interconnected whole.
 The
 definition
 of
 globalization
 below
 will
 be
 the
 benchmark
 of
 this
 work
 as there
is
no
officially
accepted
definition
of
it.
The
Term
globalization
first
appeared
in
the
60’s
 to refer
 to
 the
 increasing
 movement
 of
 people,
 goods,
 services
 and
 information
 across
 borders
 thanks to
 the
 advance
 in
 technology
 and
 international
 relations
 as
 well
 as
 to
 the
 willingness
 of
 both people
 to
 consume
 differently
 and
 companies
 to
 sell
 in
 different
 markets
 (Steger,
 2002).

For
more
than
four
decades
this
movement
grew
at
an
unprecedented
speed.

 Today,
 however,
 most
 languages
 around
 the
 world
 are
 adding
 another
 new
 term
 to
 their
 dictionaries: deglobalization.
 Everywhere
 on
 the
 planet
 both
 popular
 and
 academic
 literature
 use it
 (the
 word
 speaks
 for
 itself)
 as
 what
 it
 appears
 to
 be
 the
 opposite
 of
 globalization.
 As
 reported by
the
International
Monetary
Fund
the
world
economy
growth
is
at
its
lowest
level
for

60
 years
 (Munoz,
 2009).
 Questions
 such
 as
 terrorism,
 inequality,
 climate
 change
 and
 other
 environmental problems
 as
 well
 as
 the
 fear
 of
 losing
 national
 control
 are
 some
 of
 the
 main
 increasing concerns
 of
 stakeholders
 concerning
 the
 globalisation
 process,
 to
 say
 nothing
 of
 the
 current financial
 crisis
 that
 made
 governments
 around
 the
 globe
 rethink
 the
 way
 they
 regulate
 their markets.
 Global
 capitalism
 is
 indeed
 under
 fire.
 The
 UN
 Conference
 on
 Trade
 and
 Development
 has
 reported that
 FDI
 (Foreign
 Direct
 Investment)
 flowing
 in,
 dropped
 by
 21
 %
 in
 2008,
 and
 as
 The

World
Association
of
Investment
Promotion
Agencies
says:
it
is
expected
to
continue
this
decrease


2


in
 2009
 reaching
 between
 12
 and
 15
 per
 cent
 of
 contraction
 by
 the
 end
 of
 the
 year
 (Munoz,

2009).
 Nevertheless,
 It
 is
 not
 difficult
 to
 notice
 that
 further
 globalization
 is
 inevitable
 if
 the
 effects of
 the
 current
 global
 recession
 are
 not
 taken
 into
 consideration.
 The
 forces
 driving
 it
 are
 far too
powerful
given
the
advanced
level
it
has
reached.
As
stated
by
Gurría
(2006)
on
behalf
of
 the Organization
 for
 Economic
 Co­operation
 and
 Development
 (OECD):
 the
 trade
 stake
 contributing to
 worldwide
 GDP
 has
 been
 multiplied
 by
 three
 since
 the
 50’s
 thanks
 to
 the
 acceleration in
 globalization.
 The
 amount
 of
 FDI
 outflows
 from
 developed
 countries
 is
 now
 four
 times higher
than
in
1950,
which
has
enabled
the
transfer
of
technology
to
developing
countries.

Moreover,
other
benefits
of
globalization
are
also
highly
visible;
it
has
helped
to
move
millions
of
 people out
 of
 poverty.
 For
 years,
 the
 economy
 of
 under
 developed
 nations
 has
 been
 climbing
 whereas developed
ones
have
had
to
put
up
with
little
growth.
Further
analysis
of
the
forces
and
 the challenges
of
globalization
show
how
the
former
prevail
over
the
latter.

 Although
 it
 is
 arguable
 that
 terrorism
 as
 a
 cause
 is
 more
 of
 an
 ideological
 aspect,
 its
 effects
 also
 represent a
 threat
 to
 the
 economic
 side
 of
 globalization.
 In
 the
 Autumn
 of
 2001
 the
 terrorist
 attacks on
 the
 twin
 towers
 in
 Manhattan
 slowed
 not
 only
 the
 American
 economy
 but
 also
 all
 those economies
 from
 numerous
 other
 countries
 having
 commercial
 relations
 with
 the
 United

States.
 Over
 3,000
 innocent
 people
 perished
 in
 less
 than
 two
 hours.
 However,
 when
 deconstructing Al
 Qaeda
 and
 more
 precisely
 Osama
 bin
 Laden
 as
 well
 as
 their
 terrorist
 operation, it
 can
 be
 deduced
 that
 those
 were
 just
 another
 quarry
 of
 globalization
 and
 not
 the
 other way
 around.
 None
 of
 Al
 Qaeda’s
 bombings
 against
 Western
 nations
 would
 have
 been
 possible without
 military
 material
 from
 Russia,
 China
 and
 other
 nations,
 that
 is,
 without
 the
 fruits of
globalization.
Global
interconnections
also
enabled
bin
Laden
to
broadcast
his
videotape
 expressing opposition
 to
 modernity
 instantaneously
 after
 the
 11
 September
 attacks.
 Steger

(2002)
 summarises
 this
 idea
very
 well:
 «
Bin
 Laden
 may
 have
 denounced
 the
 forces
 of
 modernity
 with great
 conviction,
 but
 the
 smooth
 operation
 of
 his
 entire
 organization
 was
 entirely
 dependent
 on advanced
forms
of
technology
developed
in
the
last
two
decades
of
the
20th
century
».


3


Even
though
there
is
evidence
about
the
large
number
of
benefits
brought
by
global
free
trade,
it
 seems less
 clear
 whether
 its
 profits
 are
 being
 evenly
 distributed
 within
 and
 amongst
 nations
 taking part
 of
 it.
 Most
 studies
 keep
 showing
 that
 the
 income
 difference
 between
 wealthy
 and
 poor countries
is
growing
at
a
fast
pace.
Data
published
in
two
consecutive
editions
of
the
United

Nations
Human
Development
report,
1999
and
2000,
show
that
prior
to
what
is
considered
as
the
 very start
 of
 globalization
 in
 1973,
 the
 richest
 countries
 had
 44
 times
 as
 much
 income
 as
 the
 poorest ones,
 and
 73
 times
 as
 much
 twenty‐five
 years
 later
 (Steger
 2002).
 These
 reports
 also
 unveil that
 the
 number
 of
 people
 living
 under
 the
 official
 poverty
 level
 stepped‐up
 from
 1.2
 to

1.5
 billion
 between
 87
 and
 today
 while
 the
 200
 wealthiest
 people
 have
 doubled
 their
 fortune
 to
 reach $1
 trillion.
 The
 same
 observations
 were
 made
 even
 in
 the
 world’s
 richest
 countries
 as
 the

United
 States
 where
 the
 top
 1
 per
 cent
 of
 the
 population
 receives
 more
 than
 the
 bottom
 40
 per
 cent, the
 widest
 gap
 in
 70
 years
 (Daniels,
 2009).
 But
 as
 underlined
 before
 globalization
 is
 also
 about the
 development
 of
 international
 relations.
 Powerful
 institutions
 as
 the
 World
 Trade

Organization
 (WTO),
 which
 gather
 153
 countries
 and
 manage
 trade
 agreements
 among
 its
 member‐countries, have
 been
 acknowledging
 how
 important
 is
 to
 tackle
 inequality
 around
 the
 world and
 especially
 in
 Africa.
 Specialists
 on
 the
 issue
 gathered
 in
 Davos
 this
 year
 with
 the
 G20
 and although
 no
 final
 solution
 was
 given
 it
 can
 be
 considered
 that
 the
 beginning
 of
 a
 new
 stage
 in the
globalization
process
has
been
developing.
This
new
stage
has
been
fuelled
by
the
current
 financial crisis,
 which
 made
 clear
 that
 the
 most
 affected
 by
 the
 decision
 of
 the
 richest
 countries
 are the
 poorest
 ones.
 As
 expressed
 by
 Kofi
 Annan
 (
 2009):
 «
Fairness
 and
 equity
 can
 no
 longer
 be
 an afterthought.
 No
 one’s
 stability,
 security
 and
 prosperity
 can
 be
 guaranteed
 unless
 we
 strive
 to
 tackle the
gross
inequality
of
wealth,
opportunity
and
influence
in
our
world
»
(Times
On‐Line,
26th

Jan
2009).

When
 it
 comes
 to
 environmental
 issues
 one
 of
 the
 main
 concerns
 is
 related
 to
 the
 uncontrolled
 population growth,
 half
 of
 which
 occurred
 in
 the
 last
 30
 years.
 But
 most
 environmentalists
 consider that
 the
 global
 impact
 of
 humans
 on
 the
 environment
 is
 rather
 a
 function
 of


4


consumption
 than
 overall
 population
 size.
 For
 instance,
 tiny
 6
 per
 cent
 of
 our
 planet’s
 human
 beings living
 in
 developed
 countries
 consume
 on
 average
 35
 per
 cent
 of
 the
 world’s
 natural
 resources (Steger,
 2002).
 Since
 globalization
 moves
 people
 out
 of
 poverty
 to
 consumption
 patters it
 presents
 a
 serious
 problem
 to
 the
 health
 of
 our
 planet.
 Despite
 all
 bad
 environmental
 news one
 may
 still
 be
 optimistic
 given
 the
 increasing
 number
 of
 international
 agreements
 supposed to
 tackle
 environmental
 problems.
 These
 agreements
 can
 indeed
 bring
 optimism,
 provided authorities
manage
to
establish
efficient
enforcement
mechanisms
and
major
polluters
 as the
 US
 and
 China
 ratify
 at
 least
 the
 most
 important
 of
 those
 treaties.
 This
 month
 (December

2009),
 governments
 are
 gathering
 in
 Copenhagen
 to
 finalize
 a
 new
 global
 climate
 deal
 which
 is
 supposed to
 impose
 ecological
 limits
 on
 the
 global
 economy
 by
 reducing
 green
 house
 effects,
 developing alternative
 sources
 of
 energy
 and
 enabling
 poor
 countries
 to
 overcome
 the
 «
dirty
 development ».
 Technology
 will
 be
 then,
 yet
 again,
 the
 main
 means
 through
 which
 globalization
 will be
able
to
continue
at
the
same
pace
(International
Forum
on
Globalization,
2009).

 The
 fourth
 and
 last
 fear
 related
 to
 globalization
 that
 is
 mentioned
 here
 is
 the
 question
 of
 national sovereignty.
 Some
 critics
 say
 that
 the
 main
 objectives
 of
 a
 government
 such
 the
 well‐ being of
 its
 country’s
 population
 are
 counter
 to
 the
 very
 principles
 of
 global
 capitalism.
 Leaving
 borders open
 to
 foreign
 goods
 and
 services
 can
 create
 an
 overdependence
 on
 what
 comes
 from
 abroad, hence
 on
 what
 is
 «
uncontrollable
»
 
 by
 local
 authorities
 (Daniels,
 2009).
 Daniels
 (2009)

 says this
 is
 particularly
 the
 case
 of
 many
 small
 countries
 as
 the
 Netherlands,
 Costa
 Rica,
 etc,
 as
 their size
 limits
 their
 production.
 Another
 downside
 of
 free
 international
 trade
 for
 national
 sovereignty is
 the
 empowerment
 of
 big
 multinational
 enterprises
 as
 they
 can
 become
 very
 powerful insomuch
 as
 trying
 to
 measure
 their
 power
 with
 governments
 by
 threatening
 to
 relocate or
 even
 to
 go
 bankrupt
 and
 leave
 millions
 of
 unemployed
 (Daniels,
 2009).
 That
 is
 recently what
 happened
 with
 many
 car
 companies
 in
 the
 US
 and
 Europe.
 But
 then
 again
 these
 critics do
 not
 take
 into
 account
 both
 sides.
 They
 say
 such
 situations
 are
 uncontrollable
 by
 local
 authorities, which
 does
 not
 seem
 to
 fully
 represent
 the
 reality.
 As
 already
 mentioned
 before
 the


5


World
 Trade
 Organization
 has
 153
 member
 countries
 and
 exists
 to
 regulate
 as
 fairly
 as
 possible
 all trade
relations
among
its
member
countries.

 Although
the
way
this
essay
deals
with
the
challenges
and
forces
of
globalization
might
be
found,
 at some
points,
too
simplistic,
it
certainly
also
acknowledges
and
assures
that
globalization
is
not
 a perfect
 and
 flowing
 process.
 The
 main
 challenge
 now
 is
 to
 tackle
 its
 flaws
 and
 imperfections,
 and that
 is
 what
 governments
 and
 specialists
 will
 do
 rather
 than
 believe
 in
 and
 promote
 deglobalization. After
 all,
 (nothing
 more
 convincing
 than
 figures)
 the
 overall
 amount
 of
 international commercial
 transactions
 jumped
 from
 $57
 billion
 60
 years
 ago
 to
 an
 incredible
 $6
 trillion in
 2000,
 in
 the
 last
 few
 years
 the
 rich
 North
 has
 raised
 its
 attempts
 to
 set
 up
 a
 unique
 world marketplace
 by
 means
 of
 regional,
 and
 later,
 international
 commercial
 liberalisation
 treaties such
 the
 North
 American
 Free
 Trade
 Agreement
 (NAFTA)
 and
 the
 General
 Agreement
 on

Trade
 and
 Tariffs
 (GATT),
 today
 WTO
 (Steger,
 2002).
 Free
 trade
 advocates
 have
 assured
 us
 that
 the removal
of
remaining
commercial
obstacles
among
countries
shall
multiply
costumer
choice,
 boost global
 GDP,
 procure
 amicable
 foreign
 affairs
 as
 well
 as
 diffuse
 technology
 throughout
 the
 globe. Globalization
 is
 not
 only
 inevitable
 but
 also
 irreversible.
 Another
 important
 observation
 made by
 Kofi
 Annan
 in
 this
 year’s
 G20
 summit
 and
 that
 best
 concludes
 this
 work
 is
 worth
 citing
 here: «
We
 have
 now
 learned
 that
 no
 country,
 no
 matter
 how
 powerful
 or
 prosperous,
 can
 control
 the forces
of
globalization
»
(Times
On‐Line,
26th
January
2009).
 The
 ongoing
 efforts
 to
 stop
 terrorism
 have
 actually
 increased
 international
 cooperation
 and
 promoted the
 construction
 of
 new
 global
 alliances.
 The
 North
 seems
 to
 be
 willing
 to
 reduce
 the
 existing disparities
in
global
wealth
and
well‐being.
Globalization
is
then
challenging
the
current
 structure of
the
world:
the
division
into
a
privileged
North
and
a
disadvantaged
South.
Spreading
 its benefits
equitably
is
definitely
the
recipe
for
its
success.



6


References
:


Daniels,
 J.
 D.,
 Radebaugh,
 L.
 H.
 and
 Sullivan,
 D.
 P.
 (2009).
 Chapter
 1
:
 Globalization
 and

International
 Business.
 In
:
 International
 Business
 Environments
 and
 Operations.
 12th
 Edition.

New
Jersey
USA.
Pearson
International
Edition.
Prentice
Hall,
pp.
44‐77.
 Daniels,
J.
D.,
Radebaugh,
L.
H.
and
Sullivan,
D.
P.
(2009).
Chapter
4
:
The
Economic
Environment

Facing
 Business.
 In
:
 International
 Business
 Environments
 and
 Operations.
 12th
 Edition.
 New

Jersey
USA.
Pearson
International
Edition.
Prentice
Hall,
pp.
180‐225.
 Gurría,
 A.
 OECD
 Secretary‐General
 (24th
 Nov
 2006)
 Challenges
 of
 Globalization
:
 The
 Role
 of
 the

OECD.


[Online].


Available


from


:


http://www.oecd.org/document/15/0,3343,en_33873108_33873739_37726863_1_1_1_1,00.ht ml [Accessed
5th
Dec
2009].
 International
Forum
on
Globalization
(2009)
IFG
Programs
:
Climate
Change.
The
«
Copenhhagen

Convenings
»
 of
 Civil
 Society
 Networks
 To
 Press
 International
 
 
 
 
 Institutions
 Toward
 Positive

Actions.
 [Online].
 Available
 from
 :
 http://www.ifg.org/programs/climatechange.htm
 [Accessed

5th
Dec
2009].
 Munoz,
 C.
 (19th
 Feb
 2009)
 Globalization
:
 Turning
 their
 Backs
 on
 the
 World.
 The
 Economist.

Print
Edition.

 Steger,
M.
B.
(2002).
Globalization
:
A
Very
Short
Introduction.
Oxford.
Oxford
University
Press.
 Times
 On‐Line
 (26th
 Jan
 2009)
 Davos
 09
 Statements.
 [Online].
 Available
 from
 :
 http://www.timesonline.co.uk/tol/comment/article5586585.ece [Accessed
5th
Dec
2009].


7


Complementary
Bibliography:
 Dunning,
 J.
 H.
 (2003)
 Making
 Globalization
 Good
:
 The
 Moral
 Challenges
 of
 Global
 Capitalism.

Journal
of
International
Business
Studies
(2005)
36,
119‐121.
 Dunning,
 J.
 H.,
 Fujita,
 M.
 and
 Yakova,
 N.
 (2006)
 Some
 macro‐data
 on
 the
 regionalisation/globalisation debate
:
 a
 comment
 on
 the
 Rugman/Verbeke
 analysis.
 Journal
 of

International
Business
Studies
(2007)
38,
177‐199.
 Ghemawat,
 P.
 (2007)
 Redefining
 Global
 Strategy
:
 Crossing
 Borders
 in
 a
 World
 Where

Differences
Still
Matter.
Journal
of
International
Business
Studies
(2008)
39,
1091‐1093.
 Yaziji,
M.
(Nov
2008)
Time
to
Rethink
Capitalism.
Harvard
Business
Review.
pp
27‐28.

References: (2009). (2009). 2006) Challenges