GLOBALIZATION AND DEPENDENCY: AN INEVITABLE PAYOFF FOR DEVELOPMENT
...global world economic perspective. Scholars identified the countries being depended on as ‘core’, and those countries depending on others as ‘periphery’. In this paper, I shall adopt a general version of dependency which adds into account the role of politics as well as economics to understand the effects that brings forth by globalization. As said above, globalization is a relatively vague term which is virtually used by everyone, but without a standard definition of it. In the following discussion I would like to narrow down the scope of globalization in order to avoid problems of over-generalization or tautological statements. I wish then, to discuss globalization in mainly two areas: economic and political. Therefore, the main thesis of this essay is that globalization, as an inevitable process, would definitely intensify the degree of dependency of developing countries towards developed countries and other stakeholders at international level. This paper is an attempt to draw the above conclusion by first looking into the fundamental discrepancy between the developing and developed countries and see how globalization washed away such a difference, thus having a detrimental effect on the developing countries. At the economic perspective, I would like to examine different countries’ imbalance of bargaining power and the effect of exports from developing countries to their national development and various kinds of trade protections by international organizations and prosperous countries that made the third world suffer a great deal. At the political perspective, I will try to relate the sustainability of democracies at the third wave and their relationships with international pressure. Last but not least, I shall try to affirm my stances by demonstrating a case study of the Structural Adjustment Programs (SAPs) carried out by international organizations. HOW GLOBALIZATION INTENSIFIES DEPENDENCY AMONG DEVELOPING COUNTRIES During the years of cold war, it is not difficult for us to see different political and economic ideologies blossom at the same time: Capitalism, Communism, Liberalism, Government planned economy, even Authoritarianism. A. Economic globalization and the bargaining power of developing countries Globalization necessarily means an enhanced interdependence between peoples and countries. Put it in the economic term, the most important aspects of economic globalization are the breaking down of national economic barriers; the international spread of trade, financial and production activities, and the growing power of transnational corporations and international financial institutions in these processes. As Fukuyama has put it, “…(globalization) forces are now encouraging the breakdown of national barriers through the creation of a single, integrated world market. ” It is often said that economic globalization is reducing fundamentally the very possibility of countries’ pursuing national economic policies. Practically speaking, many view that economic globalization has somehow been hijacked by a market liberalism which puts the mechanism of the market before both the natural environment and the well-being of many communities. Khor recognized globalization as ‘a very uneven process, with unequal distribution of benefits and losses.’ With globalization, most developing countries have seen their independent policy-making capacity eroded. One scholar, Nayyar , examines the phenomenon of ‘uneven development’ and shows how globalization mainly benefits the developed world; while in the developing world, the benefits accrue only to a few developing countries. There were only 11 developing countries which were an integral part of globalization in the late 20th century. They accounted for 66 per cent of total exports from developing countries in 1992 (up from 30 per cent in the period 1970-1980); 66 per cent of annual FDI inflows to developing countries in 1981-1991; and most of portfolio investment flows to the developing world. Some of these 11 countries have since been badly affected by financial crises, debt and economic slowdown, thus diluting further the rate of success of developing countries in integration in the world economy. Another obvious finding from UNCTAD’s Trade and Development Report 2004 suggests that “[g]reater openness to international trade and finance has not enabled developing countries to establish a virtuous interaction between external financing, domestic investment and export growth.” The same report also comments on the prospect of third world facing international trade market that “even if the growth of the volume of trade continues unabated, the prospects for the terms of trade and the real income of developing countries are less favorable than most commodity prices may indicate.” There have been wide acknowledgements that one reason of the uneven development is from the developing countries’ lack of bargaining and negotiating power in international relations and has been dominated by a unidimensional philosophy of development led by the central countries, i.e. market liberalism. The third world’s disadvantage could stem from the very beginning, given the context of a weaker economy and social infrastructure. Besides, being heavily indebted and dependent on foreign aid, developing countries have been further drained of their capacity to negotiate. Under such unequal power relationships, the peripheral states are literally deprived of thei...