Globilisation, Trade and Financal Liberisation: Implication for the ...

More documents

Recommendations

Info

828 International Conference on Applied Ecomonics – ICOAE 2009 producing these goods and services, costs are incurred. To import and export these goods, many countries charge tariffs. Also developing countries use tariffs as a means of protecting their economy from the importation of all sorts of commodities. it also enables them to protect their infant industries that cannot compete with their counterparts in advanced countries. With the above arrangement, western nations started with the idea of international financial liberalization. Before liberalization came into being international financial institutions, which as we know are agents of developed nations, started with Structural Adjustment Programme to help to revamp the economy of developing nations. One of the tenets of the Structural Adjustment Programme was the issue of de-regulation with its attendant privatization and commercialization. According to western experts, this will enable capital to flow into the economies of developing nations and hence, the growth of their economy. To this end, they called for the dismantling of all artificial barriers to trade so that international finance could flow to help the infant industries to grow. That was what gave rise to international financial liberalization. Ezeanyika and Oruebor (2001:150) described international financial liberalization as one of the major aspects of globalization – the process of financial liberalization has been the most articulated. They therefore saw international financial liberation as the process of making finance available to any part of the world that it is needed. What therefore can be appreciated from the above is that international financial liberalization is one of those promises made to the developing and underdeveloped nations to enable them remove tariffs so hat foreign goods can be flooded into their countries thereby stifling their nascent industries. Also, it is important for us to appreciate the meaning of globalization, as this will finally enable us to justify or not justify the concept of globalization and what it portends for developing nations. Globalization or (globalisation) in its literal sense is the process of making, transformation of some things or phenomena into global ones. It can be described as a process by which the people of the world are unified into a single society and function together. This process is a combination of economic, technological, sociocultural and political forces Croucher (2004). According to Ezeanyika and Oruebor (2001:140) the concept of globalization refers to ―an increasing flow of goods and resources across national boundaries, and the emergence of a complementary set of organizational structures to manage the expanding network of international economic activity and transaction‖. Put differently, they also stated that it is a global economy in which corporations and financial institutions operate transnational i.e. beyond the confines of national boundaries. Also, Heald et.al (1999) sees globalization as a process of ―global transformers‖. It could, therefore be referred to as the historical epochs or to the various domains of activity affected and influenced by transformations, or to both (see Ezeanyika et al op cit p.142). According to Oniemola (2000:19) ―Globalization is nothing but the opening up of our economy for investment by the developed countries and deregulation in such a way that there should be no barriers or control of the economy in such a way as they may wish and repatriate their profits as they wish. He therefore concluded that this is causing a high level of poverty in the land and should not be swallowed just like that. He then cautioned developing nations to be weary about anything that comes out of the western nations. IMPLICATIONS OF GLOBALIZATION, INTERNATIONALTRADE, AND INTERNATIONAL FINANCIAL LIBERALIZATION At this point, one might simply ask, ―can anything good in terms of international business relationship, ever come out from the developed nations? Have the developing nations ever benefited from any kind of trade policy packaged by the developed nations? What then are the implications of developing countries embracing globalization and its twin evil, financial liberalization? Because the main export of poorer countries are usually agricultural goods. It is difficult for these countries to compete with stronger countries that subsidize their own farmers. Because the farmers in the poorer countries cannot compete, they are forced to sell their crops at much lower price than what the market is paying Before giving the answer to these questions, one has to define the services that can be traded internationally. According to Lehmann, Tamirisa, and Wieczorek (2003:4) They include a variety of highly heterogeneous economic activities which can be classified into distributive services (wholesale and retail, transportation and communications), producer services (advisory, legal services, banking and finance), social services (health and education), and personal services (hotels and catering). Services are often intermediate inputs, and thus play a key role in the efficiency of the manufacturing sector and the economy as a whole. Public regulation is more pervasive than in other sectors, and motivated by asymmetric information between providers and consumers, competition policy, and other policy objectives, such as universal service requirements in a number of social services. Globalization portends danger for the developing countries. A situation in which the developing countries could be asked to open up their borders for the importation of any kind or product implies that all infant industries in those countries will close-down. Not only this, the level of unemployment will become so high that crime rate will hit the roof tops.
International Conference on Applied Economics – ICOAE 2009 829 As a result of the above, the western countries that are clamoring for the total and complete removal of any kind of trade restriction are not fair to the developing countries because it breeds exploitation of the people in those nations to become cheap labor. Due to the lack of protections, companies from powerful industrialized nations are able to offer workers enough salary to entice them to endure extremely long hours and unsafe working conditions. The abundance of cheap labor is giving the countries in power incentive not to rectify the inequality between nations. If these nations developed into industrialized nations, the army of cheap labor would slowly disappear alongside development. With the world in this current state, it is impossible for the exploited workers to escape poverty. It is true that the workers are free to leave their jobs, but in many poorer countries, this would mean starvation for the worker, and possible even his/her family Chossudovsky (2003). There is therefore no justification for the adoption of globalization and international financial liberalization. What the developed nations should do is to encourage the developing nations to develop their industrial base and open up their own markets for products manufactured in less developed countries. To this extent therefore, globalization implies economic disaster for developing nations and hence, there is no basis for its justification. The implication of globalization and the so-called financial developing nations‖ and Arigbede (2000:19) reviews it this way, ―do away with liberalization and globalization and poverty will be eradicated‖. In his own contribution, Nwosu (2000:386) stated that, ―the central problem with this accelerated globalization and//or liberalization process is the shocking degree of inequality and economic and cultural domination which it unleashes worldwide‖. That what we actually require is nothing but harnessing our God-given resources for the betterment of the lives of our people. GLOBALIZATION AND FINANCIAL LIBERALIZATION: ANY RELATIONSHIP? Many writers on international trade especially of recent, can readily tell you that there is a high and positive correlation and/or relationship between international trade, liberalization (be it financial or whatever) and the present drive to make the world to become the so-called ―global village‖. Writing on the evolution of globalization, Ezeanyika and Oruebor (2001:142) exposed the link between the General Agreement on Trade and Tariffs (GATT), the World Trade Organization (WTO), Structural Adjustment Programme (SAP) and the present globalization. All are the same fingers of a leprous hand. No wonder Rist (1979) and Sharp (1979) stated that, ―despite the numerous efforts, made in order to develop‖ the poorest regions of the world, the majority of the people who are living in it tend to the world, the majority of the people who are living in it tend to become still poorer in relative and in absolute terms‖. What we are made to understand here is that despite the introduction of so many policies and programmes by the so-called international community, purportedly designed to help the poore4r countries to grow, they have even become poorer by all standards. Hence globalization that is presently being bandied about, financial liberalization and even international trade, are the same designed and used in underdevelopment of third world countries. Hence all are related both in content and in purpose. Apart form the above fact, which has exposed the treacherous act of western nations, we have also observed that when the so-called Structural Adjustment Programme was introduced in the 1980‘s, it was greeted by much fanfare by the western economists as a means of getting to the Promised Land. Yet, nothing came out of it. The same was applicable to privatization, commercialization, liberalization, etc. the same thing will be applicable to globalization. This is because all are designed with the purpose of keeping developing nations worse than they were before. Hence, we can conclude that all are the same thing. MEASURING GLOBALIZATION Globalization can be measured around the four main economic flows that characterize globalization: Goods and services, e.g. exports plus imports as a proportion of national income or per capita of population Labor/people, e.g. net migration rates; inward or outward migration flows, weighted by population; Capital, e.g. inward or outward direct investment as a proportion of national income or per head of population; Technology, e.g. international research & development flows; proportion of populations (and rates of change thereof) using particular inventions (especially 'factor-neutral' technological advances such as the telephone, motorcar, broadband).
Page 1: International Conference on Applied
Page 5 and 6: International Conference on Applied
Page 7 and 8: International Conference on Applied

Globilisation, Trade and Financal Liberisation: Implication for the ...

Create successful ePaper yourself

Delete template?

Save as template?