Globalisation and Development

Question 1

Definition and Forms of Globalisation

Answer 1

Globalisation facilities the connection and interdependence of economies resulting in the world becoming a ‘global village’. This means that events occurring in one part of the globe can have a great impact on persons all over the world in a very short space of time. It is a multi-faceted concept.

Question 2

Four Main Aspects of Globalisation

Answer 2

1. The social-cultural dimension: this encompasses the coming together and commericalisation of various cultures. Globalisation links different cultures, religions and forms of dress, for example.
2. The economic dimension: this entails trade liberalisation, the key facilitator of globalisation.
3. The technological dimension: this comprises the media and the communications aspects that deal with a network of wireless technology, 3D, 4D and real time, effectively making the world a ‘smaller place’ in terms of communication.
4. The environmental dimension: this involves viewing the world’s environments as one in which global warming and climate change occur.

Question 3

Drivers of Globalisation Include:

Answer 3

-Commnications technology: the internet, mobile phones and emails;
-faster and cheaper air, road, sea and railway transport;
-heightened the importance of market forces and market expansion as made technological revolutions accelerate.

Question 4

Facilitators of Globalisation and Development

Answer 4

World Trade Organisation (WTO)- which deals with encouraging and facilitating trade worldwide, has its headquarters in Geneva Switzerland. As part of a multinational trade agreement, it was formed in 1948 following a meeting of the world’s most powerful leaders, including United States, the UK and Canada, in Bretton Woods in 1944. It was agreed that for world economic growth to occur in the aftermath of World War II there was the need for a body to facilitate trade among countries, so they signed an agreement called the General Agreement on Tariffs and Trade (GATT). Since 1995 this agreement has been an institution called WTO.

Question 5

The Impact of the WTO in the Caribbean

Answer 5

-The WTO supports development in the Caribbean, especially, through its efforts in poverty reduction and in the development of infrastructure.

-The challenge to Caribbean exporters is to make goods that are competitively priced for the local and overseas markets. Since 200, Caribbean agricultural producers have faced competitions from cheaper imports of, for instance, poultry, onions, carrots and melons.

Question 6

Economic Partnership Agreement (EPA)

Answer 6

The EPA was signed in 2008. It was a joint agreement between 15 CAROFORUM States and 27 European Union states to allow both groups to conform to WTO rules. In the case of the Caribbean the aim was also to facilitate economic growth and job creation.

Question 7

The Impact of the EPA on the Caribbean

Answer 7

Allowances were made to remove customs duties on each other’s goods. However, this could not be equalised because of the difference in levels of development.
Liberalisation of trade in goods meant that EU members could trade in Caribbean agriculture and fisheries: bananas, rice, and sugar. Caribbean states bought fish; mainly cod, herring and sardines. Liberalisation of trade, services and investment allowed for trade-related development cooperation, resulting in an upgrade in the capabilities of the Caribbean countries’ service providers in areas such as tourism, finance and business.

Question 8

International Monetary Fund (IMF)

Answer 8

The IMF is an international lending institution that was formed in 1945 by the Un after the Bretton Woods Conference. It aids globalisation and development by ensuring stability in the international monetary sector with regard to exchange rates of currencies. A stable financial state is important in avoiding crisis or uncertainty so that investors are happy to spend their money, resulting in economic growth, the maintenance of high living standards and a reduction in global poverty. It does this through monitoring the economic and financial policies of all 188 member countries. The governing of the fund is related to each country’s position in the global economy. Each country pays a quota into the fund depending on what they can afford, and then these subscriptions are used to lend to other countries.

Question 9

The Impact of IMF in the Caribbean

Answer 9

Jamaica went to the IMF for a loan on the face of economic problems in 1977. The IMF called for some serious belt tightening including privatisation of 18 public companies, contracting out of several public services, currency devaluation and tariff reduction. Other Caribbean countries, such has Trinidad and Tobago, Guyana and Barbados, also received loans from the IMF during the 1980s and 1990s.

Question 10

The World Bank

Answer 10

The World Bank ha the responsibility of issuing loans and credit options, trust funds and grants to assist in economic growth and poverty reduction. It works to facilitate the transfer of capital from rich countries to the poor countries of Africa, Asia and South America. The World Bank comprises two development instituations. The International Bank of Reconstruction and Devlopment (IBRD) and the International Development Association (IDA). The Caribbean gets aid from the IBRD, which helps the middle-income and less developed countries. It is open to its 187 member countries only, not to individuals. The headquarters are in Washington USA. The bank began in 1945, and at first its focus was to finance the reconstruction of European countries after World War II.

Question 11

The Impact of the World Bank in the Caribbean

Answer 11

Projects undertaken by the World Bank include: road, communications, power stations, water supplies, rural development, health care and the use of ICT in education in education. The easy terms of the loans make them attractive to countries. The interest rate, or the cost of borrowing the money is usually low as the repayment period may be as long as 40 years. Countries can alleviate poverty and not get into dept, which condemns future on some aspects of social or human rights that may be lacking, such as becoming a democratic state or reducing corruption. It also provides analytical and advisory services and assists with capacity building.

Question 12

Transnational Organisations

Answer 12

Transnational corporations (TNCs) or multinational cooperations (MNCs) are huge or mega businesses that operate across the globe wit hheadquarters on every continent and employing many people at various branches around the world. The main headquarters is usually in a metropolitan or developed country such as the USA, the UK, France, Germany and Japan. These companies have huge domestic markets, so they can sell many products with low-cost mass production, low-cost mass advertising, low prices and global brand recognition or standards. (Apple and Samsung)

Question 13

Technology

Answer 13

Technological globalisation occurs via media and communications, facilitating the shrinking of the world into a global village. Due to the introduction of cable, internet, television, mobile phones and computers, globalisation has had a profound effect on other aspects of societies , such as their culture, identity, commerce and trade. Modern technology has increased both the speed of and how global communication occurs.

Question 14

Ideologies: Social, Gender, Economic, Political

Answer 14

Globalisation is an ideology that promotes the view that all social, economic and political activities must be liberalised to facilitate free movement of labour and trade. However, critics have argued that common social, economic and political activities developed in richer industrialised countries, which have a strong influences over the ideologies of the less wealthy nations, such as those in the Caribbean, through institutions including the mass media or financial and aid institutions, such as the IMF, the WTO and the World Bank.

Question 15

Social Ideologies

Answer 15

These include ideas about social equality and rights. They can differ across countries, but where there is commonality, such as in areas of equal opportunities, the roles of social institutions and the environment, it can create a connection and help break down barriers. Many of the social institutions of the Caribbean are derived from models established under colonialism. The justice and legal system, including the law codes, of the English-speaking Caribbean, for example, is very close to that of the UK, and are governed by principles very similar to those that govern the systems of many industrialised Western nations, such as the USA. These links and similarities help facilitate the globalisation process.

Question 16

Gender Ideologies

Answer 16

Gender ideologies relate to the role of women’s in society. The predominant global ideology associated with this is feminism, an international movement that seeks to achieve equality between the genders in all aspects of life: in rights, freedoms, opportunities and so on.

Question 17

Economic and Political Ideologies

Answer 17

In 1948, the formation of GATT, after the end of World War II, underlined the division of political and economic thought into two main ideologies on economic and political issues. The Soviet Union, with the Russia at its centre, and its allies in the East believed in the communist philosophy if a cnetrally planned economy and state political control of one-party state. Their economies were closed and they traded only among themselves. Other countries, including the USA, Canada, Japan and the industrialised countries of Western Europe, believed in the market economy and political democracy. Here, wealth was in the hands of private individuals as opposed to those of the state. This resulted in an intense conflict known as the Cold War between West and East, especially in the 1960s and 1970s, when each side attempted to attained influence over developed countries that had recently achieved independence and required an economic and political structure to achieve development.

Question 18

Impact and Response to Globalisation

Answer 18

Globalisation has had both positive and negative impacts on the Caribbean countries. These must be put in their proper context of the vulnerability and small size of the Caribbean states and the historic dependency of the region on wealthier and industrialised countries, particularly the ex-colonial powers. It should be noted that the various stages of development of the Caribbean states have lead to different responses to globalisation.

Question 19

Industry and Commerce

Answer 19

Allowing the free flow of capital around the world makes everyone more connected. The region has become more sensitive to what is happening in the wider world. The prices that commodities are sold at are not controlled by undividual countries, but are determined by the global market price. In the Windward Islands, there is evidence of the impact as they depend on one or a narrow range of exports, such as bananas. Other industries have also suffered from the inability to compete in export markets or with cheaper imports; for example, manufacturing (car assembly, garment manufacture, sugar cane processing), which in many countries has stagnated or declined since the 1990s.

Question 20

Distributional Sector

Answer 20

The distributional sector is the commercial sector in the economy responsible for accessing, linking and supplying the network pf wholesalers and retailers in the local market. The efficiency of the sector is crucial to ensuring that consumers have access to a wide variety of goods at competitive prices. It contributes to the overall growth and development of the Caribbean by providing employment and promoting entrepreneurship and local manufacturing. In a well organised system, it manages and maintains the balance between demand and supply, thereby promoting efficiency in the market. It also contributes to the management of foreign exchange by sourcing goods at reasonable rates.

Question 21

Labour

Answer 21

With globalisation, there has been a reduction in labour and labour costs and a rise in unemployment. Productivity is now highlighted and this often means automation and downsizing as well as a preference for workers with technical skills. In the Caribbean, this trend has accompanied a downturn in certain industries, such as manufacturing, because of an inability to compete in global markets.

Question 22

Ideology

Answer 22

As part of its colonial past, the Caribbean has been influenced by the ideologies of the wealthier, industrialised nations in Europe, such as democracy and capitalism. The later 20th century saw the increased influence of the USA in the Caribbean affairs. The region is strategically close to its borders and during the years of the Cold War became a focus for the ideological battle between the USA and communism, a situation heightened by the communist revolution in Cuba. Through multilateral agencies such as the IMF and World Bank, the US supported the economies of Caribbean countries via the provision of aid and finance, which worked to prevent the influence of communism spreading further in the region. Since independence the Caribbean has also experimented with implementing socialism- in Jamaica, Guyana and Grenada. In the former, the financial cost of social reform proved too high for the economy to bear, while in the latter two countries, intervention by the UK and US but an end to their attempts.

Question 23

Popular Movements

Answer 23

Globalisation has resulted in the growth of movements within civil society that reflect the issues and interests of people, such as human rights and the environment.

Caribbean Association of Feminist Research and Action (CARFA):
this is a regional non-governmental organisation that comprises researchers, activists and women’s groups who are focused on bringing about change for oppressed women. The work of international women’s groups have influenced the organisation’s focus on addressing issues and fighting for the rights of women in areas such as sex trade, tourism and human trafficking, as well as the impact of trade liberalisation on the poor generally and women in agriculture specifically. They receive funding from international non-profit organisations and local governments to finance projects and help them to promote sustainable development in the Caribbean. They also collaborate with reginal interest groups by publishing magazines, hosting regional conferences and funding scientific research. International non-profit organistions and local governments grant funds to CARFA for projects and help them to attain sustainable development in the Caribbean.

Question 24

The Women and Development Unit (WAND)

Answer 24

WAND was established in 1978 as a part of the United Nation’s focus on the Decade for Women, with the goal of equality, development and peace. The unit’s aim since has been to ensure gender equality and the full integration of women into the development process, by focusing on how women continue to be subordinated by culture, society and economic systems, particularly capitalism as reinforced through globalisation. It looks to influence policy and the provision of services by providing information and a point of view on women and their role in Caribbean development. It is committed to supporting and promoting women’s development through training, research, documentation and community outreach.

Question 25

Environmental and Social NGOs

Answer 25

NGOs address issues such as human rights and sustainable development and act when, for instance, countries are slow to enact legislation directed at disaster mitigation or basic environmental indictors. Some international agencies active in disaster relief in the region are the Red Cross and the Salvation Army, while global environmental pressure groups, such as Greenpeace and Friends on Earth, are also present. The CPDC is the main regional umbrella body representing NGOs concerned with social development, providing them with a voice on several policy issues and concerns at both regional and international levels. It aims to bring together NGOs, civil society and government for critical dialogue on a number of policy areas that touch on aspects of social justice, such as sustainable development, trade liberialsation , governance and participation, and capacity building.

Question 26

Opportunities for the Caribbean

Answer 26

Globalisation is an ongoing, dynamic process. The Caribbean therefore needs to position itself to deal positively with oppurtunities presented by further developments and to protect itself as far as possible against future economic shocks and threats, with human resource development and technology needing to be the focus.