Globalisation
can be seen as one of the most important force impacting on the economy.It refers to the increasing
unification of the world's economic order through reduction of such barriers to
international trade as tariffs, export fees, and import quotas. According
to Brittan (1998:2) globalisation is viewed “as a whirlwind of relentless and
disruptive change which leaves governments helpless and leaves a trail of
economic, social cultural and environmental problems in its wake.”
Globalisation
is a term used as buzzword without showing the implication of globalisation.
Walker en Fox (1999:2) states that the global integration of the financial
markets can be seen as an example globalisation. Walker en Fox argues than the
process of financial globalisation is the most important part of the process of
globalisation. It is possible to gain insight into the general process of
globalisation by studying the process of financial globalisation. It is
accepted that the world economy has become more integrated due to the process
of globalisation (Neuland en Hough, 1999:1). Despite the fact that globalisation
is not a new phenomenon, the intensity of the process of globalisation has
increased in die 1990’s. The increasing intensity in the process of
globalisation is evident in the increase in financial transactions in the world
markets.
Hak-Min
(1999:1) indicated that the threefold increase in private capital transactions
between 1980 and 1990 could be ascribed to the process of globalisation in the
international financial markets. Some
of the issues that will be dealt with in the paper are the definition of
globalization, the impact of globalisation on unemployment, the distribution of
income and the sovereignty of developing countries. Before the impact of
globalisation can be discussed it is also crucial to give a brief overview on
the current situation of economic development in Africa. The impact of
globalisation on economic policy in developing economies will also be covered.
The paper will conclude with a few remarks on the impact of globalisation on
the NEPAD initiative.
The process of globalisation is a reality. The increasingly
integrated global economy provides and unprecedented opportunity for growth and
higher living standards throughout the world, if the risk associated with the
process of globalisation (IMF, 2000:1). It is important for Africa’s
development and growth that policy makers in Africa understand the process of
globalisation and knows how to deal with the impact of globalisation.
Globalisation is a term that has become very
popular and used in many different contexts in the literature.
In
most of the definition of globalisation that is found in the literature the
process of globalisation is seen as the breakdown of borders between countries,
governments, the economy and communities. In the financial markets it is also
the blurring of borders between different markets.
According to the Oxford English Dictionary, the word "globalization" was first employed in a
publication entitled Towards New Education in 1930, to denote a holistic
view of human experience in education.
The United Nations ESCWA says globalization "is a widely-used term that can be
defined in a number of different ways. When used in an economic context, it
refers to the reduction and removal of barriers between national borders in
order to facilitate the flow of goods, capital, services and labour... although
considerable barriers remain to the flow of labor.
Tom
G. Palmer of the Cato Institute defines globalization as "the diminution or
elimination of state-enforced restrictions on exchanges across borders and the
increasingly integrated and complex global system of production and exchange
that has emerged as a result."[11]
Thomas L. Friedman has examined the impact of the "flattening" of the world, and argues that globalized trade, outsourcing, supply-chaining, and political forces have changed the world permanently,
for both better and worse. He also argues that the pace of globalization is
quickening and will continue to have a growing impact on business organization
and practice.[12]
O’
Brien (1992:5) also links the definition of globalisation to geographical
borders. O’Brien distinguishes between national, international, offshore and
global. National transactions take place between businesses in the same
country.
International
activities are activities that take place between different countries. It is
inter-national. International also means trade that does not take place in a
national country. Multinational describes activities that take place in more
than one country.
Global
combines elements of international and multinational as a more advanced stage
of integration between countries. A truly global activity does not know any
internal borders. It also gives limited recognition because of the fact that
the country is irrelevant when it comes to global activities.
Finally, Takis Fotopoulos argues that globalization is the
result of systemic trends manifesting the market economy's grow-or-die dynamic,
following the rapid expansion of transnational corporations. Because these
trends have not been offset effectively by counter-tendencies that could have
emanated from trade-union action and other forms of political activity, the
outcome has been globalization. This is a multi-faceted and irreversible
phenomenon within the system of the market economy and it is expressed as:
economic globalization, namely, the opening and deregulation of commodity,
capital and labour markets which led to the present form of neoliberal globalization; political
globalization, i.e., the emergence of a transnational elite and the phasing out
of the all powerful nation-state of the statist period; cultural
globalization, i.e., the worldwide homogenisation of culture; ideological
globalization; technological globalization; social globalization.
Background of globalization: The historical origins of
globalization are the subject of on-going debate. Though several scholars
situate the origins of globalization in the modern era, others regard it as a phenomenon
with a long history An early form of globalized economics and culture, known as
archaic globalization, existed during the Hellenistic Age,
when commercialized urban centers were focused around the axis of Greek culture
over a wide range that stretched from India to Spain, with such cities as Alexandria, Athens, and Antioch at its center. Others have
perceived an early form of globalization in the trade links between the Roman Empire, the Parthian Empire, and the Han Dynasty. The increasing articulation of
commercial links between these powers inspired the development of the Silk Road, which started in western China,
reached the boundaries of the Parthian empire, and continued onwards towards
Rome.[16] With 300 Greek ships a year sailing
between the Greco-Roman world and India, the annual trade may have reached
300,000 tons.
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