Globalization in the New Emerging Economic Giants- MINT - Essay Example

Globalization in the New Emerging Economic Giants- MINT (Mexico, Indonesia, Nigeria and Turkey). The Question That Makes You Worry: In Which Direction Is Globalization In the Third World Moving? The presence of international economic giants today, ensures that the world has a certain direction to follow in the path to attaining globalization. However, there are a few questions that remain unanswered and raise concerns as to whether the picture that we see today is going to stay the same in the coming decade. “Global changes are likely to increase the inequality between and within these groups and reshape livelihoods and lifestyles of everyone. So, the question is how can we promote pro-poor development policy after the MDGs and amid complex changes, some of which mediate in favour of the poor, and many do not?” (Rothenberg, 2002, p.4). Globalization has a definite impact on the culture of a country, and when you check out growth in different countries, you receive a varied graph in terms of ideas, practices, and concepts of globalization. It is very clear today, that the leading world economies of the country are going to take a back-seat once third world countries come to the fore through gradual developmental economics. Economists today pose the question as to what will happen to the world economic order. The economics model followed in attaining globalization may also change over time. Paving the path for a changing economic model, is the developmental economics adopted by new emerging economic giants like Mexico, Indonesia, Nigeria, and Turkey. In our present thesis, we will study the questions being posed by most world economists and how these countries have developed dynamic economic structures to bypass the self-interest of existing economic giants and creating a new definition of globalization, mainly through key areas like foreign investment and trade. “the tendency of such processes to de-stabilize existing livelihoods, unravel social fabrics, create conflicts and exclusion as well as disrupt international markets” (Sumner & Tiwari, 2009, p.23). It is indeed interesting to see what economists have been talking about over the past one decade, and how these emerging nations have developed strategies to ensure these problems are put to rest in their respective economies. Globalization and its Impact On Mexico Globalization was a term that many residents of the southern parts of Mexico hated. They blamed the process for cutting down on labor wages, leaving many families of laborers half-starving. As Mexico lost out on its sovereignty upon the peasant economy, the country suffered massive losses in food self-sufficiency. This could not have been worse for a country wherein migration became the only solution to fighting poverty. Labor and peasant lives were considered comfortable sources of income and globalization kind of ruined it all. This was back in the 1980s. As Chang mentions in his book ‘Rethinking Development Economics’ - “Analysts began to explain the failure of development policies in terms not just of the conflict between development and other governments’ public objectives but of conflict between development and the state’s hidden agenda. The nature of the hidden agenda then began to be explored in a variety of political-economic analyses of the nature of the state.” (Chang, 2003, p.30). As the self interest of leading world economies took its toll on the Mexican society, the economists of the country started a new strategy. By 1985, the government liberalized both domestic and international trade and opened up economy to the international market. There were three direct consequences of the liberalization. The northern and southern states of Mexico were showing a convergence of income differences. As the difference narrowed very slowly, it became important to halt the process through one means and accelerate it through another. free market economists would argue, Mozambicans should be realistic and not mess around with things like cars (let alone hydrogen fuel cells!); instead they should just concentrate what they are already (at least ‘comparatively’) good at – growing cashew nuts” – (Chang, 2007). The government did just the same. Labor earnings went up rapidly. In fact, although the southern parts felt the economic crisis that hit the country in mid-1990s, the northern parts could easily avert adverse effects of the crisis. And all this thanks to the careful strategy developed by the country’s economists. International trade share in Mexico grew rapidly. The boom was strongly noticed by economists all over the world as the country culminated the process of liberalization in 1994 by signing the NAFTA (North American Free Trade Agreement), raising all restrictions on trade and using very low tariffs. By 2002, the country had 32 per cent international investment share, as opposed to a meager 11 percent in 1980, almost tripled. What people saw was a definite growth in migration from the under-exposed southern states. However, this did not stop the country from sailing high in developmental economies. The country may have seen labor losses that are higher than China or India, but with optimized economization, the Mexican government hopes to regain the lost labor. In a nutshell, the selfishness of the economic giants saw a mixed economic reaction in a labor intensive country like Mexico (Chang, 2007). Globalization and its Impact on Nigeria : The story of Nigeria being a part of world economics is one that sounds dismal to every discerner. There is no doubt that with a careful plan, the local government could have improved the flow of oil revenue in the country. Much of the difficulty experienced with financial liberalization, for example, arises because it is more costly for depositors and regulators outside banks to acquire relevant information on bank operations than it is for the managers inside the bank to do so.” (Chang, 2003, p.35). But corruption is rampant in the federal and Nigeria has turned out to be one of the victims of globalization. At least, the initial stages of globalization, which opened up chances of development in the Nigerian economy for the first time after the country got rid of colonization. Hopefully, things turned out better as soon as oil companies leading the game all over the world started taking interest in transparent dealings with the oil producing states of Nigeria. The Extractive Industries Transparency Initiative made things more discernable to the economists. Oil companies sent in their money, while the economists tracked whether the money reached the common man. And soon, Nigeria was riding high on GDP. The catch lay with the companies making all payments public, including those made while acquisition of operating licenses and leases. However, developing countries have their own set of problems and globalization does not address each of these problems separately. In fact, it does nothing to address these problems to help the country make it to economical stability like the economic giants of the world today. Nigeria had health issues like HIV/AIDS plaguing its economy by the start of 2000. While the fat paychecks went to only the high officials, the laborers and the common man benefitted nothing out of the neoliberalisation economic structure, since treatment for AIDS was not available in a progressive or sustainable form to the sufferers. The economic re-structuring did not allow better insurance or health coverage and this led to high criticism of the World Bank and IMF backed approach to globalization for the country (Chang, 2003). Globalization And Its Impact On Indonesia Being one of the most populated countries of the world, Indonesia has seen a mixed growth triggered in by systematic globalization. The country is still under heavy debts under the IMF. But this has not stopped the youth from considering the bright aspects of globalization. On the positive side, there is more revenue generation, better work cultures, more jobs, discipline and increased tourism. If these were enough to keep the economy from crashing, they would have helped during the economic Recession that the world and Asian countries saw post-1990. Problems that plagued the country of Indonesia were direct descendents of the exploitive nature of neo-liberal policies of globalization. Smuggling: Free trade and lesser restrictions called for lower check patrols. This increased chances of smuggling and thousands of goods get smuggled into Indonesia harming the economic balance of the country. Exploitation Of Natural Resources: The country has good solar back-up for its factories and households. However, with more number of tourists flowing into the country, locals are experiencing outflow of the energy reserves towards fulfilling demands by the tourism industry. As a result, the energy conserves are lost with no apparent gain by the local population. Other natural resources are also being exploited. Increased Trade Deficit : The country has increased number of jobs today, but many big companies are changing bases and are therefore, causing massive lay-offs in the population. The trade deficit in turn is rising with every passing year. Erosion of Mutual Help and Solidarity: Values that were earlier found in the local populace have been fading due to influence of Western lifestyles that has seeped into normal lives of Indonesians through television and free media. This further, downgraded the advantages that globalization was bringing along with it. The country revived it’s economy by using the increased tourist inflow in the nation to generate revenue. They have three very useful policies in this regard, which are Pay-for-visa-on-arrival, Visa-free facility, and Visa-overseas policy. This approach has worked well in extracting revenue from the tourist crowd that land at its airports every day. The value added tax refunding has also helped the government attract more number of tourists and keep the revenue flowing in. Thankfully, corruption is not rampant in the country but when foreign companies move their locations abroad, massive lay-offs result (Sumner & Tiwari, 2009). In a nutshell, Indonesia has seen slow growth, but the consequences are so many that the local population is unable to reap the rewards of the country going global. Globalization And Its Impact On Turkey The main emphasis of globalization lies in its propounding Western culture as a source of lifestyle that opens up chances for more international trade for the developing countries. Developing countries like Turkey which have followed autonomy all through history seem to bear the brunt of culture differences that occur during the process of globalization. What turns out to be an adaptation of globalization, global capitalism is the theory that has propelled Turkey towards taking the plunge. However, things have not really worked out the way they should have been, since the difference between internationalization and trans-nationalization is very clear in the land of Turkey. And the difference is basically in the quality of life. As always, globalization propounded by the World Bank and the IMF, fails to address quality lifestyle needs of citizens of developing countries like Turkey. The impact of globalization got thwarted by socio-political issues even before revenue could be generated to strengthen the economy. And this is where the Turkish government came up with strategic approach to internationalization. The need to keep local populations satisfied with the rapidly changing scenario. The most important negative impact that has been observed in Turkey however, is the destructive influence of transnational companies on SME. “Global changes are likely to increase the inequality between and within these groups and reshape livelihoods and lifestyles of everyone. So, the question is how can we promote pro-poor development policy after the MDGs and amid complex changes, some of which mediate in favour of the poor, and many do not?” (Sumner & Tiwari, 2009, p.16) Needless to say, almost ninety-nine percent of the businesses present in the country are SMEs that cater to the domestic population only. The rampant self-sufficient culture of the country, wherein every house has a set of tools to set right things of daily use, is getting weakened in the face of this economic invasion. Is this any separate to colonization, something that we have seen in the past? “Global changes are likely to increase the inequality between and within these groups and reshape livelihoods and lifestyles of everyone. So, the question is how can we promote pro-poor development policy after the MDGs and amid complex changes, some of which mediate in favour of the poor, and many do not?” (Rothenberg, 2002, p.2) Conclusion : Not all talk of globalization leads to claps and cheers. The story had been dismal in third world countries like Turkey and Nigeria, until these countries made up their minds to reboot their internationalization strategies and keep the change within their control. In every case we have seen that although globalization brings with it the promise of a better and peaceful world order, the invasion into lives of simple people and third world countries with weak social fabrication and economies, has an immediate adverse effect. “Delinking from the West is proposed as an economic strategy so that the Rest can in fact catch up, and be like the West. The goal is the same, the difference is over the means to achieve it.” (Kiely & Marfleet,1998, p.8). Every country needs to understand from the examples of Mexico, Turkey, Indonesia, and Nigeria, that in the growth of the nation, developing crucial strategies that combine both internationalization and economic growth is important to the success of globalization. References Andy Sumner and Meera Tiwari . (2009). After 2015: International Development Policy at a Crossroads .[Online] Available at: http://www.palgraveconnect.com/pc/doifinder/10.1057/9780230234680. (Accessed: 21 March 2014). Chang,H.(2003) Rethinking Developments Economics, London : Anthem Press Chang,H.(2007) Bad Samaritans; The Guilty Secrets of Rich Nations and The Threat To Global Prosperity, London; Random house. Kiely, R. and Marfleet,P.(1998) Globalisation and The Third World, London : Routledge Rothenberg,L.(2003) Globalization 101; The Three Tension of Globalization. Issues in Global Education, [Online] Available at: http://www.globaled.org/issues/176.pdf (Accessed: 21 March 2014). Read More