How Has Russia Been Affected by Globalization - Literature review Example

Global Political Economy: How has Russia been affected by globalization? I. Introduction The 1990s saw a number of intense international changes, including the end of Cold War, and the emergence of a phenomenon termed as globalization. These two significant international events are the subjects of most Global Political Economy (GPE) studies, debates and discussions, because, besides sharing prominence in the same period, the resulting Russian democracy out of the end of the Cold War, has been hugely affected by globalization trends. In the interest of better understanding of the concepts, of the issues and of the reasons behind, this paper will try to first provide basic facts and insights on globalization in the context related to its influence on Russian affairs. A discussion on the Russian trends as affected by globalization will follow. II. Globalisation Globalisation has been given a variety of definitions, owing to its unique features and its seemingly seamless, borderless scope, as it reaches even the nation-states’ international as well as domestic affairs, and the social, cultural, political and economic aspects of nation-states, which either provide hope of a bright future to the positivists, or create fears among the skeptics. Veseth, Michael (2007) confirms this in his article in International Political Economy Zone, that globalization defies easy definition because it breaks down barriers which separate nation-states, cultures, labor markets or national economies. He further notes that globalization creates opportunities for new forms of economic and social relations, but in the process destroys what already exists. Fedorov, Yuri (2000), attempts to describe globalization as not only an economic phenomenon, since it has many other facets like the global trend toward democracy and the rapid change in the area of information and communications technology. Fedorov further claims that globalization is also closely associated with the growth and development of post-industrial models in economy and society, thus can be said to bring with it a wavelike rise of democracy. On the other hand, Inozemtsev,Vladislav (2006) depicts globalization as not a natural phenomena but rather a well-directed manipulative drama of political forces that are America and Europe in the interest of perpetuating hegemony. Vladislav argues that, for some ideologues to say that globalization is a natural process where there are no actors and subjects, neither dominators nor oppressed, neglects the reality of a force or forces at play behind. Palmer, Tom G. (2002), in his speech to students in Cato Institute and as published in Cato’s Letter (Fall 2002, Volume 1, No.2), gave a clear picture of globalization by presenting the myths that surround and the benefits derived from, globalization. Palmer said that many groups and institutions oppose globalization for the following reasons, which he claimed are myths: (1) globalization eliminates jobs; (2) globalization directs capital where wages are lowest and xploits the poorest workers; (3) capital is exported from rich countries to the third world creating sweatshops, which then export lots of cheap goods to richer nations, generate trade surpluses, and undercut manufacturing in rich countries, so all are made worse off; (4) globalization causes a race to the bottom in environmental and labor standards; (5) globalization creates a homogeneous American culture around the world; and, (6) globalization creates inequality. Palmer continued to point out that the following benefits of globalization far outweigh its negative consequences: (1) globalization leads to peace by diminishing the incentives for conflict; (2) trade leads to benefits for all; (3) trade creates wealth; (4) free trade is the fastest route to the elimination of child labor; (5) trade, openness, and globalization support accountable, democratic government and the rule of law; and, (6) free trade is a fundamental human right. There are still other definitions of globalization, but for the purpose of this paper which is mainly to take a look at how globalization has affected Russia, the above definitions will suffice. III. How has globalization affected Russia 1991 saw the fall of communism, the breakup of Soviet Union, and eventually the following year, the birth of Russia. It was a period of high hopes and expectations for Russia, with all the world predicting a very bright future for the new democracy. International assistance, both in monetary form which reached tens of billions of dollars, and in other forms like advices from experts, policy-makers and world leaders including then President Clinton, were poured in aid of the new promising economy. However, to the dismay of the world especially of analysts and world leaders, Russia never rose above and failed all expectations. As Saunders, Paul (2001) summed up, “Russia has not lived up to its hype”. Current trends likewise show the same – Russia remains a poor nation, staggering and struggling. Several reasons for Russia’s failure have been offered, most interesting and noteworthy of which are the reasons presented by none other than the President of Russia himself, Dmitry Medvedev. In his first State of the Nation Address on November 5, 2008, Medvedev pointed out that the highlights of the year had been the August war in Georgia and the world economic crisis, both of which, he blamed America for. He explained that the war in Georgia in August was caused by the presumptuous policies of America’s government, and that the economic crisis is a consequence of America’s arrogance and selfishness, thus his proposition for a more anti-American Russian government moving towards preservation of its political system. (The Economist, 6 November 2008). This strong message is worth exploring, as it implies that Russia has failed primarily because of America. Is it really America’s fault that Russia is what it is today? Or is it the process of globalization which entails an interplay of interrelated issues, both domestic and international, that has led Russia to its place today? Some analysts and scholars claim that the American’s influence in globalizing Russia led to the latter’s dismal failure, but most of them believe that it is the process of globalization that has largely affected Russia. Vorobyov, Alexander and Zhukov, Stanislav (2000) stress that a number of interrelated, mutually reinforcing historical processes have been shaping Russia’s transition, with an array of disturbing negative outcomes including large and still increasing foreign debt. According to Vorobyov and Stanislav, both external and internal factors and forces dominantly influence the Russian economic and political scene, forcing, among others, its producers to compete in the global market, which shocks Russia whose economy is historically built upon absolute and relative prices (and production costs), a far cry from prevailing world prices. Seen in this perspective, Vorobyov and Stanislav claim, globalization is the driving force in Russia’s transition. Similarly, Saunders, Paul J.,(2001) wrote about a “shocked” Russian nation, but he stressed American’s or Washington’s influence in the process. Saunders wrote that, in the interest of transforming Russia into a state-nation that can actively play in the rapidly globalizing world, Russia had first to be transformed into a “globalized” nation, under the strategy known as “shock therapy” or “Washington Consensus”. Said strategy entailed liberalizing trade policies to encourage competition, and privatization, eventually creating a market economy in Russia in the quickest possible time. Despite blunders and growing opposition from the Russian legislature, this strategy was continued, and consequently and expectedly, failed. It is quite ironic that the efforts to integrate Russia into the globalized world failed, despite the concerted efforts of the world leaders and international policy-makers at achieving a totally transformed Russia as a major player in the global economic and political affairs. It is a disturbing situation that the current position of Russian leaders now is seemingly to blame the US, and thus withdrawing from any commitments it has forged with the US, and ultimately preserving its political regime. Amidst all the chaos and uncertainties, it is good to note why globalization has affected Russia negatively. Apart from the major reasons already cited by Vorobyov, Alexander and Zhukov, Stanislav (2000) and Saunders, Paul J.,(2001), there are other explanations offered by analysts and scholars. Panic, Mica (2006) explains that globalization as served to Russia had been to focused on economic reforms, neglecting other equally important aspects. Panic states that, although economic conditions are critically important, they cannot be separated from non-economic factors. Conversely, for economic policies to be effective, they must consider the capacity of a society, meaning its institutions and resources, to solve any problems that would result from divisions and tensions which cause recurring violence. IV. Conclusion The case of Russia in the face of globalization serves as a reminder for the key players in the globalized world that change or transformation is a painful and long process, and there is not shortcut to it. It is also telling the world that change cannot be focused only on one aspect, in Russia’s case, economic aspect, if the objective is a long-term transformation. Works Cited Vorobyov, Alexander and Zhukov, Stanislav, ‘Russia: Globalization, Structural Shifts and Inequality’, Globalization, Labor Markets, and Social Policy, CEPA Working Paper Series I, Working Paper No. 19, February 2000, Center for Economic Policy Analysis New School University. Inozemtsev, Vladislav, ‘Two Faces of Globalization: Europeanization Vs Americanization’,08 Feb 2008, accessed online 07 Nov 2008, http://eng.globalaffairs.ru/numbers/14/1008.html Saunders, Paul J.,Why "Globalization" Didn’t Rescue Russia, reprinted from Policy Review, February & March 2001, No. 105, accessed online 7 Nov 08 from http://www.nixoncenter.org/publications/articles/Russia%20and%20globalization.htm Panic, Mica, ‘Reconstruction, Development and Sustainable Peace’, © "Russia in Global Affairs". № 1, January - March 2006, posted online 8 February 2006, accessed online 7Nov 2008,http://eng.globalaffairs.ru/numbers/14/1009.html Palmer, Tom G., ‘Globalization is Grrrreat!’, Cato’s Letter, Fall 2000, Volume 1, No. 2. Walker, Shaun, ‘Now financial crisis takes toll in Russia’, The Independent World, 17 September 2008, accessed online 7 Nov 2008, [http://www.independent.co.uk/news/world/europe/now-financial-crisis-takes-toll-in-russia-933890.html] Read More