Politics of Globalization - Assignment Example

1. Regimes: or nations are political constructs that exist as sovereigns that have certain rights and responsibilities under the international system. A basic requirement for regimes is that they must subscribe to the international order by being members of international bodies like the United Nations and must abide by the international charter. There are several regimes that are considered rogue regimes like North Korea and earlier Iraq for their noncompliance with international treaties and sanctions. This has led to the international system becoming fragile and threatened by frequent wars and strife as the dominant members of the sovereign order like the United States and UK have sought to bring these regimes under the ambit of international law and make them obey the treaties and rules of the international system. 2. Democratic Deficit: The absence of strong democratic institutions and structures that would provide legitimacy to the overall democratic superstructure is known as democratic deficit. The example of the European Union or EU is usually cited to indicate or explain this concept. The implication is that the EU suffers from democratic deficit because of the lack of legitimacy for the union in terms of binding political structures. Recent events have proved this right as can be seen in the way the member countries of the EU are scrambling to impose binding conditions on the PIIGS (Portugal, Ireland, Italy, Greece and Spain) 3. International Political Economy: IPE or International Political Economy is the study of international relations in combination with political economy. The study of IPE draws upon many disciplines including economics and political science as well as sociology, history and cultural studies. The noteworthy feature of IPE is that the boundaries of academic study in IPE are flexible and porous meaning that many disciplines come together to constitute the study of IPE. The study of globalization and its processes is at heart of IPE and the recent research into these processes has shown how IPE can contribute to the extension of research into these processes. 4. Hegemonic Stability Thesis (HST): refers to the principle of dominant powers that help to maintain stability because they are hegemon’s. This is the thesis that subscribes to the view that hegemonies maintain peace and stability in the international system by becoming world policemen and hence can play a stabilizing role in the international order. This has gained currency since the time of the cold war when the two superpowers, United States and the erstwhile USSR were supposed to have maintained peace in the world because of their opposition to each other and hence maintaining a balance of power. Ever since the end of the cold war, the United States is supposed to have been playing the role of the dominant or the only superpower and helping the international system to be stable and peaceful. The thesis holds that because of the preeminent military and economic superiority of these states or hegemon’s, other countries tend to abide by these powers thereby helping to make the world safe for trade and commerce. In future, the United States and China are expected to play the hegemon roles in opposition to each other and thereby stabilize the international system. 5 Washington Consensus: Washington Consensus is the term applied to the way of development prescribed by the Bretton Woods twins or institutions of the IMF and the World Bank. The developmental paradigm that the term Washington Consensus implies is that of deregulation, opening up of markets to the Western countries, privatization and public sector reform including wage reform and economic restricting. Usually, this way of development is prescribed to the developing countries or the Third World countries as a path to be followed to alleviate their social and economic problems. However, in recent years, the Washington Consensus has come in under criticism because of the debt crises in the Third World. 6 .Multilateral Agreement on Investment (MAI): refers to the practice of agreements between nations to adopt preferential policies welcoming investment and capital from each other into the other country. This has been the case since the global economy was integrated and these processes of multilateral agreements on investment have gathered pace in the last two decades. With these agreements, attracting foreign investment from other countries has become easy leading to a win-win situation for both countries that are signatory to the MAI’s. Hence, the practice has been encouraged because of the inherent economic benefits that it brings to the table. 7. Sustainable Development: Refers to the practice of development that is to be followed if it has to ecologically, socially sustainable meaning that such development should not lead to over depletion of resources or causing too much stress on the environment. Any form of development that is polluting or causes too much resource extraction is considered unsustainable. The emphasis on the way of development that would go easy on the environment and the natural resources has been the trend in recent years given the very real cases of resource depletion and environmental stress. 8. Flexible Exchange Rate: is a mechanism of maintaining the exchange rates that are freely floating in the sense that they are not tied to a particular currency or a basket of currencies and hence can be traded or speculated upon. When contrasted with fixed exchange rates that are the case whenever a country wants to maintain export competitiveness or keep its imports expensive and exports competitive. On the contrary, flexible exchange rates are subject to market movements and hence are not tied to any particular currency. The system of flexible exchange rate for currencies is recommended by the IMF and World Bank as a means of opening up the country to foreign investors and making the currency attractive to them. 9. Neo-Protectionism: refers to the new and emerging strains of protectionism in the Western countries in response to the ongoing global economic crisis and the loss of jobs due to outsourcing and Offshoring. Neo protectionism has emerged due to the fact that trade is supposed to have caused huge global imbalances leading to the present financial crisis and in the aftermath of the crisis, the wisdom of using trade as a component of a country’s economic strategy is being questioned. This has led to calls for increased trade barriers with countries like China that have built a sizeable chunk of Dollar reserves that has given it unprecedented power over the US. 10. Debt Service Ratio: Refers to the amount of money that is needed to repay the principal and interest components of a country’s or a company’s debt. Usually, the term is widely used to refer to a country’s outlay to repay the interest and the portion of principal that is to be paid each year or month or quarter depending on the repayment frequency. 11. Hollowing out: refers to the practice of countries like the United States outsourcing their industries and other sectors like software and call centers to countries like China and India. The term refers to the fact that many of the jobs at the core of the manufacturing and knowledge sectors are being hollowed out of the United States and are being sent to China and India. Though the phenomenon of outsourcing produces benefits for the United States, the term hollowing out is used in a derogatory sense mainly due to the strident opposition from many groups within the United States to the processes of globalization and Offshoring. Hence, it must be remembered that the government has to devise ways and means to compensate workers whose jobs have been hollowed out and sent overseas. 12. Most Favored Nation (MFN): is the status conferred by one country upon another to indicate that it is willing to offer trade concessions and favorable economic terms for partnership. The conferring of the MFN status can be bilateral or multilateral. The former refers to countries like the United States conferring the status on Mexico and Canada in a two way partnership or conferring the same status in a NAFTA format wherein it is multilateral. However, the term is usually applied to bilateral agreements in general. The recent case of Pakistan bestowing the MFN status to India is a case in point where trade can trump hostilities and hence can lead to peace. 13. Preferential Trade Agreements: are mechanisms by which a group of nations agree to extend preferential conditions of trade and commerce with each other so that they all benefit from the arrangement. Examples of preferential trade agreements include the NAFTA and the FTA (North American Free Trade Agreement and Free Trade Agreement respectively). Another example of the preferential trade agreements is the SAARC grouping of nations or the South Asian Association for Regional Cooperation that is a grouping of South Asian nations that extend preferential terms of trade with each other to augment trade and commerce within these regions. The preferential trade agreements can be between two nations or a group of nations. Since the preferential trade agreements in the form of MFN have been discussed earlier, I have listed multilateral free trade agreements in this section. The preferential trade agreements are sometimes criticized for circumventing the WTO rules or the rules of trade laid down by the World Trade Organization which mandates how trade between nations is to be carried out in accordance with international rules laid down by the body. 14. International Panel on Climate Change: is the international body of scientists and researchers that has been set up to study the effects of climate change and global warming on the ecology of the planet. Given the fact that climate change and global warming are supposed to be impacting the earth’s economic and social systems in a major way, the formation of the IPCC is supposed to be a step in the direction of studying such impacts on the peoples of the world. As the IPCC is made up of eminent researchers and experts, due credence is given to its findings and research by the international community. 15. Voluntary Export Restraint 16. Sustainable Development: Refers to the practice of development that is to be followed if it has to ecologically, socially sustainable meaning that such development should not lead to over depletion of resources or causing too much stress on the environment. Any form of development that is polluting or causes too much resource extraction is considered unsustainable. The emphasis on the way of development that would go easy on the environment and the natural resources has been the trend in recent years given the very real cases of resource depletion and environmental stress. References 1. Bhagwati, Jagdish. 2004, In Defense of Globalization, Oxford, London.pp 3-5. 2. Chua, Amy. 2007, The World on Fire, Penguin, New York. 3. Friedman, Thomas. 2005, The World is Flat: A brief history of the Globalised World in the 21st Century, Allen Lane, London.pp 400-410. 4. Klein, Naomi. 2006, The Shock Doctrine: Rise of Disaster Capitalism, Penguin, New York. 5. Micklethwait, John & Wooldridge, Adrian. 2003. A Future Prefect: The challenge and promise of Globalization, Random House, London, 2005. pp xix. 6. Naim, Moises. 2008, Illicit: How Smugglers, Traffickers, And Copycats are Hijacking the Global Economy, Double Day, London. 7. Shmick, David. 2008, The World is Curved: Hidden Dangers to the Global Economy, Simon and Shuster, New York. Read More