Globalisation and Sovereignty - Essay Example

 Introduction One of the recent most debated topics within the issue of globalisation is the continued practicality of state sovereignty, especially in the context of economic conditions. According to some experts, the process of globalisation has set about rendering the concept of nation-state useless (Camilleri and Falk, 1992). These theorists contended that the increasing reach of worldwide markets pose as threat while subverting all geopolitical hypotheses of realism. According to realists such as Morgenthau, the survival of the modern state is now based on using military power, which has become an integral part of modern politics. Realism’s theories contends that while states are autonomous bodies and have the authority to function according to independent policies and exercise political power, currently they are challenged by increasing globalisation of trade and capital gains (Patrick, 2003). According to some analysts, globalisation has effectively halted the monopoly of nation-states over sovereignty, which were guaranteed by territorial borders, owing to fact that in ‘borderless’ economies, States have little role to play except act as ‘transmission’ zones for global capital gains (Held, McGrew, Goldblatt, and Perraton, 1999:3). The hypothesis underlying such assumptions is that the state would ultimately play a limited role and serve as a mere conductor of global capitalism. Undoubtedly, globalization has had a deep impact on power dynamics between the global market and the state, especially in major areas associated with social policies, environmental issues and macroeconomics, and management of economies by the state governments within the process of globalisation has increasingly turned more complex. As the forces that drive globalisation, such as, innovative technologies, capital mobility and fierce competition grow wider in scope and erase all concepts of borders, the states are undergoing various changes in their functioning processes. Under the new global system, it is difficult for the governments, from both the developed and developing nations, to control their marketplace in an exclusive manner. The governments are also finding it more difficult to edict labour and environmental safety laws (as for example, framing legally defining working hours, job place related health-and-safety standards, and minimum-wage laws) and to implement social security programs, such as, family benefits, and unemployment insurance, for safeguarding their citizens from the inconsistencies of economic globalisation. The social security programs are increasingly becoming difficult to implement as the national tax system that supported these programs has become difficult to procure, owing to increased capital mobility. As the global financial systems become more integrated, along with greater solicitude for placing of capital profits, policy makers and economists feel that this could lead to depleting of national tax revenues, either by tax evasion that might become easier or by promoting economic activities to move away to nations that have lower-tax patterns (The Economist, 1997). With fierce competition between states to bring in more FDI, implementation of laws that accord environmental and social protection, such as stringent labour laws or regulations that protect the environment, tend to turn home markets attractive to the investors, as such laws tend to lower the profit margins by increasing business costs. They may cause business houses and financial institutions to move out, leaving many jobless and stopping all economic growth and development. Owing to such possibilities, states are a facing great deal of pressure to make their laws less stringent, to continue drawing FDI and preclude capital flight. Thus, it is contended that the states have in effect, been reduced from being sovereign autonomous bodies that frame its own laws for economic activities within its borders, to bodies whose freedom is now governed and dictated by the global markets , encompassing transnational corporations and other financial actors. Therefore, some analysts argue that without a meaningful role to play within its economy, the concept of nation-states is rapidly losing its importance (Khan, 1996). The concept of state sovereignty appears as irrelevant and weak at the start of the twenty-first century, when compared to the twentieth century. Even during the Cold War, when the two global powers, the erstwhile USSR and the US, were pressuring different countries to choose one camp or the other, the concept of nation-states still held ground and remained relevant. However, other analysts give an opposing viewpoint and in this context, Krasner contended that sovereignty, which has been facing challenges from long time since, was here to stay (Krasner, 2001). The concept of state sovereignty remains popular with the weaker nations, where domestic infrastructure and internal systems remains strongly dependant on external factors, and where political heads lack control over trans-border mobility or over internal activities. Maintaining sovereignty gives global recognition to such states and guarantees access to various international organizations, while offering power to individual political leaders. While some of the developed nations in Europe have abandoned some aspects of sovereignty, the governments in some nations, such as Japan and the US, lack both inclination and interest to renounce state authority. In this article, the researcher reviews and analyses the effect of globalisation on the concept and functioning of state sovereignty and examines how nation states have transformed to deal with the new challenges emerging from globalisation. While many activists and governments claim that international organisations such as the IMF, the WTO, and the UN cross their authorial limits by advocating universal standards globally, and this in turn affects and restricts state authorial limits. This essay aims at deriving the extent to which globalisation has actually affected state sovereignty. Discussion What is globalisation and why is the world globalised? Globalisation as a process has resulted from a complex mix of socio-political, economic, aspects along with various other dimensions of the modern world (Etzioni, 2011). Among the various factors, one must distinguish wide scale modifications that have taken place within media, technology, productive forces, specialisation and global trade in the last few decades (Maddison, 2007). While it is essential to ascertain the economic aspect of globalisation, one must consider both technical and economic changes that are the main drivers of the twenty-first century (Abylgaziev and Ilyin, 2011). Commerce and technology have created new global network connections while turning territorial boundaries irrelevant, which combined with other factors, complicates the external circumstances that society has to deal with (Yeoman 2010). Owing to this, globalisation significantly tends to modify and lessen the scope of state sovereignty and weaken the position of a state within global affairs and international power play (Grinin, 2009). Thus, modifications within production forces create changes in other spheres of activities, including political ones, which imply wide scale changes in the behavioural pattern of business groups, governments and the common people. Thus, the forms, directions, and results of globalisation will be constantly based on the shifting balance of all global forces, on the strategies chosen by different countries, and on varying geopolitical factors (Held and McGrew, 2003). Typically, there are three processes distinguished through which globalization has shown to affect state sovereignty. First, the emergence of capital markets and global trade has hindered with the control of nation-states over domestic economies. Secondly, owing to global trade the nation-states have commissioned legal power to various international bodies. Thirdly, the creation of international laws by these international bodies has restricted free implementation of national policies. While these recent developments tend to place the concept of state sovereignty under threat, the complete destruction of state sovereignty is neither desirable nor inevitable. Sovereignty sustains the current global political order and gives scope for democratic decision-making, and the right to sovereignty does not translate into a turndown of global integration. The term globalisation has recently become a favourite term for politicians, economists, and even journalists. However, the actual connotation of the term globalisation is rather confusing. There are few terms as universal as globalisation, within public affairs and there are innumerable journals and publications that review the term globalisation in the context of international relationships, political science and sociology. Despite a great deal of interest, there is no consensus on the bearing of the term. Peter Spiro (2002) contended that globalisation being very broad in nature, a comprehensive delineation of the term is almost impossible. In this context, Scholte (2001) stated, that despite various attempts at defining globalisation, the term remains conceptually shallow and rather vague. This is related to the fact that globalisation is a multifaceted process, with implications on cultural, socio-economic, political, and geographical aspects. Globalisation as a process has been a popular subject among sociologists, political scientists, economists, and geographers, and has been analysed from almost every aspect. However, the term lacks a clear definition, owing to its diverse interpretations. Globalisation can be referred to as processes where social relations become more disassociated from territorial boundaries and the people start interacting more within a unified world (Scholte, 2001: 14-15). Smith and Baylis (2001) defined globalisation as a process where there is increasing links between nations and various incidents that are having a wider impact on greater number of people from all over the world. Therefore, in other words, a complex system is created where issues related to separate nations, countries, regions, business house, organisations, media companies all interweave into one tangle, wherein separate conflicts and even local events tend to affect many nations concurrently. At the same time, decisions taken in globally important centres have an impact on other nations. From an overall viewpoint, globalisation is characterised by the intricacy of interconnectedness and rapid intensification within basic socio-economic and political lives that has attained wide-scale global reach (Inoguchi, 1999). Globalisation being a versatile process almost all spheres of activities are impacted by it, and various phenomena types (both positive and negative ones) procure a global character, such as, human rights, environmental protection, crime and acts of terrorism, drug and human trafficking among many more (Collins 2010). Therefore, any particular development, even a simple one, has the potential of making changes that can turn a situation worse, when compared to the pre-globalisation era. In this context, decreasing the scope of state sovereignty leads to consequences with both potential positive and negative effects. Borderless societies not only helps in global trade, but also leads to increased scope for terrorism and human/drug trafficking. However, at the same time, different nations experience a varying balance of benefits and disadvantages at national, regional, local, territorial and social levels. This leads to a vague conception of globalisation and this has led the critics to highlight irregularities in advantages derived from globalisation and the widening gap in living standards in different nations (Capra, 2004). While creating the framework of a new order, globalisation breaks down the old one working within the state systems, wherein the speed at which the old relations break down exceeds the speed of forging new ones. This has been observed in many countries, which is reflected in the breakdown of conventional ideologies, consequently weakening previously held values, such as nationalism, owing to the emergence of alternate national characteristics. However, globalisation has failed to create any single ideology to rope-in the masses, owing to which western theories on globalisation remain unacceptable in many developing countries. However, in most countries territorial boundaries are a less serious roadblock for economic and technical forces than it was in the pre-globalisation era (Grinin, 2009). The main factors that contribute to this development are the emergence of global transport system, trade, MNCs and movement of international capital (Habermas, 2003). The closely interlinked national economies lead to uncontrollable and rapid reactions, almost akin to dominos effect, to a small-scale local event and or a more severe global crisis, which was evident in the various financial crises, which occurred in the last two decades. Therefore, it can be derived that financial markets are unstable and unpredictable in nature, primarily owing to the fact that political institutes have failed to match with the speed of developing economy that have overgrown all territorial boundaries under current globalisation and require planning at a supranational level, with some forms of trans-national control over the global markets. What is sovereignty? In the realms of international relations, sovereignty is viewed as the most important characteristic of the state that denotes its self-sufficiency within territorial boundaries, that is, its control over domestic policies and freedom over foreign ones. This theory was popular during the 19th century, but at the start of the modern era, it received a precise definition in the works of Hobbs, Machiavelli, and other philosophers. In the Westphalian system, formulated after the 1648 Peace Treaties of Westphalia, the principles of sovereignty gradually derived a European outlook, which gained widespread acknowledgment. However, the term received the comprehensive and guided legal application only by the end of the 18th century, after the Great French Revolution, when the Vienna Congress formed a new global order. Currently there are provisions in the UN Charter and other international treaties that regulate sovereignty of states and the national right to self-determination that coupled with additional scope for external security for majority of the nations, which has adequately delineated the term national sovereignty within matters of global relationships in the latter part of the 20th century. The trend to recognise sovereign rights of states is combined with the move toward voluntary restraint practiced by the sovereign states themselves. Despite these delineations, the concept of sovereignty remains vague and difficult to comprehend, and its content keeps modifying to adapt to the changes that taken place within international relations and the nature of the states, in relation with intricacy observed within the definition of the term ‘state.’ This content was also modified based on what is meant by the term supreme sovereign: an absolute yet enlightened ruler acting on behalf of his/her citizens or the state, or a feudal ruler having the authority with complete power to divide states as under laws of inheritance. Furthermore, within the theory of states, absolute sovereignty remained strongly restricted owing to various factors. Sovereignty as a theory can be viewed from different aspects and have different versions (Jackson, 1990). The concept of sovereignty is not absolute and irrefutable and gives rise to many debates and questions, thus demanding clarity and detailed explanation on the different approaches adopted for categorising states having sovereignty. As for example, there are two ways of classifying sovereign states: state-nations and nation-states that correspond as earlier and later, while there is also the concept of quasi-states (Giddens, 1990). Within international relations it is essential to review and re-interpret the notions of ‘sovereignty’ in regard to emergence of the global community, framing borders for private sovereignty, riles for combination and hierarchy, while keeping in mind other factors such as the NGOs, MNCs, multinational organisations and global ideologies. Observations revealed that in during the end of the 20th century the national states failed to tackle the increasing intricacy associated with globalisation issues (Gelber, 1997). Especially during the 1990s owing to direct interferences and military attacks, there were noticed various theories on the varying aspects of the term sovereignty, as were noticed in different countries, such as Bosnia, Somalia, Iraq, amongst many others (Pugh, 1997). Sovereignty is the main attribute of the state, which is a form of political entity. The term does not merely signify a quantifiable amount of power, and the degree of a state’s sovereignty cannot be calculated by its economic or military strength. The term sovereignty means possessing the power to act and the right to act, at the same time. In some instances, power to act may be so restricted that a state’s right to act turns meaningless. On the other hand, there have been instances where in extreme cases, actual power of the state becomes so high that while not officially acknowledged, the power is informally recognized. Typically, sovereignty relates to the possession of power and rights, and all issues associated with sovereignty are conflicts on power and rights of a state. Sovereignty can be defined in various ways, and from one perspective, it is the power and right over territory, which in turn relates to possession of a portion of the land (earth's surface). This possession of a portion of the land or territory includes a power and right to make decision over all (mobile or static, living or non-living) within territorial limits that includes territorial airspace and waters. Sovereignty denotes a main area of power and right self-determination, where the state is not under the rule of others and no other external entity has the right to dictate a sovereign state. Sovereignty is often mixed-up with the concept of freedom however, it must be taken into consideration that right of sovereignty is founded on acknowledgment by other sovereign states, and hence it exists in a relationship with other states. As for example, Northern Cyprus is self-proclaimed sovereign republic, but it lacks true sovereignty, as it is not recognized by other states. Sovereignty can be equated with fundamentals, which is the power and right to suspend normal activities domestically when faced with some internal threat that disturbs stability and peace, or the power and right to fight against external threats. During normal times under a constitutional rule, sovereignty may seem as non-existent; but it is revealed during times of crisis. However, sovereign power is not related to a totalitarian form of government. The meaning of the term sovereignty is largely dependent on the context and is of core importance to the concept of a state within modern international relations. To summarise, the concept of sovereignty is a form of absolute power, congruous with global unity and inter-relationships, along with modern technological and scientifically advanced knowledge that has turned the world into a global village. Globalisation and decreasing sovereignty: do states still exist? As discussed earlier, under actual circumstances the sovereign rights and powers of states remain restricted owing to various factors, however theoretically the ‘Westphalian sovereignty’ still remains relevant. Currently, there are evidences that principles of international relations as per the Westphalian sovereignty have undergone basic changes, and the notions of a sovereign state’s free act has changed even from a theoretical perspective. In the last decade, the scope of internal sovereignty has been largely marginalised in legal terms, due to various international treaties, especially the ones related to human rights (Shinoda, 2000). As Mann (1997) noted, the changes in the role and position of a state within modern global power play and relations, the debate is often one-sided, focusing on whether the state system has turned weaker or stronger. In the contrary, changes in state sovereignty is more complex and rather ambiguous in nature, wherein in some ways the power and rights of the state are weakening, while in other ways they are turning stronger (Ignatieff, 1999). Thus according to some analysts, under strong economic processes some of the state powers are becoming weaker, while simultaneously these same states have started regulating certain areas of concern, which were previously handled by the citizens themselves without state interference. Thus, one can contend that there are almost no areas where state bureaucracy cannot intervene (Strange, 2003). Therefore, the general movement is not in a straight line and comprises of a complex balance of alternative modifications. There is a definite narrowness in the approaches adopted for analysis of state sovereignty under current globalisation, since the issue is mainly reviewed from the viewpoint that powerful global economic supranational bodies and anonymous powers affect changes within state sovereignty, transforming it completely even against the will of the states (Strange 2003). The threats to sovereignty include MNCs, global flow of finances, internet, media business houses, and amongst others global interventions (Held and McGrew, 2003). Along with emergence of global capital movements and cross-border trade, globalisation has led to the creation of various international organisations or IOs that have established themselves as key actors within realms of international relations. These are legal entities formed by a number of sovereign states ratifying an international treaty. These have legal authority, allowing them to exercise independent rights at a global plane. The recognition of these organisations and their special status came into existence after the WWII, and it shows a clear steering away from the Westphalian sovereignty, alleviating to a certain extent the complete freedom enjoyed by nation-states prior to the two great wars. While analysing the impact of global economy on sovereignty, it can be suggested that globalisation tends to have a profound impact on national economy in two ways. First, there has emerged an open market with reduced trade barriers and tariffs, which in turn has led to free movement of goods, which is a necessity for globalisation. Secondly, globalisation has increased the transnational movement of capital gains that has outpaced the goods trade. FDI has increased sharply in the past 15 years, and the nation-states have helped in this growth by removing controls on capital movement and easing out tariffs on foreign products. As national barriers to global trade and financial activities were removed, the sovereign states became vulnerable to impact from the forces within global market. As global trade increased and became an integral part of national economy, the nation- states with large tariffs or those providing domestic subsidies faced the risk of retaliation. The experts suggested that globalised capital markets prevented sovereign states from framing macroeconomic policies at a domestic level. In the context of globalisation, the sovereign states also tend to lack complete control over their currency values, and in one instance the UK traders forced the government to allow currency movement, while the authoritative China maintained tighter control over their currency movements. Fluctuation in currency values, in turn, has restricted the sovereign states from implementing macroeconomic policies that initiate growth by increasing the supply of capital. However, there is another dimension to this problem wherein often it has been noticed that sovereignty is voluntarily reduced by the states themselves. There are various factors that influence the process of state sovereignty, including, economic and technological changes, the objective of avoiding conflicts, the issues related to unifying countries, the increasing incidences of contacts among citizens of different nations, and increasing number of nations turning towards democracy in the world. However, the aspect of voluntarily reducing the scope of sovereignty to gain more power and prestige can be considered as the most important factor, which was after the World War II, where many states deliberately opted to decrease their power and right to act. Thus, one can derive that voluntarily decreasing sovereignty comprises of: A) Following the norms as set by various international treaties, conventions and declarations within domestic levels; B) Acknowledging superiority of the international norms over the domestic ones; C) Acknowledging that the decisions of an international court have more authority over domestic legal bodies; D) Voluntary allocation of authority to international and supranational organisations. From an overall viewpoint, the process of voluntary reduction of sovereignty also reveals a deeper change within the global political order, which might later lead to the establishment of a supranational political body. Furthermore, various economic and other forces that work towards undermining state sovereignty, will lead to the creation of a new order for the sake of controlling weak actors. There is no doubt that currently, when compared with early twentieth century, the concept of state sovereignty associated with complete freedom has decreased significantly, often given up voluntarily by the states themselves. While principally the state continues as the chief unit within political and historical arenas, the scope of state sovereignty in the twenty-first century has been largely redistributed, wherein many crucial powers are being gradually transferred from states to supranational bodies. Thus, state sovereignty is now distributed between national, supranational, subnational, and sometimes even between municipal and regional bodies (Yan, 1996). Owing to globalisation there has been a decline in the power of state governments in affecting and directing their domestic economies (in the context of macroeconomic management), and in ascertaining their political framework. This is evident in the case of national politics, which are currently dependant on market-driven forces. In order to remain in power the governments must opt for managing national politics in a manner that would allow them to adapt to the trans-national market forces. The institutionalisation of political bodies has led to the creation of political globalisation. The European interstate order, since the start of nineteenth century, has been promoting on mutual agreement, global governance, and it refers to the development of both general and specialised global bodies (Giddens, 1990). The leading organisation of this form is the League of Nations, which has now been replaced by the United Nations. Other organisations of a similar nature include the European Union, African Union, the Arab League and the Organization of American States. The organizations have led to the creation of a process known as building of organisations, and the global organisations can now dictate and determine the nature of governance within its member states. This is the current trend within political globalisation and the states that refrain from ratifying the global charters, remain outside the union, and considered as anomalies. In the future, experts predict that more states will conform to the rules established by these trans-national organisations, and the effect is already being seen in areas of human rights. Due to globalisation of human rights, a sovereign state is not free anymore to treat its citizens and foreigners in a manner it pleases them, and they must necessarily follow global standards created within various human rights treaties, regarded as compulsory legal obligations. Thus, persistent focusing of sovereignty within global institutions might gradually lead to the political sovereignty of various global bodies. Interlinks between finance, markets, services and goods, with the global networks established by the various transnational business groups are the most evident demonstrations of economic globalisation. While the capitalist nations have been experiencing globalisation for many years, the scope of globalised investments and trade has increased largely in the recent years. The rate of economic globalisation has increase mainly due to the emergence of information technology that has changed the manner in which the money can move globally. It has been contended that the power to transfer money easily from one country to another simply by the click of a mouse has transformed the norms of policy-making, placing economic decisions at the commiseration of global market forces. Economic globalisation is a result of technological advancement and human innovation, and refers to the wide scale integration of worldwide economies, through commerce and capital movement (Saroochi, 2004). Movements in financial activities in the US or Japan or in any other country, can be felt in all parts of the world. The globalisation of technology, markets, services and manufacturing has brought forth new series of limitations on national freedom or state sovereignty. Furthermore, emergence of global bodies, such as the IMF and the World Bank, has added new limitations, forcing transformations within economic sovereignty for better adjustments to the new global conditions. Conclusion One of the most recent debates within the context of globalisation is the issue of the viability of state sovereignty, concerning current economic conditions. However, from the above review it is clear that while undoubtedly there is some impact, State sovereignty largely remains unaffected. First, as the primary element in maintaining order and providing governance, states that are have such as the establishment of necessary laws and public bodies and the provision of public services such as national security, environmental protection, etc., which cannot be easily emulated by other institutions or bodies. In the years after the 9/11 terror attacks on the US, and the increasing complexity of the gradually changing order of international relationships, states have started gaining more importance, within an increasingly globalised world. Furthermore, states are not passive victims of current socio-economic globalisation. In the context of internal laws and policies, to political systems, whatever the states do, carry a great deal of significance. The state reflects sovereignty that is territorially bounded, hence it will exist and function to make crucial decisions related to the political system, human and natural resource allocation, and other socio-economic aspects associated with education, economics, health, social welfare, and human rights, among other areas related to governance. The various limitations that are observed on a government’s activities are mostly self-imposed aimed at achieving better results such as improved economic conditions or better national security. Since taking part in globalisation remains a matter of choice, it cannot turn states into powerless and weak bodies; however, there may be instances where decision making may turn into a complicate procedure within the political process. Thirdly, globalization does not make states obsolete or irrelevant, it just changes the way in which a government might function, wherein they are modified according to the growing intricacy governing in a world that is highly interconnected due to innovative technology (Held, McGrew, Goldblatt, and Perraton, 1999). In some cases, greater state activism is required for directing successful market liberalization and open trade; however, assertions that the state has been tendered useless and constitutionally altered under the unstoppable force of globalisation, do not hold much ground. Therefore, the main challenge lies not in the question whether state sovereignty will survive, but rather in the question, how the state will change as globalisation gains greater acceptability, and whether this change will later pose as a threat to state sovereignty. 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