Globalisation: For whose benefits?

Atiur Rahman

The era of traditional global security relations overshadowing economic concerns and regional conflict has nearly passed. Accelerating economic interdependence and international competition have emerged as major sources of tension and conflict among world powers. In this uncertain environment, developed countries eager to maintain their standards of living, and developing countries equally determined to improve their own, are under pressure to use whatever means they have to improve their productivity and ensure their economic security. That is, the traditional focus on the security of states has now been quite blurred and the emphasis is being rightly placed on the people and the environment in which they survive. The livelihoods security of vast majority of the people is now a matter of central concern. Apparently, the new “mantra” is to improve this shade of security (primarily economic) of the people to embrace faster pace of liberalisation and integration. Economic security is the maintenance of those conditions necessary to encourage sustained long-term relative improvements of labour and capital productivity and thus a high and rising standard of living for a nation's citizens, including the maintenance of a fair, secure and dynamic business environment conducive to innovation, domestic and foreign investment and sustainable economic growth. Today, this is a broad goal sought by the governments all over the world. This goal has been brought forward and shaped to a large extent by explosion of information technology leading to all embracing globalisation. Globalisation is a multifaceted issue with varied implications including the ones on human security. Globalisation has historically been linked to the concentration and centralisation of capital, wealth and power. The driving force of globalisation has been the co-operation and competition of the 'imperialist' powers. Global trade and investment policies, agreements and institutions that undermine democratic process while ignoring labour, consumer, environmental, human rights, small business and local community development concerns. Globalisation has a way of rearranging the economy of a country, which leads to a growth pattern that also perpetuates inequality and poverty. Liberalisation and globalisation appear to have been associated with rising levels of unemployment and underemployment, income inequality, and poverty in global level

Globalisation argues for a universal incorporation to the world marketplace and the distribution of benefits among the wealthy creditors as well as the bankrupt debtors; super-rich speculators and impoverished unemployed workers; imperial states that direct international financial institutions and subordinate states to their dictates. The prescription of globalisation is to open up economies through trade and investment liberalisation, deregulation and privatisation. In order for monopoly capital to survive its crisis and in order for globalisation to succeed, it must continue to push for liberalisation of markets to allow it to take over economies. The direct result is the devastation of economies, displacement of livelihood and employment, and the destruction of productive forces the world over. The recent trend in globalisation has been largely characterised by continued integration of the world's economies through expanding flows of goods, services, labour and ideas through collective action by countries. Present era of globalisation has distinctive features. Shrinking space, shrinking time and disappearing borders are linking peoples' live more deeply, more intensely, more immediately than ever before. The combined result of the technological revolutions and globalisation are quickly integrating markets and linking people across all kinds of traditional boundaries.

Globalisation has been triggered by new information and communications technologies. The process has been polarising the world into the connected and the isolated. Globalisation expands the opportunities for unprecedented human advance for some but shrinks those opportunities for others and erodes human security. It is integrating economy, culture and government but fragmenting the societies. Driven by commercial market forces, globalisation in this era seeks to promote economic efficiency, generate growth and yield profit. But it misses out on the goals of equity, poverty eradication and enhanced human security.

The shift in focus to human security also highlights the importance of scrutinising global processes that may impact on, even jeopardise, security and the global governance structures that drive these processes. A proper understanding of the process of global economic integration and of the distribution of associated costs and benefits is crucial. Armed with this knowledge, an informed debate can take place on global development policy.

This is already happening. We can work to reconstruct development policy in the cause of attending to the human security needs of all global citizens, particularly the poorest. Too many people are dying of hunger and disease. This is not the product of bad luck, but rather of existing structures that can be changed. The recent mobilisation of millions of people immediately before G-8 summit in concerts across the globe, to highlight the curse of poverty in Africa and elsewhere, was able to focus sharply on the dichotomy between so much of opulence and deprivations that has been challenging global peace and stability.

While the debate continues at the international level on whether or not globalisation can bring benefits to the world's poor, the fact remains that the deepening inequalities of income and opportunity between and within nations has led to an increase in the number of people without adequate and secure housing. The human rights of people and communities to housing, water and sanitation guaranteed under international law and commitments of development targets made at global summits including the Millennium Summit 2000 and the World Summit on Sustainable Development continue to erode as the process of privatisation deepens and accelerates. It is time to rethink the current global economic and social policies and to recommit us to the human rights principles and standards that offer the only real paradigm for improving the lives of millions of the poor.

The challenge of globalisation in the new century is not to stop the expansion of global markets. The challenge is to find the rules and institutions for stronger governance local, national, regional, and global to preserve the advantages of global markets and competition, and also to provide enough space for human, community and environmental resources to ensure that globalisation works for people (i.e., for ethics, equity, inclusion, human security, sustainable development) rather than for profit only.

The levels of social development indicators achieved so far are not negligible but still generally significantly lower compared to the average for South Asia or for developing countries excluding South Asia. Actually, the poor and the disadvantaged groups including women, given their marginalised socio-economic position, cannot secure worthwhile access to opportunities and resources in the market place nor can they secure even their legitimate benefits from programmes intended for them. The rich and powerful people, who constitute a tiny proportion of the total population, capture the lion's share of the benefits of the increased economic activity and social development programmes because their socio-economic strength enables them to prevail even when seeking undue advantage and, in any case, the market economy reforms favor them and penalise the weak and the marginalised.

In a country like Bangladesh where about half of the population is absolutely poor and hence poverty alleviation is the most basic national goal, an increase in poverty cannot be socially acceptable. Again, socioeconomic inequality between the rich and the poor, between urban and rural populations and between men and women has accentuated, putting further strain on social sustainability of the process of growth being pursued. The increased level of marketisation experienced by the poor countries like Bangladesh in recent years has been playing a decisive role in generating the process of poverty. It is also defining the space for the poor beyond which they cannot operate in the emerging market-driven context. Of course, different classes experience marketisation differently both positively and negatively.

Both moderate and extreme poor face negative impacts of marketisation while other classes (i.e., middle and well off) did not have to go through similar grilling of it. There are different categories of market and terms of trade are different for different sectors. For example, the unfavorable terms of trade facing agricultural sector representing higher price of producer (intermediate) and consumer goods and lower price of agricultural goods, which have had undesirable consequences on poverty.

In fact the present situation of globalisation and partial marketisation places the poor to remain locked into 'poor markets', essentially trading with each other at low levels of income and expenditure. Since their communities have low endowments, they are compelled to operate in markets that offer low rates of return. None of these pernicious trends growing marginalisation, growing human insecurity, and growing inequality is inevitable. With stronger governance - local, national, regional and global - the benefits of globalisation can be preserved with clear rules and boundaries and stronger actions can be taken to meet the needs of pro-poor development.

The real GDP growth rate has improved and the population growth rate has declined between early eighties and late nineties and, as a result, the rate of growth in per capita GDP has improved considerably during the same period. The rate of inflation has also improved (decreased), however, it is still higher (7 per cent in 1998 and perhaps almost approaching double digits now) which has serious implication on poverty. Lower and limited income groups find themselves in a very difficult situation to cope with this higher rate of inflation and consequently people living just over poverty line are always at risk of moving down to the poverty line (often termed as the future poor) in the near future.

The continued trend of improvement in the human poverty situation in Bangladesh in the nineties is better appreciated when compared with the matched progress of its South Asian neighbours. The incidence of income-poverty at national level is much lower in Pakistan than in Bangladesh (28.7 per cent in 1993/94 versus 46.6 per cent in 1995/96). The incidence of human-poverty is, however, higher in Pakistan than in Bangladesh: the HPI value for Pakistan was 47.2 in 1995 compared with the estimated 40.1 observed for Bangladesh in 1995-97. Note that the value of HPI for India was 40.5 in 1991-93. However, very recent stagnation in the US economy and on-going Iraq crisis has impacted the economic security of Bangladesh, whose at least 40 per cent of economy is now globalised. The July 2005 London bombings will certainly have significant impact on global economy including Bangladesh economy, which has been historically linked to British trade and commerce. The flow of younger Bangladeshis to UK for study may be bas well be temporarily, if not permanently, affected by the man-made London disaster.

Two recent threats of globalisation on economic security to Bangladesh stemmed from post-MFA challenges and money market liberalisation. Although the government has taken the earlier challenge somewhat easily as no sharp fall in RMG exports has been observed in the last few months, the real consequence could indeed be serious in the coming days unless Bangladesh takes adequate mitigation and adaptive measures. RMG exports may be reduced significantly in the coming years until we do not have substantive formal and informal measures in order to have preferential access into the EU and US markets. Therefore job security of our 1.5 million garment workers is in serious threat, and it would impact adversely on related economic activities, employment situation, economic growth, and poverty reduction in the forthcoming years. On the other hand, money market liberalisation through a floating exchange regime has translated into, inter alia, real depreciation of Taka against dollar, increased price of imported commodities along with higher energy price, higher inflation, and more importantly, severe dollar crisis. Investment and commercial activities have been affected due to globalisation-led money market liberalisation, which deserved to be better managed. You can not leave it to inefficient myopic bankers to handle foreign exchange market with serious macroeconomic implications. All these also have many negative implications for human dimensions of economic security.

From the above discussion it is clear that globalisation has brought about a set of opportunities and challenges to the people of the world and Bangladesh as well. In many cases it has been creating global inequality, deprivations, joblessness, food insecurity and other forms of human insecurity amidst economic growth, prosperity and trade creation. Of course, nobody can deny that if the opportunities of globalisation can be utilised appropriately, the huge benefits could be earned as well. But that entails serious preparedness, particularly amongst the governance-related stakeholders.

The surge of globalisation over the past decade or two is only a beginning. The globally integrated people will require stronger governance if it is to preserve the advantages of global market competition, and to turn the forces of globalisation to support human advance, especially of the poor. To walk in a pro poor stream of development, global governance requires a common core of values, standards and attitudes, a widely felt sense of responsibility and obligations comprising of respect for life, liberty, justice, equality, tolerance, mutual respect and integrity. This is not by individuals, but by governments, NGOs and civil society members. Human development and social protection have to be incorporated in the principles and practices of global governance. Recent advances in global governance have been built on concepts and principles of economic efficiency and competitive markets. These are important but not enough, for the human security of the many. This is also true for governance at the national and local levels.

Groups of landless villagers can sell irrigation water to farmers or retail seasonal farm credit on market terms, or sell modern telecommunication services as Grameen Cellular Phone has demonstrated. In short they can compete in markets previously dominated by the rich. This also provides a way of re-distributing new wealth, thus helping to lower the level of systemic inequality in social and economic opportunities. Intellectual property rights under the TRIPs should be reviewed comprehensively to redress their perverse effects undermining food security, indigenous knowledge, bio-safety and access to healthcare. Bangladesh could take collective, especially regional initiatives, to strengthen their positions in global negotiations in trade, intellectual property rights and other areas by establishing regional institutions.

Stronger global cooperation and actions are needed to address the growing problems that are beyond the scope of national governments to manage. Regional approach to cope with the pressure of globalisation in terms of policy coordination could always prove beneficial to the member countries. And state should acquire that efficiency to work with by balancing the demands of the market forces and aspirations civil society, both at the national, regional and global levels. At the end of the day the strategic needs and aspirations of the poor should never be compromised while pursing the process of globalisation even if the latter is inevitable.

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The author is an economist and chairman, Unnayan Shamannay, a development research organisation.