The term globalization project may be a relatively new one, but the ideas and concepts behind it have been building for many years. To fully understand the term and the significance behind it, one must delve back in history to find out where it came from and how it came about. In a sense, the globalization project has evolved from the developmental project. This report will briefly look at such things as: Financial Globalization, the New International Economic Order, the Debt Regime, Global Managerialism, Global Governance, from these major categories, a clear path will be drawn to lead to what is now known as the Globalization Project. A global infrastructure has been a very important evolvement in the last few decades. It is an institutional complex that organizes global economic activity (Laurier Course Package 74).
The rise of this infrastructure has taken many different forms: Financial Globalization A growing trend has been forming in the world, it has been the continued movement away from nation-state organized financial organizations to global ones (i.e. transnational banks). This move is certainly a change from the development project, which concentrated on a local and national governing power, which included financial control. This world economy depended on the circulation of U.S. dollars and it was the Bretton Woods arrangement that served to maintain a stable currency for world exchange. At the same time, fixed currency exchanges stabilized countries interest rates, which in turn stabilized the countries economies (Laurier Course Package 75). Still, it was the breakdown of the Bretton Woods system that helped to lessen national financial control and solidify a new globalized economy. Unfortunately with the great loss of national control over their currency domestic dollar values fluctuated tremendously in the volatile world market.
With such a huge amount of money passing through the worl system every day it was virtually impossible to steady the fluctuations that were taking place. There was also a move by these transnational banks into the Third World market, which illustrated another departure from the development project (Laurier Course Package 74-78). The New International Economic Order (NIEO) The flood of money borrowing and the demand by the Third World states brought about a New International Economic Order. The major objective of the NIEO was Third World ist, which meant that it was interested in the growth, development and security of Third World economies. It was believed that the promised rise in the standard of living by the development project was not being realized for the most part and also the multilateral and bilateral programs established through the development project were quite selective.
Aid funds were unequally distributed across the world, with the smallest amounts reaching the neediest cases (Laurier Course Package 79). In the end, the main goal of the NIEO to equalize wealth in First and Third World countries was relatively successful. The Debt Regime The debt crisis that has been emerging in the last few decades has brought with it the idea that there needed to be a global management and involvement as a way to help regulate and control debt. The International Monetary Fund (IMF) was given primary power and control; it acted as a supervisor in world economic activity. New economic structural adjustments were made to debtor countries and also there were regulations put on borrowing and debt financing. As countries adopted the rules of the debt managers and restructured their economies, they reversed the path of the development project (Laurier Course Package 82).
There was a new push towards exportation and involvement in the world market; the focus was shifted from national economic growth to global economic growth. There is a downside to this because although restructuring brought time for debt repayment it also had a few negative effects. The result included a drastic reduction in public spending currency devaluation privatization of state enterprises, and reduction of wages to attract foreign investors and reduce export prices (Laurier Course Package 82). Global Managerialism Global managerialism refers to the relocation of the power of economic management from nation-states to global institutions (Laurier Course Package 84). The new management style encompasses many things, such as exportation, privatization, and new global policies (the debt regime was a good example of one such policy). National units are becoming increasingly weak as many global institutions, enterprises, and policies become stronger and more powerful in the world market.
With this new trend towards feeding the global economy it is not surprising that the development project had to be restructured and reformed, for the focus was no longer on national economic growth, but rather on the growth of the world market. Global Governance A major governing power, although not an absolute one, is the World Trade Organization (WTO) that was formed in 1995. Its rulings are binding to all members and its powers stretch into the trade industry in many forms, such as services, investment, manufacturing, and agriculture. [G] global managers assume extraordinary powers to manage the web of global economic relations lying across the states, at the expense of those state organizations, including their democratic achievements (Laurier Course Package 101).
Another source of global governance is the uplift in power that is reached by way of debt. Debt became a powerful form of political leverage under the debt regime when the multilateral financial agencies strengthened their control over national policy making by assuming the lending role (Laurier Course Package 96-7). The development project has not been completely forgotten in the awake of the globalization project, there are still thousands of local agencies and institutions that work towards and are interested in linking human development with local and national economic growth. A central idea of the globalization project is the belief in market liberalization that took hold under the debt regime (Laurier Course Package 92). The idea of liberalizing the market was thought to be a much more efficient way to foster economic growth. Along with this liberalization though, came less national economic control.
Countries had to find goods and services that they had a comparative advantage in, in order to compete in the world market. Growth strategies where less focused on social welfare and more centered on economic welfare. Currencies were unstable and subject to great fluctuations over the course of a very short time. But even with its few negative aspects the globalization project has still been the most powerful operation of its kind. It is an alternative form of organizing and governing the world market and the global economy as a singular entity.
At the very least, it can certainly be said that the globalization project opened up many opportunities for the future to unravel. Below is a brief summary of the major elements of the Globalization Project: 1. An emerging consensus among policy makers favoring market-based rather than state-managed development strategies; 2. Centralized management of global market rules by the G-7 states; 3. Implementation of these rules by the multilateral agencies: the World Bank, the IMF, and the WTO; 4. Concentration of market power in the hands of transnational banks; 5.
Subordination of former Second and Third World states to these global institutional forces; and 6. Subordination of First World states to these global institutional forces a subordination as yet by no means as severe as in the former two Worlds. (Laurier Course Package 105)
Laurier Course Package. DI 100: Introduction to Development & International Studies. Winter Term 2001.
Instructor: Joe Hodge, p. 1-37, 53-105. Lecture Notes. Lecturing Professor: Joe Hodge. Jan. 3rd Feb. 14th, 2001.
Lew ellen, Ted C. Dependency & Development: An Introduction to the Third World. Bergin & Garvey. Westport, Connecticut, 1995, p.