Chapter 5: Globalization and its Impact on Human Rights, by Mathews George Chunakara
Dr. Chunakara is Asia Secretary of the World Council of Churches, Geneva, Switzerland.
The word ‘globalization’ is now used widely to sum up today’s world order. It means they increasingly integrate the world into one capitalist political economy operating under a neo-liberal free market ideology. Economic globalization as witnessed in the world today is not a new phenomenon. It has been evolving for the past several years and gaining momentum day by day. The trend, at present, is a shift from a world economy based on national market economies to a borderless global market economy increasingly governed by one set of rules. In this context, globalization means global economic liberalization, developing a global financial system and a transnational production system which is based on a homogenized worldwide law of value1. The demise of the Cold War helped the emergence of a new aggressive competitive global economic order. This was possible mainly due to the integration of the newly industrialized countries and much of the developing nations. Although globalization and market liberalization have made some progress in terms of economic growth in certain countries, it has also had many negative impacts in developing societies.
Richard Barnet of the Institute of Policy Studies describes globalization in terms of four increasing webs of global commercial activity: global cultural bazaar, the global shopping mall; the global financial network; the global workplace2. The global cultural bazaar promotes the notion of uniform cultural values and products across the world. This idea influenced billions of people, shaping their goals and homogenizing their tastes and attitudes towards a desired fantasy lifestyle. The unprecedented increase in global trade -- the buying and selling of goods and services among countries -- has created a planetary supermarket. The cultural bazaar and shopping mall intersect through the vehicle of advertising. Media has become a powerful player in the globalization process. In fact, globalization of economies has also led to the globalization of media. Media is used to impose the culture and power of the wealthy nations from the global North. The global financial market has created a new atmosphere to search for quick profits. The foreign exchange market is mainly dealing with currency speculation, bet for or against foreign currencies. The increasing mobility of jobs has created global workplaces and this has boosted international labor migration. In other words, the globalization and market-oriented economic reforms helped transnational companies shift their manufacturing units to developing countries. Because of this more people are crossing borders in search of jobs and in most conditions people are forced to work in inhuman conditions for lower wages. All these proved the fact that globalization is not a simple but a very complex set of process that operates at multiple levels -- political, economic and cultural. Nicaraguan scholar Xabier Gorostiaga argues that in this era of globalization humanity is perceived as fundamentally one, with a common destiny that is the result of a technological revolution in information and communication and the awareness of the unsustainability of the current way of life3.
In an article titled “The Human Rights Debate in an Era of Globalization: Hegemony of Discourse”4, Nikhil Aziz describes two kinds of globalization based on Richard Falks theory on the making of Global Citizenship. He argues that we can see globalization in different perspectives: Globalization from Above (GA) and Globalization from Below (GB). At the political level, GA manifests itself in its action of the Western countries, particularly the United States of America, and global financial institutions in pressuring countries of the South to democratize. This translates as the adoption of a Western-style liberal democratic system of governance. They closely tie economic Globalization from Above to the political aspect in that (1) the source of pressure for change is the same, and (2) close links are alleged between the ideologies of free markets and free societies. Economic Globalization from Above entails countries of the South to accept - within the parameters of the dominant World capitalist system - the imposition of structural adjustment programs, neo-liberal economic policies, including the wholesale liberalization of domestic economies, to allow unrestricted entry to transnational capital. On a cultural level, GA arises from the control of the global information and communication networks by Western media corporations; and the spread of modern technologies of a consumerist culture, and Western cultural expressions as the global culture.
The transnational companies are the spearheads of globalization and have become the dominant economic and political force in the world economy. Increasing competition and pressure on transnational companies to increase profits leads to a relentless search for cheap labor markets. Many of the companies from the developed and the Newly Industrialized Countries (NIC) have shifted their manufacturing and service industries to developing countries. For example, several major airlines now have their global accounting done in India. A large number of computer software companies from the United States are developing software in Bangalore, India, at less than one-fifth of the price in other countries. The German car manufacturing company BMW and Lorean car manufacturers like Daewoo and Hyundai have already established their manufacturing units in Vietnam. The Export Processing Zones of many developing countries are catering to the needs of the transnational companies by way of providing cheap labor. The International Labor Resource and Information Group based at the University of Cape Town has described these phenomena a race downhill in which countries underbid each other. Because they cannot see an alternative, workers also end up underbidding one another. The main arguments are competitiveness and the need to survive. But for workers it is a race to the bottom, and the bottom means slave like conditions. When work moves to less developed countries, the shift does not automatically bring Western levels of employment and prosperity to the host countries.. What it does bring are very profitable high-tech islands and Export processing Zones where they protect transnational capital, with the help of the state, from social responsibility5. There may be short-term advances in the living standards of a small group of workers. Nevertheless, when some workers elsewhere lead the race to the bottom, those jobs may disappear. A report by UNCTAD notes that transnational companies encroach on areas over which sovereign responsibilities have traditionally been reserved for national governments. A situation has arisen where many governments of developing countries no longer control the flow of financial capital; so they can no longer control their own economies.
Globalization has substantially contributed to the intensification of debt, poverty and economic crisis in the developing world. The Structural Adjustment Programs (SAP) designed and imposed by the global creditor institutions is a typical instrument to create a favorable atmosphere for globalization, which ultimately affects developing countries. In order to meet the mandates set by the SAP, a country spends less by cutting back government expenditures, social services, and economic investments so that resources can be placed elsewhere. More money is being spent on export orientation, which results in local economies becoming dependent on the integration with the world economy. The international lenders demand poor economies to divert substantial resources away from sectors serving domestic needs: withdraw all subsidies for poor people, privatize the state sector, deregulate the market, and decrease wages. In effect, this process opens up countries to globalization. Thus structural adjustment programs and import-export-led strategies of industralization. were part of a political and economic restructuring process, a prelude to globalization. The advocates of globalization give philosophical justifications to accept export-led growth, lower wages and living standards for workers, shrinking government budgets, and extremely high interest rates. They say “There Is No Alternative” - TINA, the phrase coined by British Prime Minister Margaret Thatcher in 1980s. Powerful institutions like the International Monetary Fund, the World Bank and the World Trade Organization raise the TINA, argument to persuade the developing nations to qualify themselves to borrow money. The developing countries are left into no option but to accept the liberalization and market-oriented reforms. Under this liberalization policy production tends to be export-oriented. Meeting the basic needs of the people becomes less important. State-run factories or enterprises are often privatized to suit the needs of foreign investors. Free trade and liberalization lead to competition and local producers, like farmers, have to suffer the consequences.
Globalization has created a situation where the role and importance of nation-state is becoming irrelevant. Kenichi Ohmae, widely recognized as one of today’s top business gurus, asks, in a world where economic borders are disappearing and money flows around the globe beyond the reach of governments, ‘who, indeed needs the nation-state?” He argues that 4 Is-Investment (sic), Industry, Information technology and Individual consumers6 - make the traditional middleman function of nation-states, and of their governments, largely unnecessary. Because, the global markets for all the Is work just fine on their own, nation-states no longer have to play a market-making role. In this situation multinational corporations are becoming the actors even in international politics. A growing trend to promote the idea of recapturing the capitalist frontier and its lost values is more visible through the globalization and market liberalization in the developing countries. It is true that a few rich or middle class people have emerged in societies where transition to market system has been introduced. China and Vietnam are typical examples. In these countries a newly rich class has emerged as a result of globalization and market reforms. Several other Asian countries are also witnessing the emergence of a few - rich and middle class people at the expenses of many poor. These new-rich and middle class are really the products of globalization and they provide the market for imported products and further strengthening the economy of the developed countries. While analyzing the economic development, social status and political consciousness of the new-rich in Asia, Richard Robinson and David S. G. Goodman observe that it is as consumers that the new-rich of Asia have attracted an interest of almost cargo-cult proportions in the West. They constitute the new markets for Western products: processed foods, computer software, educational services and films and television soaps. They are the new tourists, bringing foreign exchange in hard times. What has helped such an enthusiastic embrace of the Asian new-rich is that they are emerging at a time when prolonged recession and low growth rates have depressed home markets in the West7. The emergence of the new middle class and their wealth manifest themselves in the society in several ways. This is more visible through a new emerging culture which Robinson and Goodman describe as Mobile phones, McDonalds and middle-class revolution. It is estimated that 55,000 people a day regularly pass through the McDonalds restaurant in central Beijing (China’s first, opened in 1992) - to pay for a hamburger much more than the most Chinese will earn in a fortnight. It was reported that in 1993 a mobile telephone number 58888 containing four lucky eights - was auctioned for 1,30,000 RMB. An ordinary mobile phone itself costs about 25,000 RMB in China to buy, install and register, and there are monthly service and user fees to pay8. This McDonald and Mobile phone culture has already spread among the new-rich in many developing countries because of the globalization of markets. Even Cambodia and Bangladesh the world’s most poverty stricken countries, are affected. A globalization of taste has occurred in every field of the developing world. Consumer goods like Levis Jeans, Nike athletic shoes, and Hermes scarves are visible all over the world now. A decade ago Kenichi Ohmae described this process9, driven by global exposure to the same information, the same cultural icons, and the same advertisements, as the “Californiazation” of taste. He now argues that, today, however, the process of convergence goes faster and deeper. It reaches well beyond taste to much more fundamental dimensions of world-view, mind-set. There are now, for example, tens of millions of teenagers around the world who, having been raised in a multimedia-rich environment, have a lot more in common with each other than they do with members of older generations in their own cultures10. Well, one group is considering this an achievement of globalization. On the other hand, the reality is that, “globalization requires the humiliation of hundreds of millions of people keeping them in constant insecurity, pitting them against one another in a competitive struggle for survival”11.The Human Development Report of 1997 says; Globalization can also shift patterns of consumption. Luxury cars and soft drinks can rapidly become a part of daily life, heightening relative deprivation. The pattern can increase absolute poverty by undermining the production of goods on which poor people rely. A flood of imported wheat can shift consumption away from sorghum or cassava, making them scarcer in loyal markets.
Roberto Verzola12, a social activist of the Philippines, comments that in the same way that colonization was the trend one hundred years ago, globalization is, today. Today global corporations have replaced the colonial powers. In developing countries, global corporations are allowed to feast on natural resources, human resources, and national wealth. they displace farmers from their land, workers from their jobs, and communities from their roots. They are responsible for the breaking up of communities and the destruction of the environment to serve the human and raw material requirements of global production for the global market. The consequence is the collapse of food security and the emergence of global environmental crises, which in the end may turn out to be even worse than colonization. Even the peoples of developed countries suffer from the profit-hungry rules of global corporations today, which virtually rule the world. Globalization and market-oriented economic reforms have been designed for the benefit of these groups. In reality, globalization means the rule of global corporations. It means decision about lives are being made in corporate boardrooms in the USA, Europe and Japan, instead of in local community councils or at the national level. National governments are becoming the implementers of orders received from the international actors. This has created a situation of powerlessness and suffering for many in developing countries which results in violation of rights of millions of people.
Globalization, Development and Human Rights
The relation between globalization, development and human rights raises policy and legal questions. One such question is whether globalization of market-oriented economic system is essential for development and protection of human rights? While searching for an answer to this question we should analyze how we perceive the concept of development and human rights, especially in the context of developing countries. Human rights have become an integral part of the process of globalization in many ways. The Western countries are increasingly using their view of human rights concept as a yardstick to judge developing countries and to deal with economic and trade relations to extend development assistance. At the same time globalization intensifies impoverishment by increasing the poverty, insecurity, fragmentation of society and thus violates human rights and human dignity of millions of people.
Development or economic development is widely perceived as a historical process that takes place in almost all societies characterized by economic growth and increased production and consumption of goods and services. Development is also often used in a normative sense as a multi-valued social goal covering such diverse spheres as better material well-being, living standards, education, health care, wider opportunities for work and leisure, and in essence the whole gamut of desirable social and material welfare. But, in today’s globalization, the concept of development itself is interpreted differently and the concept of right to development is not taken seriously.
The Preamble of the Declaration of the Right to Development, adopted by the UN General Assembly in 1986, describes “development as a comprehensive economic, social, cultural and political process that aims at the constant improvement of the well-being of the entire population and of all individuals on the basis of their active, free and meaningful participation in development and in the fair distribution of resulting benefits”. The 1990 UN Global Consultation on the Right to Development as a Human Right, stated that the right to development is an inalienable human right with the human being as the central subject to the right and that all the aspects of the right to development set forth in the Declaration of the Right to Development are indivisible and interdependent, and these include civil, political, economic, social, and cultural rights. It was further maintained that the right to development is the right of individuals, groups and peoples to participate in, contribute to, and enjoy continuous economic, social, cultural and political development, in which all human rights and fundamental freedoms can be fully realized. A development strategy that disregards or interferes with human rights is the very negation of development.
The aims and objectives of the so-called development models promoted by different governments or international development agencies are not compatible with human rights standards. A new model of development ideology is being promoted that is based on the market and its logic. Several decades of discussion on alternative development model is withering away and a dominant model of market-oriented development taking roots in that place. As a result of the globalization process, more negative effects are visible now. Global integration of the structures, processes, and ideologies produce injustice, oppression, exploitation and mal-development in society. The systematic integration of the forces that are dominant in the globalization process intensifies human rights violations.
Development Aid and Human Rights
It has long been accepted by the United Nations and in most international forums that “developed” countries should provide aid in the form of grants and loans to the developing countries. The General Assembly has, by consensus resolutions, called for such development aid to reach 0.7 per cent of the GNP of developed countries. Actually less than half of that target has been attained. For example, the United States gives only less than 0.2 per cent, instead of 0.7 per cent.
Overseas Development Aid (ODA) presents debatable issues from the perspective of human rights. For example, it raises the question whether aid should be directed mainly to reducing poverty and providing social services to the needy or whether priority should be given to economic growth and strengthening infrastructure. Another key question of a legal political characteristic is whether the recipient government or the donor state should have a decisive voice. The developing states emphasize their primary responsibility for development of the country and their right to self-determination in respect of the economy and resources. Donor countries tend to emphasize their narrow concepts of human rights as a prerequisite to sanction development assistance. They also emphasize the pragmatic political fact that aid is not likely to be provided if the beneficiary states violated basic human rights. According to Mikhail Assize, human rights have become another arsenal of Western countries in their bid to bring recalcitrant Third World nations to heel in their New World Order.
The question whether aid should be given to countries where human rights are substantially or systematically violated has been analyzed by Katherine Tomasevski in the following statement.
Donor governments and agencies are continuously making decisions which country to assist, how much and what for, because aid needs are much larger than available aid. Human rights have entered the already numerous criteria for allocating aid fairly recently. this entry has been neither easy nor smooth because no general criteria have been developed by donors and consequently decisions have been made on case-to-case basis. Moreover, these decisions have been limited to some human rights violations in some aid-receiving countries. Thereby human rights terminology has often been used to justify decisions to provide aid or to terminate it; while human rights criteria - to the extent that there is such a thing in the aid policy of any donor - have been confined to the search for those human rights violations which could justify cutting off aid.
Trade and Human Rights
Global trade is being liberalized and opened up in this era of globalization. A set of new rules and regulations have been promoted through international firms like WTO and new initiatives have been taken through the formation of regional economic trading blocs.
At the same time several developed countries in the world have been trying to inter-relate trade policy with human rights policy. Under mounting pressure from the business lobby in the irrespective countries, several Western governments have altered their policies depending up on their business interests. Under the Generalized System of Preferences (GSP) which provides for trade benefits for developing countries, the USA has withdrawn or threatened to withdraw preferences from some countries that violate human rights. The case of China has been controversial, with opinion in the United States sharply divided on the desirability of conditioning trade preferences on compliance with specified human rights. There has been strong pressure from US business lobby against use of the Jackson-Vanik Trade Act of 1974 for denying MFN status to China. It held that talking about “political freedom is not a sound argument for attempting to use the blunt instrument of trade sanctions to win democratic rule for China. Keeping millions of Chinese in poverty by restricting their right to trade, in the hope of promoting human rights, is neither logical nor moral. Likewise, depriving Americans of the freedom to trade and invest in China violates their rights to liberty and property”13. This is a case of shift in policy based on convenience rather than on ideological convictions or moral principles. On the other hand, some developed countries are pressing for trade sanctions against states found to violate human rights, especially human rights standards that are generally based on the Conventions and Recommendations of the International Labor Organization. They have tended on the whole to oppose trade liberalization treaties such as NAFTA and currently WTO. The developing countries have generally objected to such measures since they would reduce their comparative advantage through cheap labor and constitute a major barrier to their industrialization. From their point of view, workers rights enforced by trade barriers would contribute to greater poverty in their countries.
Drawing on the experience of the “Sullivan Principles” applied by foreign companies operating in South Africa, some activists and scholars have proposed imposing international human rights standards, particularly labor standards, directly on private companies engaged in transnational activity. Guidelines for Multinational Enterprises adopted by the Organization of Economically Developed Countries in 1976 provided for observance of standards of labor relations by transnational companies. A UN Commission on Transnational Corporations devoted about 15 years of study and negotiation on a draft Code of Conduct for Transnational Corporations that included a general provision requiring transnational corporations to respect human rights and fundamental freedoms in the countries where they operate and more detailed provisions on observance of laws on labor relations and involvement of trade unions. Objections of the USA and a few other countries have prevented its adoption. These are some of the examples of the double standards adopted by the developed countries that profess concern for human rights. The fad is that the economically developed countries are in a better position than others to take the advantage of globalization and at the same item dictate policies and guidelines to increase their bargaining power.
The TNCs which have gained strength in the post-globalization era is the main actor in several developed countries in formulating new foreign policies to shape a new global order. This trend has been highlighted in a recent study that the emerging global order is spearheaded by a few hundred corporate giants, many of them bigger than most sovereign nations. By acquiring earth-spanning technologies, by developing products that can be produced anywhere and sold everywhere, by spreading credit around the world, and by connecting global channels of communication that can penetrate any village or neighborhood, these institutions we normally think of as economic rather than political. private rather than public, are becoming the world empires of the twenty-first century.
The impact of these global giant’s operations have negative impact on human rights. Virtually all developing countries at the present time seek private foreign investment for development. Such investment now greatly exceeds loans or grants from official sources. The growth of Transnational corporations - now numbering about 35,000 with 1,50,000 foreign affiliates - is evidence of the increased role of the private sector and of market economies in developing countries. New technologies have transformed the nature of production and facilitated re-location of firms. Nationalization, once the centre of debate, has now virtually disappeared from the agenda of developing countries.
The human rights implications of these trends are outlined by an economist, David Korten in the following terms:
Today the most intense competition in the globally integrated market is not between the gigantic Transnational Corporations, but it is between governments that find themselves competing with one another for investors by offering the cheapest and most compliant labor; the weakest environmental, health, and safety standards, the lowest taxes; and the most fully developed infrastructure. Often governments must borrow to finance the social and physical infrastructure needed to attract private investors. Having pushed almost the entire social and environmental costs of production onto the community, many firms are able to turn a handsome profit. Having bargained away their tax base and accepted low wages for their labor, many communities reap relatively few benefits from the foreign investment, however, and are left with no evident way to repay the loans contracted on the .firms behalf14
Impact of Globalization on Human Rights
Globalization has its winners and losers. With the expansion of trade, market, foreign investment, developing countries have seen the gaps among themselves widen. The imperative to liberalize has demanded a shrinking of state involvement in national life, producing a wave of privatization, cutting jobs, slashing health, education and food subsidies, etc. affecting the poor people in society. In many cases, liberalization has been accompanied by greater inequality and people are left trapped in utter poverty. Meanwhile, in many industrialized countries unemployment has soared to levels not seen for many years and income disparity to levels not recorded since last century. The collapse of the economies of the Asian Tigers are examples of this. The Human Development Report of 1997 revealed that poor countries and poor people too often find their interests neglected as a result of globalization. Although globalization of the economy has been characterized as a locomotive for productivity, opportunity, technological progress, and uniting the world, it ultimately causes increased impoverishment, social disparities and violations of human rights. That is what we see today.
1. Mohameden Ould-Mey, Global Adjustment; Implications for Peripheral States, Third World Quarterly, 15:2, 1994.
2. Cited in Carole, Collins, A World in Mutation. WSCF Journal, December 1995.
3. Xabier, Gorostiga, Latin America in the New World Order, in Global Visions: Beyond the New World Order, Jeremy Brecher, (ed).(Boston, MA :South end Press, 1993), p.67.
4. Nikhil Aziz, “The Human Rights Debate in an Era of Globalization: Hegemony of Discourse.” Bulletin of Concerned Asian Scholars, Vol. 27, No.4, Oct-Dec., 1995.
5. International Labour Resource and Information Group, “Getting to Grips with Globalization”, Workers World, No.3-4, January-February, 1996.
6. Kenichi Ohmae: The End of the Nation State, New York: The Press, 1995. p.2-5.
7. Robinson Richard and Goodman David S.G. (eds). “The New rich in Asia: Economic Development, Social Status and Political Consciousness”, The New Rich in Asia, London: Routledge.1996.p.1.
8. Ibid. p.226
9. Ohame, op.cit, p.15.
11. Seabrooke Jermey, “Internationalism versus Globalization”, Asia-APEC internet message, Sept. 11 1996.
12. Verzola Robert, Asia-APEC internet message, August 16, 1996.
13. Dow James A, Trade and Human Rights in China, Journal of Commerce, November 15, 1996.
14. Korten David, Sustainable Development: A Review Essay, World Policy Journal, vol 9, p.157-190.