The role of the State in Globalization
Introduction: Understanding Globalization
Globalization is a multi faceted term that incorporates many ideas in the society. It is a term that has been used to describe and explain many worldwide events in the 20th century. Much debate was been said about the very idea of globalization, yet they can never come up with a concrete answer as to where globalization would bring the entire humanity in the new millennium.
Globalization is relatively a new concept, but all through out history, many wars was been made out of globalization. What really is globalization? Globalization is the term used to describe the changes in societies and the world economy that result from dramatically increased international trade and cultural exchange. It describes the increase of trade and investing due to the falling of barriers and the interdependence of countries. In specifically economic contexts, the term refers almost exclusively to the effects of trade, particularly trade liberalization or "free trade, more broadly, the term refers to the overall integration and resulting increase in interdependence, among global actors, be they political, economic, or otherwise.
Globalization is the beginning of endless debates from two polar points of views. It has been given positive connotations by those who advocate greater economic and cultural integration across national borders, while it has been fiercely criticized by radical groups who perceive it as threat to social cohesion and is only one of the many wheels in the advancement of unfettered capitalism.
Globalization is a complex phenomenon that it brings no justice to label it as sanctified or demonized, nor should it be used as a scapegoat for the major problems that are affecting the world today. It has a multi dimensional character and thus it does not have the privilege of unique definition. It creates both opportunities and costs for different players in the globalization of goods, services, capital, ideas information and people. This unrestricted assimilation produce cross border integration of a number of economic, social and cultural activities.
Main Body (The Role of State in Globalization)
It seems that man has a natural instinct to expand his territories beyond his border, and venture towards horizon. Globalization might be a new concept, but man has been practicing the very basic of ideals of globalization since man found out that “the grass is always greener on the other side of pasture”.
Alexander, Napoleon, Magellan and Columbus all pioneered global expansion of territories. Alexander and Napoleon might be thinking of military might as the reason for its expansion of empire while Magellan and Columbus where thinking of economic gain and advantage by finding the island of spices and controlling the trade route of the old world. All this conquest, were sponsored by the state. Alexander, Napoleon, Magellan and Columbus sailed and conquered the world carrying the name of their state. The mission in the first place was funded and was for their own respective territories.
The modern worlds enjoys and defend well its well defined territories and state which is sovereign from one another, and is recognized by other states and the community of nation. A state is defined as an organized political community occupying a definite territory, having an organized government, and possessing internal and external sovereignty. Recognition of the state's claim to independence by other states, enables it to enter into international agreements, this is not only important for the establishment of its statehood, but equally important that a state can take part in the activity of nations.
Because of this need for state to enter into international agreements, globalization seemed inevitable. The interdependence of nations and states created a global community. A world, reduced or shrinked into what is now termed as the “global village”.
There are four main driving forces behind increased interdependence of the states. These are trade and liberalization, technological innovation and the reduction of communication costs, entrepreneurship and lastly global social networks. Trade and investment liberalization is important to every state, especially those who lacks in economic materials needed to run their economy efficiently. A state that do not enjoy large oil deposits like the Arab countries have, would engage into trade with states with large oil deposits, large enough for their own consumption. In this way, both state receives advantage and can continue operating their economies smoothly. With the birth and wide use of internet, individuals and states can now communicate freely with out leaving their own neighborhood, again making globalization inevitable. The entrepreneurs, or better known as the multi-national who outsource their businesses to other countries contribute also to globalization. Services and infrastructures are offered by the host country in exchange with the capital investment and jobs the investment would create. And lastly, most sovereign and democratic states need to ally itself to other states to better position themselves in lobbying for their agendas, or just friendly relation aimed at fostering stronger ties between states. Information’s are exchanged, technologies or even humanitarian help are extended between countries who are members of the global social network.
The significant role of the State
Although many believe that technological innovation and entrepreneurship are the main forces behind globalization, these factors cannot alone explain the process of enhanced economic integration. National governments have played a pivotal role in allowing a greater interdependence and economic integration of specific activities through the elaboration and adoption of market-oriented policies and regulation, at both international and local levels. In 1980’s many government supported economic liberalization in number of economic areas which significantly increased global integration. In general, liberalization refers to a relaxation of previous government restrictions, usually in areas of social or economic policy. The latter included “financial sector deregulation, the removal of controls over foreign exchange and enhanced freedom of trade. Financial deregulation has resulted in the progressive elimination of capital controls, the removal of controls over interest rates, and lifting of traditional barriers to entry into banking and other financial services (1995).
State efforts to uphold free trade and to encourage the reduction of trade barriers have been reflected in the eight successive negotiating rounds of the former General Agreement on Trade and Tariffs (GATT), which culminated in 1995 with the establishment of a multi lateral trading system, the World trade Organization (WTO). The latter organization of states in favor of multi lateral trading between countries has not only led to the reduction of barriers to trade in goods, but has also proceeded to liberalize services and capital flows. The WTO has as well focused more closely on an ever growing range of policy measures affecting the terms and conditions of market access, such as standards and regulations, subsidy practices, and intellectual property rights (1998 ).
Contrary to popular beliefs that economic globalization is a blind force that is not controlled by any factor, it is still individual governments that set the policies and the rules in the globalized economy. Economic globalization is, in other words, the result of “policy decisions made by individual countries that allow global market forces to operate (2002).
How the States Operates in Globalized Economy?
Not all states in the world are equal, if it is so then globalization would be redundancy. Some countries or states are more influential than the other. Economic factor as well as military factor plays a big role. But in peace time, it is usually the industrialized nations that are the most influential. The big and real issue here then is which countries set the rules, whom do they favor and how can the least powerful state also influence policy-making in the international arena, and do it in ways that will benefit them. Due to significant power imbalances among nations brought by the factors mentioned, and are reflected in institutional institutions, some countries do not have as much leverage as others in setting the international economic and political agenda. As a consequence, the present form of globalization is largely shaped by the rules advanced by one part of the world, namely the most influential or industrialized countries, and these rules do not necessarily favor developing countries and countries in transition ( 2002). “Globalization can be a powerful and dynamic force for growth and development if it is properly managed. And the foundations for enduring and equitable growth at the international level can be laid. For that it is essential to persevere in the search for consensual solutions through open and direct dialogue that takes account of the fundamental interest of all (2000).
As mentioned above, globalization and more in particular economic integration, presents both opportunities and costs. Greater economic openness, foreign direct investment and transfer of technologies offer potential opportunities for economic growth. Free trade allows specialization of services and goods between regions, allowing them to produce according to their own comparative advantage. It also expands the consumption choices of the citizens by providing increased opportunities to buy goods and services from other country. It is in this respect important to keep in mind that international trade is not a game where some countries are winners and some countries are losers. On the contrary, all countries benefits from trades because it enhances the choices of the consumer and the quality of products. It is also worthwhile to underline that countries as to what is commonly believed, compete with each other. Or that any of their major economic problems can be attributed to failures to compete on world markets (1994).
Economic globalization has also provided opportunities for developing countries in that it expands the size of their markets for exports and attract foreign capital, which aids in local development. Foreign investment is conducive to technology transfers and know-how, which in return increases local productivity. Another positive effect of globalization is greater competition among firms, which benefits consumers who have access to products at increasingly lower prices. Those who gain most from the free trade initialized by the government in both developed and developing countries are very often the poorest since they can buy goods at more affordable prices and therefore have a higher standard of living. In this sense, governments and states are seeing free trade as an indirect way to reduce poverty.
Despite many concerns about the loss of sovereignty , the state remains the key factor in the domestic as well as international arenas. The popular assumption that the emergence of global civil society, and increasing levels of cross border trade, finance and investment flows turns the nation or the state into an anachronism is wrong. In the international arena, closer cooperation and concerted actions among states represents an exercise of state sovereignty. Such concerted actions does not necessarily weaken the states, rather it can strengthen them by creating a more stable international environment and by giving them greater scope top expand their exchanges in variety of fields. Moreover, globalization without effective and robust multilateralism is bound to lead to crisis because markets are neither inherently stable nor equitable.
The state will persist because the need for the state has grown over times. It also will continue its existence because the local resource pools and socio economic problem on which states are based are undiminished. Only the state can guarantee, through independent courts, the respect of human rights and justice. It also promotes national welfare and protect the general interest of the state. The role of the state is also fundamental in operating the intricate web of multi lateral arrangements and inter governmental regimes. It is still the state, collectively or singly, that set the rules of the game, that enters into agreements with other states, and that make policies which shape national and global activities.
The changing role of the State
The functions and role of the state have transformed substantially. The general configuration of its responsibilities has changed and this has introduced important modifications both in the policy arena and in the state’s requirements for high level skills, qualitatively and quantitatively. Overall, the course of change points to a shift of focus away from hands-on management and the direct production of services and goods towards strategic planning with a view to the establishment and maintenance, refinement and reform of an enabling framework for private enterprise and individual initiative.
A parallel shift has moved the state’s centre of gravity and with it the locus of power. Decentralization, debureaucratization and deregulation are adding to the importance of the local government and non political actors on whom significant factors and functions are devolved or outsourced. At the same time range of tasks and policy decisions, traditionally handled by the central government in the state capital is being increasingly transposed to an inter governmental level as a result of increased flows between countries of goods, capital, labor and information. Increasingly the state is called upon to act as the link or the bridge of process of planning, consultation, negotiation, and decision making involving all other players in the globalization game. The state is the hub of activities connecting multiple partners and stakeholders from varying fields, regions, cultures, occupations, professions and interests.
In these globally aware state governments, institutions have been created or altered to scan the rapidly changing environment, to promote policy invention and dialogues to speed up decision making in order to take advantage of emerging opportunities, and to embrace short term failures in favor of creating a more long term sustainable strategies. The state are faced with dynamic transformations at the global and local level, the states without adequate capacity to recognize and respond to change are destined to be left behind in the dynamic waves of change. The ability to embrace change is related to an attitude of openness and diversity, to embrace and take comfort with uncertainty and optimism about the future. Globally aware leaders must be chosen by the state to seek and build institutions that can embody these attitudes to inspire the citizens to participate in the emerging aspects of globalization at the same time attracting global forces to participate the states local development. With the advance of globalization, the state has an important role to play in the establishment and preservation of an even playing field and enabling an environment for private enterprise, individual creativity and social action. It can also contribute to the establishment and maintenance of social safety nets, to promote as well as facilitate dialogue and understanding at the sub national, national and international levels. Lastly, a strong democratic state is responsible in the necessary need to protect the children, the sick, the elderly and other vulnerable segments of the society, to combat social exclusion of minority groups and most importantly to ensure a more equitable distribution of the benefits of globalization.
Conclusion
It is increasingly being acknowledged that good governance is the key and the main factor in the development process of any country, state and government. Good governance ensures that the benefits of globalization are benefited by all in the society. The state in partnership with the civil society and the private sector has a major role to play in the quest for peace, freedom, social equity and sustainable development. The state is also responsible to seek improvement and reformation in public administration and governance systems, for this are critical in addressing number of issues, including making globalization work for all. That is, globalization would be used as a tool in alleviating poverty and income inequality. It should also advance human rights and democracy, protect the environment, promote sustainable development, manage violent conflict and in combating international crimes or terrorism. The state can either guarantee people’s freedom and measure of social justice, or it can hold back the state’s development. Therefore, it is how the state structure, administer and operate its public sector and how it pursue policies that makes great impact on people’s well being.
The promotion of higher quality of life and the protection of human dignity should be regarded as a crucial element in ay effort to globalize. Accordingly, globalization also do not mean abandonment of state’s guidance over its market control. The economic sphere cannot be separated from the more complex fabric of social and political life and sent shooting off in its own trajectory. To survive and thrive, a global economy must have a more solid foundation in shared values and institutional practice. It must advance broader and more inclusive social purpose (2000). The state must at first satisfy the basic needs of its people as an end in itself, but also as a means to allow people to be able to seize a greater extent the benefits of globalization. This is especially true in developing countries should benefit more from the rapid transformations in terms of technology where the people can have better access to q1uality education and health programs. The improvement of physical infrastructures including transport and communication networks, hospital and water systems improved and if poverty amidst plenty is reduced and technology gap between industrialized nation and developing nation is narrowed, that is to say that people have greater opportunity to make choices (1999).
Simply, what people can achieve in the advancement of globalization can be positively achieve as influenced by economic opportunities, political liberties, social powers and the enabling condition of good health, basic education and the encouragement and cultivation of personal initiatives to improve. And the state have a very important role to play in this aspects.
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