Globalisation: taking stock' Part 1 Guyana the wider world by Dr Clive Thomas Stabroek News February 18, 2001 Last week's article concludes the first part of the series on globalisation. So far I have sought to achieve two things. One is to inform readers about the institutions, rules, behaviour, and organizations that represent globalisation. And, the other is to provide the basic information and statistical data needed to concretely evaluate the various phenomena we were considering. This is I believe an essential platform from which to start our next set of explorations. This week we enter into the second phase of the series. Here the concerns will be different. The focus will be on a number of policy or policy-related issues, which presently engage global attention. There is no particular order or ranking by importance in the way the topics will be selected. Except of course, that topicality more than anything else, may influence the selection from week to week. Taking stock Before embarking in these new areas, I wish to respond to requests from several readers, particularly students, to very briefly re-capitulate what, in my view, are the leading manifestations of globalisation, which the first part of the series sought to identify. The first of these manifestations is the observation that, despite the controversy over the use of the term globalisation, the phenomenon I am describing is complex, multi-dimensional, and process-oriented. It has already embraced every major sphere of human activity, and continues to expand at a rapid pace. It is as much a material, as a non-material aspect of our existence. Culture, religion, social and political behaviour, recreation, the arts and knowledge, are as much involved in it, as are technology, production, investment, consumption, and the environment. Secondly, changes in the economic dimension of globalisation, broadly interpreted, are perhaps its most dramatic manifestations. Thirdly, within the sphere of these economic changes, several novel features stand out. Among the novel features I have emphasized in the series are the following. There is to begin with, the rapid growth of international production and the sales of transnational firms (TNCs). In an historically unprecedented development, this type of economic activity now exceeds the growth of global production (GDP) and the growth of international trade. At present therefore, whether we like it or not, the activities of the TNCs constitute the most dynamic element of globalisation. Another feature is the rapid technological revolution now underway. This is evident in many areas, but particularly so in the areas of information, communications, bio-technology, and raw material use. This technological revolution has brought into existence many new industries, while at the same time revolutionising the operations of well established ones. The most dramatic evidence of this is no doubt the computer. However, the recent cracking of the human genetic code may have opened up yet unimagined possibilities. Globalisation has also witnessed a growth in international trade that exceeds that of global GDP. The result is a rising share of international trade to national production in many countries, including large ones like the United States, which were traditionally considered to be almost self-sufficient. Alongside this rapid growth of international trade, the growth of trade in services has exceeded the growth of trade in commodities. This is another first for the global economy. This pattern is of course replicated in CARICOM, where the international sales of services, especially tourism, has had an unprecedented take-off relative to traditional commodity exports. North-north bias The growth in trade in goods and services is heavily concentrated among the already developed economies of Europe, North America, Japan, and Oceania. The classic north-south trade patterns, have been replaced with a dominant north-north trade pattern. Accompanying this development, there has been an explosive growth of finance and cross-border financial flows. To many, these flows constitute the cutting-edge of globalisation. Certainly, in terms of value these flows now dwarf all other global transactions. In the area of investment capital most of the flows are now private. The traditional transfer of resources from the north to the south through governments of the north and multilateral institutions like the World Bank to governments in the south, has given way to private transfers on a global scale. These transfers are motivated by the search for profits, thereby bringing to an end the importance of 'aid' and subsidized capital transfers in the contribution to the economic development of the south. Most of the private capital transfers also pattern the dominant movements of international trade, in that they are now north-north oriented, rather than north-south as in the past. Most of the private capital transfers that are of an investment nature also take the form of mergers and acquisitions (M&As), especially the latter. These are also overwhelmingly concentrated among the already developed economies of the north. At the same time, the bulk of the private financial flows are also speculative and unrelated to the financing of trade in goods and services. This means that today greed and the instinct to gamble, play disproportionate roles in shaping the global economy. Today global trade in goods and services along with capital flows increasingly encapsulate 'related' activities, especially those in the areas of technology, property-rights, the 'social' bases of trade, and the environment. No longer is it possible at the global level to separate the 'pure' influences of the economy from these other considerations. Finally, despite the spread of global concerns about poverty and inequality, globalisation has witnessed a significant increase in the absolute numbers of the poor, and a widening gap between the incomes and wealth of the rich - both across nations and within them. These are the major points to be distilled from the first part of the series, and the statistical data and information in support of them have been included in the earlier articles. Next week we explore the new issues of Part 2. We shall begin by looking at globalisation and food security. Follow the goings-on in Guyana in Guyana Today If you do not see the 'Guyana: Land of Six Peoples' drop-down menu on the left then please click here to enter through the front door which will give you additional options and information.