It’s a Small World After All

But Will Everyone Benefit?


By Leela Jacinto

Sept. 6, 2000 - The world is getting smaller, but is that good news for
everyone?
Well, it depends who you ask. At a time when globalization, the
blurring of political, cultural and economic boundaries, is often seen as
the hope for solving global economic problems, it’s also often blamed as
the cause of many troubles plaguing nations and their citizens.
And nowhere will globalization be more hotly debated than at this
week’s U.N. Millennium Summit in New York, where more than 150 world
leaders are gathering to debate nothing less than the course of the
planet.

The Ideological Gulf

There is little consensus on how globalization affects people. The schism
often follows the North-South divide with some countries mostly in the
developed world viewing globalization as an opportunity to expand
business interests and with it, global standards of living and human
rights.
But for many developing countries, globalization is often viewed with
suspicion, as a means for the power centers be they big business or
industrialized countries to set the agenda for their economic
development, often on unsatisfactory terms.
One of the problems of course, is that globalization often means
different things to different people. We see two angles of
globalization, says Georg Kell, senior officer at the executive office of
the U.N. Secretary General.
The first is the economic phenomenon that allows for the movement of
capital, goods and services across border, driven largely by the private
sector. But secondly and more importantly there are the social and
cultural ramifications of how these policies affect people.
Consider Victoria Pauli, an indigenous Indian from the Philippines
who believes globalization is a force that has to be controlled.
Globalization is having an adverse impact on indigenous people in the
South and in the North, she says.
A member of the Asian Indigenous Women’s Network, Pauli hails from
the Cordillera region of northern Philippines, which is rich in mineral
resources. Under the economic restructuring program initiated by the
government in 1995, multinational mining companies have been encouraged to
invest in the region.
But Pauli is not impressed with the new economic policies. These
corporations have been granted leases at minimal fees to extract resources
and take home hundred percent of the profits, she says. We haven’t seen
the economic benefits of globalization. Where are the employment promises?
One bulldozer can do the work of ten men.
Along with other human rights and environmental activists, Pauli is
in New York to attend a teach-in organized by the International Forum of
Globalization, an umbrella organization of nongovernmental organizations
questioning the role and implementation of globalization.

Blue Washing Corporations?

The relationship between the United Nations and business groups came under
fire last month when U.N. Secretary General Kofi Annan launched the
Global Compact, a program of 44 multinational corporations, labor
unions, human rights and conservation groups in an effort to stave off the
backlash against globalization.
Global Compact requires corporations to commit themselves to nine key
principles embodied in U.N. treaties such as ending sweatshop conditions,
child labor, discrimination against minorities and developing
environmentally friendly technologies.
Once a year on a special U.N. Web site, the corporations are expected
to publicize how they have succeeded in applying the U.N. principles of
good international behavior.
But skeptics, including Greenpeace, the international environmental
organization, accuse the United Nations of allowing corporations to ‘blue
wash’ themselves in the blue and white colors of the United Nations.
But Annan maintains it is a pragmatic move. We know that some of
these companies may have made mistakes, may have done the wrong things,
he told reporters last month. This does not mean that we should not
encourage them and work with them in moving in the right direction. They
are part of our reality.

Seattle on Their Minds

The clashes in Seattle last year during a meeting of the World Trade
Organization are widely seen to have brought the anti-globalization issue
into the spotlight. And the push behind including globalization on the
summit’s agenda is widely believed to be Annan himself.
Prior to the anti-WTO protests, Annan had addressed the globalization
issue at various forums, including the World Economic Forum in Davos in
January 1999. But Seattle spurred the Annan into action.
The secretary general was concerned that the backlash against
globalization had no direction, said Kell. He was concerned about
reactions that were opposed to openness, that were inward-oriented.
Although there are fears that the international organization is being
usurped by corporations, most admit that a failure on the part of the U.N.
to address the issues facing an increasingly complex world would simply be
a head-in-the sand approach.
We believe that the United Nations is the missing link in the
international system that can control the excesses of globalization, says
Victor Menotti of the International Forum on Globalization.
We hope that this summit will frame the debate that the
international system needs to be reconfigured not only on a political
level, but on a social and cultural one as well.
By Friday, participants at the Millennium Summit are expected to sign
a declaration pledging to halve the number of people living on less than
$1 a day.
It remains to be seen if globalization will help achieve this goal.
Globalization at Work
Nike Inc. is one of many American companies that have taken
advantage of globalization to make a profit.
Nike does not manufacture its own products. It is a marketing
and design firm that buys its goods from independent contractors in
underdeveloped nations, where wages are low, and resells them in
richer nations where people can afford to pay $100 for a pair of
sneakers. Typically though, Nike sneakers cost about $16.75 on the
factory floor.
But Americans don’t want to make Nikes. If they did, U.S. wage
scales would make the cost and markups prohibitive.
Worldwide, Nike has contracts with 700 factories that employ
550,000 workers in 50 countries. In Indonesia for instance, workers
earn an average of $65 a month.
This may not be much by American standards but is nearly double
Indonesia’s minimum wage of $34 a month and comes with numerous
other employment benefits often unheard of in Indonesia.
Proponents of globalization, especially those in the Third
World, note that the problem in Nike’s case and with other such
corporations manufacturing in developing countries is not so much
the fact that goods are produced in these countries. They point out
that these plants actually raise the local wages, employment rates
and the standard of living.
The problem, they say, is the markup that Nike adds on to the
sneakers after the cost of manufacturing. But as most economists and
experts agree, a decrease in markup prices calls for an structural
overhaul of the existing market system, a change that most admit, is
hardly likely to come through.

ABC News

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