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Monday, 14 May 2007
Globalization and Investment

Imagine you own a leading company which relies on labor intensive production processes. You've done your homework, and have adopted all the current technologies available to increase productivity, your products have the best quality in the market, your finances have been healthy, your marketing campaigns have also had great success. You may even have a commitment to your community, offering the occasional sponsorship to the local school's soccer team or maybe you give donations to a poor intercity school.

Yet, some competitors have undermined your market share by selling their products at lower prices. Much lower prices.

You keep wondering how is this possible?

Soon you realize that they've moved most of their labor-intensive operations to a union-free industrial park in Costa Rica, where the local, state and federal governments offer tax exemptions for the first 5 years and labor costs are a fraction of the price you are used to pay and that of course includes health care and labor litigation expenses as well.

Labor outsourcing sounds efficient at the business-level, what about domestic unemployment at the nation-level?

From advanced tech-factories in the developed nations to maquiladoras across the US-Mexico border to sweatshops near the equator in Asia and Latin America, the current trend takes advantage of what has been called a global or open labor market, giving large companies an array of options when it comes to reducing labor costs. That is, if they are willing to move service or production facilities abroad.

In recent years, we have witnessed a general price drop of mass produced goods because of this labor market flexibility. It has also been touted as a great benefit for developing nations which offer quality labor, as money is poured into the country in the form of direct foreign investment (DFI) and new job sources.

The current labor outsourcing exodus has affected the economies of some developing countries in such a magnitude, that just after a few years, this focalized DFI has actually risen the previous living standards of the communities that have received the new jobs. This has been an obvious concern to companies, not by the wealth this creates though, but because of the consequences it has brought: a more educated working class that begins to demand, beside higher salaries, higher labor protection laws and higher health care and retirement benefits, increasing the labor costs for the companies and 'forcing' them to close factories and repeat the cycle they begun more than a decade ago, but in a different country with lower standards. A more business-friendly place to start over.

This cycle does not begin by firms opening new factories alone, the previous step in the cycle is of course, mass layoffs and closure of labor sources across entire communities when the costs to support them reach a critical point. Breaking the income source of thousands of their now ex-employee's families, hindering the development of entire communities and nations.

The current business logic breaks Henry Ford's postulate "There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wage possible." Which defined the bottom line in terms of social benefit, instead of investor profit. In current terms, it defines the debate of shareholder vs stakeholder liability.

Although this locust-like behavior of companies is most evident in industries with a small added value, such as the apparel industry in Central America and Southeast Asia, it extends to other latitudes in every goods or services productive process, whether it is software development in India, airplane design in Mexico or call centers in Chile. They all have seen their share of mass opening of job sources, a few fat-cow years of development that vanishes when the companies realize that a poorer nation offers them a juicier deal.

One way some nations have dealt with this issue, is by imposing conditions to investors on what industries will be allowed to enter and in some cases, by making agreements with the corporations over the transfer of technology in given timeframes, thus assuring that in case the companies decide to leave, at least a highly capable workforce remains in the country, able to continue the development of the nation. This has been the case of some Asian countries, but governments of Latin American countries have for the most part refrained from negotiating this issues and have embraced the practice with open arms. The countries that have done so despite stern IMF recomendations and the corporations have figured out a legal framework to eliminate these limitations via TRIMS. In the words of Chomsky: 

Those approaches are blocked by Trade-Related Investment Measures. Superficially they sound like they are increasing free trade, but what they are in fact increasing is the capacity of huge corporations to carry out central managemnent of cross-border transactions, because that’s what outsourcing and intrafirm transfers are --centrally managed. It’s not trade in any meaningful sense. And they again undermine growth and development.

  

Perhaps its time to name things for what they are, and stop calling "free trade" to the practice that gives only marginal benefits to one part and huge profits to the powerful.

 

References:

 Miller, John. (2006). Nike to the rescue. Retrieved 1 may, 2007 from: http://www.zmag.org/content/showarticle.cfm?ItemID=11234 

 Rusell, Martha. (2004). Capital Destroying Jobs. Retrieved april 23, 2007 from: http://www.zmag.org/sustainers/content/2004-03/04russell.cfm

 Chomsky, Noam (2000). Unsustainable Non Development. Z Magazine Daily Commentaries. Retrieved april 21, 2007 from: http://zmag.org/ZSustainers/ZDaily/2000-05/30chomsky.htm

 The Economist. (2007). Cities Guides Los Angeles, economic profile. Retrieved 3 may, 2007 from: http://www.economist.co.uk/cities/findStory.cfm?city_id=LA&folder=Facts-Figures

 Wilkinson, Will. Human Capitalism.  (2007).  Economist.com FreeXchange. Retrieved 8 may, 2007 from: http://www.economist.com/blogs/freeexchange/2007/05/human_capitalism.cfm

 


Posted by carolingiadiaz at 9:31 AM EADT
Updated: Monday, 14 May 2007 1:21 PM EADT
Wednesday, 9 May 2007
Globalization and Environment
I believe that mostly those that are part of the modern and developed world like me have a false idea of what it means to be concerned of the environment. Nowadays it is more of a slogan and trend to "be green" than really being conscious about the issue. Others just believe that is a lost cause, that only the powerful ones have control over the issue and can do something about it.

I believe that we are so used to a life-style where services do not just give us the basic needs, but instead they provide us with comfort and high standards of living, which exempts us from really participating in the sustainability of the environment. Therefore the whole issue remains on the air. If we all have the services and products we need and paid for, why worry about it? Why should we really worry about water for instance, if we don't have problems getting it?


Another way of taking responsibility with the environmental harm is to become an informed consumer. Consumers have the power to press corporations to improve their policies and respond to the environmental damages they cause.  If corporations do not respond adequately to these pressures “society could place increasing costs on unsustainable business practices, and customers many not choose to purchase associated products and services.  Resulting in reduced reputation, increased costs, decreasing shareholder value” (Steurer, Langer, Konrad, & Martinuzzi, 2005)

In order for corporations to feel the pressure of consumers, different actions have been taken in the past. The most notorious -although often unsuccessful- is the boycott. Another measure taken, but from the same corporate side of the business, is the media coverage of scandalous environmental disasters, which may give a bad reputation to company, forcing it to order to wipe out their bad image with greener behavior. But this type of measure is rarely seen, considering that many of the most powerful media corporations are also partners of irresponsible corporations or at least share economic interests.

But some believe that to be a responsible consumer is to pay higher prices for the same goods or services. Local producers and small firms that are ethically involved with social and environmental issues cannot compete with big corporations and their product prices in the global market. Therefore the idea of being a responsible "green consumer' becomes a luxury and not affordable to consumers that in a wider sense, could make a difference to press industries and corporations to protect the environment.


Another factor is that the majority of people who suffer the worst consequences of environmental predation, water pollution and deforestation, live in the poorest nations. Therefore environmental problems that affect those close to poverty are not seen by those who live in developed nations, and at most, see the environmental problems as an external thing.


The issue of environment degradation is also often reduced to ecological problems, even though there is evidence that human health is threatened by this problem. Diarmid Campbell, from the World Health Organization has declared that health is becoming a central subject in the debate on the global warming. The WHO has estimated that by 2030, climate change could cause 300,000 deaths annually.

Other reports such as the United Nations’s Health agency indicate that climate change may be to blame for some 150,000 deaths each year, with tropical places and poor countries being the most vulnerable, because the poorest people who can't afford proper refrigeration are more likely to eat food tainted with increased bacterial contamination. In Europe for example, many people have suffered a great deal from the heat wave because air conditioning requires high energy costs, but in the other side Campbell argues, that installing more air conditioning in homes, workplaces or hospitals is also a risk in increasing the emission of gases from the burning of fossil fuels like oil, gas and coal. According to Shrivastava (1995) it is estimated that the production of goods and energy required to provide basic amenities to all people will need to increase 5 to 35 times its levels.

Professor Jonathan Patz of the University of Wisconsin in Madison says that there is a enormous global ethical challenge, because those countries bearing the greatest responsibility for the greenhouse gases that cause global warming are least affected, while the least responsible are most affected. Therefore developed countries should show a moral leadership.


Corporation interests vs. local environmental issues; a case of dangerous wastes in Mexico since NAFTA.


Through a local perspective and mostly coming from a developing country, I don’t think there is much enthusiasm in believing many international speeches that seem to worry over social and environmental issues.

Since 1987, when the United Nations announced the Report “Our Common Future”, in which “development must meet the needs of current generations without compromising the ability of future generations to meet their needs and aspirations”, there has been no real evidence of international responsibility and this type of programs are still a superficial consensus, which haven’t reached the aspirations of many local communities suffering from environmental harm and arbitration from corporations.

In particular I would address how foreign investment contributes with the harming of many developing countries social and natural environment, because in one side, there is the power coming from developed countries and in the other side there is the necessity and corruption problems that debilitates local interests and government policies that could protect the public’s interests. As Rugman and Verbeke explain with an economic point of view that many environmental regulations discourage investment and raise production costs. Therefore the relationship between environmental goals and industrial competitiveness has normally been thought of as involving a tradeoff between social benefits and private costs.  One side pushes for tougher standards; the other side tries to beat the standards back. (Porter & Van der Linde, 1995)


In the case of Mexico and its biggest international leading partners, some can consider NAFTA as a major breakthrough since it was the first international trade agreement to explicitly incorporate environmental issues, and to establish a bureaucracy to administer trade and environment interaction (Rugman & Verbeke, 1998), but many cases have proved that industries and corporations have find the ways to turn aside domestic environmental policies. Richard D. Morgenstern in his paper over the cost of environmental protection explains how evidence from analyses of productivity growth, suggests that a high percentage of industry level declines in productivity growth are attributable to environmental regulation (Richard, 2001). So, if firms are concern over the price of their market shares and profits, environmental regulations are not part of their personal agenda.

In cases of “maquiladoras” and border issues between the United States and Mexico, many U.S. officials blame the slow cleanup of dangerous waste sites on Mexico’s economic crisis and the corresponding lack of resources. While it may be easy for those in the United States to hold Mexico responsible for the uncertain status of environmental cleanup, the truth is that U.S.-based corporations may have been the principal contributors to the problem. Although the La Paz Agreement, signed by Mexico and the United States in 1983, requires hazardous waste created by U.S. corporations to be transported back to the United States for disposal, many companies avoid paying disposal costs by dumping toxic and other waste into Mexico’s rivers and marine waters. This limited protection was eliminated in the year 2000 under NAFTA.


In Mexico and many Latin American countries mining industry is an issue over environmental and local problems. Mining is one of the most polluting productive activities, since it implies the exhaustion of nonrenewable resources says Adriana Estrada in her study of environmental impact of mining industry in Mexico. For Estrada Socially mining is often tied with cases of violation of human rights or supporting undemocratic regimes. In environmental terms, mining appears to be in the scenario of the greater threats for the biological diversity, because it creates enormous amounts of contaminated wastes and water contamination with highly toxic substances. Adriana Estrada had studied several cases of environmental degradation from foreign mining companies in Mexico and their impact in local communities.

Estrada addresses on the Metalclad case, which becomes a serious antecedent of commercial conflict resolution that undermines the sovereignty of local, state and federal governments in Mexico. In May 1994 Metalclad started a confinement of dangerous remainders in a poor locality in the state of San Luis Potosi, declaring to count with the support of the state and municipal authorities. Nevertheless, in October of that same year the construction work was stopped by order of the City council of the locality of Guadalcazar, since the company lacked the municipal permission to work and an Environmental Audit was made by different national institutes that recommended to remedy the site before beginning the operations, since more than 20.000 tons of dangerous remainders had been deposited illegally in the place by the company. The case was taken to several NAFTA court interventions in the U.S. and Canada, because the U.S. Company was suing the Mexican government and requesting a 90 million of indemnification. The resolution was in favor of Metalclad, and Mexico had to paid after several appeals, 16,685 millions dollars to Metalclad Corporation (Estrada, 2001).
The resolution of the international court on this case makes it clear that commercial interests are the supreme value to protect and that the protection of the environment and public health is subordinated, leaving a serious limitation on governments work to safeguard public interests. The defense of values like justice, fairness and liberties does not have capacity in this scene, only with the exception of the sacred economic freedom.


REFERENCES

Estrada, A. (2001). Impactos de la inversion minera canadiense en Mexico: Una primera aproximacion. Mexico D.F.: FUNDAR, Centro de Analisis e Investigacion.
Kreiser, L., Butcher, W., & Schoch, H. (1998). The Taxation and Management of Environmental Cleanup Costs: A growing Wordwide Concern. Taxes.
Porter, E. M., & Van der Linde, C. (1995). Towards a New Conception of the Environment-Competitiveness Relationship. Journal of Economic Pespectives, 9(4), 97-118.
Richard, D. M. (2001). The Cost of Environmental Protection. The Review of Economics and Stadistics, 83(4), 732-738.
Rugman, M. A., & Verbeke, A. (1998). Corporate Strategy and International Environmental Policy. Journal of International Business Studies, 29(4), 819-833.
Steurer, R., Langer, M. E., Konrad, A., & Martinuzzi, A. (2005). Corporations, Stakeholders and Sustainable Development I: A Theoretical Exploration of Business-Society Relations. Journal of Business Ethics, 61, 263-281.
Unit, E. I. (2007). Los efectos del cambio climatico.   Retrieved 9 May, 2007, from http://www.jornada.unam.mx/2007/05/08/index.php?section=economist&article=026n1eiu




Posted by carolingiadiaz at 3:40 PM EADT
Friday, 4 May 2007
9. MIGRATION AND GLOBALIZATION
HISTORY'S STORY OF MIGRATION AND UNDOCUMENTED MIGRATION IN THE U.S
 
Migration is definitely a complicated topic to talk about in regards with globalization and social topics. Just like we say that we must avoid political and religion topics in a family dinners, migration is another of those taboo topics that complicate human relationships.  Today I cannot avoid it and I will try and address some of my personal opinions with those who have made studies on the issue of migration.

When talking about migration in globalization, economic and political views dominate the topic and sometimes a historical perspective is left aside. Those who are interested in analyzing migration through its historical sense, can argue that we are all migrants because our ancestors have traveled to places where we have come from (Nederveen Pieterse, 2000). A narrower position is taken when looking at migration from the nation state point of view. Pietersen in his study explains that from a cultural point of view, political rights and constraints are the major concern and from the nation point of view a cost-benefit analysis is mostly implied over the issue of migration.

But taking it from a historical point of view, migration has increased cultural creativity and has definitely contributed to economic development in many nations. I understand that this topic is polemic and complex, but it seems that now of days those who are against migration have forgotten to look back at history that proves that immigrants have formed most of the developed countries and that cultural diversity has been part of its richness. Here I would quote Nederseen Pieterse:

 “The contributions of foreigners, migrants, disporas, minorities, have been generally ignored. They have been ignored in a fundamental sense because acknowledging them would go against the Zeitgeist, the nationalist ethos”. (Nederveen Pieterse, 2000)


Present and future of immigration cannot be ignored as well. In recent studies, it is estimated that there are about 140 million people living outside their countries of birth, which means that migrants comprise more than 15 percent of the population in over 50 countries. The US National Intelligence Council on Growing Global Migration estimated in 2001 that some 45 million people in developing countries would enter the job market each year through 2015, while many will fail to find work and some will emigrate, whether legally or illegally.

By following these numbers, maybe the idea of free migration would increase its flow into a worldwide disaster, by predicting that there would be not enough jobs and opportunities for all migrants in developed countries and enormous drip of people from the poorest countries. But this idea of free migration would probably never happen, because even though contemporary globalization implies the free movement of capital that doesn’t mean free movement of people and labor will exist. Nederseen Pieterse explains that in order to address this paradox of globalization there would be a need to involve global reforms and policies that are far from reachable, because “uneven development serves also as a major economic opportunity structure of differential market niches” in today’s global economy. In the other side Meyers believes that even though immigration is now responsible for population stability or growth in many Western societies, immigration control policy is a crucial element, which mainly determines the scope of global migration. (Meyers, 2000)


Whether there are benefits or not in many countries where migration is promoted by the state, many citizens worry over migrants taking their job opportunities and cultural identity. Sometimes the idea of sharing civil and political rights to “new” people or “invaders’ is not a good idea for many citizens that believe their countries nationalism and law system is threaten. Just as Meyers says,; “immigration has a great impact on the demography, culture, economy and politics of a state”. (Meyers, 2000)

Then the whole issue of migration goes far than complicated when the word illegal is added. Illegal immigration then is another topic of discussion by considering that the word illegal sounds terrible and results in the idea that the individual migrant breaking the law is a criminal. In this matter I have a personal attachment to the issue of “illegal migration of Mexicans to the United States” because I have worked closely with undocumented workers living in New York and I profoundly believe that it is not an issue of “illegal aliens” invading the United States, it is a complex human issue that needs to be addressed and analyzed through different perspectives.

For example, by starting from a historical background, states such as Texas, California, Arizona, New Mexico and others, where part of Mexico’s territory before the Mexican-American war in the late 1800s, I can say that this is a historical fact that left a path of cultural connection and communication between the two countries. And of course the Bracero Program (1942-1964) that marked the beginning of the large-scale immigration from Mexico to the United States.

Geographic proximity and economic inequalities are also factors of illegal immigration, but it is important to understand that the flow of Mexicans to the United States is not an arbitrarily decision or just because of proximity. There is an existence of well-established migration networks, which enable U.S. employers to communicate changes in their demand for labor to prospective migrants in Mexico.  Migrants use these same networks to find jobs and housing in the United States (Hanson H., 2006), therefore economic needs and conditions can be applied to both countries and not only to one side of the coin.   

Migrating can be pushed by poverty, natural disasters, and war or even to increase income and lifestyle, but is still a human process that should not be seen as a crime. And that we cannot deny that migration through and economic point of view is an investment decision, where there is the risk to lose but also the chances to win what is expected.

Therefore I conclude this blog by speaking for those undocumented people I met in the United States that gave me an example of hard work and love for their families. Those 12 million undocumented workers estimated in the United States are mostly driven to cross borders from the force of survival and work and not by the means of crime. I speak for a deeper dialogue and tolerance over the issue of immigration and for a need of policies and reforms to enable those who are out of the game to enter to the legal system of immigration in the world.
 
"Our immigration needs a meditated and effective reform. We do not forget that the migration has been and is the wealth of the United States ", declared the senator of New York Hilary Clinton before about five thousand delegates in the convention celebrated in San Diego, California. "We must remove from the shades to 12 decent million of people, workers, who try to gain a life for their children; we must know who are in favor here of reasons for national security and to have a way for the legalization ", said the presidential aspiring. 
 
 

 
 
 
 
 
REFERENCES
Council, U. N. I. (2001). The US National Intelligence Council on Growing Global Migration. Population and Development Review, 27(4), 817-819.
Hanson H., G. (2006). Illegal Migration from Mexico to the United States: University of California, San Diego and National Bureau of Economic Research.
Meyers, E. (2000). Theories of International Immigration Policy-A Comparative Analysis. International Migration Review, 34(4), 1245-1282.
Nederveen Pieterse, J. (2000). Globalization and human integration: we are all migrants. Futures, 32, 385-398.
O. de la Garza, R. (1998). Interests Not Passions: Mexican-American Attitudes toward Mexico, Immigration from Mexico, and Other Issues Shaping U.S.-Mexico Relations. International Migration Review, 32(2), 401-422.
Notimex. (2007). Propone Hillary Clinton legalizat a migrantes por seguridad nacional [Electronic Version]. La Jornada. Retrieved 18 May 2007.

 
 

Posted by carolingiadiaz at 2:40 AM EADT
Updated: Monday, 21 May 2007 12:26 AM EADT
Tuesday, 1 May 2007
5. TRADE AND GLOBALIZATION

Trade and Globalization. The game of the rich.

The argument of trade liberalization has been promoted by some governments as a prosperity factor for developing nations. Margaret Thatcher, perhaps the toughest proponent of the model and one of it's founders, is often quoted saying “There is no alternative”, to global free-market capitalism. And many politicians, intellectuals and of course the media, keep repeating the same concept.

The model proposes not just the elimination of tariffs, but a complete change in the way governments are run, adding a set of recipes to the mix, like the recognition of intellectual property rights by participating (often developing) nations in the terms stated by developed nations.

But perhaps the biggest change in the current model, is the implied necessity that the role of the government be reduced to a mere arbiter, instead of a major player in the nation's productive processes. In other words, the notion that privatization of every state operated goods or services enterprise, is the one single path to prosperity as well as the idea that subsidies are the means of a protectionist government to hinder the private sector's competitivity and efficiency. From key strategic industries, like telecommunications, water, energy, food, education and health, to lesser activities, like garbage processing and park maintenance, privatization and elimination of subsidies are seen as the major cure to the disease of the inefficient government bureaucracy.

The proponents of global free-market capitalism anylize the problem with a keen business eye. They compare a profitable business, like a private hospital, with the heavily subsidized public health system, and see in profit inefficiency clear evidence in favor of their argument. Their reasoning rarely goes beyond the balance and result sheet statements, which more than revealing monetary losses, cast the social and welfare organizations as a bottomless pit of tax money. And this applies to every industry the government has it's hands in. The analysis is reduced to a diminishing returns logic, and the only explanation we get is this: the government is inept at running businesses. Let the businessmen be in charge of businesses.

It's hard to see an effort made to go beyond this logic, the positive aggregate effect of the public health sector in the national economy is hardly even considered, or the increasing returns effect of subsidies to labor-intensive crop industries. The previous conception of investment for development has been forgotten and in it's place we are left with the idea that a terribly expensive and paternalistic government must evolve, hence Thatcher's mantra becomes the new order.

Instead of seeing the government as a provider of equality and social security, the globalized free-trade model seeks only to benefit those who profit from human needs. The idea of the free market as the natural state,  evaporates the concept of social justice and social programs are left in the magic hand of Adam Amith and at the mercy of market laws. In the words of economist Julio Bolvitnik: “The rise of bread's price may balance bread's supply and demand, but does not solve people's hunger”.

What I see as the real drive for the globalized free-trade model is not an agenda of market efficiency but a very human trait, taken to a radical extreme: greed. To me, the embargoes, appeals and trials brought to the WTO's panels are a clear example of this and make more sense when I see them from the greed-power perspective, than from the optimization-benefit one.

A clear example is the trade relationhip that exists between the U.S.A. and it's NAFTA partner México especially in areas where both countries have a strong industry and compete with each other. For example the tuna fishing industry or the avocado crop industry. Despite having one of the most liberal Free Trade Agreements, the powerful partner in the relationship has consistently resorted to protectionist and paternalistic policies toward it's own industries. In the case of tuna fisheries, the strategy the U.S. industry has used is to finance an environmentalist group as a third party to lobby for them at the congress, effectively blocking the entrance of mexican tuna into the U.S. market since 1980.

The avocado crop industry has seen a change in recent times. Following a similar story from the tuna fisheries, mexican avocados have been under embargo from the U.S. since the early 1900s, when avocado farmers in the southern states started to obtain high ravenues from their largely government-subsidized agribusiness. This year, after Californian avocado crops were badly damaged from frost, Mexican avocados will be sold in the last U.S. state to resist to the natural and liberating forces of the good old uncle sam-inspired free market.

Why is it then that the main proponents of the free-trade new order, refrain from practising it at home, while impose it as a condition via the World Bank and the International Monetary Fund to every developing nation they aid?

Perhaps real, absolute, bilateral free-trade is not so good a measure to take at all.

It is then, when Hugo Chavez's answer to the U.S.'s Free Trade Area of the Americas: the Bolivarian Alternative for the Americas starts to make sense, as it proposes the principle to enroll in free-trade of non competing key industries of each country. Obviously an effort of this magnitude would require much work and revisions to from detailed consensus among participating nations, at least more than was taken in the negotiation tables to include México into NAFTA. But in the end ALBA would probably render a fairer and socially concious agreement, whose impact would distribute the lion's share of free-trade to the whole pack.

References

Boltvinik, J. (2006). Ley de Desarrollo Social, a debate/ I [Electronic Version]. La Jornada. Retrieved 28 April 2007 from http://www.jornada.unam.mx/2006/05/05/040o1eco.php.
Economic Agriculture Seminar (2006).   Retrieved 28 April 2007, from http://www.iiec.unam.mx/media/pres/seminario_economia_agricola/2006/Argelia_Salinas.ppt
Notimex. (2007). Adios a 93 años de embargo al aguacate mexicano en California [Electronic Version]. La Jornada. Retrieved 28 April 2007 from http://www.jornada.unam.mx/2007/02/02/index.php?section=economia&article=029n4eco.
Ratifica corte de EU embargo contra atun mexicano [Electronic (2007). Version]. La Jornada. Retrieved 28 April from http://www.jornada.unam.mx/ultimas/2007/04/28/ratifica-corte-de-eu-embargo-contra-exportaciones-de-atun-mexicano.
Restretpo, I. (2003). ¿Fin del embargo al atun mexicano? [Electronic Version]. La Jornada. Retrieved 28 April from http://www.jornada.unam.mx/2003/01/06/017a2pol.php?origen=opinion.html.
Quote retrieved on 28 April 2007 from http://en.wikipedia.org/wiki/TINA


Posted by carolingiadiaz at 2:11 AM EADT
Updated: Tuesday, 1 May 2007 3:14 AM EADT
Monday, 30 April 2007
7. GLOBALIZATION AND DEVELOPMENT
Developing countries in globalization. The United Nations and poverty.

It sounds logical that development would have to be the main step to eradicate extreme poverty and that the discourse of globalization where technological development and capital would rescue the poorest, through international institutions, seems to be for a hopeless world the only solution, but certainly not the most accurate.

Many economists, politics and academics say that through the flow of capital, trade, private investment International and technological innovation poverty can be eliminated. Some are optimistic that growing abundance of knowledge, technology and capital would possible remove radically extreme poverty from human condition.

Claire Short form USA Today magazine, believes that extreme poverty can only be eradicated through international financial institutions such as the United Nations system, and the Organization for Economic Cooperation and Development. Indeed for Short, globalization is the key to achieve the International Development Targets, but also a new risk that the poor will be left further behind if some improvements in international policies are not made.  

For Short history has proven that those nations that have opened their markets to attract export and investment, have enriched materially and culturally and reduced poverty.  So, those countries that didn’t open their markets are suffering the consequences. But for Noam Chomsky a recognized American academic, history has proven the contrary. He explains that those nations that have protected their industries have developed the richest economies of the world. For example, Chomsky explains how the British developed their empire by protecting their industries and using technologies copied from India and later on the United States used tariffs to protect their rising industries. Germany, France and Japan, and more recently the Asian tigers, did the same, says Chomsky.

Therefore, for Chomsky protectionism was a crucial element in the development of all the most successful models of the first world and now the advanced countries try to avoid that others use these same strategies to develop their economies, leaving the weak nations to follow the rules.  Short in the other hand, believes that a call for protectionism and the destruction of international institutions are synonymous of antidevelopment. For Short, poverty requires more international cooperation and not a reduction of trade and investment. “The question is not whether we should be “for” or “against” globalization, but -in the words of UN Secretary General Kofi Annan- how “to ensure that globalization become a positive force for all the world’s people, instead of leaving billions of them behind in squalor”. (Short, 2001)

These two opposite positions show how fragmented the idea of globalization is. Considering that I am a bit suspicious in the “good” intentions of globalization to solve the problems of the world, Chomsky’s idea seems to be more accurate and realistic. I understand that people have their hopes in international institutions like the United Nations, because we have as human beings a need to rely on some hope.


It is true that the United Nations has promoted programs that have as main objective to eradicate extreme poverty, but effectiveness of those programs are still under question. The United Nations, according to Ruggie (2003) has struggled with the challenges of globalization for several years, especially since the Asian financial crisis. Critics of the UN, believe that the foundation of the United States was rooted in some selfish elitist scheme to more easily control people rather than to act as some angelic international body (McEntee), while others believe that the United Nations has a central role in solving international problems and that this institution has become the embodiment of global solidarity and a indispensable instrument for coordinated global action (Arystanbekova, 2001). While Shah (2001) argues that the $20 billion that the United Nations spends each year is just a tiny fraction of the world's military spending and that the UN has faced financial difficulties and forced to cut back on important programs. Many member states, says Shah have not paid their full dues and have cut their donations to the UN's voluntary funds while the United States alone has recently owed the 81% of the regular budget member arrear.


The idea of promoting development and economic growth sounds great in the words of many International programs and it is common to hear that the poorest countries need modern knowledge and technology to become healthy and educated.  In terms of how international programs intend to solve the problem, if an entire community doesn’t change and adapts to the “modern” world, then it would probably remain poor because they would not be ready to survive through globalization. Instead of giving the means of development through the real needs of a community to increase their local production and cultural richness, private investment seems to have the right solution while their real motivation is mostly the benefits of international market and the transformation of people into active consumers of that capital system.  Therefore the image sold by the United Nations is similar to how “democracy” works in most of all the developed countries. Votes have to be secured and for that reason, image and idealistic and humanitarian discourses are essential to make people think that the right thing is done about extreme poverty.

In Mexico for example, since the Mexican Revolution of the 1900s, social discourse had been essential for the ruling government. The programs to help the poorest were based on community basis and now programs to eradicate poverty have change to a more individual sense. A good example is Oportunidades, which is an anti-poverty program that already existed but was modified and implied during president Fox’s administration, that basically gives a monthly allowance to parents to keep their children in school and take them for regular health checks.  I believe that even though this program has helped many families, it does not solve the problem form its real roots. Rural communities need a strong educational and productive system that would integrate its people and make them participate in the solving of their own local problems.  Instead of just giving an amount of money, we should invest in what it is required to improve their lives as a whole. If agriculture is the base of a communities’ economy, then programs should focus on how to improve agriculture and not expecting a private investor to open a factory in order to give them exhaustive low-salary jobs.  If the community speaks another language that is not Spanish, then it would be important capacitate teachers to be bilinguals and to respect the communities’ culture. For that reason I believe that complex issues should not be solved through easy solutions and many of the programs that try to help eradicate poverty should reconsider how to adapt, instead of making people adapt to the program.

I am not an expert in saying how things should work, but since I have had the experience of living with indigenous communities I understand how complex is to eradicate poverty.  It is not just the lack of the services and infrastructure that a community needs, is more about a true understanding of each community. Many indigenous families believe that they need to change in order to become part and accepted by the “better” world and I strongly believe that being different doesn’t make you more susceptible to become poor; it is more about the lack of tolerance of today’s economic system; an economic system that tries to earn capitals easily and solve problems easily.
 
 
REFERENCES 
Arystanbekova, A. (2001). Essential to the World, essential to my country. United Nations Chronicle, 38(4), 63.
Khiabany, G. (2003). Globalization and the Internet: Myths and Realities. Trends in Communications, 11(2), 137-153.
Mandel, D. (2005). The U.N. at 60. What a disappointment [Electronic Version]. Philadelphia Daily News. Retrieved 29 April from http://www.aijac.org.au/updates/Apr-05/280405.html.
McEntee, R. Criticism of the United Nations.   Retrieved 29 April, 2007
Ruggie. (2003). The United Nations and globalization: Patterns and limits of Institutional Adaptation. Global Governance, 9(3), 301.
Short, C. (2001, July 2001). Rethinking the United Nations´ mission. USA Today, 130, 54.


 

Posted by carolingiadiaz at 2:15 PM EADT
Updated: Tuesday, 1 May 2007 3:25 AM EADT
Friday, 27 April 2007
WEEK 4. TECHNOLOGICAL INNOVATION AND GLOBALIZATION
The “not too positive side” of the Internet, by reading Gholam Khiabany.

Globalization and technology link inevitably to the Internet, because many people believe that the Internet is a phenomenon of a new era information and social integration. It is true that the media in the last years was easier to define than today because Internet has fundamentally changed the way we access and experience media. But even though many experts define Internet as the phenomenon of convergences, which according to Viviane Reding (2005) in her speech in the European Forum Alpbach, generates new media services and new modes of delivery, for others it is just a myth of globalization.  Reding gives as an example for convergence in practice, the new generation of mobile phones that allows access to any content, at any time and at any place we like. What Reding says, sounds like the language mainly use in the advertising campaign and product slogan, which makes things look powerful and unlimited. It is true that by considering Internet primarily as a service, users have the possibility to interact, participate and have a more dynamic and personal media experience, but the questions that pop out are; who are those users? Are these users the whole population of what we called the globalize world of communications and technology?

For some academics like Jon Anderson, Internet socially opens participation and expands public opinion. “…a world-wide "web" of information and medium of communicating that has captivated journalists and academics whose working communities it expands”.  So, for Anderson this community is form by people that have access to information and are mainly interested in it, just like those who work in media environments and universities. Reding also sees the positive and potential side of converging media and globalization, by saying that it brings more choice and more freedom for a new global forum for an exchange of ideas and creativity.  

In the other side, Robert Rhoads (2003) from the Graduate School of Education and Information Studies, UCLA, says that we exist in a momentous age defined more by paradox and ambiguity than by positivism and assuredness. An idea that comes to my mind every time I try to make sense of the world or while researching for a certain topic of globalization, where I most of the time find contradictions and millions of unanswered questions.

Gholam Khiabany from the Department of Applied Social Sciences London Metropolitan University, centers a question over the issue of globalization and Internet as a more evolutionary process than a revolutionary one. There is also the idea believed by many that argue the “positive” sides of globalization, that information technologies and technological advancements will help the developing countries to catch up with the North and global information society (Nulens&Van Audenhove,1999). For Khiabany (2003) is just a big myth, because it is a mistake to believe that access to technologies equals economic, social, and political developments.

The idea of compression of time and the breakdown of national boundaries is based of how capitals flow more quickly throughout this new information system and communication technologies, because Internet has offer new possibilities and opportunities for business by reducing costs, faster developments of products, transactions, delivery, indeed a much better global coordination, but not entirely represents the emerge of a new “free” social community.

Khiabany quotes Rheingold (1994), who argued that the latest technology would decentralize traditional media and media channel, allowing a new interpersonal and interactive communication and therefore more citizen participation in the world. But Khiabany agues, and I agree with him, that flow of information, images and content in globalization is not an equalizing process. On technologies like the Internet, there is still a control over economies by individual nation-states and large corporations.  Therefore Internet and other technologies, more than been a revolutionary, democratic and social tool, are still sold in the market place as commodities.

Al Gore, former Vice President of the United States in 1994, announced a plan for a global communication infrastructure and the possibility of a global human community. Even though it’s common to hear the discourse of democratic dialogue and social development in globalization and new technologies, economic factors and capital flows have always been on top of the agenda for politics and corporations. According to Khiabany (2003) technologies by themselves, cannot solve political, social, cultural or economic disagreements within societies, nor can they be regarded as the engine of history; “They do not teach literacy; are not education in themselves; and cannot conceal the lack of clean water, electricity or food”.

What I believe in this matter is that the idea of a unified and participatory world is only for those who have the power to name it and for those who have the means to hear it. What I mean is that those who have the power to develop technologies in a large scale, search for a secure place of possible users, and build the necessary requirements for that technology to become a commodity. Therefore few have the opportunity and education to access a technology like the Internet, where the majority of users clearly come from Europe and North America.

Khiabany strengthens his opinion of facts that suggest that more than 90% of Internet users are based in the 29 richest countries that only represent a mere 19% of the world population, while the WorldBank in 2000 stated that nearly two thirds of the Internet population lives in the United States and Canada. Khiabany also states that big cities such as New York and Tokyo have more telephone lines than all African countries combined, mostly because telecommunications infrastructure, hardware and service costs are basic for Internet access. Considering that unlike television, the Internet requires more than electricity. Internet needs additional expenditure on telecommunication connections, regular update for faster access, and other requirements that become larger in the fast growing industry of technologies.

The interactivity of Internet and its idea of free access of information is of course one of the optimistic and positive sides of this technology, but for Khiabany (2003) there is an overwhelming majority of evidence that is not promising for what it means to create a true global public sphere, instead there is an undeniable fact that diversity is threatened by media products and cultural production. Examples of giants of the Internet are Yahoo, AOL, Google and Microsoft, which determine the online experiences of many of the Internet users.  Therefore for Khiabany there is evidence that just like in Television media or Newspapers, the Internet is also dominated by the major news organizations and well-known brands.

I understand that Internet can be an important technology for public dialogue and sharing of information and has all the potential to bridge the gap between countries, but in the negative and very accurate side, Khiabany and his study in other reports from academics and critical observers have predicted that the Internet will in the current political and economic climate widen the gap and marginalize the majority of countries. Khiabany gives the example of how developing countries have to pay huge sums of money to U.S. firms for the limited access that they have.

“No wonder U.S. firms are pushing so hard for further liberalization of international markets and encourage deregulation at the global level. One of the key issues is the fact that 98% of Internet protocol bandwidth globally connects to and from North America”  (Khiabany, 2003)


REFERENCES
Khiabany, G. (2003). Globalization and the Internet: Myths and Realities. Trends in Communications, 11(2), 137-153.
Reding, V. (2005). The Media and Globalisation. Paper presented at the European Forum Alpbach, Alpbach, Austria.
Rhoads A., R. (2003). Globalization and Resistance in the United States and Mexico: The Global Potemkin Village. Higher Education, 45(2), 223-250.



Posted by carolingiadiaz at 7:24 PM EADT
Tuesday, 24 April 2007
WEEK 3 - ANTI-GLOBALIZATION

FAST FOOD CHAINS AND GLOBALIZATION

A reason why foreign franchises of US companies are often attacked is mainly because globalization is intrinsically related to Americanism and capitalism. US franchises like McDonald’s and Starbucks are considered symbols of globalization and a main target for criticism.

By making a simple analogy of how fast food franchises work in relationship with globalization and its international policies, we can find a very interesting similarity. For example Wikipedia defines fast food as:

“Food cooked in bulk and in advance and kept warm, or reheated to order. Many fast-food restaurants are part of restaurant chains or franchise operations, and standardized foodstuffs are shipped to each restaurant from central locations”

So, in order for franchises to work, standardization of food, service and image are essential, which are concepts similar to how international laws and free trade policies work. For globalization to work, there is a central point where all the policies are cooked and then later taken to other countries to be reheated and ready to be applied. In this case, the U.S. is that central point, which delivers easily and effectively the standards of how the world must work. Those groups that have the most power to influence international decisions are feeding developing countries with the idea that globalization is the best deal to buy, just like a Big Mac.

Another way of applying this analogy is that McDonalds and most of all the fast food chain franchises, sell food that in general lack of nutrition, while similarly international policies from the World Bank and WTO are not healthy enough for a developing country’s local culture. Fast food chains are opposite to a country like Mexico, where food is essential part of culture. On one hand Mexico is a diverse country, which has a rich and healthy cuisine that follows a whole history of tradition and on the other hand, fast food chains simplify and operate in terms of profit and standardization. But now things are changing, since the opening of free trade agreements and direct investment, Mexico is filled with American food chains and in consequence traditions are changing and getting used to a new way of living.


But it is also very paradox and contradictory that franchises of the US are often attacked and millions of people find it hard to believe that a country doesn’t have a McDonalds. For example, I went to Cuba to an international congress of graphic design five years ago in La Havana and when I arrived I felt that I was in another world. The cars were mostly from the 50s, while the house looked old fashion and one of the things that really made me feel like I was visiting Mars was mostly the lack of billboard ads and McDonald’s in every corner.  Instead I saw people are out on the streets, talking to each other, playing chest, kids playing soccer and girls in their ballet class. That was definitely a very different scenario of what you see in a “developing country” like Mexico, where the US presence is clear and undeniable.

The fact that the physical presence of the U.S.-based fast food chain in developing countries is an enduring symbol of open markets, countries like Cuba that have a commercial block with the United States, portray symbols of anti-globalization movements and social revolution.


ANTI-GLOBALIZATION GROUPS. ANARCHIST?

People and groups from any civil society, concerned over environmental and social issues mostly form the anti-globalization movement. Humanitarian organizations, such as NGOs, local unions, academics, intellectuals, are some of the critics of how the world is functioning through a neo-liberal system.  But even though there are different critics of globalization, anti-globalization groups are often related to anarchism. Manifestation and protest during International congress of organizations, such as WTO, IMF, and the World Bank, are most of the times defined by the medias as anarchist movements. 

These opponents of globalization mostly protest in international meetings of the IMF, WTO and the World Bank, because these organizations are pillars of globalization. Often calling themselves anarchists, they use symbols from the Soviet Union and the Cuban Revolution, like the Che Guevara face in a T-shirt and in Mexico, for example “Sub-comandante Marcos”, from the Chiapas guerrilla.
According to Epstien (2001), the appeal of anarchism that has grown among young activists, especially within what is generally called the anti-globalization movement, has not accurately been described. Contemporary young radical activist believe in anarchism as a decentralized organizational structure, based on affinity of groups that work together by consensus and is not primarily focused by the real Soviet Union or the Old left, where the main focus was the working class as the leading force. Instead, the main focus of today’s movement’s is not on stopping globalization but transforming the terms on which it takes place. The movement might be better described says Epstien (2002) as against neo-liberalism, or against U.S. imperialism and domination by U.S. based transnational corporations.


It can also be defined as an anti-corporate movement, which includes groups working against sweatshops, against destruction of natural environments, and around a range of other issues. Eptstien (2001) states that in the United States, young people in their teens or twenties form the central part of these activists movement, while older people involved, include intellectual and activists associated with organizations such as Global Exchange and the International Forum on Globalization.

“Most movement activists are white and culturally middle-class, but this is changing with increasing involvement of Latinos, particularly in connection with the campaign against the Free Trade Area of the Americas”.  Eptstien (2001)

Indeed, everyone should primarily understand how globalization works and become an active critic of international policies towards our own countries. By creating an awareness and social concern beyond the superficial and one-dimensional view of globalization that is mostly portrayed through an American media.

But I also ask myself as a conclusion, why is it that people from developing and developed countries, tend to criticized Americanism and its policies and at the same time are active consumers of American culture. It is paradox and complex to understand why most of all the people have become passive critics of globalization but active consumers of it. What is the force that drives us to into that contradictory system?

REFERENCES

Deen, T. (1999). "Coca-Colonization" of the Third World.   Retrieved April 3th, 2007, from http://www.globalpolicy.org/globaliz/special/cocacola.htm

Epstein, B. (2001). Anarchism and the Anti-Globalization Movement [Electronic Version]. Monthly Review, 53, 1-14. Retrieved 03/15/2007.
 


Posted by carolingiadiaz at 11:35 AM EADT
Wednesday, 4 April 2007
2. GLOBALIZATION ERAS
2b. Is globalization today another form of colonization?

Globalization can be another form of colonization. By considering that many developing countries that had opened their markets to free trade and global relationships and results have not been that great. Therefore something must be wrong.

It seems that the most powerful countries are the ones that are profiting from globalization. They are the ones making the rules over free trade and integration of the world, which of course are the main goal to be able to influence other countries local decisions. We as a society have become slaves of consumerism and capitalism. And developing countries and their governments pretend to solve all the economic and social issues through globalization, and hoping to get quick results against poverty. Many countries like Mexico, forget its diversity and how many ethnic groups are not familiar to processes of technology, globalization and capitalism. Their roots are on activities such as agriculture, spirituality and ancient customs, which are not essential in globalization; it is all about making money and opening markets to create jobs. Corporations and big companies are looking for the best spot in the world to invest and open their industries. The best spot requires having good workers that can be paid low salaries and the best circumstances for their profits. The excuses are always drawn to the benefits of the markets, were low prices for all consumers make people live better and affordable to live. Through capitalism consumers are slaves of the most powerful brands and therefore pushed into the system of globalization. I understand that we cannot deny that we live in a system of capitalism and development of technology, that has many benefits, but I see a world were certain groups retain the power and that power to invest in the world and make the right rules to profit.

Integration of the world, centralizes economy and manipulates the systems all around the world, Developing and developed countries are affected in globalize form when things do not go the way they should. We have to learn to be specialize in something in order to be the best and the most competitive, but when things are not going right in that specialty, we immediately out of the game and most of the time paralyzed. For example the next quote taken from the article Coca-Colonization of the Third World explains how the McDonald’s theory proves to be wrong. Deen (1999) explains how the New York Times columnist that argued that globalization and free market had created an incredible scenario of prosperity and development that no two countries with McDonalds fast food chains would ever go to war.

“But the theory was proved wrong in March when 19 nations belonging to the North Atlantic Treaty Organization (NATO) went to war against Yugoslavia. All the countries involved have scores of McDonalds' outlets. In fact, when a wave of anti-Americanism swept through Yugoslavia, one of the first targets trashed by protesters was the McDonalds restaurant in downtown Belgrade! Just as Britain, Portugal, France and the Netherlands, among others, exploited their colonies in a bygone era, the corporate giants of the United States and Western Europe are now viewed as modern-day economic colonialists. Americans have even coined a word for it: "coca-colonization."  (Deen, 1999)
 
Globalization means different things for different people. It doesn’t have the same effect for all societies.  In my country for example, social and economic differences between are wide. There is a huge contrast between a small group of very wealthy families and a large number of families in poverty. The middle and upper-middle classes are always competing with each other in order get the best job or economic opportunity and for that reason, they must to learn to globalize. If not they’re out of the game. On the other side, low class families have very few options, and the most reasonable would be to take the job they can, which pays very low money and requires extensive hours of work at the Maquilas. Governments should find the means to protect the country against poverty and inequality, and not fall into the idea of taking the easiest path to wealth and development that the idea of globalization is selling to the developing countries.  Governments and public institutions should understand that diversity is part of the richness of the country and should reconsider the consequences of integrating that diversity into a form of globalizes economic condition.

A good example, of why Indigenous people of Latin America haven’t “learned to globalize”, is because maybe globalization hasn’t understand their way of living. The next example is one of the cases of failure in the attempts. In 2006, the World Bank financed a study over the issue of the Indigenous people of Latin America (Indigenous Peoples, Poverty and Human Development in Latin America). The study showed that despite considerable attention to indigenous peoples’ issues over the last ten years and some significant progress on human development indicators, “poverty among indigenous peoples did not decline, and the gap between them and the non-indigenous population remained almost unchanged” (Patrinos & Skoufias, 2007).
 

Posted by carolingiadiaz at 2:13 PM EADT
Updated: Tuesday, 1 May 2007 3:23 AM EADT
Monday, 19 March 2007
1. GLOBALIZATION PHENOMENON

B. Lecture concepts

1a. What are the manifestations of globalization today?


Globalization is becoming and intrinsic part of today’s world. For this reason, the manifestations of globalization are part of our ordinary lives and essential for today’s standard of living and sometimes a way to survive. But the definition of globalization is not something we ask ourselves every day. I personally began to ask myself the definition of globalization, when anti-globalization movements were surging in international and political celebrations in Mexico and in other parts of the world. I thought to myself that globalization may not be very good, if my country suffers poverty and mostly and increase in inequality. But it is important to underline that globalization in developing countries has many manifestations that can be negative or positive for different people.  But even if we are not to familiarize with the concept of globalization, its contribution to the transformation of culture, economy and politics, is undeniable.


Globalization manifests in the way we are getting used to technology, as well as to how effectively we communicate and travel around the world. Manifestations of globalization are everywhere; printed publicity around the cities, food chains around the world, the way most people dress, the concerns in searching for the best deal when buying goods and products, etc. Other manifestations are migration and changes in cultural behavior. 


In my country globalization is related mostly with the influence of the United States how in Mexico’s economy and politics. If an American company opens a big factory in Mexico, the first thing that comes to our minds is that it could create new jobs and increase the income of many poor families, but the idea that the most powerful and rich country gains the best in that transaction is never behind. Indeed, there is a suspicious thought that globalization is not always good for many people. In the other hand, we cannot deny we enjoy the privileges of technology and we become part of globalization. It seems that to survive and be part of the system, we must be trained and educated to join the mechanism of globalization. 


1b. How has globalization impacted on you, your family, your life?


Globalization has impact my life in many ways. Firstly it has opened the gates to buying goods from other countries and to be able to communicate with other fast and effectively and minimize procedures. In the contrary is has also affected and persuaded my family in following certain ways of living by standardizing and creating a more “western country” lifestyle. 


The power of U.S. mass media and its proximity with Mexico transforms and changes ways of thinking and pursuits in new generation certain goals. For example, many cities of Mexico are looking more like the streets of a city in California with most of the American franchises and chains. Another example is how English has become for developing countries a requisite and a necessity for opportunities. 


In particular globalization has impacted my life by following certain standards of life and rules, as well as to attracted to migrate and study in another country. The opportunity to study in Australia and meet people from around the world is one of the ways how globalization impacted my life and my family. All the students that I have met from around the world, here in Australia, share a similar profile in the economic posture, as me. The boundaries and limitations of migrating and studying in another country only allow a certain group of people to cross it. This is a good example that allows us to understand the globalization doesn’t benefit all people. Many groups, mostly the minorities are excluded from it.



Posted by carolingiadiaz at 5:58 PM EADT
Updated: Tuesday, 1 May 2007 3:16 AM EADT

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