Monday, 7 April 2008

Globalisation Challenges

Last Saturday's Progressive Governance Summit presented a number of mixed reactions in the international community and this blog is not left alone.

[In a paper by Jean Pisani-Ferry summarising the highlights of the progressive governance agenda on globalisation in the 1990s]

“It highlighted opportunities offered by globalisation, and therefore the need to embrace it…two-handed strategy, it advocated a combination of bold domestic reforms and a strengthening of global governance to make the most of economic globalisation.”

That objective however, had not been achieved. But the blame...

“However the speed and magnitude of the transformation affecting the world economy are larger than initially envisaged, while domestic policy reforms and redistribution have often been insufficient to cope with this adjustment challenge.”

The paper admits...

“…the two-handed globalisation strategy has not been invalidated by events, but has not been fully implemented.”

looking at the years ahead..

"The return of scarcity and mounting concerns over economic security; the re-emergence of state capitalism and the rise of Sovereign Wealth Funds; and financial instability represent new challenges to address. The continuing development of an open, multilateral world economy is less able to be taken for granted today than it could a decade ago.”

[what of Social Stock Markets, Microfinance, Fair Trade and EPAs]

On the whole globalisation has failed the world when most individual companies make more profits that the GDP of more than five sub-saharan African countries combined. Globalisation only help the rich nations to become more richer. There might be others who disagree but the results are there for all to see.

The discussion of globalisation can not be done without touching on Development, Climate Change and international Institutions which are also sub-themes of the summit. Tags: ,,,


Sijui said...

First time visitor to your blog :) could not disagree more with you on this point. I think Phase II of globalization has already started doing wonders for Africa. Let me explain. I see phase I as the period spanning 1980 to 1995, this is when globalization was mainly the purview of the Western industrialized world i.e. their mobile capital and competitive efficiencies allowed them to spread worldwide, establishing their brands in new countries, overwhelming domestic competition who were faced with either coopting the status quo or disappearing over night.

Phase II of Globalization is upon us, enter the emerging economies in Asia, Latin America and Middle East. These countries are reaping the benefits of globalization because 1) they figured how to carve a niche for themselves in the global production chain 2) they made their domestic economies more productive and efficient thus attracting global capital, technology and expertise 3) they started small but dreamed big, in other words they took advantage of similar markets and resources i.e. regional economic blocks to develop robust domestic investment that would be the foundation for global trade e.g. Tata first perfected its industries in India and Southeast Asia before it went after global brands like Range Rover.....

Africa benefits greatly from this new dynamic because:
1) it has similar markets and resources to the emerging economies hence is seen as both A MARKET (perhaps the first time in its history) AS WELL AS A PRODUCE BASE.
2) emerging economies now command a large chunk of global capital, and because the landscape in Africa is similar to their own they are not afraid of investing heavily
3) MOST IMPORTANTLY, the economic growth of emerging economies IS DEPENDENT ON AFRICA TO SURVIVE.

The most progressive economies in Africa, yes including Ghana are those that fully understand these three points and their implications. The issue for Africans in terms of economic policy is this:
1) how to ensure that as a PRODUCER BASE we are not relegated to primary commodities, VALUE ADDITION TO OUR RESOURCE BASE is paramount. Related to this, we have to make sure that emerging economies subsidize the necessary infrastructure and technology development that will create value addition IN EXCHANGE for market access. Getting something for nothing goes both ways, both sides must have an equal exchange especially Africa (we can't expect the Chinese to build roads out of the goodness of their hearts)
2) Ensuring that our domestic economies are conducive for investment especially domestic/foreign investment partnerships
3) They need us to maintain their 10% growth......milk that for all its worth!

P.S. I help run a company in Ghana,, we would not be in existence if it were not for globalization......and we definitely believe that we are adding to Ghana's bottom line.

Moses Sena Kpetigo said...

Thank you Sijui for the additions.

Anonymous said...

Very Interesting!
Thank You!