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Asian Tribune is published by E-LANKA MEDIA(PVT)Ltd. Vol. 20 No. 113

Globalisation, Economic Rationalism and Civil Society: What are the Negative Consequences?

Dr. Siri Gamage, University of New England, Australia

During the 80s and 90s many political leaders and commentators presented globalization as a positive force, especially after seeing the collapse of former Soviet Union and the opening of boundaries with the new information revolution, removal of trade barriers, increased migration etc. The world has seen a remarkable increase in the breaking down of national barriers in areas such as trade, tourism, education, skilled migration, information traffic, and modern technologies.

After the collapse of the cold war and the demonizing of communism by the leaders of so-called free world, people around the world including intellectuals struggled to define an alternative philosophy or ideology to liberal free market economic doctrine commonly known as 'economic rationalism'. Even the countries of the developing world that was sympathetic to socialist, people-oriented governing ideologies started to imitate the liberal economic policies and open up their countries to foreign investment by multinational corporations.

Following this model of development was considered as the most desirable approach to development. Sri Lanka took this step in 1977 with the slogan 'economic liberalization'. A decade or later India followed suit. Rise of China and India to be the engine room of world economy shows how far the Asian countries have followed the liberal/capitalist economic doctrine couched in the term Globalization. The economic strength of ASEAN countries as well as the EU countries as dominating forces in the contemporary world shows how far the world has embraced this economic doctrine. In Sri Lanka, even when Chandrika Kumaratunge came to power in 1994 after the UNP's long rule, she continued in the same path economically. Do these examples show that the world has lost the appetite for an alternative development model? Certainly not.

Economic rationalist model of development being pursued by the leaders of countries as the ‘Only’ model of development available - except perhaps countries such as Cuba - has many evils. While leaders argue that economic development is essential to eradicate poverty and provide services to the public, hence giving almost a free hand to companies engaged in the production, manufacturing, distribution and marketing of various services, more and more people in the developed as well as developing countries are facing hardship. Many are struggling to survive. Services that were available through the government agencies in areas such as education, health, and telecommunications under the formerly popular welfare policies have starved for necessary funding for maintenance and expansion. Key service areas have been opened up for competition by the private sector. Governments encourage people to embrace private providers saying that the State alone cannot provide these services.

What we need to understand is that the economic basis of so-called globalization is still the free market liberal economic rationalist policies promoted by governments. The political leaders assist national and multinational companies etc. to increase prices of their products and services even to an unjustifiable level in some cases so that the companies keep operating. From the point of view of these companies, their main aim is to generate enough income and profits. Part of them to be distributed to share holders and keep the rest for the future operations of the company and their expansion. While companies are making billions of dollars in profits while increasing their prices annually large sections of the population in given countries miss out from the economic miracle as many are not shareholders.

For example, in Australia the four main banks have been listing billions of dollars worth of profits each year for the last decade or more while charging customers for the services they provided free of charge previously. While the information revolution and modern electronic technology has enhanced transaction convenience, it has come with a cost.

Customers with an average account are entitled to only a certain number of free transactions. After that a charge is levied. Private medical funds have been given permission to increase their premiums annually. In New South Wales, electricity companies have been given similar permission. There are very few breaks applied for such companies including those providing essential utilities either by the state or federal governments. Freedom that came with globalization is for the companies to do whatever they like in terms of the charges they make from the general population. Governments have also joined the bandwagon by applying 'user-pay principle'. Ideally, as governments collect taxes from the people, services provided by governments should be free of additional charges. However, when someone has to apply for a birth certificate or access some other basic service governments charge 'an application fee'. Thus the governments themselves have become agencies that collect additional fees and charges. This is even clearer in the arena of immigration and international education.

While globalization has brought freedoms and liberalization to the people around the world in areas such as migration, education, trade, communication it has also brought even more freedoms to companies operating in many fields. In public discourses on the subject many forget to emphasize this fact. One could argue that globalization has brought intense competition in the market place also, when we look at how the products from China are being marketed in countries such as Australian, US, and the European Union this becomes clearer. Cars produced in Korea, Japan are being sold in the Australian and US markets. Exports from smaller countries like Sri Lanka have found their way to developed countries.

For example, in earlier times the popular tea in Australia was ‘Lipton tea.’ About a decade or so ago,’ Dilma tea’ started to encroach the market. Now in Australian supermarkets ‘Dilma tea’ is sold along with ‘Lipton’ and other brands. While the space for market competition has expanded one has to realize that ‘Dilma’ Tea Company is also another privately owned and operated Sri Lankan Company looking to increase its profit margins. Embracing products with nationalism is another aspect of marketing strategy adopted by many companies around the world.

Services such as education have become a commodity under globalization. Even publicly funded universities have engaged the services of privately owned companies to recruit students from other countries for full-fee paying places. The universities in some countries charge exuberant fees from international students. USA and UK are examples. Countries like Australia have introduced special visa categories for international students to seek permanent residence status after completing their higher studies. This process has contributed to the brain drain syndrome.

However, governments in the developed world are not concerned about this. In this context one has to notice the fact that many European countries have not yet embraced the provision of higher education to international students for a high fee. Some Canadian universities also have not embraced the full fee charging policies yet. India is an example. The governing philosophy in these countries is that the education should be a basis human right and by allowing foreign students to come to their universities on scholarships granted by the higher education institutions the learning and research in their institutions become enriched. However, most universities in the English speaking countries except the examples cited above have made provision of international education a business to earn income.

Indigenous communities that lived a traditional way of life in many parts of the world are also facing challenges in the face of many development projects being implemented by multinational and national companies with the support of national governments. Land and sea resources for which these communities had access previously are being targeted by such companies for their operations to generate profits. Companies from developed countries are constantly looking for further opportunities in other parts of the world for their operations. Areas of interest include oil, minerals, and telecommunications, infra structure development, logging and manufacturing of timber products, and provision of services. There are many struggles being waged by these disempowered indigenous communities in countries such as India, China, and elsewhere. These struggles are not being reported in the mainstream media very much because it goes against the widely accepted economic (and political) doctrine of economic rationalism, market liberalization and international trade.

What these examples highlight is that globalization is not a simple, one-sided process of social and global change. It is a complex process with many faces. Some tend to emphasize only one face for obvious reasons. While it has opened up the world for many activities it has also created serious challenges, including in the area of climate change, with serious repercussions for the welfare of people. We have to look at this phenomenon from diverse angles if we are to make sense of the process and its consequences.

Dr. Siri Gamage, Senior Lecturer, Contextual Studies & Education School of Education Faculty of Education, Health and Professional Studies University of New England, Armidale NSW Australia 2351.

- Asian Tribune -

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