- To examine the main features and drivers of globalization
- To assess the impact of globalization on Caribbean countries as well
as on the workers in those countries.
Main features and drivers of globalization
Much of the discussion to this point has centred on the economic aspects
of globalization. This module widens the scope of the discussions away from
the framework, to look at features and major characteristics of
Globalization is a creature of the thinkers, entrepreneurs, manufacturers
and policymakers of the dominant countries of the world. Much effort has
been extended in developing a paradigm shift, in forcing the mass of people
into observing the reality of their existence from an alternative viewpoint.
Few now see socialism as a path for human development, and most are
convinced that the market is the mechanism for man’s advancement.
Underdevelopment in former colonial territories can no longer be blamed on
the colonial masters but must be seen as the fault of the colonials, who no
longer require aid and assistance. Greed and the desire for maximizing
profits must not be restrained by consideration of threats to the
The proponents of globalization have been very successful in stifling the
voices of the South, which up to the 1990s, could be heard proposing
alternative pathways to development and criticizing the greed of those whose
main aim was the extraction of profit and the exploitation of labour.
The ideological underpinning of globalization is that the exploiter and the
exploited, the capitalist and the worker share the same world views, and
share the opinion that the market is the best mechanism to advance the
interest of all concerned.
- The major economic feature of globalization is the dominance of the
Transnational Corporation, and the international division of labour in
which the world economy can be organized as a global assembly line. An
example is given in the following illustration of how a Pontiac Le Mans
motor car is produced:
- South Korea is responsible for the assembly operations.
- Japan makes the advanced components, engines and electronics.
- Germany provides the style and design.
- Taiwan and Singapore make the small components.
- English firms advertise and market the product.
- Barbados and Ireland handle the data processing.
- Detroit is the seat of legal and banking facilities.
- The world economy has been reorganized so that high tech and
knowledge-based industries are located in the developed centre,
particularly in the G- 7, while the developing world provides low tech,
low wage production processes.
- There is the rapid integration of financial markets, and capital is
free to move over the globe with minimal restrictions. Foreign Direct
Investment flows determine the development of countries. Uncontrolled
financial movements can damage an entire region and pollute other economic
- Where access to natural resources, such as land and raw materials was
the basis of the wealth of countries, financial wealth can now be
disconnected from natural resources.
- The development of mega-blocs and regional trade groupings and
increased trade between the countries of the regions lead to large
companies being formed.
- The services sector is one of the fastest growing areas in the global
economy, along with growth in the high tech information and
telecommunications area. Electronic commerce is gaining steady ground and
momentum for those countries which have been able to twin technology with
commercial activity .
- There is an intensifying of competition on the world scale as all
countries are competing for the same consumer. Global elites, global
middle classes, and global teenagers are the market for leading ‘brands’
from all over the world. Workers are competing with their colleagues all
over the world to gain shares in the market for the output of their labour.
An information technology-driven, knowledge-based revolution is a major
driver of globalization. The fastest growing area of trade relates to high
tech products and services. Furthermore, access to new technology, creates
opportunities to change work processes, and to modify the very nature of
Globalization is characterized by corporate reorganization on a massive
scale. Organizations are being flattened, some are being downsized,
strategic corporate alliances are formed, mergers and acquisitions are the
order of the day and franchises are expanding at a rapid rate.
The spread of negatives
The impact of the Asian Crisis of 1997 across the world, the terrorist
activities in the United States of America on September 11, 2001, and the
anthrax scare all tell a story of how much the world has become a global
village. This negative story can be embellished by reference to the spread
of drugs and gun-related crimes worldwide within recent times.
The threat to the nation state is real as they surrender to the
hegemonic power contained in framework agreements such as the WTO. Within
nation states, the power of the state is diminishing under globalization.
This is leading to the privatization of state-owned entities as states
accept a minimalist role in economic activities.
The most important social feature of globalization is the growing
disparity between the rich and the poor. The ratio of the income of the top
20% in the world to that of the poorest 20% rose from 30:1 to 84:1 in 1995.
The impact of globalization on the Caribbean
Right wing economists and others speak glowingly of the positive impacts
which globalization can bring to the Caribbean and to the workers of the
region. They speak of the impressive foreign direct investment flows which
countries such as Trinidad and Tobago and Barbados have gained in the
manufacturing plant and tourism infrastructure, respectively.
The reality is that globalization has not witnessed any rapid growth in
investment in most Caribbean countries, nor has it resulted in Caribbean
states being able to expand their trade significantly by expanding exports
to any of the regions controlled by the triad. Indeed the result has been
that Caribbean markets have been more exposed to imports from the developed
countries. Where jobs have been created in areas such as informatics and
data processing, they have tended to be low-waged and to have attracted
females and white collar workers.
The Caribbean is witnessing privatization of state enterprises, the
development of atypical forms of employment contracts, attempts by employers
to contract and curtail benefits gained over the years, and attempts at
bolstering productivity by flexibilization of various types.
Footloose investors have been attracted to the region in search of low
wages. Any attempt at organizing their employees into trade unions is met by
a rebuttal which can take the form of challenging the country’ s industrial
relations system or may lead to an abandonment of the investment and moving
on to a more compliant location.
For many, globalization is seen as the enemy of the trade union which is
considered to be an institution which prohibits the free utilization of
capital, and which tries to restrict the rights of management to determine
work practices unilaterally.
There is an acceptance that general living standards have declined in some
areas of the Caribbean in the 1970s and 1980s, and the existence of poverty
is at an uncomfortable level in some countries.
In recent times, the penetration of large and powerful American
transnationals in the distributive sector, such as K-mart and Price Smart,
has had negative effects on the performance of the indigenous business
class. There is a widespread fear that local businesses will be supplanted
by these powerful retailers who will then exercise monopoly power in the
territories. They have also introduced their employment practices in their
Caribbean countries are characterized by small size, dependency, openness to
external stocks and the ravages of nature. They will have to learn to
manoeuvre carefully in a globalized world controlled by the wealthy and
The major threats to the worker in globalization include reduced job
security, having to compete for jobs worldwide, and the danger of having
their wages and salaries driven down.
- In what ways has globalization shown a negative impact in your
- What steps are being taken in your country to combat the negative
influences of globalization, and to position your ountry to face the