TOPIC 2 - GLOBALIZATION
GLOBALIZATION
The term globalization refers to the socio-economic, political and cultural phenomenon where the world has been integrated into a single global village due to improvement in IT and ICT.
HISTORICAL BACKGROUND OF GLOBALIZATION
The history of globalization can be traced as far as in 15th C during the period of mercantilism when European merchants crossed their boarders to over sea searching for bullions.
THE DRIVING FORCES FOR GLOBALIZATION
The expansions of global networks have been attributed by many factors
i. Discoveries and innovations such as the discovery of marine technology and compass which enabled the discovery of the new world.
ii. Development in information technology and information and communication technology. This has facilitated interaction of different people.
iii. Movement of people. The movement of people from one point to another has stimulated integration of the world culture. E.g. the movement of whites from Europe to Africa, Asia and America.
iv. Trade. This has also speeded up the development of global networks because it facilitated interaction of people from different parts of the world for example mercantilism, Trans-Atlantic (Triangular trade) etc.
v. Advancement in education. Education has contributed greatly to the development of science and technology and integration of people from far distance.
vi. Religion. The efforts to spread Islam religion and Christianity have resulted to the integration of people from far distance for example from Asia to Africa, Europe to Africa.
vii. Economic integration. This involves integration like ECOWAS, SADC, E.U etc.
ASPECTS OF GLOBALIZATION
The following are major aspects of globalization
i. Information and communication technology (ICT)
This involves the wide spread of news papers, television, mobile phones, radio, internet etc. The rise of biggest information companies such as Microsoft, Cisco indicates the integration of the world in a single village.
ii. Movement of people. The movement of people from one country to another, indicate that now the world is like a single village.
iii. Flow of goods and capital. The flow of capital and goods through bilateral and multilateral companies such as Coca-Cola, Pepsi and Vodacom indicates that interaction between people has increased
iv. Spread of ideas, skills and knowledge. This is another aspect of globalization as we find the diffusion of ideas and ideologies such as human rights, multiparty and democracy all over the world.
v. The rise of intellectual property. This involves patents, copyrights of movies, computer software, compact discs, advertisement and financial services.
vi. Economic liberalization. This refers to the increasing freedom in economic matters. It involve things like free market economy, privatization and trade liberalization.
vii. Political liberalization. This refers to the increasing freedom in political matters which involves democratization process, good governance etc.
viii. Presence of common religion, for example the spread of Islam and Christianity all over the world indicate that the world is integrated.
ix. Economic integration. Refers to regional economic integration such as SADC, ECOWAS, EU etc.
PRIVATIZATION
This refers to the policy of transferring public owned asserts and activities into a private sector or individual. The policy was introduced by IMF and WB in 1980s as part of SAPs. The origin of the policy is Britain during Margaret Thatcher regime.
ADVANTAGES OF PRIVATIZATION
i. It helps to increase efficiency and productivity hence development to the country.
ii. It helps to reduce the government burden by providing services such as health or education to the people.
iii. It provides employments to the people due to expansion of employment sector.
iv. It helps to improve provision of social services such as water, electricity, education and health due to competition between private and the government.
v. It helps to raise the government revenues because private sector pays tax to the government.
vi. It help to expand markets especially external markets for example through EPZ
vii. It helps to improve infrastructures such as roads, railways etc
viii. It helps to reduce bureaucracy in public sector
ix. It helps to attract foreign capital and technology.
DISADVANTAGES OF PRIVATIZATION
i. It may lead to the problem of unemployment especially to the indigenous of a particular country
ii. It may lead to the conflicts between foreign investors and indigenous for example that of Babati 2011 and Nyamongo.
iii. It can lead to moral erosion in the society
iv. It may lead to the fall of agriculture due to withdraw of the government from providing agricultural incentives.
v. It may to the poverty especially in rural areas due to the decline of agriculture.
vi. Competition among service providers may create temptation to reduce the quality of services.
STRUCTURAL ADJUSTMENT PROGRAMS (SAPs)
SAPs refer to the policy package by IMF and WB as a per-condition for African countries to qualify for a loan or aids from donors. The policy package involves free trade, democratization and privatization. The policy was introduced in Tanzania in 1986.
CONDITIONALITIES OF SAPs
i. Cost sharing on the provision of social services
ii. Currency devaluation. This is to reduce the value of the money.
iii. Retrenchment of workers. This is to reduce the number of workers in the government sectors.
iv. Reduction of government expenditure by reducing the size of the public sector
v. Elimination of agricultural subsidies or incentives for example in agricultural in puts.
vi. Elimination of trade berries through free market economy
vii. Financial reforms in financial sector
viii. Political liberalization such as multiparty system.
STRENGTHS OF SAPs
i. It has led to the expansion of democracy in developing countries
ii. Privatization has created efficiency and productivity in public and private sector
iii. Cost sharing has enabled expansion of social services
iv. Reduction of government expenditure promoted economic growth in 1886
v. It has expanded African markets
WEAKNESS OF SAPs
i. It has weaken sovereignty of many states in Africa
ii. It has increased the global gap between rich and poor people
iii. Cost sharing on social service has increased poverty because many people are too poor to extent that cannot afford to share cost.
iv. Elimination of agricultural incentives has led to the decline of agriculture
v. It has turned Africa into a dump of foreign goods
vi. Multiparty system has created a lot of conflicts and civil wars in Africa.
IMPACTS OF GLOBALIZATION
The impacts of globalization can be categorized into social, political, economic and cultural effects.
A: SOCIAL ECONOMIC IMPACTS
POSITIVE IMPACTS
i. Globalization has widen employment opportunities
ii. It facilitates the flow of capital and goods from one angle of the world to another
iii. It helps to improve provision of social services such as health and education.
iv. It has improved quality and quantity of goods and services
NEGATIVE IMPACTS
i. It has created unemployment problem due to movement of labor from one point to another and also due to improvement in science and technology.
ii. It has led to the spread of diseases such as HIV/AIDS
iii. It has to the exploitation of African natural resources such as minerals
iv. It has led to economic espionage and unfair competition in the world market.
B: CULTURAL IMPACTS
POSITIVE IMPACTS
i. It has promoted human rights and gender issues all over the world. This has enabled women to get their rights
ii. It has facilitated elimination of bad cultural values such as FGM, marriage and inheritance of spouse
iii. It has facilitated the spread of Islam and Christian civilization
iv. It has enabled development of African culture
NEGATIVE IMPACTS
i. Destruction of African culture through internets, TVs, News papers and Radios
ii. It has increased crimes such as prostitution, lesbianism and drug abuse
iii. Destruction of African technology and industries due to unfair competition
iv. Moral erosion such as improper dressing, disobedience of children to their parents
C: POLITICAL IMPACTS
POSITIVE IMPACTS
i. It has promoted regional political integrations such as African Union and SADC
ii. It has widen democracy in Africa
iii. It has promoted good governance in Africa
iv. It has integrated Africa politics into a global politics
NEGATIVE IMPACTS
i. It has weaken the sovereignty of African states
ii. It has created civil wars due to massive transfer of weapons
iii. It has led to terrorism for example bombing of US embassy in Dar es Salaam and Nairobi in 1998
iv. It has spread puppets in African countries.
D: ENVIRONMENTAL IMPACTS
i. It has led to loss of biodiversity due to the wars and over exploitation of natural resources such as forest
ii. It has created a problem of environmental pollution for example air pollution, water pollution and noise pollution due to industrialization.
iii. It has led to the problem of deforestation due to the increasing demand in forest products
iv. It has caused a problem of global warming and desertification in southern Sahara countries
v. It has led to the problem of global climate change.
CHALLENGES OF GLOBALIZATION
The following are the challenges of globalization in Tanzania
i. Low level of science and technology especially in IT and ICT. Most Tanzanians are not aware with internets and communication satellites.
ii. Low level of education among Tanzanian. This low level of education hinders Tanzanians to meet global intellectual demands
iii. Low saving and investment. This hinders many Tanzanians to compete with foreign investors due to lack of capital.
iv. Low production and poor quality of goods produced within the country.
v. Ignorance among the people. The rate of ignorance in the country is still high, statistics show that 31% of Tanzania do not know how to read and write.
vi. Dept crisis. This is a big challenge to Tanzania since it has been used as a line of weakness to other countries.
vii. Poor leadership is another challenge.
POSSIBLE SOLUTIONS TO DEALS WITH CHALLENGES OF GLOBALIZATION
i. Tanzania should create a home based economy which will focus on her own policies and plans
ii. Education system in Tanzania should be reviewed to create intellectuals who can meet the global standards
iii. There should be proper utilization of both human and natural resources
iv. There should efforts to improve science and technology
v. Regional integration should be encouraged. This will enable poor countries like Tanzania to have one voice.
vi. The problem of corruption should be fought seriously among the government leaders.
SUMMARY
Globalization
Globalization - The integration of regional economies, societies and cultures throughout the world.
Cooperation - Stabilization of the personal relationship between members of the society
Free Market Economy - Is where people are free to engage in any type of economic activity
State centered economy - Is an economic system where the government controls the economy Nationalization - The process of taking an industry or assets into the public ownership of a national government or state.
Purpose of the East African union
i. Common market
ii. increase agricultural and industrial products
iii. encourage investors to move capital here
iv. common passports, encourage production of commodities on a large scale
v. Common regulation/standardization boards and laws Areas of cooperation in East African countries
vi. Trade
vii. investments/industrial development
viii. monetary/fiscal affairs
ix. infrastructure/social services
x. free movement of people and goods
xi. science/technology
xii. agriculture/food security
How the establishment of the East African common market benefits Tanzania
1. It will facilitate economic competition
2. Increase employment opportunities
3. Free movement of goods and people
4. Promote investment
5. Development of industries
Benefits of the World Economic forum on Africa held in Dar es Salaam 2010 for Tanzania
1. Helps attract foreign investors
2. Develops positive relations with other countries
3. Problems in Tanzania are openly discussed
4. Opens trade barriers
5. To promote the country’s image
Effects of globalization on Tanzanian culture
Positive
- Respect of human rights and higher living standards
- Eradication of bad cultural beliefs/practices
- Integration of all cultural practices in the world
- Diffusion of good international beliefs like democracy and human rights
- Expansion of religious institutions
Negative
- Erosion of morals in the society
- Undermining of local languages and Kiswahili
- Eradication of cultural boundaries
Effects of globalization on the economy of Tanzania
Positive
- Leads to effective utilization of natural resources
- Easy transportation and production of goods
- Creating employment opportunities
- Improves provision of social services
Negative
- Decline and underdevelopment of the industrial sector
- Decline of locally produced technology
- Influx of outside goods
- Presence of multinational companies
- Creates unemployment
- Causes environmental degradation
Political effects of globalization on Tanzania
Positive
- Integration of Tanzania into global politics
- Formation of strong political organizations
