TOPIC 2.GLOBALIZATION
GLOBALIZATION
Globalization
is defined as the increasing process of interdependence and interconnectedness
between different political, social and economic components of theworld. It is
the way in which the world in seen as the global village. Globalization becomes
a worldwide system asit integrates people across national boarders, making the
world operate as a village and therefore enablingfree movement of goods,
capital and information.
The Concept and Aspects of Globalization
Globalization
is a result of man's progressive nature of change. It can be traced far back
from the 16th C - the period when European traders and sailors interfiled
overseas trade through mercantilism. From the 16th C on-wards, the shape of
global migration was transformed by the Europeans and Americans. The first
great wave of the early modern migrations involved forced movements of the
Trans-Atlantic Slave Trade which shifted about 9-12 million people. By the
mid-19th century, this trade linked West Africa with the external world through
enslaving Africans.
The
integration became more pronounced during the Second World War. The Europeans
economies in the 1950's and 1960's drove a renewed epoch of global migration
that that turned Europeans interest to overseas nations where they were thought
to be acheap source of wealth, despite the oil shocks of 1970's and the closure
of many Europeans peripheries.
Concept and Aspects of Globalization
Explain
the concept and aspects of globalization
During
the1970's, the wave of migration was enormous. Labour added the new pattern of
regional migration within Africa, Latin America and East Asia. However, from
the 1990's, migration in the global society has been intense, due to the
advancement of science and technology, crisis ‘s and disintegration in the
developing world. The interconnectedness has led to the development of the
communication technology and space explorations.
DRIVING
FORCES OF GLOBALIZATION
·
1. Advances in Science
and Technology. The development of science and technology has contributed
greatly to the development of global interconnectedness, interactivity and the
integration of the world societies into asingle global village. Through science
and technology, machines which simplify human activities like communication
have been developed. The development of science and technology marked the
initial stage of integration of people from far distances. Education process
marked the point of no return towards the integration of different people from
different nations and cultures in the world. From the 20th C, revolutionized
education marked the intensive integration of people in universities, colleges
and international conferences. Through interaction and integration, most people
have adopted culture from other people and thus the beginning of cultural
liberalization.
·
2. Socio –
political liberalization.Liberalization was derived from the liberal
democratic principle. Liberalists believed that the freedom of an individual is
the main principle of life that people are supposed to have. The freedom of
individual has fostered the development of globalization in the world. Social
liberalization is widespread due to the advancement of information and
communication technologies like television, e-mail, cellular phones and the
internet.
·
Political integration of
politics in the
global scale has fostered the development of globalization. National
governments have been ultimately responsible for maintaining the security and
economic welfare of their citizens as well as the protection of human rights
and security of the world. Political activities increasingly take place, from
national to global level.Examples includedemocratization process, multiparty
democracy, formation of NGOs and Civil society Organizations (CSO).
ASPECTS
OF GLOBALIZATION
Globalization as a economic, political and social phenomena is
associated with the following major aspects:
1. Information and Communication Technology.
Globalization is characterized by the advancement of information and
communication technology. This sector expanded drastically within the last few
years, specificallythe last quarter of the twentieth century. This period
witnessed the global distribution of media images through computers, screens,
radio, newspapers, televisions and mobile phones. Development of information
and technology goes hand-in-handwith the rise of information companies such as
Microsoft, Intel, Compaq and Cisco. The rise of these companies indicates the
quick advancement of technology.
2. Movement of People. There
has been an increase in the movement of people from one country to another.
These may betourists, migrants, refugees, business travelers and diplomats.
Most migrations occur between developing countries and developed countries.
There is also a flow of migrants to developedeconomies from
developingcountries, making the world more interconnected.
3. Spread of Ideas and Ideology. Spread
of knowledge, ideas, information and ideologies has been anintegral aspect of
globalization. This may be different physical capital, technical skills
andproduction methods, managerial skills, marketing skills and global economic
policies. The concept of multiparty and green peace areexamples of political
ideologies that have acquired international dominance.
4. Finance. There
is a global flow of money often driven by the interconnected currency market
stock exchange, as well ascommodity markets. The flow of money is also
facilitated by international financial institutions such as the IMF and World
Bank, assisted by multilateral Banks which have branches in almost every part
of the world. Thus, this flow allows for smooth money transaction all over the
world.
5. The Rise of Intellectual Property.This
refers to items includingpatents, copyrighted movies, compacts discs,
advertisements and financial services.
6. Free Market Economy. Globalization
has brought about the integration of an international political economy through
inter-financial institution policies and international trade. Free market (Neo
liberalism) has become a dominant economic ideology inthe world. The price is
determined by the market.
7. The Structural Adjustment Program (SAP).SAP refers to the list of
budgetary and policy changes required by the International Monetary Fund (IMF)
and World Bank (WB) for developing countries to qualify and apply for a loan.
This conditions typically include reducing barriers to trade and capital flows,
tax increases and cuts in government expenditure. All sub – Saharan African
countries south of the Sahara including those in east, central and southern
Africa - excluding the Republic of South African - were obliged to adopt the
policy to solve the international problems and reduce the heavy debt burden
that seemed to increase rapidly between 1970s and 1980s.
Objectives
of (SAP)
1. To
introduce tax reforms and eliminate quantitative restrictions in the trade
sector.
2. To
rationalize the public sector and enhance employment opportunities.
3. To
improve the public investment program.
4. To
introduce agricultural sector reforms, market liberalization and institutional
reform.
5. To
improve sectoral resource allocations, mobilize domestic resources and restore
growth ofthe economy.
6. To
devalue local currency as a means of monitoringexchange rates and therefore
balance the domestic currency price.
7. To
reduce poverty by improving the living standards of people in lesser developed
countries.
Reasons
for Structural Adjustment Program Formation
·
The GDP declined by nearly 20%. In 1987, it dropped by 4.7%.
·
Export earnings fell by about 40%in 1986. In 1987, it continued
to decline due to price falls in the World market.
·
Import purchases fell by about 40% from 1981 to 1985, due to the
presence of tariffs.
All in
all, eventssuch as theworld economic crisis, the oil shock of the 1970's, the
Kagera war and failure of the government to provide social services were among
other factors thatnecessitatedTanzania's adaptation of SAP as part of their
economic recovery efforts.
Principles
of SAP
·
Elimination of tariffs, reduction of taxes and promotion of the
role of private operation in export trade, as well asliberation of domestic
retail and whole world sale trade (in final goods and capital).
·
Lowering explicit and implicit taxes on the agricultural sector,
raising real producer prices while reducing subsistence taxes on imports and
liberalization of export crop marketing.
·
Removing restrictions on collective reforms and wage setting
practices in order to attain better life of people in the LDC‟s.59
·
Parastatal privatization and reform programs, financial sector
reforms, and improving public sector management through civil service reforms,
all intended to consolidate and ensure effective performance in trade sales and
joint ventures.
·
Governments to withdraw from providing free education and
agricultural incentives. Instead cost sharing to be implanted in all social
services.
·
The agricultural sector to be privatized to minimize government
expenditures on it.
Achievements
of SAP
1. The
formation of adjustment programs and policies with the intention of economic
sustainability, efficiency and growth has raised the living standards of people
in their respective countries through the privatization policy.
2. Agricultural
productions, exports, investments and consumption witnessed increases in strong
reformed countries.
3. The
average annual export growth rates rose by 5 – 6 percent in strong reforms and
only by about half ½ % as much in non- reforming countries from the early 1980s
to 1985 – 1987.
4. The
invest performance improved mostly in strong reforms, while it went up slowly
in non – reforming countries, in years between 1980 – 1984 and 1985 – 1987.
5. The
increase in the growth rates on real consumptions in 1986 and 1987 compared to
1980 – 1984, has been three times as great in reforming countries.
6. Exchange
rates grew in some of African countries, for example, Nigeria in 1980 - 1984,
prices and exchange rate was 86%.
7. Today,
people have a choice on commodities. They have the ability to choose what to
buy and at what cost. It is different from previous situations; when people
were buying only what was available in themarket without choice. For example,
all Tanzanians can buy sugar from Mtibwa, Kagera or Kilombero. People have a
choice on the kind of commodity, the price and quality of items to buy. This is
due to privatization which allows different companies to engage in business of
the same kind.
8. No more
bureaucracy. Before SAP establishment in Tanzania, there was bureaucracy in
offices that provide public services such as banks, posts, telecommunication,
transport, etc. But with SAP, bureaucratic actions in offices have ceased as a
good number of companies are engaging in the same business and therefore
competing for customers. This has allowed thecustomer to be attended
effectively. With SAP, it is “customer first” practice.
9. Politically,
SAP has made many third world countries democratic. Among SAP conditions, good
governance is insisted. Therefore, people have freedom of speech, decision
making and accountable in their development. This has been made possible
through multi-partyism process which intends to alloweveryone topractice
democracy by participating in decision making for the betterment of their
country.
Failures
of SAP
1. SAP has
failed to implement most of its objectives and principles to the developing
countries and instead it accelerated the rate of poverty in rural areas. This
has come about due to the fall of the agricultural sector which acts as the
back bone of most developing countries.
2. Economic
diversification is still low due to instability ofeconomis in which the capital
earned per year tends to be directed in different socio-economic issues.
3. Export
capital and investment capital ratio still low in developing countries,
especially in Sub-Saharan African countries.
4. Agricultural
and industrial products are still unsatisfactorily produced due to improper
investment and inadequate technology.
5. SAP has
destructed local industries. This is due to theborder-less policy which allows
regional and international companies to pour their commodities into the market.
This has increased theavailability of commodities produced and reduced their
price,compared to local industryprices. Therefore, the low price of commodities
in the market hasresulted in the failure oflocal industries to
tradeeffectively. Theyproduce at high cost and sell at high cost which result
in a decrease inmarket and makes industries fail to continue producing the
commodities.
6. SAP has
brought about user fee or cost sharing. This has made poor people fail to get
services. For example, user fees have made people fail to get medication at
hospitals. Also, it has made students fail to continue with their studies. This
is more evident at tertiary level where students aregiven 40%, 60%, 20% or 80%
of the total cost by governments and demanded to pay the rest. This practice
has made a good number of students unableto continue with their university
studies.
7. SAP has
stratified societies into “know and know not”. With SAP, people are making
choices even in education. Poor parents fail to send their students to school
while the rich send them to quality schools. The consequence of this is the
creation of social classes of those who are knowledgeable andare obviously
going to be decision makers and those who do not have knowledge andend up being
poor.
8. SAP has
brought about chaos and crisis. With the introduction of multiparty democracy,
many African countries are in chaos and conflict. The conflict is between the
ruling and opposition party. This is evident in Zanzibar, Kenya, Burundi and
Zimbabwe.
Possible Solution to Each of the Challenges
Propose
possible solution to each of the challenges
THE WAY
FORWARD
·
State interventions: The state should act with regulatory framework. It should not
control but where possible should intervene. The state should make the market
friendly to all, i.e. buyers and sellers. Otherwise, without state
interventions, the poor will remain poor and the rich became richer and richer.
·
Priorities and
preferences in privatization: Not all
government institutions should be privatized. The government should have
priorities on what to privatize and why. Otherwise , privatize everything can
lead to lack of sovereignty and imbalance in market; which in turn lead to
failure of poor Tanzanians fail to get basic needs. This can be dangerous for
the betterment if national security and development.
·
Human capital should be
developed. More
schools offering sound and appropriate education should be established. The
curriculum should reflect SAP needs. This will make Tanzanians compete in
global market.
·
Effective tax collection: With
SAP conditionalities, the government provides investors with tax holidays. In
order to make SAP to all stakeholders, no tax holiday is to be provided to
any62investors. Tax holiday has made the government fail to collect revenue for
development. Many investors have started making some manipulation of changing
the names and ownership of the investment. Therefore, No tax holidays is to be
offered unless otherwise there is a special circumstance to be offered for
specific investment.
·
Local or internal
industries should be provided with subsides: This will make the
local industries to complete in the market.Also, Low Developed Countries
(LDC‟s) should implement their integrations. They must produce and sell in
their market rather than the current situation where every country is producing
as its stake and selling in the world market at low price. Regional integration
will make more market for the local products. By integration, it will be easy
for LDC‟s to establish common more for the price of their products in the world
market.
·
All in all, in order to fight out the failure or challenges of SAP , LDC‟s
should have state interventions, priorities effective tax collection , develop
human capital, internal effective resource mobilization, provide subsidies to
local entrepreneurs integrations of LDC‟s , promote expert sectors, and make
indigenous control their economy.
The
Privatization Process
1. Privatization
refers to the policy of transferring assets and activities of public sector to
the private sectors to be owned and operated by individuals.
2. Privatization
is one of the results of Structural Adjustment Programs which has been
emphasized by the International Monetary Fund (IMF), (World Bank (WB) and
donors from abroad, particularly Western countries like British, France, USA,
Denmark, and Germany.The ongoing economic crises of developing countries and
dependency syndrome of these countries are some of the factors that contributed
to the formation of privatization.
3. However,
the policy started in 1980‟s and gained significance public notice at the
global level during the same decade (1980‟s) when Britain‟s Prime Minister
Margaret Thatcher took deliberate and extra efforts on economic sectors to
restructure the prevailed condition in the country.
4. Under
the provisions of the World Bank, governments of developing countries began
experimenting various forms of market reforms including increased privatization
out of public63services. Under this situation, therefore, privatization gained
wide spread interest and became an acceptable policy, to government policy
makers, service providers as well as public planners.
The
Objectives of Privatization
1. To
create more market oriented economy where those privatized firms will
participate in the stock market.
2. To
improve economy, productivity and efficiency of the privatized parastatals.\
3. To
secure and enhance access to foreign markets, capital and technology through
attracting managerial and technological foreign investors.
4. To
broaden and share ownership through the equal provision of public services at
all levels by individuals and the state.
5. To
reduce the overwhelming and challenging increase of the public debt. This is
done by collecting tax from the private investors and use part of the tax to
service the foreign debt.
6. To
preserve the goal of self –reliance.
Measures taken to Enhance Privatization in Tanzania
1. To
improve the operational efficiency of enterprises and their contribution to the
national economy.
2. To
reduce the burden of parastatal enterprises to depend on the government budget.
3. To
expand the role of the private sector in the economy and permit the government
to concentrate on social services like health, education infrastructures.
4. To
encourage wider participation in ownership of private companies and management
of business.
Advantages of Privatization
1. It has
increased flexibility due to the reduction of bureaucratic complexity and
procedures in order to improve the national economy.
2. It has increased
efficiency in provision of goods and services due to the competitive spirit in
production.
3. Privatization
has led to the improvement and rise of competition among the existing
organizations, hence brought about better services.
4. It has
met the demands beyond the current government capacity. The private sectors
encourage competitions which increase the level of productivity and efficiency.
5. Privatization
provides clients with more choice of options where they can be more satisfied
in terms of contracts, salaries and work conditions.
Disadvantages of Privatization
·
Privatization has increased unemployment of the indigenous
people. This has been the case because most of the personnel are from outside.
When any public enterprise is privatized, it is accompanied by massive
redundancy of the previously local working personnel.
·
It has led to the fall in agricultural sector due to the
withdrawal of the government from providing the agricultural incentives.- It
has increased temptation to reduce quality of services in order to reduce costs
and maximize profit.
·
Privatization increases the rate of moral erosion due to its
policy of free trade. The private companies tend to import all types of goods
without considering the consumers. Such goods include phonographs and other
related firms or VCD/DVD which ruin the younger generation morally.
·
Privatization policy increases the rate of poverty to the people
living in rural areas due to the decline in agricultural production. Rural
people depend on agriculture for the better quality of their life.
(i) Trade liberation
Trade
liberation refers to the reduction of the tariffs and trade barriers to permit
more foreign competition and foreign investment in the economy. It is a term
which describes the complete or partial elimination of trade barriers such as
quotas and tariffs. Trade liberalization is sometimes refers to as free trade.
Free trade is the unhindered flow of goods and services between countries, and
is a name given to economic policies and parties supporting increase in such
trade. It is a market model in which trade in goods and services between or
within countries flow unhindered by government –imposed restrictions.
Restrictions to trade include taxes and tariffs, and other non-tariff barriers,
such as legislation and quotas.
Free trade includes:
·
Trade of goods without taxes (including tariffs) or trade
barriers (e.g., quotas on imports or subsides for producers).
·
Trade in services without taxes or other trade barriers.
·
The absence of trade-distorting policies (such as taxes,
subsidies, regulations or laws) that give some firms, households or factors of
production an advantage over others.
·
Free access to markets.
·
Free access to market information.
·
Inability of firms to distort markets through government – imposed
monopoly or oligopoly power.
·
The free movement of labour between and within countries.
·
The free movement of capital between and within countries.
(j)
Democratization Process
Globalization is associated with global political reforms under
the Process called democratization. The democratization process is assessed by
looking at the following principles.
·
Free and fair political
competition: There
is peaceful, free and fair competition between parties for the right to control
the government. In order to control such competitiveness, there ought to be the
following requirements. First, permanent party organization at the local and
national level. No opposition party can exist without continuous and permanent
struggle against the ruling party. The goals of these parties should not be
linked with the personal interests of particular party leaders. Second there
ought to be continuous contact at all levels of a given political party.
Thirdly, there should be determination of party leaders to hold political office.
Fourthly, there should be determination of the party to gain popular acceptance
for its programmes. Fifthly, there must be constant search for more members.
Such requirements can exist only in a multiparty system. Therefore, mono –
party system cannot be democratic. It is a rejection of democracy and it leads
to dictatorship.\
·
Tolerance: This is the ability to bear with something unpleasant or
annoying. Tanzania is a pluralist society. This means a society composed of
different ethnics, racial and religious group.66In this society Africans form
the majority, compared with the negligible non-African minority groups. The
right of the small groups does not depend on the number of people in a group.
The majority group has a duty to respect the convictions and ways of life of
the minorities.
·
Citizen participation: participation is the major role of citizen in a democracy. It is
both their right and duty. Citizenship participation includes standing for
elections, debating issues, voting on elections, gathering for community
meetings, joining parties and organization, protecting and ways of life of the
minorities.
·
Equality: In a democracy all people are equal. This means people are
valued equally. They have equal opportunities. No one is discriminated against.
Moreover, groups are free to maintain their different cultures, personalities,
languages and beliefs. When the majority deny rights to or destroy their
opposition, they also destroy democracy. A democracy is enriched by diversity.
·
Accountability: In a democracy, elected and appointed officials ought to be
accountable to the people. They must make decisions and perform their duties
according to the wishes of the people, not for their own interest.
·
Smooth transfer of power: In democracy there is a well established and transparent system
of transferring power from one political party to another.Economic freedom: In
a democracy people must have economic freedom. This means that the Government
allows people to own private property and businesses. People can chose what
work to do and can join trade unions. There should be free markets. The state
should not control the economy.
·
Control of power abuse: In a democracy, elected and public officials are prevented from
misusing their powers. The most common form of power misuse is corruption. This
occurs when officials use public funds for their own benefit, accept bribes in
order to render services, or exercise power illegally. Protection against abuse
of power has been achieved through various methods. For example, having
independent courts with power to take action against corrupt officials,
allowing for citizen in elections, and checking police abuse of power.
·
Inclusion of a bill of
rights in the constitution: A bill
of right is a list of rights and freedom guaranteed to all citizens in country.
Many democracies include a bill of right because it limits67the power of
government with good intention. It may also impose obligations to individuals
and organizations.
·
The rule of law: In a democracy no one is above the law, not even an elected
president. This is called the rule of law. It means every one must obey the
law. If they violate it they must be held accountable or liable. Similarly the
laws must be equally, fairly and consistently enforced.
·
Sovereignty: Only a sovereign nation can practice democracy. Sovereignty
means the freedom to decide and execute domestic and foreign policies without
interference from another country. Therefore a neo – colony cannot exercise
true democracy. Neo-colonialism means the control of a weak country by a more
powerful one. The subject country loses control of its destiny. The master
nation controls both the domestic and foreign policies of the neo-colony. In
other words, the weak country loses part of its sovereignty. It loses power and
freedom to make its own decisions. It loses the ability to practice democracy
too.
By
considering the above principles, any country in the world is considered to be
democratic if it abides with all or most of the principles discussed above.
(k)
Economic integration
Economic
integrations have been emphasized today due to globalization. Economic
integrations refer to the combination or grouping together of several countries
for the sake of cooperating in various undertakings to as to enjoy economic
benefits. It is aimed at increasing the benefits of international trade and my
result in political integration, which can be national or inter-state.
Economic
integration is classified according to the levels or stages of development as
follows:
1. A Free Trade Area: This is
the type of integration whereby countries remove all trade barriers such as
tariffs, imports and export quotas or devices, so as to trade freely among
member countries but each member country maintains unilateral right to impose
tariffs on goods from the rest of the world. (Non-member countries).
2. A Custom Union: This is
a stage at which, in addition to having abolished trade restriction among the
member countries as in a free trade area, the members have a common tariff
against non-members (third countries).
3. A Common Market: In this
stage, on top of what takes place in customs union, there is a free factor
movement among the member countries. This means that capital and labour are
free to move within the region. The nationals (people from member countries)
can find employment in any member country. For example, in East Africa a person
from Kenya can go to work in Uganda or Tanzania and one from Tanzania or Uganda
can go to any other member country and work.
4. An Economic Community (union): This
embodies all elements of the common market; in addition the member countries
institute joint ownership of certain enterprises like roads, railways and so
on. All economic policies in this stage are harmonised or are common.
5. Total Economic Integration: In this
stage, not only there is free movement of commodities and other factors of
production among the member states as in economic union, but also there is a
unification of monetary, fiscal, social and other policies. The members can
start using a common currency. In addition, there is a supra-national authority
that makes decisions binding to all member countries.
Necessary Conditions for
a Successfully Economic Integration
·
Good infrastructure In order for economic integration to be
successfully countries in the region of integration must be having good
infrastructures to facilitate movement of goods and people from one area to
another.
·
Political will and commitment69For a regional integration to be
successfully political leaders must be willing and committed to implement
various resolutions that are made and to make necessary decisions for the
betterment of the integration.
·
Common Language Common language among the people in the
integration enables ease communication among the people in the region when they
engage in socio-economic and political activities.- Common currency In order to
smoothen exchange a common currency is very important in the integration,
absence of a common currency makes exchange to be difficult.
·
Differentiated products Exchange cannot take place if countries
produce similar products, each country specializing in a commodity of
comparative advantage.
·
Trade gains For integration to be successfully each member
country must be gaining from trade, if some member countries do not gain from
trade or any economic activity then the integration will not be successfully.
·
Similar level of developmentIn order to reduce uneven
distribution of gains among the member countries, countries should have similar
level of economic development, if the levels of development are so wide, rich
members will gain more than poor countries.
·
Member countries must be neighboursIt is easier for member
countries to engage in economic activities and establish joint institutions
when they are close neighbours in terms of geographical location than when they
are located far distance from each other.
·
Cultural similaritiesCultural similarities facilitate
interactions among the people in various economic activities such as trade and
investments.
·
Trade creationTrade creation is said to occur when a country in
an integration import goods from a low cost member country after abolition of
tariffs which it was importing from a high cost non- member country.
Reasons
for Economic Integration
The rationale behind economic integration in the world includes
the following:
·
To expand the market among the member countries and attain a
common voice on advocating the market for the goods of the member countries.
·
Another reason for economic integration is to establish good
condition for industrial development among the member countries. This happens
due to the fact that the removal of restrictions facilitates the movement of
factors of production, distribution of products and fast spread of technology.
Also duplication of industrial products is avoided when the countries decide to
integration economically.
·
To promote transport and communication development for easy
distribution of goods and services as well as facilitating information flow.
·
To intensify security, fraternity and unity among the countries,
which have long been disunited and conflicting over various aspects, based on
ethnic grounds.
·
To maintain peace and uphold the status of human rights among
individuals of the member countries in order that democracy can prevail and
discrimination of any kind can be brought to an end.
·
To promote comprehensive research activities on various areas
that range from economic, social, political and environmental aspects.
·
Another reason for integration is to encourage diversification
of the economies of the member countries following the expanded market and
removal of trade restrictions. When countries decide to integrate various needs
for various goods and services crop up leading to the need for producing a
variety of goods and establishing various enterprises to cater for the
increased needs.
·
Countries integrate so as to promote the capacity for rational
or sustainable use of resources. This takes place after the advancement of
science and technology in the member countries. In integration, people exchange
ideas and experiences on how to better plan for sustainable use the available
scarce but valuable resources.
·
To formulate common policies geared towards solving global
problems like population explosion and migration, epidemic diseases like cholera,
Ebola and HIV/AIDS, as well as environmental problems and challenges of
globalization.
·
Economic integration also encourages heavy investment on the
available resources. When countries integrate, they create confidence among the
investors due to the fact that the market is expanded, peace and security are
assured and the resources are easily available due to removal of restrictions
or tariffs.
·
To promote the life standard among the member countries as a
result of increased production, easy movement of goods and services and
economic diversification.
·
To promote employment opportunities following the
diversification of the economy and development of industries among the member
countries.
·
Economic integration increases the opportunity to borrow from
outside since it is easy to borrow as a community rather than a single country
due to the fact that that the donor do not have high confidence on individual
countries.
·
To promote the quality of production among the member countries
through positive competition in the production process
·
To easily share common services such as Posts and
Telecommunications, railways, airways, medical services etc
·
To stimulate smooth development of trade using a common currency
and by removing tariffs. A common currency removes complications of converting
currencies, which sometimes tends to be cumbersome and time-consuming leading
to inefficiency and ineffectiveness in the commercial activities.
·
Economic integration leads to political cooperation and sharing
of ideas and experiences which in turn bring effectiveness in the production
process and promotion of peace and security for smooth development proces
Disadvantages of Economic
Integration
Economic integration has several disadvantages, which include
the following:
·
- Trade diversion: Low cost trade can be replaced by a high cost
trade due to the geographical restrictions. A country can buy goods at a higher
price than it is used to buy from another country, which are not members
leading to the decline in profit or income generation. The other countries can
start enjoying economic advantages in trade.
·
Movement of goods can be in one direction leaving other
countries without goods. This can encourage the occurrence of polarized
development in which some countries develop at a higher speed than other
countries.
·
Countries may be compelled to buy goods of poor quality within
the region especially if the level of technology is low. This is a great
problem in African countries where there is low level of technology in many
countries. Agricultural products, for example, tend to be very poor due to poor
methods of cultivation and processing among the countries.
·
Because of uneven industrial development, one country which is
more industrialized. In the East African Community, for example Kenya was developing
faster and at the expense of Tanzania and Uganda because of more industries
that made her keep on exporting manufactured goods of high quality.
·
Economic integration is usually associated with political
problems, as some leaders tend to be in need of holding positions permanently
so that they can keep on looting while in position.
·
Cultural disruptions, which tend to stifle cooperation among the
members, can occur following the multiple interactions of people from different
member countries. In East Africa for example, one can see deterioration of
morals, and prevalence of other unwanted behavioural aspects.
·
It is difficult to harmonise the common external tariffs due to
differences in the foreign policies.
·
Member countries tend to produce the same goods and hence forces
to loom for market outside the region.
Factors that can
Facilitate Economic Integration
1. Strong
determination among the states can lead to the fast pace of economic
integration. This is due to the fact that when people are determined they tend
to be ready to work very effectively for the purpose of bringing about common
development.
2. Language
which functions as a unifying force can lead to fast economic integration. When
people communicate intelligibly they easily exchange ideas and experience as a
result they cooperate easily in solving common problems.
3. Readiness
to cooperate among the leaders of states also plays a great role in
facilitating economic integration. This happens when some of the leaders are
ready to relinquish some of the leaders are ready to relinquish some of their
powers and work cooperatively.
4. External
influences also play a great role in integration. Some donors urge that they
cannot provide assistance to individual countries since there can be misuse of
fund provided. Also experiences of success in the integration from outside
stimulate the need to integrate. For example, the EU has been a strong dynamo
in stimulating the formation of the African Union (AU). Another external
influence is related to the dynamics within the international trade. The
existence of poor trading system and especially poor pricing in the world
market make the developing countries join to have a stronger voice in
bargaining for better prices and also to pave the way for the creation of the international
market.
5. Well-developed
infrastructure can also expedite the pace of economic integration. If, for
example, there is good transport and communication network the movement of
goods and services as well as the flow of information takes place effectively.
6. Where
the countries exhibit positive economic performance can integrate very easily
unlike the countries where there are poor records of economic performances.
Usually the countries, which are very poor and have few resources, tend to take
time to accept integration for fear of losing freedom to the stronger nations.
In Africa for example many countries fear South Africa and Libya due to their
stronger economics bases.
7. Existence
of peace and security in the countries, which intend to cooperate, can also
hasten the pace of economic integration. Where there are political conflicts
integration is not attained easily since people who are the major stakeholders
of integrations ventures are usually restless and some run out of their
countries of origin to other countries as refugees
8. .
Advanced level of technology can also act as dynamo for facilitating smooth
economic integration because the cooperating nations produce high quality
products which can attract market.
Constraints
(setbacks) on Economic Integration in the Developing Countries
1. Low
Technology is one of the hindrances of economic integration. This slows down
the industrial development among the member countries. Low technology leads to
poor quality of product and hence low market for the products leading to poor
income generation.
2. Political
instability characterized by wars and other problems disrupt peace and security
and keep people restless such that they cannot settle and produce or interact
effectively.
3. Balkanization
(division) of the states is another limitation. This leads to the poor
cooperation in different economic aspects since people of one country tend to
feel as different in status and belongingness from people of other countries.
4. Poor
infrastructure network like roads, railways make cooperation ineffective since
movement of factors of production, as well as goods and services can take place
effectively between member countries.
5. High
degree of poverty among the member countries weakness the cooperation. Because
of poverty people fail to move from one country to another, they cannot invest
properly in technology promotion and production of high quality goods, and
efficient provision services.
6. Problem
of common market and the way the local markets operate do not allow for the
positive cooperation among the member countries.
7. The
resources are not evenly distributed since some countries are naturally endowed
with more resources than other member countries. This also leads to poor
cooperation as some countries are not ready to share their resources with other
countries, which lack such resources.
8. Environmental
predicaments (problems) like floods, such as those of Malawi and Mozambique;
earthquakes, drought, diseases like EBOLA that hit Uganda, and the75HIV/AIDS
pandemic disrupt cooperation due to the fact that people are not physically and
psychologically settled and hence, cannot cooperate effectively.
9. Cultural
differences are also setbacks to economic integration. This is manifested
through existence of many tribes, religions and political ideologies. With
different cultural orientations people fail to easily reconcile their
differences and work together smoothly.
10. Lust
for positions among some of the leaders is another problem as some of them do
not like to relinquish some of their powers to other leaders for the sake of
promoting economic integration.
11. Some
countries are reluctant or are not committed to contributing for the
development of the organization leading to ineffective running of the various
functions.
12. High
illiteracy rate is also another bottleneck. This obstructs the diffusion of
technology among the member countries.
13. Explosive
population expansion creates pressure for resources and forces the governments
to concentrate on solving the problems of population growth like food supply
rather than focusing on then economic integration among the member countries.
14. Exhaustion
of resources caused by over exploitation deters economic integration in the
developing countries.
15. Inferiority
among the small countries, which fear being dominated by other countries, some
of which are even more developed than them, is a hindrance too. These small and
poor develop feeling that they can lose their freedom and the available few
resources.
EFFECTS
OF GLOBALIZATION IN TANZANIA
The
impact of globalization in Tanzania can be discussed under political, economic,
social or cultural categories. Globalization has positive and negative effects
as discussed below.
Social –Economic Effects
·
On the economic point of view, globalization as worldwide phenomena
has both positive and negative effects on developing countries like Tanzania.
·
Many economist support globalization because they believe it is
beneficial for all countries involved. Economists believe that, if there is
worldwide trade then there will be more efficient use of resources.
·
Each country can make money off of the product they can most
easily produce.Every country will be able to produce a maximum amount of goods
and services for a limited cost. If each country produces what it is best at
manufacturing then, it can trade that abundant product for other products the
country itself cannot produce.
·
This potentially means that every country can get everything it
needs, and get it at the best price. If you can cheaply produce your product,
then you can also sell it cheap.
·
This trade spreads environmentally beneficial products and
technologies to countries that otherwise could not have the technology. In this
way and in others, globalization gives a “helping hand” for developing
countries.
Positive Effects
1. Through
trade liberalization and free – market economy, globalization has stimulated
much the utilization of natural resources. There are many companies which are
investing in natural resources such as the mining companies at Mwadui,
Bulyankulu, Geita, Nzega and Kahama. Presence of these foreign companies
enables Tanzania to utilize her resources for development of her people.
2. Globalization
has made production and transportation of goods easier and faster than ever
before. Therefore, it enables Tanzania to get different varieties if goods in
both quality and quantity, from any corners of the world. These goods include
electronic devices (computers, mobile phones). Food, medicine, automobile and
chemicals.
3. In some
instances, globalization has created employment opportunity to many people. For
example foreign companies like Vodacom, Zain, Zantel and Tigo have employed
thousands of killed Tanzanians.
4. Through
liberalization of social services there is a wide spread of private schools,
hospitals, dispensaries which contribute much in providing services to people
hence improving their wellbeing.
Negative Effects
1. For
developing countries like Tanzania, free trade causes a decline and
underdevelopment of the industrial sector and local technology. The decline of
industrial sector and local technology is caused by influx of goods from
outside whose prices are low and are of higher quality than our local goods.
2. Presence
of multinational companies in Tanzania if not well controlled may acquire super
profits through exploiting the citizens and the countries resources to the
maximum.
3. Globalization
sometimes creates unemployment. With growth of technology, machines greatly
replace human labour therefore unemployment sometimes increases. The
introduction of electronic devices like computer technology and its programs
have led to eviction of many Tanzanians from their jobs.
4. Through
privatization and capital mobility, Northern countries (Europe, North America)
undermine southern countries (Africa, Asia, South America) through unequal
exchange. Most of potential natural resources in developing countries are owned
by companies from developed countries hence undermining local communities.
5. Advancement
in technology causes environmental degradation. More increase in the use of advanced
machines and modern equipments causes environmental degradation. Technological
advancement in the mining sector, agriculture, fishing, transport systems and
industrial sector threatens environmental quality in Tanzania. Moreover, poor
countries like Tanzania have been turned to a garbage bin of capitalist waste
products. Globalization has also made Tanzanians spend much of their resources
in recreation activities instead of investing it into productive programme. As
an adaptation from Western culture some Tanzanians, spend their money for
buying beer, pornographic materials, drugs and other useless materials.
POLITICAL EFFECTS OF GLOBALIZATION
(a) Positive effects
1. Globalization
has brought about important changes in the content of international law.
Contemporarily states like Tanzania makes laws which comply with international
laws and therefore it abide with them in such a way that it can no longer
mistreat her citizens the way it wishes. Issues like human rights, social
justice are part of Tanzania‟s constitution, by laws and statutes which
effectively started to be used in Tanzania in 1987.
2. Under
globalization, Tanzania has integrated itself into global politics through
international agencies and organizations. New forms of multilateral and global
politics have been established involving governments including the government
of Tanzania.
3. Globalization
has made it necessary for poor countries like Tanzania to form strong political
organization such as the formation of the East Africa Federation.(iv)
Globalization has speeded up the democratization process in Tanzania. In order
to promote democracy Tanzania is adopting global democratic principles such as
rule of law, transparency, multiparty, accountability and it is trying to
implement those aspects.
(b) Negative Effects of Globalization
1. Negative
Effects of Globalization(i) There has been centralization of power political
power in biggest capitalist powers. The above situation has created an
interstate situation whereby the poor nations are made accountable to bigger
countries like USA, UK, than to their citizens.
2. Tanzania
has been affected by global political disorders and terrorism. The bombing of
the USA embassy in Dar es Salaam is a product of global political conflict
which involves USA and Al-Qaeda terrorists who protest against USA imperialism.
3. Globalization
is pushing down the efforts of the poor countries like Tanzania to form strong
political organizations such as the African Union or East African Community due
to spread of spheres of interest to the regions by biggest powers from America
and Western Europe. Countries like Tanzania become more interested to cooperate
with one of the capitalist countries rather than her neighboring countries like
Malawi, Mozambique, Zambia etc. wishing to get more profit.
4. In some
cases, globalization with its related political propagandas such as
multipartism, transparency, accountability, rule of law and others create chaos
in the country. There are some politicians who manipulate the above agendas of
democracy to jeopardize peace and security that have existed in countries since
independence
CULTURAL EFFECTS GLOBALIZATION
1. Positive Effects of Globalization
1. Globalization
has made diffusion of good international beliefs and values to the individual
nations. Each community in the world including Tanzanian communities are
struggling to archive those world cultural standards i.e. respect of human
rights, and better living standards.
2. Through
development of information and communication technology like the internet, fax
machines, satellite and cable TV, globalization has managed to integrate all
cultural practices in the world and have common cultural practices in the world
and have common cultural practices such as sports, games and music.
3. Globalization
has revealed out some bad cultural practices which have been performed by some
communities. For instance, the issue of female Genital Mutilation (FGM) is
globally condemned with great emphasis from different international agencies.
4. The
expansion of the great world religious institutions particularly in Africa and
Asia has transformed bad socio-cultural value into modern and acceptable ones.
In Tanzania, the speed of the country plays a significant role in eradication
of bad and unacceptable cultural practices such as Female Genital Mutilation,
forced marriages and harassment of women.
2. Negative Effects of Globalization
1. Globalization
has swept away cultural boundaries which exist by the use of advanced
information and communication technology such as, the radio, TVs, internets and
magazines. This situation has led to destruction of interior cultures of
Africans including Tanzania. Most Tanzanians particular young men have been
influenced by the Western ways of life.
2. Cultural
global ties have been responsible for erosion of morals in societies. Immoral
behaviours such as homosexuality, drugs abuse, violence, prostitution, and
other related behaviours have been brought about by globalization.
3. African
native languages including Kiswahili have been undermined by English language.
English has become a globalization language such that it is conceived by
many80Tanzanians that speaking English is a sign of civilization. By so doing,
our local languages including Kiswahili are being abandoned or left to be used
by less educated people who also wish they knew English.
4. Some
effects of globalization have also been experienced in the assessment of the
existing African traditional songs and ceremonies which are being replaced by
Western ones.
IMPACT
OF GLOBALIZATION ON ENVIRONMENT
Globalization
has a huge impact on environment. World trade can bring about many good things
such as more efficient use of resources and aid to underdeveloped countries.
But globalization can also have damaging effects on our planet.
Negative impacts:
·
Globalization can lead to shrinking forests and fisheries as
well as the extinction and wrongful transportation of animals.
·
Globalization has increased pollution due to the constant
emission of toxic gases from the heavy industries.
·
The high demand of natural resources which has been caused by
advance in science and technology goes together with deforestation. Hundred
thousands of hectares of forests are destroyed for mining activities,
construction of houses, railways, dams, industries and areas for settlement.
·
Globalization has increase d global warming due to gradual
increase of atmospheric temperature caused by emission of gases and smokes from
industries and auto mobiles in the modern world.These gases prevent the escape
of heat from the earth‟s surface to the atmosphere.
CHALLENGES
OF GLOBALIZATION IN TANZANIA
The following are challenges of globalization in Tanzania.
1. Low
level of the use of communication system. In Tanzania the use of global,
communication satellites and telephone is still low and under developed. Most
of communication systems are confirmed to the urban areas while a rural
population which is bigger is still unconnected with the world communication
system. A problem of uneven distribution of communication system where
internets, mobile phones and others are only found in cities and big towns will
make the rural population become isolated (marginalized) from this global
village.
2. The
other challenges which Tanzania faces is low production, Tanzania‟s economic
sectors such as agriculture , industry, mining, fishing are not producing
enough goods for export . The increase of international trade as one among the
fundamental characteristics of globalization will leave Tanzania a buyer of
foreign goods rather than a manufacturer and exporter.
3. The low
level of education in Tanzania is posing big challenges to Tanzania under this
world of globalization. The levels of education among Tanzanians are very low
compared to that in other countries in the world. This level of education fails
to meet intellectual demands of globalization such as technological skills,
managerial skills, entrepreneur skill and marketing skills. Thus Tanzanians
will not be able to compete in employment opportunities with others from other
countries.
4. Tanzania
faces a problem of law serving and low investment growth, low saving, lack of
individual capacity and prolonged vicious cycle of poverty among Tanzanians.
5. Moreover
Tanzanians primary exports are facing severe downward pressure of prices from
world market. This trend is continuously discouraging primary producers which
are mainly the defenseless peasants.
POSSIBLE SOLUTIONS FOR CHALLENGES OF GLOBALIZATION
The following below are some of the solutions which Tanzanians
can undertake so as to combat the challenges associated with globalization.
1. Tanzania
should create policies which focus on its own problems and lay strategies to
reduce poverty by focusing on provisional health, education and social security
to her citizens.
2. There
should be well prepared environment and conditions for investors so as to
stabilize our macro economy. Attractions of investors must go together with
stated conditions which will make Tanzanians benefit from foreign investments,
rather than being the watchers of profit transactions.
3. Education
should be given a significant priority and compulsory to all people. Tanzanians
government should make sure that most if not all Tanzanians get not only
education but higher quality education which will enable them to cope with
challenges brought about by globalization.
4. There
should be proper utilization of both natural and human resource so as to boost
the economic growth. Tanzania has been experiencing the shortage of personnel
like doctors yet there are many doctors from Tanzania who are walking abroad,
this is improper utilization of human resources. Moreover, Tanzania faces a
problem of shortage of food almost each year but they are so many uninhibited
areas with fertile soils but still undeveloped.
5. For
Tanzania to compete with other countries in the world market, she should
develop and promote researchers, providing education to all the people on how
to improve production of their goods so as to have quality goods which can
withstand competition.
6. Regional
integrations and co-operations should be encouraged so as to have a common say
against exploitative practices done by developed countries. Membership of
regional integrations and co-operations like SADC, and East Africa can enable
Tanzania and other countries to at least fight back against the negative effect
of globalization.
7. The
fighting against corruption should be an endless war so as to prevent those few
one who want to enrich themselves.
EXERCISE
1. Define
the term globalization
2. Explain
briefly the aspects of globalization
3. What
are the impacts of globalization in Tanzania?
4. Discuss
the effects of globalization to environment
5. Identify
the challenges of globalization to Tanzania
6. Suggest
possible solutions to the challenges of globalization to Tanzania
7. Discuss
the concept of international cooperation
8. What
advantages does Tanzania get from the membership in the new East African
community
9. Account
for the privatization of public enterprises in Tanzania
10. Point
out the effects of trade liberalization policies to the majority of Tanzanians
11. Assess
the impact of globalization on political and cultural aspects
12. Mention
the challenges of globalization in Tanzania and suggest measures to be taken to
cope with globalization
13. Using
any sector of your choice, show the impact of SAP in the development of that
sector and society at large.
14. Discuss
how the economic and political liberalization has undermine the efforts made by
Tanzania in the post to develop national culture
15. From
independence to 1980s education in Tanzania has been provided free of charge.
But with SAP conditionalities the situation has changed. Discuss this
assertation showing the advantage and limitations of the two periods in the
development of a country.