OGBAJI AND IKE ON GLOBALIZATION

1. THE IMPACT OF GLOBALIZATION ON THE SOCIO-ECONOMIC DEVELOPMENT
OF AFRICA
Udochukwu Ogbaji 1and Chukwuma Ike 2
1
Department of Political Science, Nwafor Orizu College of Education,
Nsugbe, Anambra State, Nigeria.
E-mail: udojoel77@yahoo.ca. Tel: +234(0) 8033486531
2
Department of Public Administration, Anambra State University, Igbariam. Anambra State,
Nigeria. Tel: +234(0) 8037793993.
ABSTRACT
Globalization is a process for advancement and increase in interaction among world’s countries and
people facilitated by progressive technological changes in growth, communication, political and
military power, skill and knowledge as well as interfacing of culture and value system and practices. It
is an interaction, a socio-political, economic and cultural permeation facilitated by Government
policies, private corporations, international agencies, treaties, conventions and civil society
organizations. This paper looked into the impact or effect of globalization on the social and economic
factors needed for the development of Africa. From our investigation, Africa is at the lowest level of
integration with the rest of the world. This implies that Africa is not likely to benefit much from the
globalization process. The research shows weaknesses and sometimes mixed results regarding the
impact of globalization on the socio-economic development of Africa. There is also evidence that
globalization can positively affect growth in the region but such positive impact will depend on how
fast Africa countries become integrated with the rest of the world and also be prepared to deal with
the adverse consequence of the situation (Orji, 2007). From our review, many scholars have
suggested that to be more integrated with the rest of the world, Africa countries must maintain strong
and stable macro-economic framework, embark on institutional reforms including promoting good
governance in all its aspects, foster trade liberalization and regional economic integration, promoting
sound banking system and financial development. Africa countries will also encourage private sector
development, including foreign direct investment, improve infrastructure and encourage agricultural
development and investment in people capacity building on our own, we recommend, among others
that Many Africa countries will also have to undertake a comprehensive reform of the civil service,
aimed at improving the quality and size while enhancing its efficiency. Africa countries must also
ensure efficient, reliable and cost effective public infrastructures such as transport networks,
electricity, water, telecommunications, health services and education to ensure economic security.
INTRODUCTION
From its rather obscure genesis, the American and French expressions in the
1960s, globalization has became today the world’s vocabulary of the times as its
current trajectory aggressively encompasses virtually everything that takes place on
the planet in the new century world affairs which represent the contemporary
profound and rapidly remolding of the world systems into a particular social
geographic map by the use of military; economic and technological apparatuses,
eventuating gradual erosion or limiting the capacity or power of sovereign nation
states to exercise effectively political, economic and socio-cultural control over their
territorial domains (Omelle, 2006).
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2. For many advanced economies critical decade for globalization since world
war 11 was the 1970s, when the ratio of trade to out-put rose markedly in both
advanced and developing economies in the wake of the two oil shocks. In
developing countries, exposure to international market picked up again in the late
1980s coinciding with their movement towards trade liberalization (Slaughter and
Swagel, 1997) but Africa has not really been part of this trend.
Since the beginning of 1980s the international economic, political and social
scene has been dominated by the twin concept of globalization and liberalization.
These concepts are said to “have set in a process whereby producers and investors
increasingly behave as if the world economy consisted of a single market and
production area with regional or national sub sectors rather than a set of national
economies linked by trade and these phenomena flows” (Barikor, 1999). The tempo
of these phenomena have also accelerated significantly in recent years resulting in a
widened scope that has gone beyond the realm of the economy to encompass
social, cultural and political norms and practices.
The process of globalization has been associated with strong consequences
not only for the economic well-being, but also social structures and political
processes of countries throughout the world (Barikor, 1999). As Dharam Ghai
observed, the different parts of the world have become so interdependent in so many
ways that it is no longer possible to understand their socio-economic problems much
less do something about them, without taking into account the play of global forces.
The processes of globalization have generated fundamental changes in the role and
responsibilities of a wide range of institutions - Families, Communities, Civil Societies
Institutions, Business Corporations, States and Supranational Organizations. Africa
has not taken sufficient advantage of the process of globalization.
CONCEPTUALIZING GLOBALIZATION
Globalization as a concept resists any single or simple definition. Although
often associated with claims that the present world system is undergoing
transformation, it is an old idea (McLEAN AND McMILLAN, 2003). Nevertheless,
some definitions may still provide us a clear understanding of how the process
works. Rubens Ricupero cited in Barikor (1999) sees globalization as a process
whereby producers and investors increasingly behave as if the world economy
consisted of a single market and production area with regional or national sub sector,
rather than set of national economies linked by trade and investment flows.
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3. According to John Dunning “globalization refers to the multiplicity of linkages
and interconnections between the states and societies which make up the present
world system. It describes the process by which events, decision, and activities in
one part of the world come to have significant consequence for individuals and
communities in quite distant parts of the globe or which operate worldwide, the
concept therefore has a special connotation….. On the other hand, it also implies an
intensification on the levels of interaction, interconnectedness or interdependence
between states and societies, which constitute the world community. Accordingly,
alongside the stretching goes a deepening of global processes”.
In consonance with Dunning, Ajie and Ogbaji, (2009) sees globalization as “a
comprehensive term for the emergence of a global society in which economic,
political, environmental, and cultural events in one part of the world quickly come to
have significance for people in other parts of the world. Globalization is the result of
advances in communication, transportation, and information technologies. It
describes the growing economic, political, technological, and cultural linkages that
connect individuals, communities, business, and governments around the world.
Globalization also involves the growth of multi-national corporations (businesses that
have operations or investments in many countries) and transnational corporations
(businesses that see themselves functioning in a global market place).”
Globalization refers to increasing global connectivity, integration and
interdependence in the economic, social, technological, cultural, political and
ecological spheres. It is an umbrella term and is perhaps best understood as a
unitary process inclusive of many sub-processes that are increasingly binding people
and the biosphere system.
The Encyclopedia Britannica says that Globalization is the “process by which
the experience of everyday life is becoming standardized around the world” while
some scholars and observers of globalization stress convergence of patterns of
production and consumption and a resulting homogenization of culture, others stress
that globalization has the potential to take many diverse forms.
Although the popular conception of globalization equates it with the growing
integration of national economies, we have used it here to also refer to the rapid
spread worldwide of some dominant social, cultural and political norms and
practices. At the economic level, it is reflected in the heightened acceptance of free
markets and private enterprise as the major process for promoting economic
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4. activities. The essence of globalization at this level is captured by increasing trade in
goods and services, private capital flows in different forms, foreign investment,
technology transfer, operations of transnational enterprises, business travel and
communications, and migration and remittances. At the social level, globalization is
conceived in terms of social relations and customs (family relations, social
organization, etiquettes of social behaviour) and consumption pattern and life styles
(consumer goods and services such as consumer durables fashion and designer
articles, food and beverages) (Barikor, 1999).
Furthermore at the cultural level, it is conceived to encompass issues of
values, religion and identity. It also includes such leisure pastimes as television,
videos, music, dance nightclubs, sports and foreign travel. Finally, at the political
level, globalization is reflected in the spread of pluralist systems, multiparty
democracies, free elections, independent judiciaries, non-governmental organization
and human, women and environmental rights groups (Barikor, 1999).
In economics, globalization is the convergence of prices, product wages, rates
of interest and profits towards developed country norms on the role of human
migration, international trade, movement of capital and integration of financial
markets. The International Monetary Fund notes the growing economic
independence of countries worldwide through increasing volume and variety of
cross-border transactions, free international capital flows, more rapid and
widespread diffusion of technology. Theodore Lowi is usually credited with
globalization’s first use in an economic content. Supporters of free trade point out
that advantage suggest that comparative trade leads to a more efficient allocation of
resources, with trade benefiting in general, this leads to lower prices, more
employment, higher output and a higher standard of living in developing countries.
Libertarians and other proponents of Laissez-faire capitalism say that higher
degree of political and economic freedom in the form of democracy and capitalism in
the developed world are ends in themselves and also produce higher levels of
material wealth. They see globalization as the beneficial spread of liberty and
capitalism. Liberals see it as a tool in relieving poverty and providing the poor with a
foothold in the global economy.
HISTORICAL PRECEDENTS
The term globalization was coined in the latter half of the twentieth century
and the term and its concepts did not permeate popular consciousness until the
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5. latter half of the 1980s. Various social scientists have tried to demonstrate continuity
between contemporary trends of globalization and earlier periods.
Globalization is a century’s expansion of human population and the growth of
civilization that has accelerated dramatically in the past 50years. Earlier forms of
globalization existed during the Mongol Empire, when there was greater integration
along the “Silk Road”. Global integration continued through the expansion of
European trade, as in the 16th and 17th centuries, when the Portuguese, and
Spanish Empires reached to all corners of the world. The effects on European
industries were notable e.g. the silver mining in Schwas, Austria was partly gold and
silver was available from the Spanish colonies for lower prices.
The globalization becomes a business phenomena in the 17th century when
the first multinational was founded in the Netherlands. During the Golden Age, the
Dutch East India Company was established as a private owned company because of
the high risks involved with the international trade, ownership was divided with
shares. The Dutch East India Company was the First Company in the world to issue
shares, an important driver for globalization.
Liberalization in the 19th century is often called “The First Ear of
Globalization”, a period characterized by trade growth in international trade and
investment, between the European imperial powers, their colonies, and later the
United States. “The First Era of Globalization” began to break down at the beginning
of the First World War, and later collapsed during the gold standard crisis in the late
1920 and early 1930s. Lenin’s theory of imperialism (1905) provided a seminal
critique of this period as being characterized by the exploitation of he third world by
those in the first. This theme forms the basis of many recent critiques of
globalization.
Globalization in the era since World War ll has been driven by advances in
technology, which have reduced the costs, trade, trade negotiation rounds, originally
under the auspices of GATT, which led to a series of agreements to remove
restrictions on free trade. The Uruguay round (1984 to 1995) led to a treaty to create
the World Trade Organization (WTO), to mediate trade disputes and set up a uniform
platform of trading. Other bilateral trade agreements, Including sections of Europe’s
Maastricht Treaty and the North American Free Trade Agreement (NAFTA) have
also been signed in the pursuit of the goal of reducing tariffs and barriers to trade
grand.
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6. The World increasingly is confronted by problems that cannot be solved by
individual Nation states acting alone. Examples include cross-boundary air and water
pollution, over fishing of the oceans and other degradations of the natural
environment, regulation of outer-space, global warming, international terrorist
networks, global trade and finance and so on. Solutions to these problems
necessitate new forms of cooperation and the creation of new global institutions.
Since the end of World War 11,(WWII), following the advent of the UN and the
Bretton Woods institution in the reach and power of multinational corporation and the
rapid growth of global civil society.
MEASURING GLOBALIZATION
Looking specifically at economic globalization, it can be measured in different
ways. These centres around the four main economic flows that characterize
globalization:
1. GOODS AND SERVICES: These include import as a proportion of
national income or per capita of population.
2. LABOUR/PEOPLE: Migration rates; inwards or outward migration flows,
weighed by population.
3. CAPITAL: Inward or outward direct investment as a proportion of national
income per head of population
4. TECHNOLOGY: For example, International research and development
flows; proportion of population using particular inventions “Factor-Neutral”
technological advance such as the telephone, motor-car etc.
To what extent a Nation-State or culture is globalized in a particular year has until
most recently been measured employing simple proxies like flows of trade, migration
or foreign direct investment as described above. A multivariate approach to
measuring globalization is the recent index calculated by the Swiss think tank “KOF”.
The index measures the three main dimensions of globalization: economic, social
and political. In addition to three indices measuring these dimensions, an overall
index of globalization and sub-indices referring to actual economic restrictions, data
on personal contact, data on information flows and on cultural proximity is calculated.
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7. Pro-globalists believed that the first phase of globalization which was market–
oriented should be followed by a phase of building global political institutions
representing the will of world citizens. The difference from other globalists is that
they do not believe in this will, but would leave it to the free choice of those citizens
via a democratic process.
1. The percentage of people in developing countries living below US $1 “(one
dollar) per day has halved in only twenty years; with the greatest improvements
occurring rapidly reducing barrier to trade and investment, yet detailed variables
measuring poverty should be studied instead.
2. The percentage of people living on less than $2 a day has decreased greatly
in areas affected by globalization, whereas poverty rates in other areas have
remained largely stagnant. In East-Asia, including China, the percentage has
decreased by 50.1 compared to 2.2% increase in Sub-Saharan Africa.
3. Life expectancy has almost doubled in the developing world since World War
1 and is starting to close the gap between itself and the developed world where the
improvement has been smaller. Infact mortality has decreased in every developing
region of the World.
4. Income inequality for the World as a whole is diminishing
5. Democracy has increased dramatically from there; while universal suffrage is
increased to 62. 5% in all nations having it in 2000.
6. Feminism has made great advance in areas such as Bangladesh through
economically liberating and empowering women with jobs.
Supporters of globalization are highly critical of particular, current policies. In
particular, the very high subsides to and protective tariff for agriculture in the
developed world, for example almost half of the budget of the European Union goes
to agriculture subsidies, mainly to large farms and agriculture business, which form a
powerful lobby. For instance, Japan gave 47 billion dollars in 2005 in subsidies to its
agricultural sector, nearly four times the amount it gave in total foreign aid, billion
dollars each year in subsidies to its cotton sector, including 25,000 growers three
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8. times more in subsidies than the entire USAID budget for Africa’s 500 million people.
This drains the tax payers money and increases competition and efficiency, prevents
exports by more competition agricultural and other sectors in the developed World,
decreases competition and efficiency, prevents exports by more competitive
agricultural and other sectors in the developed world, decreases competition and
efficiency, prevents exports by more competitive agricultural and other sectors in the
developed world due to retaliatory trade barriers, and undermines the very type of
industry in which the developing countries do have comparative advantages. Tariffs
and trade barriers thereby hinder the economic development of developing
economies, adversely affecting living standards in these countries.
ANTI GLOBALIZATION: Critics of the economic aspects of globalization contend
that it is not an inexorable process, which flows naturally from the economic needs of
everyone as its proponent typically emphasized. The movement is very broad,
including church group, national liberation factors, left-wing parties,
environmentalists, and peasant unionists, antiracism groups, protectionists,
anarchists those in support of relocation and others. Some are reformist while others
are more revolutionary and others are reactionary, believing globalization destroys
national industry and jobs.
In terms of the controversial global migration issues, disputes revolve around
its causes, whether and to what extent it is voluntary, necessary or unnecessary and
its effects, whether beneficial or socially and environmentally costly. Proponents tend
to see migration simply as a process whereby white and blue collar workers may go
from one country to another to provide their services, while critics tend to emphasize
Negative causes such as economic, political and environmental insecurity and cite
as one notable effect, the link between migration and the enormous growth of urban
slums in developing colonies.
Some anti-globalization group argue that globalization is necessarily
imperialistic, and it is one of the driving reasons behind Iraqi war and is forcing
savings to flow in to the United States rather than developing nations, it can
therefore be said that “globalization” is another term for a form of Americanization, as
it is believed by some observers that the United States could be one of the few
countries to truly profit from globalization.
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9. THE POSITIVE IMPACT OF GLOBALIZATION IN AFRICA.
Globalization open people’s lives to other cultures and allow the flow of ideas
and values. Information and communication technologies have eased interaction
among countries and peoples. It has eased international trade and commerce,
facilitated investment and flow of capital. Globalization has freed labour across
boundaries and facilitated easy trade. It has equally set new rules that are integrating
global market out of a wide and diverse world.
THE NEGATIVE IMPACT OF GLOBALIZATION IN AFRICA.
Some cultures are being diluted and destroyed at the expense of others and
negative values are being spread all over Africa. The world is divided between the
connected, who know and who have a monopoly on almost everything and the
isolated, who do not know and who practically have nothing.
Globalization has encouraged illicit trade in drugs, terrorism, crime, rapid
spread of diseases, prostitutions, pornography, human/female smuggling, dumping
of dangerous waste and depletion of the environment by unscrupulous
entrepreneurs. (Microsoft Encarta, 2009). Globalization has facilitated “brain drain “in
developing countries thus reducing further their human capacity.
Globalization has set new global rules that have further marginalized Africa’s
poor countries and people, especially in the area of trade. It has also created a
global village of privileged people whose borders are impenetrable to the poor,
unconnected and very few. The effect of Globalization on the state in Africa is not
only of an economic nature. There are international courts, international and human
rights organizations, international military converting international laws, rules and
regulations to which the state is subjected.
The most dramatic evidence of globalization is the increase in trade and the
movement of capital (stocks, bonds, currencies, and other investments) (Ajie and
Ogbaji, 2009). From 1950 to 2001 the volume of world exports rose by 20 times. By
2001, world trade amounted to a quarter of all the goods and services produced in
the world. As for capital, in the early 1970s only $10 billion to $20 billion in national
currencies were exchanged daily. By the early part of the 21st century more than 1.5
trillion worth of Yen, Euros, Dollars, and other currencies were traded daily to
support the expanded levels of trade and investment. Large volumes of currency
trades were also made as investors speculated on whether the value of particular
currencies might go up or down. (Ajie and Ogbaji, 2009).
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10. Other negative impact of Globalization in Africa could be noted in the following
ways:
1 OVERSTRETCHED CAPACITY TO REGULATE AND PROTECT THE
ENVIRONMENT.
The capacity of most Africa state to handle issues such as production of
organic agricultural dumping of nucleus waste is still limited. As global
actors invest and expand their activities, especially related to industrial,
agricultural, mining, forest exploitation and fishing, the regulatory capacity
of Public Administration in African countries, which is already limited in
many respect is becoming overstretched.
2 UNDERMINING THE POWER OF THE STATE.
Some African governments are finding themselves in a situation of “fait
accompli” when it comes to making certain policies and decisions. Some
international agencies take decisions, which are binding, on countries.
This could be seen as eroding the sovereignty and power of the state.
3 UNDERMINING THE POWER OF THE STATE: Case of International Law.
There is an ongoing democratization struggle in Africa. Some African
countries began the process of democratizing their government, political
systems etc.
4. OVERSTRETCHED CAPACITY TO HANDLE INTERNATIONAL AND
COMPUTER-BASED CRIME
The African state and its forces of laws and order were used to handle
“traditional crime” white globalization there has been an increase on crime
such as drug abuse, pornography international crime like advanced fee
fraud popularly called “419” e.t.c. Progress in information technology has
facilitated emergence and growth of computer-based crimes.
5. DEBT ACCUMULATION AND THE DEBT BURDEN
The debt burden of Africa countries is well known. Most of the
accumulation of this debt over time was as much as result of incapacity of
the borrower to pay it back as it was or the ease, which the tenders gave
money to the country.
6. MAKING THE TASK OF POVERTY ERADICATION MORE DIFFICULT
As global actors pressurize African government to open more and more to
maximize foreign investment and capital inflows and as big multinationals
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11. and local enterprises utilize this environment to cater for their interests, the
government is having less and less room to pay attention to the object
poverty amongst its poor members or people.
CONCLUSION.
The main focus of this paper is on the impact of globalization on the socio-economic
development of Africa. From our investigation, Africa is at the lowest level of
integration with the rest of the world. This implies that Africa is not likely to
benefit much from the globalization process. The research shows weaknesses
and sometimes mixed results regarding the impact of globalization on the socio-
economic development of Africa. There is also evidence that globalization can
positively affect growth in the region but such positive impact will depend on how
fast Africa countries become integrated with the rest of the world and also be
prepared to deal with the adverse consequence of the situation (Orji, 2007).
Globalization has impacted in two fold as regards African development. It has
the positive and negative impact which sequel to this has improved in one way or
the other, the social, cultural, political interaction and existence amongst member
states.
The process of globalization which entails the expansion of capital and market
forces into uncultured terrain brings along with it harsh social/economic conditions
for the populaces. In Nigeria for instance, the imposition of IMF/World Bank’s SAP
greatly undermined the living standards of the people and exacerbated the
deterioration/decay in strategic sectors of the economy.
Many scholars have suggested that to be more integrated with the rest of the
world, Africa countries must maintain strong and stable macro-economic framework,
embark on institutional reforms including promoting good governance in all its
aspects, foster trade liberalization and regional economic integration, promoting
sound banking system and financial development. Africa countries will also
encourage private sector development, including foreign direct investment, improve
infrastructure and encourage agricultural development and investment in people
capacity building. For Africa to be effective actor in the new globalization era; these
major structural changes must be put in place.
(a) The problem of global inequality that is the 20:80 world population
spectrum-divides, where 20 represents the global hyper-rich and 80
represents the mass global poor.
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12. (b) The global accountability/transparency question on the part of giant
transnational corporations and the supranational institutions of global
governance.
(c) The problem of a befitting strategies or mechanisms to adopt as potent
movers of new social struggles for a different form of globalization capable
of addressing the plights of the vast majority of the global population,
which the present globalization process fails to address.
(d) Many Africa countries will also have to undertake a comprehensive reform
of the civil service, aimed at improving the quality and size while
enhancing its efficiency
(e) Africa countries must also ensure efficient, reliable and cost effective
public infrastructures such as transport networks, electricity, water,
telecommunications, health services and education to ensure economic
security.
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