Monday, March 26, 2007

Final Summary

After reading the news concerning globalization for the length of this semester I have identified a couple of overall themes that are recurrent. The first theme is the fear of globalization encroaching on local culture. I summarized four articles concerning this emerging trend. There was not really any progress in field during the semester. I think this is because not every country has responded to this perceived threat in the same way. The articles I found were all just focusing on one specific culture or place and how they felt about globalization’s threat to their native culture. The second theme I identified was the growing concern about the interconnectivity of the global economy in the era of globalization. I wrote about seven articles that focused on this topic. All of the articles cited the growing risk that we all face because of the interconnectivity of our economies. More so now than ever, if something happens in one country, it has an affect in some way on all the others in turn. The articles I read did not suggest any solutions to reduce the risk we face, but mostly just pointed out the situation in reference to various places. A third theme that I identified was the increasing amount of attention paid to the growing wage divide in globalizations biggest winners. These article focused on the US, China, India, Singapore, and Angola. In each case, the article showed how globalization was benefiting mostly the middle and upper classes, while leaving the poor behind. There was not any progress in this trend either. For the most part, the articles were proclamation of the problems and statements of what needs to improve for the future.

In the immediate future, I do not think that globalization or the themes that I identified will change. There may be some legislative reform in the area of narrowing the divide between the rich and the poor that is widening due to globalization. However, the sweeping changes, needed to make real change in this area, are slow to materialize. I think that, even though I identified a theme of increased attention to the risk faced by interconnected economies, the world’s economies will continue to become closer in the immediate future. For now, the potential benefits seem to outweigh the risks for many governments. I think that there will continue to be a backlash against the globalization of cultures in the future. Culture is a product of one’s history, upbringing, family, and lifestyle, which will be hard for globalization to destroy. However, I think will see more of an integration of world cultures into the local cultures. The movement of workers and the ability to share ideas globally will make this transition smoother, but I think we will continue to see resistance by the older generations.

The commenting process has been very disappointing for me. I worked really hard on my blog entries to not only give a summary of the articles, but to provide important insight as to why this information was important for the larger issue of globalization. I received no comments on my entries. However, I myself did not comment on anyone else’s blogs either. I was very hesitant to comment because I read many other people’s blogs and did not have any idea what to write in response other than good job. This was especially true because most of the people’s blogs that I read only included a short summary of the article, with no explanation of why they chose the article or why it was important to their topic. I’m sorry that I felt that I could not have been more active in this part of the assignment.

Viewpoint: Asia's Poverty Divide

By William Pesek (Bloomberg News)

Published: March 4, 2007 in the International Herald Tribune

This article is about the poverty divide in Asia, where some of the world’s fastest growing economies still include two-thirds of the world’s poor. This is especially true in the great success stories of Asia: China and India.

A recent Unicef analysis of India's government statistics says that India growing almost 10 percent, supposedly gaining on China and providing one of history's greatest investment stories. However, Indians figured even worse in the report than Ethiopia and on a par with Eritrea and Burkina Faso in the area of malnutrition. “The Unicef analysis, done in conjunction with India's Health Ministry, found that about 46 percent of children below the age of 3 suffer from malnutrition. That's a staggering figure, and one that compares with roughly 35 percent in sub-Saharan Africa and 8 percent in China. It's even more startling when you consider India predicts growth of 9.2 percent this year.”

Globalization in Asia has largely benefited the upper and middle class, just as it has around the world. This is a big problem for the future in the globalized world. Even though education and training is improving in countries thanks to globalization, overall large portions of the world’s future workforce are not being adequately trained to compete on the leveled playing field

This is one of the most pressing problems facing globalization. As a people, the human population, is growing too fast, consuming too much, and using, and then leaving the poor behind.

Viewpoint: China Ignores Wage Gap

By Andy Mukherjee (Bloomberg News)

Published: March 6, 2007 in the International Herald Tribune

This article is about what the Chinese government is doing to ease its growing economic disparities and arrest its rapid environmental deterioration. “Achieving a balance between investments and consumption, reducing the trade surplus, curbing growth of polluting industries, spending more money in rural areas and boosting incomes of low- and middle-income citizens are all well-known elements of China's policy wish list.”

For China to accomplish these goals, it will require government planners to figure out a way to reverse a steep decline in the share of wages in the economy. This is a fundamental challenge facing many countries, which is going to be tough to turn around.

This article is important because global economists are concerned that this marginalization of rich nations' workforces, like what has happened in China, may cause a political backlash against globalization. The threat to social stability from too much profit and too little benefit for the people is even more pronounced in China, but it is becoming a problem in most developed countries around the world.

Spotlight: Selling Globalization to France

By: Katrin Bennhold

Published: March 9, 2007

This article is about a woman whose job is to sell France to the world and globalization to the French. Her name is Christine Lagarde and she is the Trade Minister for the government of France. She has a difficult job ahead of her, because in France the term globalization has become synonymous with "delocalization," or the migration of jobs abroad.

“Globalization is often seen as a threat, despite the fact that we are actually among the most open economies and benefit from it,” Lagarde said. “It's paradoxical: the openness of France alongside our fears of the world.”

She says that one of the reasons that France is skeptical of globalization is the language barrier. “We feel a bit left out, because the language of globalization is English,” she said.

She has decided to create an educational campaign to market globalization in France. She has asked a panel of 15 independent experts, ranging from chief executives to economists, to report to her this month with ideas of how to communicate more effectively about globalization in everyday life.

“If you show people the benefits of globalization they otherwise take for granted, you're halfway there,” Lagarde said. “In a world that moves constantly, we cannot afford to be rigid.”

This is an important article because it highlights the struggles that many countries are facing tying to sell the idea of globalization to its citizens. I think Lagarde is very right about language being a big barrier to acceptance of globalization. If you do not speak English, you are already at a disadvantage in the globalized world. Also, people are suspicious of globalization because they think that it means shipping jobs to other countries. They do not see all of the benefits that globalization brings to their lives already today.

As German IT Sector Grows, Bitkom Sees an Upturn

By: Kevin J. O'Brien

Published: March 14, 2007 in the International Herald Tribune

This article is about the growing IT sector in Germany. It discusses the German movement to increase government spending on computer and engineering education, so that their companies and their workers can compete in the era of globalization. Germany has the second largest IT sector in Europe, second only to Great Britain.

In the past, German IT sales have been restrained by the nation's “Mittelstand” layer of midsize companies. These companies generate about 80 percent of the nation’s economic growth and have had less appetite for hardware, software and IT services than service industries in Britain.

However, the pressures of globalization are beginning to reach these midsize and smaller German companies, and now, according to experts, many of those companies are finally turning to technology for cost-saving advantages.

This article is important because it shows that in order for countries to compete in the globalized world, education and investment in R&D is essential. This trend is global with increased spending in almost all developed countries in these two areas. The thinking is that in order to have competitive workers, now that the playing field is leveling, they must have the highest quality of education.

Get with it, Europe

By: Simon Tilford

Published: March 9, 2007 in the International Herald Tribune

This article is an opinion piece that discusses how Europe is moving too slowly to ensure its place among the winners of globalization. The author says that Europe is not moving into knowledge-based industries fast enough to ensure it profits from the new division of labor being brought about by globalization. The reason the author feels this way is because the EU invests less than 2 percent of its GDP in research and development, far less than its competitors such as the United States or Japan.

The author says this is happening for two reasons. The first is that the fast- growing and R&D-intensive sectors, such as pharmaceuticals, software and technology hardware, have been weakly investing in by Europeans. “The proportion of R&D accounted for by these sectors is actually falling in Europe, with R&D increasingly concentrated in mature, slow-growing sectors, like the automotive industry. The second is that many of Europe’s leading researchers are dying out, with graduation rates not increasing to meet the demand for new researchers.

This is an important issue for globalization because Europe constitutes a large portion of the global economy. If some of these countries do not reform in the near future, they could start seriously lagging behind, which would be bad for all countries in the era of globalization because of the inter-connective nature of our economies.

Around the Markets: Europe and Asia might not Weather a U.S. Slowdown

By: Michael R. Sesit (Bloomberg News)

Published: March 19, 2007 in the International Herald Tribune

This article is about the interconnectivity of the global markets. Basically it discusses how much the US economy affects other countries’ economies. While other countries are coming into their own despite the US slowdown in growth, currently the world still depends heavily on the U.S. consumer.

“The global economy is too dependent on exports to the United States, whose trade deficit was $765.3 billion in 2006, as Asia and Europe do not have enough domestic demand to offset a cut in U.S. spending on imported goods,” said Stephen Roach, chief economist at Morgan Stanley in New York.

“The United States accounts for 24 percent of Japan's total exports, 84 percent of Canada's, 86 percent of Mexico's and about 40 percent of China's,” he said.

“Just as China is dependent on the United States, other countries rely on China's economy. So a U.S. slowdown that hurt China would reverberate in Japan, Taiwan, South Korea and commodity producers like Russia, Australia, New Zealand, Canada and Brazil.”

This is an important issue in globalization because some argue that the interconnectivity of global economies has made us economically weak. Economists tend to support that view. While most counties have greatly benefited from globalization, we have opened ourselves up to a level of vulnerability, which was never possible before.