Globalization in India | UPSC Notes

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Globalization in India | UPSC Notes

Introduction—   

  • Multidimensional, multifaceted & Complex web of phen
  • It stands for De-Territorialization & is described through many prepositions
    • Kenichi Ohame— “Borderless world” 
    • Marshall Machluhan—“Global village”
    • Thomas Freidman (“The world is flat” )
  • Thomas Freidman (“The Lexus & olive”)—”Inexorable integration of markets, N-S & tech to a degree never witnessed before”Today individuals, corp, Nations r reaching the world farther, faster, deeper & cheaper
  • Anthony Giddens— Intensification of worldwide social relations & Compression in time & space

Beginning of Globalization

  • Formally after demise of C.W–1990s—End of history (Fukuyama) & N.W.O (Ascendency of Neo liberalism)– Est of WTO marked its highest point.
  • Marxists—It begin with beginning of capitalism in 17th cen—
    • Marx— “Search for profits will take bourgeoise to settle everywhere & nestle everywhere”
    • Hirst & Thompson—Present Glbl is a Rhetoric or a “New buzz word” for old capitalist exploitation– It is just a global expansion of capitalism.

Models of Globalisation

  • Present model—based on Neo-liberalism led by USA—Free market capitalism & Liberal democracy (“End of History”) 
  • Chinese model— At WEF– Xi expressed that China is willing to lead the Glbl & China led model will be more inclusive & Sustainable unlike USA. 
  • Indian model— Cosmopolitan vision of w.o— “V.K”, “S.B.S”–Aims at welfare of all rather than dividing the humanity into winners & loosers. ‘
    • Bhikhu Parekh– Norms governing the cosmopolitan w.o shd not be based on value system of one civilization, but shd be the result of “Dialogue b/w civilization”

Theoretical perspectives on Glb— 

  • Liberals—Glbl promotes Free trade, Interdependences– ↑ Peace, prosperity & Dev
  • Realists—Sceptical—Reinhold Niebuhr—Heightened E.I is likely to breed mutual vulnerability + It may have altered S, P & C domains but has not transcended the political domain.
  • Marxist—WST—↑ Gap b/w Core & periphery
  • Feminists—Feminisation of poverty & migration, sex tourism.
  • Post-Colonial Perspective—It results in Neo-colonialism—Subverting indigenous cultures + Spreading soulless consumerism

Globalisation: Myth vs Reality 

  • Hyperglobalists— 
  • Sceptics / Myth—Marxists—H & T—Globalisation is a fantasy— New buzz word
  • Transformationalists—Rosenau / Giddens / David Held— Profound changes have taken place but est features have not been swept altogether   
  • Although it has become universal, however there are lot of regional & inter-sectral variations in terms of its depth—so “Real but not perfect”

Impact of Glb on Nation-state

  • Glbl stimulated a major debate about power & sig of state in a globalized world—Glbl in its E&P forms, has led to a process of state retreat, even fashioning what some called the “Post-sovereign state”
  • Glbl defined as borderless world & De-Territorialization but N-S rep Territorialized enitiy—These r anti-thetical ideas
  • State lost authority—
    • Marshall McLuhan—Global village
    • Kenichi Ohmae—Borderless world
    • Susan Strange– ‘where states were once masters of markets, now it is the markets which, on many issues, are the masters over Govts of states’.
    • Traditional conception of sovereignty–States had supreme control within their borders, but forces of Glbl have made the hard shell of state perforated (Borders became increasingly ‘permeable’)
    • Rise of ‘supra-territoriality’,with increasing range of economic activities take place within a ‘borderless world’.
    • Financial markets that have become genuinely globalized– that financial crises in one part has impact in other parts of the world.
    • Changing BoP b/w Territorial states &‘De- territorialized’ TNCs
  • State is still a central actor— Realists–Robert Gilpin
    • Glbl has not rendered state redundant as an economic actor, States retain a vital role in bringing about economic modernization(Robert Gilpin).
    • Market based economies can only operate effectively within a context of legal & social order that only the state can provide.
    • Although states, when acting separately, may have a diminished capacity to control transnational economic activity, they retain  facility to do so through macro frameworks of economic regulation, as provided by G-20, WTO, IMF
  • Transformationalists— David Held & Bob Jessop– Glbl is not a “zero-sum game”
    • Although profound changes have taken places, but w/o traditional features being swept away altogether. We are witnessing the both. In some aspect, globalization is winning & in other aspects, states are holding the power.
  • G. Sorenson’s view—Diff states have been impacted differently—
    • Advanced Industrial States— Post-modern multilevel governance
    • Weak post-colonial states— Lost sovereignty
    • Modernising States like BRICS— Better positioned
    • It has effected sovereignty of poorer & smaller nations in a worse way than the bigger ones 
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Impacts on Devg countries— Xi–Glbl is a “Double edged sword”

+ve—In general Asian countries r winners, evident from prediction of “Asian century” & shift in C.O.G of IP from T-A to A-P.  

  • Share of India, China & S-E Asia in global GDP ↑ from 12.5% to 31.8% b/w 1990 & 2016 + Poverty alleviation in Global south + achivement of MDGs.
  • China’s share in Global GDP– from 4% to 17.5% in 2019, India’s share– 7%
  • Vietnam— miracle—In a single Gen moved from poorest to middle income economy (Bcz it invested in health & edu)
  • Branko Melinoski’s Elephent curve

-ve 

  • Inequalities ↑, Inequitable & Exclusive growth, Jobless growth (Ex– Service sector perpetuated but Agriculture stagneted due to WTO policies etc), -ve on food security, Env degrd
  • Benefitted rich sections the most, as PBM says–Rise of “Plutocracy”
  • Inter & Intra state disparities—WST

Critical

  • Jagdish Bhagwati—Glbl has to be properly governed to yield desired result
  • Xi–Glbl is a “Double edged sword”— It has its own Challenges & Opp– Depends on how we face & how well we r prepared– countries which has invested in capacity building & Skill dev have taken max benefits
  • Amaratya Sen (Book– “Economic Dev & Social opp”)– Countries which joined have been better than those remained outside– Can serve as opp only by Capacity building of people

Impacts on Developed countries—

Initially benefitted but now adversely impacted— so Resentment & retreat– Rise of Right, Protectionism, Social mov like Occupy wall street mov, Middle class worst affected

-ve—Economic C.O.G shifted towards east—Fareed Zakaria—“Decline of west & Rise of rest”

  • Share in global GDP declined B/w 1990 & 2016—
    • G-7—from 51% to 31% + EU’s share– from 27.6% to 16.8% + PIGS adversely impacted
  • Security issues— Refugee crisis, Terrorism 
  • Joseph Stiglitz— Backlash in Devd world— as growth has not been inclusive

Critical

  • Xi at WEF— Warned against scapegoating Glb for world’s ills or erecting protectionist walls
    • “No point in blaming Glb for world’s problems”— Not Glbl but Automation & incorrect policies of Govt r R/S for job losses—Even GFC was bcz of regulatory failures
    • “Pursuing protectionism is like locking oneself in a dark room. Wind and rain may be kept outside, but so is light and air”
    • Glb is a “double-edged sword” but benefits far outweighed the -ves  
    • “Global economy is a big ocean you cannot escape from” 
    • Sweden & Germany benefitted bcz of steps in skill dev, while UK & UK neglected this.

Critics of Globalization

Marxist criticism

  •  I. Wallerstein— WST
    • ↑ gap b/w Core & peripheries
    • Time to sing Swang Song  for it– Glbl has reached its “Dead end”
    • Humanity has 2 options—Barbarianism / Socialism
  • Samir Amin  (“Capitalism in age of Glb”)– Applied Dependency theory to show continuing Drain of wealth
  • Hirst & Thompson—Just a “New Buzz word” for Old Capitalist exploitation

Other criticism

  • Thomas Piketty (Capital in the 21st century) 
  • Arundhati Roy (Capitalism: A Ghost Story )—Mutant variety of colonialism – remote controlled & digitally operated 
  • Prof Ramesh Thakur & George Heine (Dark side of Glb)—Though engine of prosperity & progress, it is also a soft underbelly of corporate imperialism.
    • Dark side—Rise of uncivil society—TN terrorism, H- trafficking
    • Not “end of history,” but “end of geo”. 
    • Aversely impacted S-E rights & strenghtend property rights
    • Aversely impacted economic sovereinity, cultural integrity & Social stability.
  • Vandana Shiva—Glbl is brutal for nature
  • Noam Chomsky– ( Book–“Profit over people”)
    • It has also -vely impacted Developed countries as well    
    • Capitalist wars, -ve impact on health, education
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Current phase

  • Initially protests in Devg but now in Devd world
  • Prof Deepak Nayyar—Glb is under stress with its present disrupted & future uncertain
  • PBM—“Pincer moment”—attack from all sides—World doesn’t seems so flat now—Optimism of “end of history” is under challenge
  • Signs of de-globalization—Stagnation in WTO, Rise of right, BREXIT, America first, Treaty withdrawals
    • ↑ support for Rightist parties
    • Anti-Glb mov—Occupy Wall Street mov, Protests against WEF, WTO  ( In Seattle )& G-20 ( In Humberg ) meetings
    • In Europe– Tends of ” Border control” instead of “Borderless world” + Growth of Nationalistic & Xenophobic sentiments.
    • Trade barriers— “Border control rather than borderless world”
    • Multilateral inst are crumbling
    • PBM—Rising “Me First” sentiment 

Future Prospects

  • Although Glbl is passing through uncertain phase, but It is irreversible—as there r global challenges— Climate change, Terrorism

Hence there r imperatives for co-op— Aurobindo—“Aggregation is the law of Universe, Nature will destroy if we go against it”

  • Jospeh Stiglitz (Making Glb work)—Address Democratic Deficit in inst of G.G

Can China lead Future Globn ?

  • Xi Jinping at WEF— China ready to lead globn
  • Steps Taken
    • Enhanced RBEO— AIIB, NDB, BRI  
    • Reforming its currency policy 
  • Challenges
    • Chinese economy slowing down 
    • China-US great Thucydides trap.
    • PBM (The second coming)—Even if China manages its domestic transition to slower growth, it is doubtful whether it has global political legitimacy to act as leader– China always see itself as “Middle kingdom”.

Globalisation & Covid-19

It was already in decline 

  • Richard Fontaine & C. Raja Mohan—It was in decline well before COVID-19
  • The Economists—Already a process of Slowbalisation was going on—GFC, trade war, Halt of  WTO talks—Covid has not led to decline but it has hastened its decline
  • While heat against globalisation was simmering, pandemic added fuel to fire. 

-ves— Covid has prompted a new wave of Glb obituaries

  • Highlighted risks inherent in overdependence on global supply chains— Prompted Re-nationalization of production
  • Idea of a “Borderless world” is under serious questioning—Travel ban, US banned export of medicines 
  • Harsh V. Pant— Covid-19 will strengthen the ongoing anti-globalisation voices
  • Stephen M Walt—Realist Guide to Coronavirus Outbreak–Crisis is vivid reminder of centrality of state in IP + proves that— Intl co-op is fragile & Underlying anarchy of G.G is being exposed. 
  • The recent Covid Crisis is seen as the beginning of deglobalization and the comeback of the state .

Will Globalisation will die?— No

  • Steven Altman—Covid-19 is a “bend but won’t break crisis” for globalization.
  • Shyam Saran—Covid may have stalled Glbl but it is here to stay. Also Pandemic has triggered Galloping Glb in digital economy

Covid-19 Will unleash a new phase of Glb—

  • Richard Fontaine—Covid-19 will accelerate not its demise rather the likely result will be a new, different & more limited form of globl
  • C. Raja Mohan—Sovereignty is certainly back. Solidarity is under stress, but not dead—Drift is towards a middle path b/w extreme globalism & hyper-nationalism, Also Corona added awareness of “global problems” & the need for “global solutions” 
  • Suhasini Haider—While it will be impossible for countries to cut themselves off from Global market entirely, But regional initiatives will become the “Goldilocks option”—Middle path b/w Globalisation & Hyper-nationalism
  • Further politicise migration, entrench biasness towards self-reliance & Inward looking economy— Modi—New era of economic self-reliance has begun
  • “Import substitution” may again gain currency as perils & pitfalls of overdependence on foreign supplies become clear. 

Conclusion

  • Harsh V. Pant—Obituaries of globl have been written many times in past as well. It will surely survive this latest assault. But the form in which it might endure will requires us to think more creatively 
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Which type of Glb needed in Post Covid world– A “New Templete” of Glbl is needed–

  • Modi—“In post covid world, we need a new template of Glb based on fairness, equality & humanity”– Thus needed a “More inclusive Glbl with Humane face”
  • Joseph Stiglitz– Reform Inst of G.G & global financial inst like WB, IMF + address Democratic Deficit

Features of Globalization

  • Complex process– Creates conditions for a more co-op world but also a major source of Instability, inequalities & Conflict
  • Emergence of Globalism– collective awareness or conciousness of the world, Globalised way of life
  • Relative De-Territorialization of S, E & P activities
  • Relative De-nationalisation of power.
  • Economic Power shift in World politics– BRICS, G-20.
  • Menifests in all domains of social life, albeit with varying intensity– But Economic Glbl > Cultural, Pol etc
  • Uneven / Assymetric in nature– has diff degree of enmeshment — Rich countries more globalised than poor.

Globalization’s impact on world order

  • Instead of “End of state, Glbl has produced a “More activist state”– To achieve Domestic objectives, State engages in co-op & collaboration
  • A shift from a world of discrete but interdependent N-S to the world as a shared social spaces that transcend National bounderies.
  • Westphalian conception of Monolithic, Territorially bounded, unitary state is displaced by image of the “Disaggregated state”–
    • Power & Political authority now is not the sole preserve of State but is diffused among diverse Actors, Pvt agencies, NGOs, Supra state bodies
    • Sovereignity is now shared among national, regional & Global authorities.
  • Baylis & Smith– A shift from state centric Geopolitics to Geo-centric Global politics
  • Emergence of “Post westphalian world order”– Sovereign power & Authority of State is transformed but Not eroded
    • Territoriality– still relevent, but now emergence of new Political org that transcends Territories & Borders
    • State Sovereinty– Transformed not eroded- Now Sov rep shared exercise of power & Authority by National, Regional & global authorities + States now uses Sov as a bargaining chip in Intl Negotiations
    • State Autonomy– To achive Domestic objectives in interdependent world, States r forced to engage in co-op & collaboration (But this also compromises their autonomy of self governance) 

Globalization & Return of Geo-politics

  • Matter of Debate whether Glbl & Geopolitics r compatible or not
  • NO–  Bcz they r Anti-thetical concepts
    • Brian Blouet–While Geopolitics restricts movements, est imperial controls but Glbl stands for De-territorialization
    • Ellen Frost–We r moving towards a much more ‘interconnected world system’ + External threats have assumed transnational forms that traditional geopolitics of BoP is now largely irrelevent
  • YES–
    • Realists– Imperitives of Geopolitics outweighs the principle of Glbl
    • Realpolitik is again taking centre stage– Present Realist ex
  • Critical–Richard Falk–
    • “New Geopolitics” is emerging in era of Glbl–It rests less on military power & more on soft power
    • “winless withdrawal” of US from Iraq & Afghan r evidence that superiority in military power ‘is no longer able to reach desired political outcomes in violent conflict’– US shd learn that depending on “Old Geopolitics” will bring only ‘Frustration & defeat’