WHAT IS GLOBALIZATION ?
Globalization is defined as the
increasing process of interdependence and interconnectedness between different
political, social and economic components of life world. It is the way in which
the world in seen as the global village. Globalization becomes a worldwide
system because it integrates people across their national boarders, making the
world operate as village and therefore making free 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 16th C, the period
when European traders and sailors interfiled overseas trade through
mercantilism. From 16th C onwards, the shape of the global migration was
transformed by the Europeans and Americans. The first great wave of the early
modern migrations involve the 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 came to be more
pronounced during the Second World War. The Europeans economies in the 1950s
and 1960s drove a renewed epoch of global migration that that turned Europeans
interest to overseas nations where they thought to have cheap 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
In 1970‟s the wave of migration of
enormous flows to the oil rich and labour added the new pattern of regional
migration within Africa, Latin America and East Asia. However, from 1990‟s
migration among global society has been intensive due to advancement of science
and technology, refugees and disintegration in the developing world. The
interconnectedness has been quickly brought by the development of the
communication technology and space explorations.
DRIVING FORCES OF GLOBALIZATION
- 1. Advancement in Science and Technology; The development of science and technology has contributed greatly due to the development of global interconnectedness, interactions and integration of the world societies into the single global village. Science and technology has enabled technologists to design and make things like machines which simplify the human activities like communication that sounds much when we talk of globalization.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 intensive integration of people in universities, colleges and international conferences. Through interactions 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 liberal democratic principle. Liberalists believed that 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 wide spreads due to the advancement of information and communication technologies like television, e-mail, cellular phones and internet technology.
- 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 protection of human rights and security of the world.Political activities increasingly take place from national to the global level. For instance, democratization process, multiparty democracy, formation of NGOs and Civil society Organizations (CSO).
ASPECTS OF GLOBALIZATION
Globalization as economic, political
and social phenomena is associated with the following major aspects.
1.
Information and Communication
Technology Globalization is characterized by advancement of information and
communication technology. This sector expanded drastically within the last few
years especially by the last quarter of the twentieth century. This period
witnessed the global distribution of the media images through computers,
screens, radio, newspapers, televisions and mobile phones. Development of
information and technology goes together with the rise of biggest 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
increasing movement of people from one country to another. These people include
tourists, migrants, refugees, business travelers and diplomats who move from
one country to another and from one continent to another. Most migrations occur
between developing countries and developed countries. There is also a flow of
migrants to advance economy from poor countries hence making the world
interconnected.
3.
Spread of Ideas and Ideology Spread
of knowledge, ideas, information and ideologies has been the integral aspect of
globalization. Direct foreign brings physical capital and technical skills or
production methods, managerial skills, marketing skills, global economic
policies. These have been spread of technical knowledge and diffusion of
political ideologies. For instance multiparty and green peace is examples of
political ideologies that have acquired international dominance.
4.
Finance There is also a global flow
of money often driven by the interconnected currency market stock exchanges and
commodity markets. The flow of money is also facilitated by international
financial institutions such as the IMF and the World Bank assisted by
multilateral Banks which57have branches almost every part of the world. Thus
this flow allows smooth money transaction all over the world.
5.
The Rise of Intellectual Property
The rise of intellectual property, items in this case includes patents,
copyright movies, compacts discs, advertisements and financial services.
6.
Free Market Economy Globalization
has brought about the integration of international political economy through
inter financial institution policies and international trade. Free market (Neo
liberalism) has become a dominant economic ideology of the world. The price is
determined by 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) in order for the
developing countries to qualify for a loan. This conditionality typically
includes, reducing barriers to trade and capita; flows and tax increase and
cuts in government expenditure.All sub – Saharan African countries South of the
Sahara including East Africa, 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 reform and
elimination of quantitative restrictions in trade sector.
2.
To rationalize the public sector to
enhance employment opportunities.
3.
To improve the public investment
program.
4.
To introduce agricultural sector
reforms, market liberalization and institutional reform.
5.
To improve the sectoral resource
allocations and mobilize domestic resources and restoring growth to the
economy.58
6.
To devalue the local currency so as
to check the exchange rates and therefore to balance the domestic currency
price. To reduce poverty by improving the living standard of the people in
Least Developed Countries.
7.
To reduce poverty by improving the
living standard of the people in least Developed Countries.
Reasons for Structural Adjustment
Program Formation
- The rapid decline of per capital gross domestic product (GDP) for most of Sub
- Saharan African countries. For example, Economic statistics between 1980 and 1987, GDP declined by nearly 20%. In 1987, it dropped by 4.7%.
- Export earnings fell by about 40%. For example, in 1986
- 1987 the decline went further down due to the fall of prices in the World market.
- Import purchases fell by about 40% from 1981
- 1985, due to the presence of tariffs.
- The increase of external debt within a region. For example, around the year 1987, the external debt reached US dollar 129 billion. This made many Africans countries fail to improve their economic growth.
- Falling of education standards in all levels. Most Africans failed to afford the cost of education due to their poor economy.
All in all, world economic crisis,
oil shock of 1970‟s, Kagera war, government failure to provided social
services, were among other factors which led Tanzania to adopt SAP as economic
recovery programs.
Principles of SAP
- Elimination of tariffs, reducing taxes and promoting the role of private operation in the export trade, and liberation 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 standard of people in the respective countries through
the privatization policy.
2.
Agricultural productions, exports,
investments and consumptions witnessed increases in strong reforms and slowly
agricultural productions, exports, investments and consumptions witnessed
increases in strong reformers and slowly in non – reforming countries, during
the 1985 – 1987.
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 ability to choose what to buy and at what cost. It is
different from previously, when people were buying only what cost. It is
different from previously, when people were buying only what is in the market
without choice. For example, it was possible 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 has made
a good number of companies to engage in business of the same kind.60
8.
No more bureaucracy. Before SAP
establishment in Tanzania, there was bureaucracy in offices providing public
services such as banks, posts, telecommunication, transport, etc. but with SAP,
no longer bureaucratic actions in offices. As a good number of companies are
engaging in the same business and therefore competing for customers. This has
made customer to be attended effectively. With SAP, it is “customer first”
practice.
9.
Politically, SAP has made many third
world countries democratic. Among SAP conditionalities, good governance is
insisted: Therefore people have freedom of speech, decision making and
accountable in their development. This has been made possible through
multipartism process which intends to make all people practice democracy by
participating in decision making for the betterment of their country.
Failures of SAP
1.
SAP has failed a lot to implement
most of its objectives and principles to the developing countries and instead
it accelerated the rate of poverty in rural areas. This aspect s has come about
due to the fall of the agricultural sector that acts as the back bone of most
developing countries.
2.
Economic diversification is still
low due to unstable economy 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 unsatisfactory produced due to improper investment and inadequate
technology.
5.
SAP has destructed the local
industries. This has been possible by its borderless policy which allows the
regional, international companies to pour their commodities in the market. This
has led to availability of commodities produced and sold at low cost compared
to that price by local industries. Therefore, the low price commodity in the
market has made local industries fail to produce or produce at high cost and
sell at high cost which result into lack of market and this makes industries
fail to continue producing the commodities.
6.
SAP has brought about the user fee
or cost sharing. This has made poor people fail to get the services. For
example, user fees have made people fail to get the medication at61hospital.
Also it has made students fail to continue with their studies. This is more
evident at tertiary level where a student is given 40%, 60%, 20% or 80% of the
total cost by government and demanding him/her to pay the rest. This practice
has made a good number of students fail to continue with their university
studies due to cost sharing.
7.
SAP has stratified the society into
“know and know not”. With SAP, people are making choice even in education.
Those parents who are poor fail to send their students to school while those
rich send them to quality schools. The consequences of this, is the creation of
classes of those who are knowledgeable who are obviously going to be decision
makers and those who do not have knowledge who ends up being poor.
8.
SAP has brought about chaos and
crisis. With the introduction of multiparty democracy, many Africa countries are
in chaos and conflicts. The conflict is between the ruling party and opposition
party. This is evident in Zanzibar, Kenya, Burundi and Zimbabwe.
Possible Solution to Each of the
Challenge
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
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
