SOCIO-ECONOMIC CHALLENGES OF GLOBALIZATION

Author(s): Prakash Mani Tripathi and Santosh Kumar Tiwari

Source: The Indian Journal of Political Science , OCT. - DEC., 2008, Vol. 69, No. 4 (OCT. -
DEC., 2008), pp. 717-725
Published by: Indian Political Science Association

Stable URL: https://www.jstor.org/stable/41856464

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The Indian Journal of Political Science
Vol. LXIX, No. 4, Oct.-Dec„ 2008

SOCIO-ECONOMIC CHALLENGES OF GLOBALIZATION

Shri Prakash Mani Tripathi

Santosh Kumar Tiwari

In general connotation globalization stands for free communication, destined for the
rapid development at International level through the spread of social, economic, political,
educational, ecological, cultural, scientific and technological advancement. Certainly,
economy is the core of globalization but it has other dimensions too . Every dimension
is related to some other dimension and each dimension has it's own branches and
sub-branches which by different means and processes create a network of
interdependence between different regions. Thus, globalization involves a series of
activities through which a region affects others and in turn gets affected by them. No
doubt, globalization has caused the opening of innumerable opportunities. It believes
in integrated system being conducted by the economic powers of the market.
Globalization has resulted in the growth of economic quality, product and profit but is
far from its objectives of equality, eradication of poverty, unemployment, social
disorganization, ecological degeneration and human security. In brief, globalization
has resulted in establishing new standards of social, economic, political, cultural and
ecological degeneration. In the present research paper, a brief attempt has been
made to highlight social and economic challenges caused by the process of
globalization.

Introduction

International interaction has accelerated the pace of development for a long time. So, is the
case with globalization. In pre-medieval period scientific and technological developments took
place in the countries like China, Saudi Arab, India and Turkey. Printing press, Gun Powder, Iron,
Suspension Bridge, Kite, magnetic needle, fan and the like had been invented in China, more than
thousand years ago. India had the knowledge of decimal system and zero during first to six century
A.D. Arab mathematician Mohammad-lbn-Musa-AI-Khwarizmi developed the technique of algorithm1
and Alzebra2. Similarly, printing press was invented in China while the first published book3 was in
Sanskrit. It was translated into Mundarin (China's language) in fifth century A.D. From this region the
knowledge of mathematics and science diffused towards the West. Decimal system reached to
Europe towards tenth century A.D. via Arab countries. Similarly, the knowledge of algorithm, alzebra
and the printing press entered into central Europe during eleventh and fourteen century and that
deeply impressed European renaissance, religious reforms and industrialization. This process
was instrumented in bringing unexpected changes in European life. Similarly, before the medieval
times, the flow of science and technology was from non-West to West. Thereafter, the direction of
this process got reversed. The process of globalization is neither initiated by West nor by non-West.
That is why Amartya Sen the Nobel Prize winner calls this process 'Global Heritage'.

"Marketization of Economy and globalization of market" are the new mantras contemporary
system of development. Globalization is related to free economic interdependence and integration
of the world economy with its increased tendency. Though this process of global integration has
been derived from economics, this concept is not purely economic. It is a process of social, political,
administrative, technological and cultural integration.

The political globalization has two important aspects. The first, is related to the factors

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The Indian Journal of Political Science 718

concerning resources, wealth and technology ac

with the serious challenges faced by various natio
sovereignty raises importance of government organ
Lowell Bryan, Diana Farrell, Caroline Thomas and Da

The Economic globalization is concerned with t

privatization, stability of inflation, price decrease, in
in foreign investment, rise in trade, end of quota and
decline of corruption of government systems and d

Explaining cultural globalization, S. Latouche mo

a part of culture itself4. Cultural globalization has
techniques give an organized shape to the society t
general have expressed themselves with respect to c
of relation between contemporary cultural cha
McDonaldization5 (George Ritzer), some Glocalizati
regards it as Creonization.7

The new techniques of science and technolo

globalization. The social, economic, political and ec
identity because of globalization. Thus, globalizatio

Effects of Globalization

Individual, community, society and sub-national community have developed contacts across
the borders for the long time. The earlier state centric system gradually received international fervor
by global interaction. Even this process is not universal. This process uneven and markedly different
at different places. It asserts in the development of complex and powerful interrelation through its
scope and accountability8. The state is not declining but is trying to adapt itself in various functions
and powers from within and outside. Both these concepts of continuity and change are interwoven.

The process of global integration has left far behind the concept of 'Global Village' of Marshal
Maclham. In the world any body and everybody and from anywhere, has got connected to anybody
else. A citizen of a country may live in a different country it makes no differences. Likewise individuals
and groups, private and public organizations keep in touch on the issue of common interests of
different places. Thus, it increases intensity of contacts and does not care for the obstructions
caused by variations and languages, regions, nations or cultures. Revolutionary steps like contacts
and increasing cooperation between individuals and groups are bringing governments closer to
each other. Both positive and negative effects of globalization are now visible. In positive sense, it
relates to open economy, increasing economic interdependence and interaction of world economy.
Though considered mainly as an economic process, it has many other dimensions like technology,
communication, polity, culture, ecology and society.9 All these dimensions are inter-related and
some dimensions are fragmented into sub-dimensions having several branches that represents a
network of interdependence. In negative sense it can be seen as the increasing dominance of

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Socio-Economic Challenges of Globalization 719
developed countries over developing countries.10

The process of globalization entails a chain of actions through w

by the activities of other decisions. Trade of a country affects labour
at the global level. Technology has changed the methods of trade. In
trade has strong network that affects social and cultural activities
itself is connected to the totality of human actions relating to quali
culture Administration infect effects at global level various huma
culture.12 Integration of economies across the national boundaries
and investment all over the world. It is also related to various organi
and European Union. The spread of globalization has brought f
economy.13

This process also includes trade, production, investment by multinational companies (MNCs)
and market. MNCs have reoriented their organizational structure because of the global network of
production. The price of concerned has come down because of the cut down of the cost in opening
the offices in different countries and related areas. Developing countries are associated with these
MNCs as suppliers of raw materials and labour. Investors of world market are interested in investing
through Brettenwood institutions. It increases the flow of private investment in developing countries
because of faster transfer of finance and free trade; investors and global market system get
integrated.14

The process of globalization has created conditions for direct foreign investment. The annual
report of WTO released on August 14, 2007 claims that increase in merchandise trade is not merely
restricted to developed countries. Developing countries also witnessed increase in exports by 0.9%
which is largest since 1980. American trade deficit in June 2007, was estimated at $823.4 billion, is
rising because imports to America have increased significantly.15 The impact of globalization on
developing countries is being seen in terms of modernization of industries as well as urbanization.
It has resulted in economic growth as well as social problems. It causes problems in market,
business, and service sector. New demands have come up in business world. Attracting investors
and raising competitions about various products has become new trend in international economic
system. It is essential for business concerns to sustain in contemporary world environment.

Information and communication have boosted the process of globalization. In mid 1998 the
number of Internet users was 140 million it rose to 700 million in 2001. Today, more than a billion
people surf daily. American economy, which had started shrinking in 1990, is world's largest
economy today. The use of Internet generated the revenue of 830 billion in year 2000, which was 30
percent more than the previous year. It promoted production and employment. Globalization has
caused greater awareness in common man. The role of citizen, civil society and even the
administration has undergone considerable changes. In traditional as well as modern democracies,
people's participation in election has increased, giving impetus to their role in vote making and
operation of organizations. Earlier, the role of national government was quite limited. Now
governments are performing the role of economic deciders rather than economic actors.

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The Indian Journal of Political Science 720

Socio-economic globalization enriches the politi

information related to economic activities that pr
and political limits. Globalization in social, politica
level. This process of development creates consum
provides a mosaic view of the filmy culture of Ho
China, Japan, Korea and South East Asia. The ma
superhighway culture of Sony and M-TV can be
tradition and religious bond. Every one is free fro
the class. Everyone is independent in himself
culture in India have come close than ever before.

Challenges

Under prevailing circumstances the process of globalization has opened the doors to
unlimited opportunities. It believes in integrated economy, culture and administration. Being directed
by the trade powers, globalization increases economic abilities, production and profits. Yet this
process is still far away from its objectives of equality, poverty alleviation and human security.17 The
process of globalization has enhanced social, economic, political and cultural disintegration also.
Countries involved in globalization are not concerned with social justice. This process is poised to
degenerate the social fabric and environment. It may create discontent so for as the issue of sugar
industries, cultivable land for industries and establishment of a factory by foreign investors are
concerned. As per statement of EU trade commissioner dated Sept. 3, 2007, India is much better
placed than Europe concerning hazards of globalization. Europe has yet to decide about the political
approach towards globalization. Several persons have opposed it blindly considering it as a
problem.18 Therefore, this process has become a matter of concern throughout the world.

Through the terms like liberalization, privatization and globalization often used in contemporary
world, the economic structure has never been defined properly. The process of Privatization started
in 1980s. Eastern Europe, Russia, Ukraine and Poland are still passing through this process. It is
also evident that an economic concern of the state creates problems in other areas. The true picture
of privatization, globalization and liberalization is quite different and complex. No doubt the trade
promotes economic developments but the economic globalization and trade liberalization have
been fitted into international business houses at large. Hence, the corporate world has given rise to
inequality worldwide. There were seven hundred international corporations in 1970s and the number
touched the figure of 5307 in 1998. The total income of six major corporations (Axon, G.M., Ford,
MITSU, Dane! Cristler, Mitsubishi) is more than the total budget of 64 countries with 58 percent
population of the world. Only seven countries (France, Britain, Italy, China, Japan, Germany and
U.S.) have the budget bigger than these corporations. Oil crisis of 1973, 79 and market crash of
1987 is the evidence of this fact, though economy provides better independence to work according
to its rule than trans-national economies resulting in economic imbalances; which causes economic
diversion leading to the decline in capabilities, marginalization of system and de-nationalization.20
Thus this system is meant for receiver and deceiver. It marks the tension between globalization and

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Socio-Economic Challenges of Globalization 721
social-cohesion.21

The world today is more polarized than ever before. Globalization

classes or societies - a. small category that has enjoyed the benefi
second - a major category that is poor and devoid of facilities.22 For Ex
level of poverty rose from 20 percent to 70-85 percent. Six out of eight c
birthday, while eight die before 8th birthday. 14 out of 100 children ca
education. In year 2000, 2.8 billion people all over the world over, earn
1 .2 billion earned less than 1$. Thus it seems that globalization does tal
which is restricted to small elite only. This inequality, not only crea
causes the emergence of social and national divisive forces.

The growing global production has dramatically changed the econ

decision making system of the state. The mechanism of production a
the main reason behind the semi-permanent employment, which
welfare state. Newly emerged trade culture due to the process of glo
process of privatization. The culture of privatization has increased the
this culture of management an employee has become rather a liabilit

The garb of cultural globalization has resulted in the rise of cult

course of development. As George Ritzer has said, the process of McDo
gives rise to cultural variation and de-humanization of social relations.
the name of music, appreciates loud music. Taking into account its mo
and priorities it expects cultural ethos. Drugs, violence, sex and artists
the ideals of ýouths and there is no place left for traditional, social an

It is interesting to note that globalization goes against the process o

the position of developing countries is concerned. The concept of nat
globalization has become irrelevant.26 Violence, intoxication, terr
degradation, economic disparity and terrorism have been globalized.
society is meaningful for globalization. It recognizes market only an
consumer. Commercialization of organization has created seedless pro
non-food culture. Peasants, instead of producers are being turned in
development is creating the feeling of loneliness in which the individu
society and non material sources of his life.27 When globalization tal
referring to NGOs, protected and nourished by the state. It does not t
reasons behind the origin and existence of the states.

Scope

To make the face of globalization humanitarian up to the expectation, it is essential to add the
powerful global administration with values, trends and criteria with inbuilt steps towards
accountability, freedom, equality, liberalism, cooperation and honesty.28 Global administration
must have capacity theoretically, as well as, practical that encourages multi-dimensional human

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The Indian Journal of Political Science 722

development, social and life security. Attempt

administration but also at the regional, national, in
organizations like IMF, World Bank and W.T.O. etc
the element of social security along with economi

Similarly, national governments can also b

International market forces for lime MNCs must per
resources and social development. Private playe
New technology must be used for human develop
poverty alleviation programmes, so that they can a
attempts must be made for equality in social, edu
distribution of the wealth.

Social issues like health, education, employment

government, market and trans-corporations. They,
satisfied, he can negatively affect the MNCs. Th
public policy to provide good governance. To educa
and to convert them into educated workforce or h
also to manage the social issues that decide mark
system in and global arena. It is a tough job to ma
policies of the state. The process of liberalizati
brought with it unlimited possibilities fast econom
reforms are not upto mark. In case of supply, the
purchase of cash-crops is regulated by the state
reason for trade reforms that receive strength fr
exchange rates. Taxes are major source of revenu
reasonable and bearable. Supply also depends on t

Therefore no interrelation can be certainly m

temporary growth. Unemployment in industr
because some export based companies enter the ma
export-oriented. As the practice of the day goes i
much more progressive than earlier. It has no ne
can be made through liberalization along with econ
ignoring uneven exchange rate, contemporary tax
reforms in the financial sector.

Further more the to policy makers while making the policies must create opportunities for at
least minimum possibility of the success of trade. It is commonly behaved in the developing countries
that global market is against them in the matter of goods and services. When a country initiates
reform procedure the value of reforms increases. Now a day developing countries are following the
process of globalization region-wise. The liberalization of agriculture sector is still limited. Similarly,
trade reforms cannot have any positive impact without financial reforms. Liberalization is the fields

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 Socio-Economic Challenges of Globalization 723
like energy, telecommunications and transport, has not brought d
of any regulatory mechanism. The state authority in developing cou
of liberalization

Regional organizations like EU, ASEAN, SAARC, NAFTA and APEC have become enough so
for as important international trade is concerned. The process of economic integration between
developing and industrialized countries started in 1980s, but regional agreements are still not
capable enough to attract sufficient foreign capabilities and investment. Economic development of
any country depends on its dedication to long-term economic discipline. The present shape of
regional integration opens up economic possibilities for the countries involved but because of
excessive protection, these agreements give rise to trade diversion. Thus there is need for the
developing countries to integrate with world market system by a minimum tariff structure.

Conclusion

The process of globalization has got special importance in human civilization of the day.
Trade is a mobile force of world economy. Government is a political conductor while technology
changeable. Culture evolves value in a society. Business policies make rules for economy and a
individual's achievement depends on his capability.29

Theoretically, market is self governed on the basis of competition between the buyer and
seller. The Competition decides the utility an actor of the market system. Often technology dep
on production and distribution. The technology, lands, labour and money are the powerful sourc
economic and political power. The success of market system rests on the welfare of socie
Therefore, everyone has a share in the system. Market economy is based on division of labour w
different actors of the system co-ordinate with each other and an actor gets benefits according to h
labour.

Historically, state and market system came into existence simultaneously. In the due course
of time development activities were undertaken so as to cope with changing situations and this
process enhanced modernization. State is concerned with the related to security as market is
related to the wealth.30 As political actor, government through its capacity of leadership, adheres to
make a corruption-free strong society by healthy trade environment, rule based system, transparency
and accountability. Developed economic relations and open markets have got momentum because
of communication revolution and information technology. This networking is making people more
able and effective very fast. Resources, education, employment and thinking are being affected and
directed by this development. Some times cultural globalization is conceived as Americanization.
Because generally people use only American products (Nike Shoes, Chicago bulls T-shirts, base
ball caps), American life style and Western culture is symptom of universalization of Western
culture, but, the spread of western culture only does not mean modernization. A consumerist culture
by itself cannot be called modern. Modernization should not be treated as westernization. When
language, religion, tradition, value and customs of a place get mixed up with an outside culture then
this culture can be called modernized and the process modernization. The spread of Buddhism in

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The Indian Journal of Political Science 724

China, Myanmar (Burma), Thailand and Japan can

it according to their own society. Japan China
modernized, not westernized. It can be said that gl
of culture has become a fashion.

Global economy is fast getting integrated but it is not Zero-sum-game. This process is
beyond profit and loss. In global economy many actors like trade, organization government and
liberal interest groups.* together solve the problems. In brief, it can be said that globalization is not
something beyond control or better than placed the government. It can not be imposed upon
anyone. A nation which wants to move with global system is bound to accept this process.

The world can be given new shape by the process of globalization. Bringing the nations and
people of different nature together, strong pillars of development and understanding can be
constructed and international peace can be sustained. Multi dimensional issues of public welfare
like health, education, security, employment, human rights, energy, environment, technology, culture
and economic needs can be better dealt with international co-operation. In this regard, regional
organizations and International Corporations have become powerful source of organized social
change, if political stability in the concerned nation is assured and sovereignty is respected.

References :

1. Algorithm has its origin in Al-Khwarizmi.

2. Alzebra was invented by Khwarizmi in his famous book Ai-Zabra- Wa-AI-Mukhbillah.

3. The name of this book was Bazrachedika-Prajan Parmita Sutra.

4. Serge Latouche, The Westernization of the World (Cambridge : Polity Press, 1996), 3.

5. McDonaldization means fast food culture. This is creating crunch for dinner lifestyle.

6. Glocalization means the complexity of cultural relation at global and local levels.

7. Creonization is that process of cultural diffusion which is expressed in music, language, films and
other symbols.

8. B. Ramesh Babu, " Sovereign Nation State at the Cross Roads of History", freedom first, 425 (April-
June, 1995), 21-24.

9. Cartson, " The Old Economy is the New Economy," Business Week, No. 3707 (13 Nov. 2000), p.1.

10. Robert O. Keohane, and Joseph S. Nye Jr. " Globalization : What's New? What's Not? (And So
What?)", Foreign Policy (Spring 2000), pp. 104-105.

11. Michael R. Bon signore, "Global Connectivity", Executive Excellence, Vol.17, No. 10 (October 2000),
p.3.

12. Keehone and Nye Jr., op.cit., Ref. 1, p. 113.

13. Ibid., p.106.

14. Ibid., p. 114.

15. Trçfoêïï Tjsfrqçff, " ^ snferc "STëïï li^n, cH¿H<Wqkluí*fl, 14,2007

16. Brain J. Ford, " The Taste of Tomorrow : Globalization is coming home to Diner," Futurist, Vol. 34, No.6,

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Socio-Economic Challenges of Globalization 725
(November / December 2000), pp. 1-3.

17. Cited from UNDP, 1999 : 1, Rehman and Majumdar, op.cit., Ref. 5, p.1

18. Trçrfoëïï -à SïïfeR Tm 14, 2007

19. UNCTAD, Trade and Development Report, New York United N
20. Ibid .

21. Rodrik, Dani, Has Globalization Gone Too Far, Washington D.C., Institute for Inter
1997.

22. Rehan Sobhan as cited in Report of the 1997 International IDEA Democracy Forum, Stockholm.

23. John Plender, " Troops and Globalization The Financial Times, (26 December 2006).

24. George Ritzer, The McDonaldization of Society : An Investigation into the Changing Character of
Contemporary Social Life (Thousand Oaks, CA : Pine Forge Press, 1993).

25. Samuel R. Berger, "A Foreign Policy for the Global Age," Foreign Affairs, Vol.79, No. 6, (November /
December 2000), pp. 29, 39.

26. Jean Dreze and Amartya Sen, India : Economic Development and Social Opportunity (New Delhi : OUP,
1995).

27. Benjamine R. Barber, Jehad vs. McWorld (New York, Ballentine Books, 1996), 17.

28. Rehman and Majumdar, op.cit., p. 12-13.

29. Kennedy, Paul, The Rise and Fall of Powers, George Allen and Unwin, 1998.

30. Michale R. Bonsignore, " Global Connectivity, Executive Excellence ", Vol. 17, No.10 (October, 2000),
p.1.

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