Theconcept of globalisation continues to occupy a central part of the discourse in international relations. True, some of the heat is now out of the debate, for nowadays there are fewer anti-globalisation mass protests in the main centres of economic power than was once the case. Even so, however, globalisation issues remain with us.

Election Cycle

In the United States election cycle, for instance, much seems to turn on each candidate’s stance on globalisation. Both Bernie Sanders and Donald Trump — with different points of emphasis and different degrees of sophistication — have challenged aspects of globalisation in today’s world economy.

And, at the same time, Hillary Clinton, perhaps prompted in part by Sanders’ bombshells from the left, has become increasing critical of some of today’s manifestations of the globalisation agenda, such as the Trans-Pacific Partnership (TPP) under consideration by the USA and various Pacific States.

In Jamaica’s most recent turn at the electoral wicket, globalisation did not feature prominently in the exchanges, nor, indeed, did any other significant foreign policy issues. But we remain under the influence of globalisation, a fact borne out by the continued decline in the value of the Jamaican dollar, and, arguably, in our constant talk about the foreign investment genie.

Definition

So, what is this globalisation, and what are some of the main ways in which it influences international economic relationships?

It is, indeed, a curious thing. Academics have been writing and talking about globalisation for more than two decades, and yet, there is no agreement on how to define the concept. More than 10 years ago, writing in the Planning Institute of Jamaica’s ‘Jamaica Human Development Report 2005’, I noted that in some cases, globalization is defined simply as a synonym for the way we live our lives. In this general approach, all the realities of life, its aspirations and its problems are placed under the umbrella of “globalisation”.

This approach seems to be reflected in the definition given by Malcolm Waters in his 1995 sociological monograph on the subject ‘Globalisation’. Waters defines globalisation as “[a] social process in which the constraints of geography on social and cultural arrangements recede and in which people become increasingly aware that they are receding”. In short, as long as people are coming closer together, and know that they are coming closer together, this is globalisation.

Unduly broad

The all-encompassing definition of globalisation was apparently attractive to persons who demonstrated against globalisation in the 1990s and the first decade of this century. In cities such as Seattle, protesters took to the streets to condemn globalisation in terms which suggested that they viewed it as synonymous with all the evils in the world. This approach was unacceptably broad and unduly deterministic, for it allowed critics of our current social and economic arrangements to ascribe almost all current problems to the one general cause of “globalisation”.

This broad approach to the definition of globalisation is weakened by the fact that it undermines the search for solutions. Where globalisation is “any and everything”, then it is difficult to identify the main problems brought by globalization, and the main solutions to be attempted. In short, those who advocate the broad scale dismantling of globalisation, without properly defining its features, are suggesting that we should tear down the entire structure of the house without giving any guidance on whether some bricks in the overall edifice should be preserved.

Some features

Our analysis, therefore, needs to identify the main features of globalisation with greater particularity. In this regard, two features generally accepted as indicative of globalisation today are the reduction or total elimination of trade barriers between States, and the liberalisation of capital markets and avenues for foreign direct investment. In addition, globalisation reasonably encompasses rapid developments in technology and pronounced increases of migratory flows across international borders.

Significantly, however, these features of modern international relations are not novelties. From the time of Columbus at least, people have been talking about trade barriers, the value of investment, technological development and increased migration. The novelty of globalisation in the modern sense seems to rest in the combination of these features, together with the philosophical approach that attempts to bring these features within a general world view. This underlying philosophy is laissez-faire capitalism.

Against this background, we may identify a set of practical features in the international community — removal of trade and investment barriers, removal of barriers to communication, transport and migration — as inherent in the concept of globalisation. This is all tied together by a philosophy that seeks to promote free markets as the most efficient means of raising standards of living in the world.

Western concept

So what, then, are the main issues for Jamaica prompted by globalisation? In the first place, we need to consider whether globalisation is a Western imposition on Jamaica and other developing countries; for, if it is, then there will be, understandably, significant negative reaction on the part of persons who perceive themselves to be compelled to support a process designed with Western interests and perspectives in mind.

This point need not detain us for long. Globalisation, in its modern incarnation, is a Western phenomenon, built on Western neoliberal economic foundations, and promoted by Western, market-oriented institutions such as the World Trade Organization, the International Monetary Fund, and the World Bank. With the fall of State-centred approaches in Eastern Europe and an end to Third World-based rhetoric in favour of a New International Economic Order, free markets rule from a Western perch.

But, to be frank, the Western origin of the concept of globalisation does not necessarily mean that globalisation is bad for Jamaica. So, as a separate but related question, we must ask if free markets help or hurt Jamaica.

Free market

In its pure form, the neoliberal, free market scheme recommends that Jamaica should specialise within its field of comparative advantage, and that Government intervention in the market should be minimised. In this way, the argument runs, Jamaica can take part in free trade, and pursue open markets overseas while the Government provides an enabling environment without subsidies or other means of financial support. The main problem with this approach is that very few countries have been successful using this model.

According to Eric Hobsbawn, the late British historian, the free market approach did not recommend itself in the 19th century to the United States and Germany; and in the 20th century, it was ignored by most of the Asian Tigers as well as by Mexico and Brazil. Arguably, therefore, globalization is placing on Jamaica a free trade philosophy that was not used in promoting balanced development elsewhere (Hobsbawn, “The New Century”). Developed countries have become developed with the help of some degree of protection.

Competition

So, Jamaica is not following the approach tested by history. But, in addition, there is evidence that we are not properly in a position to compete in an environment of free trade. In a world where larger and more developed countries may enjoy economies of scale, and almost always have access to superior technology, skills, and substantial stocks of capital, free trade implies unbalanced competition. Even as against developing countries in Latin America, Jamaica, as a small State, has been unable to compete strongly in international markets. Free trade certainly hurts our export capacity with respect to agricultural goods.

Admittedly, not all the problems in our agricultural sector stem from our small size. It is fair to note, for example, that some of our production methods and processes remain rudimentary and, as a country, we seem to have mixed feelings about agricultural production: theoretically we value agriculture, but in practice, our young people tend to look beyond the farm gate for productive occupation.

The market

Globalization, by insisting upon the reduction or removal of import duties on some products, has been criticized as driving out some Jamaican producers from the Jamaican market. This follows from our failure compete; as a factor in generating unemployment, then, this must be included among the negative aspects of globalization.

But there is a countervailing consideration. When import duties are removed, prices fall; and consequently, low-income consumers benefit from globalization by having access to cheaper imports. Where free trade prevails, it is also likely that Jamaicans will have access to goods of a higher quality, simply on the basis that variety and competition are likely to enhance production standards.

Investment benefits

As noted above, globalization also connotes the opening up of opportunities for the free flow of investment capital across boundaries. From the Jamaican perspective, capital inflows bring benefits for the local economy. Jamaica has willingly entered into a series of bilateral investment treaties with the main capital-exporting countries on the assumption that these treaties will promote investment growth.

These treaties are premised on the notion of reciprocity, but it is generally accepted that the main direction of the investment traffic will be into various sectors of the Jamaican economy.

On the positive side, increased investment flows promote employment possibilities for Jamaicans at home. It may also mean that companies with the latest expertise in areas such as information technology will come to Jamaica as part of their global outreach. The establishment and rapid growth of Digicel in the Caribbean is an example of the contribution which foreign investment may make in developing technical skills and knowledge.

In most cases, increased investment as an appurtenant of globalization will also mean greater revenue for the Jamaican Government. Although in some instances foreign investors are drawn to developing countries by the promise of tax relief, the investor will eventually be obliged to make tax payments, and employees of the particular enterprise will make tax payments even during the period of the corporate tax holiday. The payment of taxes must also count, therefore, as a net positive arising from foreign investment under the free market model.

Investment challenges

There are, to be sure, less salutary dimensions to free flow of capital pursuant to globalization. For one thing, when barriers to foreign investment are removed, this may encourage the entry of foreign investment projects which could undermine domestic entrepreneurial interests and displace workers in some traditional operations. For another, critics point out that the presence of foreign investors in the local economy has the effect of undermining domestic innovation and independence.

Globalization through free investment may also work to weaken financial stability. Specifically, where investment barriers are removed, Jamaica, as a capital importer, faces the risk that capital may be rapidly withdrawn from the economy. And, where capital is withdrawn quickly — as could be the case especially with portfolio investments — this can sharply reduce business confidence and give rise to negative multiplier effects throughout the country.

No broad brush

In assessing globalization in Jamaica, therefore, no broad brush should be used. Free trade and investment bring certain clearly identifiable benefits even as they carry possible disadvantages in train. The important point, then, is to ensure that economic liberalisation is undertaken in a way that recognizes the country’s vulnerabilities and its strengths.

Accordingly, it makes good sense for Jamaica to continue promoting foreign investment into the economy. With respect to trade, Jamaica does not seem to have much of a choice. For, within the neoliberal scheme of the World Trade Organization, the requirements are defined: Jamaica cannot run the risk of excluding itself from developed country markets and from trade regimes relating to goods and services.

Caricom project

Two further points should be made about the impact of globalization and Jamaica. The first concerns the relationship between globalization and the Caricom project. There are various ways to rationalize Jamaica’s affinity to Caricom; some aspects of this attachment are sentimental, some historical or geographical, and still others are grounded in short and long-term economic calculations.

The economic aspect of the Caricom project turns largely on the idea that Caricom provides a larger market for goods within the region; the individual Caricom state may therefore enjoy economies of scale, and take advantage of a protected market. In this respect — the protectionist element — Caricom arrangements, as set out in the Revised Treaty of Chaguaramas, may be seen as implicitly opposed to the free market approach supported by globalization.

Regional free trade

But not all aspects of the Revised Treaty of Chaguaramas run counter to the ideals of globalization. More specifically, Caricom effectively eliminates import-related impositions on goods traded within Caricom, thus conforming to free trade principles associated with globalization. The removal of such barriers helps to ensure that Caricom goods sold in Jamaica, for instance, are cheaper than they otherwise would be. The pity is, though, that we tend to produce very similar items across the Caricom region, so the scope for trade, though increasing, is not substantial.

Caricom, by promoting free movement of persons, also serves in some respects to promote globalization. Many developed countries which support the economic aspects of globalization reject the idea of more porous boundaries for the movement of labour, a fact that is evident with respect to fortified visa requirements for entry into Europe. But Caricom countries, if they are true to the spirit of the Revised Treaty of Chaguaramas, promote inter-regional travel; they also promote free movement of labour for some categories of workers.

The future

The final point concerns globalization and the agenda for the future of Jamaica. Very often, globalization is perceived in Jamaica as a concept which explains the recent past and the present. But, where do current trends concerning globalization take us?

Jamaica should approach this question frankly and decisively. Jamaica should regard globalization as a way of spreading ideas, and in this regard, should take the opportunity to make sure that, in human rights matters, we set an example for other countries. One effect of globalization is that word gets around: Jamaica must disseminate the idea that it is possible for small, impoverished countries to be leaders in human rights matters; in other words, we must offer humane leadership in defence of the poor, the oppressed, and those who are rejected by society.

Looking to the future, too, we should anticipate that the USA will continue on its pivot to Asia, and work out ways of retaining American interest in Jamaica. With the Obama initiatives towards Cuba, we need to enhance the country’s foreign policy. We need to articulate coherent positions in the short-run on issues such as: the fight against lottery scamming; the problem of Correspondent Banking; the alternatives, if any, to PetroCaribe in a time of uncertainty in Venezuela; and ways of dealing with Jamaican criminals who undertake criminal activities with transnational implications.

We should address these difficult problems, as we continue to work within a globalized world.

Stephen Vasciannie, a former Jamaica Ambassador to the USA and the OAS, is Professor of International Law, UWI, Mona.