Sustainability, Globalization and Development
Definition
Globalization
Process of increasing global interconnectedness through trade, investment, culture, technology, and population movement. Complex interdependence (Nye).
- Debated Effects:
- Positive view: Drives economic growth, reduces poverty.
- Negative view: Exploitation, inequality, environmental harm.
- Four Key Trends (Etherington):
- Increased flows of commodities and people:
- Global migration (air travel), containerization (90% of goods via sea).
- Example: Port of Rotterdam adds €63bn to Dutch GDP (8.2%).
- Expansion of financial activities:
- Closer banking integration, mobile finance.
- MNC activities and financial crises spread quickly globally (e.g., 2007-09 crisis).
- Development of communication and networks:
- Improved information access, outsourcing.
- Risk of cultural homogenization.
- Increasing disparities:
- Global North and emerging middle classes benefit most.
- Poorest regions often excluded, increasing inequalities.
- Increased flows of commodities and people:
Note
- Globalization's benefits and costs are unevenly distributed, integration can simultaneously support and undermine sustainable development.
Case study
China’s Belt and Road Initiative (BRI)
- Background:
- China’s BRI, launched in 2013, aims to connect Asia, Africa, and Europe via major infrastructure projects (roads, railways, ports, digital networks).
- Trend 1: Increased flows of commodities and people
- Railways (e.g., Yiwu-London route) increase global movement of goods/people.
- Example: Port of Gwadar, Pakistan boosts regional trade and local GDP.
- Trend 2: Expansion of financial activities
- Chinese state banks provide substantial financing, creating global financial interconnectedness.
- Example: Sri Lanka’s Hambantota Port debt crisis demonstrates financial risks involved.
- Trend 3: Development of communication and networks
- Digital connectivity projects by companies like Huawei significantly enhance global communication.
- Example: Improved internet access in East Africa through Chinese-built networks and cables.
- Trend 4: Increasing disparities
- Unequal benefits: Strategic and economic gains for China and selected partners; others face debt burdens and limited autonomy.
- Example: Malaysia cancelled some BRI projects citing concerns over debt and uneven benefits.
Self review
- How does globalization impact economic inequality both within and between countries?
- Can globalization effectively promote sustainable development, or does it inevitably lead to environmental degradation?
- In what ways does the interconnectedness of financial systems pose risks to economic stability globally?
