In “The New Rules of the Game” episode of the “Commanding Heights,” it asserts that trade in the context of globalization is uncontrollable. It said that the governments in the third world countries should adapt to the fast developments or else their economies will collapse. The documentary made it appear that after the fall of communism, capitalism flourished through free trade that caused governments’ economies to thrive. Although it presented that the system has further widen the gap between the rich and the poor, it did not suggest solutions that will control the unpredictable state of world finance. It appeared that there is no alternative to the neo-liberal policies of the world trade.
I do not agree that governments in the third world or what they renamed as “emerging markets” flourished when they opened their markets to free trade. I say, it has only benefitted the Western countries and push down the emerging markets into deeper debts. Moreover, there is no genuine development if it is not felt by the biggest population which are the poor. An example from the film is the situation of poor countries in Africa that despite the fast changing technology in the global arena, the majority of the population live in a backward agricultural system. The children “snake miners” on the other hand are experiencing grave discrimination in selling stones that they mined. The film elaborated that one stone costs a thousand dollars in the world market but corporation that have control in the mine are buying it from the children at less than a dollar per stone. It is their resources and they put their lives into danger just to mine the said stones but the one who profited big time from it is the corporations. Globalization has developed the countries of the Global North leaving behind the countries of the Global South.
Yes, I agree that globalization did not cause global poverty but it made us more aware of it. It is because the gap is already unimaginable to bridge. The rich countries continue to become richer while the poor countries continue to be engulfed by dire poverty. Moreover, the policies of free trade only benefit the global north. For example, India has entered into a bilateral free trade agreement with the United States and they welcome the products of the said country in their local market. However, their textiles cannot penetrate the US market freely. They still have to pay the expensive tariff. Indeed, it is not a free trade. It is a managed trade with the global north in control.
In a very practical point of view, the worldwide financial recession in the 1990s is caused by overproduction and the lack of markets to sell the produce. The countries of the global north saw that when the poor countries open their markets through free trade, it will resolve the problem. The foreign aid for the countries of the global south became a big issue during the “contagion.” The collapse of the economies in Asia and Africa pave way for the acceptance of loan. The givers of loan appeared to be heroes of the economies that were in the brink of doom. One of the conditions however of the loan is free trade. The products western corporations penetrated the “emerging markets” while the “emerging markets” do not have anything to offer than their raw materials like natural resources and labor force.
In Asia, foreign corporations invest in extractive industries with the benefits of tax holidays, and cheap labor. They have ravaged the environment with their insatiable search for minerals leaving the poor countries to suffer the impacts of environment destruction. Call center corporations and textile industries of the global north have transferred their production operations in Asia that include India and China because of cheap labor. The labor situation in the poor countries is deceptive. In China, poor families were hopeful when the communist country opened its doors to globalization. More jobs were offered in the business districts. It has however resulted to massive forced migration with people leaving the county sides to apply for jobs in the cities and town centers. The families who have long been in dire poverty grabbed the jobs even if it were cheap. The labor force of the poor countries is working more than eight hours a day for the profit of foreign corporations. In the United States, there was also massive retrenchment of workers when the industries transferred operations for cheaper labor and the absence of labor unions.
In the context of globalization, the poor countries remain dependent to foreign aid that is not genuinely effective in uplifting their economies. On the other hand, the countries of the global north continue to mine profit even from the poorest countries of the world. The countries of the global south can no longer control their economy. It is the world trade organization (WTO) that is dictating their future. WTO controls how the poor countries spend their loans. When they say, the government cut its spending; the said government will do it. In many countries in Asia, poor sectors of the population had been revolting against their governments because of budget cuts to basil social services. The film asserts that dissent arise because of the world financial crisis. But I say dissent arises because of the unequal distribution of wealth. The existence of the world financial crisis is because the world’s wealth is concentrated in the few giant corporations.
The film appears to have its bias on the globalization as the only way to development as long as the emerging markets can follow. I would say that there is no true development when only few corporations of the global north benefit from the trade. There is no real development when a few individuals have assets amounting to billions of dollars while more than half of the world’s population struggle to live for less than one dollar a day. Genuine development will only arise when the world’s wealth is redistributed and the giant corporations that amassed profits from the resources of the poor countries pay. Genuine development will arise when a new set of rules will be in place. It will be a set of rules that will not leave anybody behind. It will be a just and equitable development and globalization and free trade are surely absent in that rules of the game.
Kofaeconomics. (2012, May 31). Commanding Heights: The New Rules of the Game. [Web video clip]. Retrieved from https://www.youtube.com/watch?v=vYf6gn_x-Zk