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Exposing globalization’s dark side

by Jorge Heine and Ramesh Thakur

WATERLOO, Ontario — The pronouncement of “the end of history” may have been a tad premature, yet, in a flat world, globalization — the intensified exchange of goods, services, capital, technology, ideas, information, legal systems and people — has brought “the end of geography” closer.

For many, globalization is both desirable and irreversible, having underwritten a rising standard of living throughout the world. Others recoil from it as the soft underbelly of corporate imperialism that plunders and profiteers on the back of rampant consumerism.

Globalization is not uncontrolled. The movement of people remains tightly restricted. The flow of capital is highly asymmetrical. Each year, for every $1 of aid money over the table from rich to poor countries, the West gets back $10 of ill-gotten gains under the table and, for good measure, lectures the rest on corruption.

The benefits and costs of linking and delinking are unequally distributed. Industrialized countries are mutually interdependent. Developing countries, largely independent in economic relations with one another, are highly dependent on industrialized countries. Brazil, China and India are starting to change this equation.

The deepening of poverty and inequality — prosperity for a few countries and people, marginalization and exclusion for the many — has implications for social and political stability among and within states. Wage shares have fallen, profit shares have risen, and capital mobility alongside labor immobility has reduced the bargaining power of organized labor. Assets and incomes are more concentrated.

The rapid growth of global markets has not seen the parallel development of social and economic institutions to ensure balanced, inclusive and sustainable growth. Labor rights have been less sedulously protected than capital and property rights, and inequitable global rules on trade and finance produce asymmetrical effects on rich and poor countries.

Many developing countries were worried even before the global financial crisis that globalization would impinge adversely on economic sovereignty, cultural integrity and social stability. “Interdependence” among unequals translates into the dependence of some on international markets that function under the dominance of others. The financial crisis confirmed that absent effective regulatory institutions, markets, states and civil society can be overwhelmed by rampant transnational forces.

Globalization has also let loose the forces of “uncivil society” and accelerated the transnational flows of terrorism, human and drug trafficking, organized crime, piracy, and pandemic diseases. This is the subject of a new book just published by the United Nations University Press, “The Dark Side of Globalization,” that is edited by Jorge Heine and Ramesh Thakur.

What can be done to accentuate the positives and mute the negatives of globalization? Its outright rejection and a retreat into autarky is neither practical nor desirable: Who wants to be the next Myanmar or North Korea? Equally, though, who wants to be the next Iceland, Greece or Ireland? The notion that endless liberalization, deregulation and relaxation of capital controls will assure perpetual self-sustaining growth and prosperity has proven to be delusional.

Finding the right balance between openness and regulation requires keeping a watchful eye on transborder crimes that thrive in the interstices of the national and the international. Illicit trade, worth $1 trillion to $3 trillion and accounting for 10 percent of global economic product, could be growing seven times faster than legal trade.

In Africa, home to 36 of the world’s 50 least developed countries, state weakness often has opened the door to transnational crime and terrorism. The following pathologies are particularly prevalent across Africa: illegal exploitation of mineral resources; ivory poaching; terrorism; the drug trade; illegal migration; and human trafficking, gun running and money laundering. International crime syndicates exploit government weaknesses to make huge profits. Illegal migration and money laundering rob the state of valuable human and material resources, in a region that desperately needs them.

A different kind of challenge is posed by insurgencies that often thrive as a result of the inequalities exacerbated by globalization. The “development dichotomy” explains why dramatic national-level progress in India has gone hand in hand with an ever greater gap between the prosperity of urban, middle-class Indians and the squalor of villages where most Indians still live. Uprooted from ancestral lands and unable to adapt to the demands of a modern economy, aboriginal populations (Adivasis) often see revolutionary violence as the only hope for redemption. The Indian Maoist insurgency also has parallels in neighboring countries, especially Nepal.

Sri Lanka’s Tamil Tigers may well have been one of the most globalized terrorist movements anywhere. Part of the reason for their considerable, if ultimately transient, success was the effective way they relied on the global diaspora to obtain resources and marshal political support for the Tamil cause.

Jihadists too have excelled at using modern communications technology to promote their cause and foster their objectives, building on the link between the drug trade and terrorism pioneered by the CIA in Southeast Asia, Central America and Afghanistan. They have perfected into an art form the international transfer of funds in ways that are essentially untraceable, by relying on ancient mechanisms that replicate the old-fashioned way Osama bin Laden gets his information — through pieces of paper brought to him by hand by loyal messengers — which is one reason he remains at large.

No single state can disrupt, dismantle and defeat global criminal activities by itself. Yet the proliferation of uncivil forces has not seen a matching growth in global governance mechanisms to regulate them.

One response to global governance gaps has been regional and inter-regional governance that enhance state capacity to combat uncivil society. The sharing of expertise, institutions, policy tools, personnel and other resources can go a long way in stemming the tide of interregional criminal activities.

Human trafficking, especially of women and children, is among the darkest sides of globalization, turning human beings into commodities bought and sold in the international marketplace. Civil society organizations work with states and international organizations to cope with this nefarious activity and report on those involved in it.

The growth in transnational networks of global uncivil society threatens state institutions and civil society worldwide. Collaboration among actors at all levels — local, national, regional and global — will be required to soften the harsh edges of globalization and shrink its dark side into extinction.

Jorge Heine and Ramesh Thakur are professors of political science, respectively, at Wilfrid Laurier and Waterloo universities, Canada.