Globalisation and its effects on the MENA region. Influence on the process of democratization
Globalization describes the process of worldwide interlinkage between not only companies, but also different governments or individuals, regarding a large variety of fields, like the business world or cultural diversity for example. It is driven by the international exchange of labor, goods, and technological innovation, while the flow of information also plays a large role in the process. The effects of Globalization are very complex and undoubtedly not only positive, as many people have to suffer for the great success of others that Globalization allows and promotes.
This shows in the phenomena of free trade, open borders, and the relocation of production in different countries, where labor is cheaper and more effective, for example. It allows customers to buy any goods at any time, while also being able to base their purchase decision on the price of the available product from different providers for instance.
Table of Contents
2. Influence of Globalization on Western countries
3. Aspects of Globalization in the MENA-Region
4. Influence of Globalization on the process of democratization
5. Possible positive effects of Globalization on the MENA-Region
6. Possible negative effects of Globalization on the MENA-Region
7. Conclusion and suggestions for further procedure in the MENA
8. Works Cited
The phenomenon of Globalization has been on the uprising for nearly two centuries now. It does not only affect the economically strong countries, like the United States or China for example, but has also always had a direct impact on countries with a weaker financial system, like those from the Middle East and North Africa (MENA) Region for example. In order to analyze the effects of Globalization on the MENA-Region, we need to take a look at how the process of Globalization works and how it shows in the economic growth of different countries. So, what exactly is Globalization?
Globalization describes the process of worldwide interlinkage between not only companies, but also different governments or individuals, regarding a large variety of fields, like the business world or cultural diversity for example. It is driven by the international exchange of labor, goods, and technological innovation, while the flow of information also plays a large role in the process. Globalization represents affairs that “compact the world into a unified, global space” and causes “new developments in different areas of the human life” (Nikfar 2).
The effects of Globalization are very complex and undoubtedly not only positive, as many people have to suffer for the great success of others that Globalization allows and promotes. “As with major technological advances, globalization benefits society as a whole, while harming certain groups” (Kolb, 1). Globalization represents a process, where “people are so integrated that vents in different parts of the world mutually effect one another” and it “reduces the importance of geographical borders and intervals” (Nikfar 2). This shows in the phenomena of free trade, open borders, and the relocation of production in different countries, where labor is cheaper and more effective, for example. It allows customers to buy any goods at any time, while also being able to base their purchase decision on the price of the available product from different providers for instance. Globalization also “encourages each country to specialize in what it produces best using the least amount of resources”, which portrays a phenomenon known as “comparatives advantage” (Kolb, 1). This shows that Globalization can be profitable for everyone who wants to become involved in the process.
In this work, to be able to analyze the effects of Globalization on the MENA Region the best way possible, I am mostly going to focus on the economic globalization rather than cultural or social Globalization. Economic Globalization, as the process of “greater economic independence among countries”, can be seen in the increasing number of “cross-border trades in goods and services, the increasing volume of international financial flows, and increasing flows of labor” (Fischer 3).
While the MENA Region can be seen as an “economically diverse region” due to the “different levels of per capita income” (Abed & Davoodi 1), its economic status mostly depends on the oil wealth in its different countries. The region has been focusing on oil production as the main source of income in the economic sector, after a “sharp increase in oil prices in the 1970s”, which the MENA Region “benefited immensely from” (Abed & Davoodi 1). But the wealth and the international reputation that the region gained through its monopoly position in the oil production sector, still doesn't even come close to what other countries were able to achieve financially and socially while using the consequences of Globalization to their advantage. But why is that? Why did the MENA- Region “underperform” since the 1070s “in contrast to other developing countries” and thus wasn't able to “reap the full benefits of Globalization and world economic integration” (Abed & Davoodi 3)?
2 Influence of Globalization on Western countries
In order to answer the question of why the MENA-Region could not benefit from Globalization as greatly as other countries, we need to clarify how Globalization has been affecting Western, economically stronger countries at first and how they have been able to make it profitable for them and society as a whole.
The United States of America have always been one of the world leaders in the economic sector and many effects of Globalization have allowed them to solidify their position in the worldwide market even further. They can even be seen as “the leader of globalized stats” (Ozdemir 13). Newfangled possibilities, like being able to outsource manufacturing or service jobs to lower-cost locations, where workers receive lower salaries and have less rights to job benefits, allowed the companies from the USA to maximize their profit and contribute to the national economy in the most efficient way.
Globalization has also managed to introduce products like a mobile phone or a computer, which were previously only affordable to only a minority group of people, as a common thing to have in most households. This is due to the fact that Globalization has played a large role in the reduction of “high inflation rates in Western economies” (Erixon 2), allowing customers to get more worth for their money. It is also partly responsible for the reduction of “gender wage discrimination” in the occupational fields and the improvement of the “quality of management in firms and the working conditions for people” (Erixon 2), thus making the working environment better for a lot of people in Western countries
Yet, a problem which has been occurring more frequently lately in our ‘Globalized World', is that, due to the new possibilities of outsourcing, companies from the USA often move their headquarters overseas in countries, where they need to pay less money for taxes, which has a negative impact on the economy in the USA, because of a missing amount of tax income.
According to statistics of the World Bank, the “US trade grew to levels exceeding a third of its GDP” (Kolb, 1), which underlines the impact of Globalization on international trade and agreements like free trade or open borders and thus on the US economy. This can also be seen in the fact that the import taxes in many countries, especially the USA, have dropped “considerably post-World War two” (Kolb 1).
While the technological advancements in the labor sector allow companies to produce goods the most efficient way possible, Globalization also has a negative influence on the US economy in so far as it has “contributed marginally to rising US wage inequality”, which can be traced back to the fact that this new technology is “reducing demand for certain low-and middle-wage workers and increasing demand for high-skilled, higher- paid workers” (Kolb 1). This issue can not only be found in the USA, but also in many other industrial countries, where most of the jobs rely on manufacturing, and is one of the main negative effects of Globalization.
This clearly shows that, although Globalization comes up with a lot of positive effects on countries with a strong economy, even those countries, like the USA and its people for example, still suffer from some negative consequences. But why is the MENA-Region not able to capitalize from the opportunities like the relocation of production or free trade that opened up through the process of Globalization and are facilitating the economic growth of many Western countries?
3 Aspects of Globalization in the MENA-Region
The MENA can not only culturally, but also economically be seen as a diverse region, which covers many countries with different economic approaches, due to their situation of labor and resources. The region can be defined as the “non-European parts of the old Ottoman Empire, plus its respective western, southern, and eastern peripheries” (Henry 9). It includes “resource-poor” countries with “abundant labour”, like Jordan for instance, but also “labour-importing and resource-rich” (Muhammad et al. 96) countries, which are mostly the oil-production ones, like Saudi Arabia or Bahrain. Globalization allows these countries to recruit workers or to import resources from all around the globe.
Due to the new economic opportunities that were created by the process of Globalization, many of the governments from the MENA-Region “have adopted ‘a new model' which is more reliant on trade and private investment” (Muhammad et al. 96). They have been adjusting their economic strategies, if not as much as countries like China or the USA, to the modern worldwide order, which has been making the global players focus heavily on trade and exchange of labor in order to maintain a stable economy.
Another important economic factor that especially plays a large role in a ‘Globalized World' is the “Human capital”. It can be measured on the degree of school education or job market experience for example and has always been “recognized as an important factor for the location of economic activity”, especially in an “increasingly globalized economy characterized by high capital mobility” (Abed & Davoodi 22). Although, over the 30-year long timespan from 1970 to 2000, the MENA-Region “has made significant progress in increasing its stock of human capital” by being able to decrease the “segment of the population over 25 years of age with no schooling” from “80 percent in 1970 to 46 percent in 2000” (Abed & Davoodi 22), the amount and quality of human capital still lacks strongly in comparison to other countries. As Andrew H. W. Stone clarifies in an abstract on “Globalization and Firm Competitiveness”, there is non-arguably still a “regionwide need to strengthen investment in human capital, and to improve the incentives for private firms to invest in worker training” (Fawzy 74) in the MENA- Region.
Although “globalization and its use in economic development have profound importance both for the region's stability and the global economy” (Ozdemir 5) already, the MENA- Region still is considered one of the least globalized parts of the world. This might be because of its anti-democratic setting and the different governments' mostly rejecting the idea of Globalization since it would probably hurt their power and authoritarian positions.
4 Influence of Globalization on the process of democratization
Globalization has always “challenged the continuity of dominant power relations” in the MENA-Region in the near past, by “restricting their capabilities”, which has threatened the authority and dominance of the governors” and by “supplying the proper facilities and platforms” (Nikfar 5) for citizens to move the states towards a more democratic way of being governed. There has also been a strong influence on the MENA-Region by other global competitors like the USA or the European Union, who “offered a series of reform initiatives that ideally would lead the Middle East to have more prosperity and democracy” (Ozdemir 14), which wasn't really accepted well by the governments of the countries in the MENA-Region. They didn't want to lose their authority and governmental power, thus hindering the process of democratization in the region quite heavily.
While the governmental institutions in the MENA-Region might have blocked most of the attempts by other countries to introduce democratic processes in the Middle East, Globalization still had an incredible impact on the fight for democracy. Due to the effects of Globalization, all the people in the MENA-Region, who have access to the internet, are capable of receiving information and news from all around the world, without only being able to see the governments agenda. Thus, they are able to organize protests for instance, to fight for their rights and a democratic state system.
Globalization also laid the foundation for the Arab Spring Revolution, a series of rebellions and protests against the government in the early 2010s in countries of the MENA-Region, like Tunisia and Egypt. Social Media, as one of the co-creations of Globalization enabled the participants and activists of the revolutions to communicate, and brought different people, who were aiming for the same change, together. Platforms like Facebook allowed their worldwide users to show support for the protestors in the MENA-Region. Although the government tried to stop the people from using social media, they could not manage to do so, as it was too much of a force.
Without Globalization and it being responsible for an interlinkage of the people from around the globe, there wouldn't be a worldwide news-flow or Social Media platforms. This displays the strong influence of Globalization on the process of democratization, not only in the MENA-Region, but also around the entire world.