Globalisation on Jamaica Essay

1. Causes of globalization affecting Jamaica: * For Jamaica, the main reason for globalization was darker. The energy Crisis of the early 1970s forced the Jamaican Government to take out loans from the International Monetary Fund and the World Bank to cover the rising expenses of fuel based imports. However they weren’t interested in cooperating with Jamaica in developing native infrastructure and resources, so they enforced a short-term repayment of the debt, budget cuts in areas supporting long term development, and removing all trade barriers that favored local industry and farming. Thus, this started the forceful movement of â€Å"globalization† in Jamaica. Three negative globalization cases with causes and effects: * The first one involved Jamaica’s dairy industry. Due to free trade agreements between the United States and Jamaica, dairy farmers in Jamaica had to directly compete with American farmers without any subsidy aid from the government. This resulted in the influx of cheaper powdered milk into Jamaica from the USA, destroying its entire dairy industry altogether and farmer selling cows to the slaughterhouse at a loss. The effect of globalization on Jamaica in this case, only fostered dependency on other nations rather than focusing on its own economic development. * The second case is caused by the â€Å"Banana Wars† between Europe and America. Britain had a long-standing trade agreement with Jamaica that favored their banana exports as a way of compensating for their legacy of colonialism. This brought about complaints to the World Trade Organization (WTO) by the USA backed up by large agricultural multinational corporations like Dole, Chiquita and Delmonte who at the time already had 95% of the world’s banana trade, citing it as unconstitutional and against WTO’s policy. The ruling of WTO in USA’s favor and an international penetration of trade into Jamaica’s biggest banana market ensured yet another downfall upon one of the country’s most profitable industries due to the lack of production efficiency. * The third case came about due to the increasing economic stagnation and poverty in Jamaica. To combat this, the government agreed to create Free Trade Zones in Kingston where governmental enforcement does not apply. Ships would unload materials cut in the USA and Jamaican workers would sew garments in huge textile assembly plants near the docks for Hanes, Brooks Brothers and Tommy Hilfiger at $30 per week. These wages were not enough to sustain their standard of living and when protests emerge, the owners simply closed down their shops and relocated to Mexico, where a cheaper work force can be found. This is an example of the â€Å"race to the bottom† stemming from the effects of globalized capitalism. As a result, it leaves Jamaican citizens with lose or lose situation to either comply with unfair demands of employers or risk unemployment. 2. 3 examples in making Global Labour fair * In order to make Global Labour fair, three sectors of society, government, multinationals and civil societies must work together using their own sets of expertise. * The first example involves the Clinton administration regarding their stance on trade in 1996. The government provided the resources and the stage to gather civil societies such as human rights NGOs and trade unions, industry leaders, and its own department of labor to discuss about responsibilities in Global Labour. Civil societies present at the meetings gave ideas and insights about developing a global code of conduct in making labour fair as well as NGOs such as the Fair Labour Association provided awareness to the public about this matter. Then multinationals and industry leaders collaborated by implementing this code of conduct throughout their supply chain, terminating contracts from their suppliers if specific labour conditions are not met. Thus forcing the improvement of Labour standards. * The second example involves the New Zealand Recognized Seasonal Employers Scheme (RSE) to relieve seasonal shortages in the NZ horticulture and viticulture industry through an overseas labour force. The NZ government collaborated with other governments of the Pacific Island Regions to provide the legal requirements and immigration processes to facilitate the influx of workers. Businesses provide employment opportunities to the migrant labour force. On top of that, the government established an evaluation board which includes NGOs such as The New Zealand Council of Trade Unions to monitor key activities, evaluate outcomes and ensuring equity and respect for migrant worker rights. The collaborations between this three sectors of society (government, businesses and civil societies), made sure the benefits of global trade between NZ and Pacific Island Countries are mutual. * The last example includes the consumer goods multinational, Unilever who has taken significant strides in sustainable living regarding the 2001 mercury poisoning in Kodaikanal, India. NGOs such as Greenpeace were responsible of raising the issue to Unilever about scrap glass containing mercury from a Unilever thermometer factory being sold to a scrap dealer located nearby. This was a breach of Unilever’s procedures as workers’ health and then environment could be adversely affected. Unilever immediately closed the plant and removed the glass scraps and the soil beneath the scrap back to the factory. After negotiations, the Indian and US governments were responsible for providing Unilever legal permits for transporting and recycling these hazardous materials in the United States. The commitment of Unilever in ethical choices combined with the cooperation of civil societies and government organizations help prevent a potential fatal disaster that protected the welfare o f international labour. 3. Joseph Stigliz’s plans or conditions for making globalization work: * Eliminating or reducing poverty through more foreign assistance from advanced industrial countries to 0.7 percent of their GDP. Although I feel it’s a good idea for countries to redistribute wealth to disadvantaged nations in order to help make globalization work, I also think that imposing a general level of GDP assistance without consideration of a country’s individual economic conditions is unfair. In recent years, we saw the EU struggling with the financial collapse of Greece and the spread of investor uncertainty throughout its member nations. In this case, I felt that a reduction of foreign aid to focus on own problems is understandable because if developing nations lose a big trade partner such as the EU due this matter, results will be worse off in the long run for both parties. * Stigliz also suggested that this foreign assistance should be given in forms of grants instead of loans as well as and an altered approach to conditionality. I agree with this Idea as we saw earlier with Jamaica, most developing countries face the same problem of debt. Jamaica was forced by the IMF and the World Bank to open up trade barriers which forced dependency on other countries and the destruction of local industries. In addition to that, most governmental spending as well as any foreign earnings from exports is used to service this debt and its ever-growing interest instead of investing in the country’s long term development. This severely limits Jamaica from restarting its own economy, making globalization benefits one sided. * Making trade fair is also on Stigliz’s agenda. For example, removing trade tariffs of developed countries before imposing them on disadvantaged countries. I agree upon this idea and my argument can be built again based on the collapse of Jamaica’s agriculture industry. Potato, onion, carrot farmers have to directly compete with USA on a level playing field by removing trade barriers. However whether this situation is equal is questionable since the USA still maintains its large agricultural subsidies to aid its own farmers forcing down prices of their own produce. This renders Jamaican farmers uncompetitive due to high borrowing costs and lack of governmental aid. I feel this is unfair as this undermines the living standards of developing countries such as Jamaica and advanced countries only benefit from the trade. Lowering trade tariffs in developed countries first allows developing countries a fair chance to adapt to changes in the economy. * Stigliz acknowledges the limitations of liberalization are important. This is shown with the Washington Consensus based upon the concepts of liberalization forged between the World Bank, IMF and U.S Treasury which focused on the downscaling of government, deregulation, and privatization. Argentina who followed the Consensus initially had expansion of investment and export volumes. However what followed was a disappointing increase in unemployment, poverty, inequality, crime and violence. I feel that the reason the consensus failed to revitalize the economy was that they employed a one-size-fits-all mentality. There was an overemphasis on GDP measures which was inefficient in measuring living standards, growth sustainability and equality. Thus these factors are ignored and contributed to the failure of the policy. Therefore, I believe that understanding the local market, government and their individual economic problems apart from just imposing liberalization is crucial in order to make globalization work. * Stigliz mentioned protecting the environment is a growing concern for globalization. The success of economic development in China and India increases the need for energy usage and the use of resources. I agree with Stigliz’s notion that the world’s environment would not able to sustain this change. This year, there was a public outcry of Beijing’s air pollution when the Air Quality Index in the city saw a staggering reading of 755. As a comparison, any reading above 100 is considered hazardous for sensitive groups. This is attributed to the exponential increase in industrial activity in China. Although China benefits from an economic boom, I feel people must realize the cost of this endeavour to its citizens as it is irresponsible to ignore the negative health effects it causes. Enforcing people to work under these conditions is no different to taking advantage of unfair Labour consistently found within the poor working conditions in developing countries.