Join Our Groups
TOPIC 2:
GLOBALIZATION
The Concept and
Aspects of Globalization
Globalization
is defined as the increasing process of interdependence and interconnectedness
between different political, social and economic components of the world. It is
the way in which the world in seen as the global village. Globalization becomes
a worldwide system as it integrates people across national borders, making the
world operate as a village and therefore enabling free movement of goods,
capital and information.
Globalization is a result of man's progressive nature of change. It can be
traced far back from the 16th C - the period when European traders and sailors
interfiled overseas trade through mercantilism. From the 16th C on-wards, the
shape of global migration was transformed by the Europeans and Americans. The
first great wave of the early modern migrations involved forced movements of
the Trans-Atlantic Slave Trade which shifted about 9-12 million people. By the
mid-19th century, this trade linked West Africa with the external world through
enslaving Africans.
The integration became more pronounced during the Second World War. The
Europeans economies in the 1950's and 1960's drove a renewed epoch of global
migration that that turned Europeans interest to overseas nations where they
were thought to be acheap source of wealth, despite the oil shocks of 1970's and
the closure of many Europeans peripheries.
During the1970's, the wave of migration wasenormous. Labour added the new
pattern of regional migration within Africa, Latin America and East Asia.
However, from the 1990's, migration intheglobal society has been intense, due
to the advancement of science and technology, crisis'sand disintegration in the
developing world. The interconnectedness has led tothe development of the
communication technology and space explorations.
DRIVING FORCES OF GLOBALIZATION
1. Advances in Science and Technology. The development of science and technology has contributed greatly to the
development of global interconnectedness, interactivity and the integration of
the world societies into asingle global village. Through science and technology,
machines which simplify human activities like communication have been
developed. The development of science and technology marked the initial stage
of integration of people from far distances. Education process marked the point
of no return towards the integration of different people from different nations
and cultures in the world. From the 20th C, revolutionized education marked the
intensive integration of people in universities, colleges and international
conferences. Through interaction and integration, most people have adopted
culture from other people and thus the beginning of cultural liberalization.
2. Socio – political
liberalization. Liberalization
was derived from the liberal democratic principle. Liberalists believed that
the freedom of an individual is the main principle of life that people are
supposed to have. The freedom of individual has fostered the development of
globalization in the world. Social liberalization is widespread due to the
advancement of information and communication technologies like television,
e-mail, cellular phones and the internet.
3. Political integration of politics in the global scale has fostered the development of globalization.
National governments have been ultimately responsible for maintaining the security
and economic welfare of their citizens as well as the protection of human
rights and security of the world. Political activities increasingly take place,
from national to global level. Examples include democratization process,
multiparty democracy, formation of NGOs and Civil society Organizations (CSO).
 |
| Globalization |
ASPECTS OF GLOBALIZATION
Globalization as a economic, political and social phenomena is associated
with the following major aspects:
1. Information and Communication Technology. Globalization is characterized by the advancement of information and communication technology. This sector expanded drastically within the last few years, specifically the last quarter of the twentieth century. This period witnessed the global distribution of media images through computers, screens, radio, newspapers, televisions and mobile phones. Development of information and technology goes hand-in-hand with the rise of information companies such as Microsoft, Intel, Compaq and Cisco. The rise of these companies indicates the quick advancement of technology.
1. Information and Communication Technology. Globalization is characterized by the advancement of information and communication technology. This sector expanded drastically within the last few years, specifically the last quarter of the twentieth century. This period witnessed the global distribution of media images through computers, screens, radio, newspapers, televisions and mobile phones. Development of information and technology goes hand-in-hand with the rise of information companies such as Microsoft, Intel, Compaq and Cisco. The rise of these companies indicates the quick advancement of technology.
2. Movement of People. There has been an increase in the movement of people from one country
to another. These may be tourists, migrants, refugees, business travelers and
diplomats. Most migrations occur between developing countries and developed
countries. There is also a flow of migrants to developed economies from
developing countries, making the world more interconnected.
3. Spread of Ideas and Ideology. Spread of knowledge, ideas, information and ideologies has been
an integral aspect of globalization. This may be different physical capital,
technical skills and production methods, managerial skills, marketing skills and
global economic policies. The concept of multiparty and green peace are examples
of political ideologies that have acquired international dominance.
4. Finance. There is a global flow of
money often driven by the interconnected currency market stock exchange, as
well as commodity markets. The flow of money is also facilitated by international
financial institutions such as the IMF and World Bank, assisted by multilateral
Banks which have branches in almost every part of the world. Thus, this flow
allows for smooth money transaction all over the world.
5. The Rise of Intellectual Property. This refers to items including patents, copyrighted movies, compacts discs,
advertisements and financial services.
6. Free Market Economy. Globalization has brought about the integration of an international
political economy through inter-financial institution policies and
international trade. Free market (Neo liberalism) has become a dominant
economic ideology in the world. The price is determined by the market.
7. The Structural Adjustment Program (SAP). SAP refers to the list of budgetary and policy changes required by the
International Monetary Fund (IMF) and World Bank (WB) for developing countries
to qualify and apply for a loan. This conditions typically include reducing
barriers to trade and capital flows, tax increases and cuts in government
expenditure. All sub – Saharan African countries south of the Sahara including
those in east, central and southern Africa - excluding the Republic of South
African - were obliged to adopt the policy to solve the international problems
and reduce the heavy debt burden that seemed to increase rapidly between 1970s
and 1980s.
Objectives of (SAP)
1. To introduce tax reforms and eliminate
quantitative restrictions in the trade sector.
2. To rationalize the public sector and enhance
employment opportunities.
3. To improve the public investment program.
4. To introduce agricultural sector reforms, market
liberalization and institutional reform.
5. To improve sectoral resource allocations,
mobilize domestic resources and restore growth ofthe economy.
6. To devalue local currency as a means of
monitoringexchange rates and therefore balance the domestic currency price.
7. To reduce poverty by improving the living
standards of people in lesser developed countries.
Reasons for Structural Adjustment Program Formation
1. The GDP declined by nearly 20%. In 1987, it
dropped by 4.7%.
2. Export earnings fell by about 40%in 1986. In
1987, it continued to decline due to price falls in the World market.
3. Import purchases fell by about 40% from 1981 to
1985, due to the presence of tariffs.
All in all, eventssuch as theworld economic crisis, the oil shock of the
1970's, the Kagera war and failure of the government to provide social services
were among other factors thatnecessitatedTanzania's adaptation of SAP as part
of their economic recovery efforts.
Principles of SAP
1. Elimination of tariffs, reduction of taxes and
promotion of the role of private operation in export trade, as well
asliberation of domestic retail and whole world sale trade (in final goods and
capital).
2. Lowering explicit and implicit taxes on the
agricultural sector, raising real producer prices while reducing subsistence
taxes on imports and liberalization of export crop marketing.
3. Removing restrictions on collective reforms and
wage setting practices in order to attain better life of people in the LDC‟s.59
4. Parastatal privatization and reform programs,
financial sector reforms, and improving public sector management through civil
service reforms, all intended to consolidate and ensure effective performance
in trade sales and joint ventures.
5. Governments to withdraw from providing free
education and agricultural incentives. Instead cost sharing to be implanted in
all social services.
6. The agricultural sector to be privatized to
minimize government expenditures on it.
Achievements of SAP
1. The formation of adjustment programs and
policies with the intention of economic sustainability, efficiency and growth
has raised the living standards of people in their respective countries through
the privatization policy.
2. Agricultural productions, exports, investments
and consumption witnessed increases in strong reformed countries.
3. The average annual export growth rates rose by 5
– 6 percent in strong reforms and only by about half ½ % as much in non-
reforming countries from the early 1980s to 1985 – 1987.
4. The invest performance improved mostly in strong
reforms, while it went up slowly in non – reforming countries, in years between
1980 – 1984 and 1985 – 1987.
5. The increase in the growth rates on real
consumptions in 1986 and 1987 compared to 1980 – 1984, has been three times as
great in reforming countries.
6. Exchange rates grew in some of African
countries, for example, Nigeria in 1980 - 1984, prices and exchange rate was
86%.
7. Today, people have a choice on commodities. They
have the ability to choose what to buy and at what cost. It is different from
previous situations; when people were buying only what was available in
themarket without choice. For example, all Tanzanians can buy sugar from
Mtibwa, Kagera or Kilombero. People have a choice on the kind of commodity, the
price and quality of items to buy. This is due to privatization which allows
different companies to engage in business of the same kind.
8. No more bureaucracy. Before SAP establishment in
Tanzania, there was bureaucracy in offices that provide public services such as
banks, posts, telecommunication, transport, etc. But with SAP, bureaucratic
actions in offices have ceased as a good number of companies are engaging in
the same business and therefore competing for customers. This has allowed
thecustomer to be attended effectively. With SAP, it is “customer first”
practice.
9. Politically, SAP has made many third world countries
democratic. Among SAP conditions, good governance is insisted. Therefore,
people have freedom of speech, decision making and accountable in their
development. This has been made possible through multi-partyism process which
intends to alloweveryone topractice democracy by participating in decision
making for the betterment of their country.
Failures of SAP
1. SAP has failed to implement most of its
objectives and principles to the developing countries and instead it
accelerated the rate of poverty in rural areas. This has come about due to the
fall of the agricultural sector which acts as the back bone of most developing
countries.
2. Economic diversification is still low due to
instability ofeconomis in which the capital earned per year tends to be
directed in different socio-economic issues.
3. Export capital and investment capital ratio
still low in developing countries, especially in Sub-Saharan African countries.
4. Agricultural and industrial products are still
unsatisfactorily produced due to improper investment and inadequate technology.
5. SAP has destructed local industries. This is due
to theborder-less policy which allows regional and international companies to
pour their commodities into the market. This has increased theavailability of
commodities produced and reduced their price,compared to local industryprices.
Therefore, the low price of commodities in the market hasresulted in the
failure oflocal industries to tradeeffectively. Theyproduce at high cost and
sell at high cost which result in a decrease inmarket and makes industries fail
to continue producing the commodities.
6. SAP has brought about user fee or cost sharing.
This has made poor people fail to get services. For example, user fees have
made people fail to get medication at hospitals. Also, it has made students
fail to continue with their studies. This is more evident at tertiary level
where students aregiven 40%, 60%, 20% or 80% of the total cost by governments
and demanded to pay the rest. This practice has made a good number of students
unableto continue with their university studies.
7. SAP has stratified societies into “know and know
not”. With SAP, people are making choices even in education. Poor parents fail
to send their students to school while the rich send them to quality schools.
The consequence of this is the creation of social classes of those who are
knowledgeable andare obviously going to be decision makers and those who do not
have knowledge andend up being poor.
8. SAP has brought about chaos and crisis. With the
introduction of multiparty democracy, many African countries are in chaos and
conflict. The conflict is between the ruling and opposition party. This is
evident in Zanzibar, Kenya, Burundi and Zimbabwe.
 |
| Poor Agriculture |
Possible
Solution to Each of the Challenges
1. State interventions: The state should act with regulatory framework. It should not control
but where possible should intervene. The state should make the market friendly
to all, i.e. buyers and sellers. Otherwise, without state interventions, the
poor will remain poor and the rich became richer and richer.
2. Priorities and preferences in privatization: Not all government institutions should be privatized. The government
should have priorities on what to privatize and why. Otherwise , privatize
everything can lead to lack of sovereignty and imbalance in market; which in
turn lead to failure of poor Tanzanians fail to get basic needs. This can be
dangerous for the betterment if national security and development.
3. Human capital should be developed. More schools offering sound and appropriate education should be
established. The curriculum should reflect SAP needs. This will make Tanzanians
compete in global market.
4. Effective tax collection: With SAP conditionalities, the government provides investors with tax
holidays. In order to make SAP to all stakeholders, no tax holiday is to be
provided to any62investors. Tax holiday has made the government fail to collect
revenue for development. Many investors have started making some manipulation
of changing the names and ownership of the investment. Therefore, No tax
holidays is to be offered unless otherwise there is a special circumstance to
be offered for specific investment.
5. Local or internal industries should be provided with
subsides: This will make the local
industries to complete in the market.Also, Low Developed Countries (LDC‟s)
should implement their integrations. They must produce and sell in their market
rather than the current situation where every country is producing as its stake
and selling in the world market at low price. Regional integration will make
more market for the local products. By integration, it will be easy for LDC‟s
to establish common more for the price of their products in the world market.
All in all, in order to fight out the
failure or challenges of SAP, LDC‟s should have state interventions, priorities
effective tax collection , develop human capital, internal effective resource
mobilization, provide subsidies to local entrepreneurs integrations of LDC‟s,
promote expert sectors, and make indigenous control their economy.
THE PRIVATIZATION PROCESS
Privatization refers to the policy of transferring
assets and activities of public sector to the private sectors to be owned and
operated by individuals.
Privatization is one of the results of Structural
Adjustment Programs which has been emphasized by the International Monetary
Fund (IMF), (World Bank (WB) and donors from abroad, particularly Western
countries like British, France, USA, Denmark, and Germany.The ongoing economic
crises of developing countries and dependency syndrome of these countries are
some of the factors that contributed to the formation of privatization.
i) However, the policy started in 1980‟s and gained
significance public notice at the global level during the same decade (1980‟s)
when Britain‟s Prime Minister Margaret Thatcher took deliberate and extra
efforts on economic sectors to restructure the prevailed condition in the
country.
ii) Under the provisions of the World Bank, governments
of developing countries began experimenting various forms of market reforms
including increased privatization out of public63services. Under this
situation, therefore, privatization gained wide spread interest and became an
acceptable policy, to government policy makers, service providers as well as
public planners.
The Objectives of Privatization
1. To create more market oriented economy where
those privatized firms will participate in the stock market.
2. To improve economy, productivity and efficiency
of the privatized parastatals.\
3. To secure and enhance access to foreign markets,
capital and technology through attracting managerial and technological foreign
investors.
4. To broaden and share ownership through the equal
provision of public services at all levels by individuals and the state.
5. To reduce the overwhelming and challenging
increase of the public debt. This is done by collecting tax from the private
investors and use part of the tax to service the foreign debt.
6. To preserve the goal of self –reliance.
Measures taken to Enhance Privatization in Tanzania
1. To improve the operational efficiency of
enterprises and their contribution to the national economy.
2. To reduce the burden of parastatal enterprises
to depend on the government budget.
3. To expand the role of the private sector in the
economy and permit the government to concentrate on social services like
health, education infrastructures.
4. To encourage wider participation in ownership of
private companies and management of business.
 |
| St Augustine University of Tanzania (SAUT) |
Advantages of Privatization
1. It has increased flexibility due to the
reduction of bureaucratic complexity and procedures in order to improve the
national economy.
2. It has increased efficiency in provision of
goods and services due to the competitive spirit in production.
3. Privatization has led to the improvement and
rise of competition among the existing organizations, hence brought about
better services.
4. It has met the demands beyond the current
government capacity. The private sectors encourage competitions which increase
the level of productivity and efficiency.
5. Privatization provides clients with more choice
of options where they can be more satisfied in terms of contracts, salaries and
work conditions.
Disadvantages of Privatization
1. Privatization has increased unemployment of the
indigenous people. This has been the case because most of the personnel are
from outside. When any public enterprise is privatized, it is accompanied by
massive redundancy of the previously local working personnel.
2. It has led to the fall in agricultural sector
due to the withdrawal of the government from providing the agricultural
incentives.- It has increased temptation to reduce quality of services in order
to reduce costs and maximize profit.
3. Privatization increases the rate of moral
erosion due to its policy of free trade. The private companies tend to import
all types of goods without considering the consumers. Such goods include
phonographs and other related firms or VCD/DVD which ruin the younger
generation morally.
4. Privatization policy increases the rate of
poverty to the people living in rural areas due to the decline in agricultural
production. Rural people depend on agriculture for the better quality of their
life.
 |
| Kilimanjaro Christian Medical Centre (KCMC) |
TRADE LIBERATION
Trade liberation refers to the reduction of the tariffs and trade barriers
to permit more foreign competition and foreign investment in the economy. It is
a term which describes the complete or partial elimination of trade barriers
such as quotas and tariffs. Trade liberalization is sometimes refers to as free
trade. Free trade is the unhindered flow of goods and services between
countries, and is a name given to economic policies and parties supporting
increase in such trade. It is a market model in which trade in goods and
services between or within countries flow unhindered by government – imposed
restrictions. Restrictions to trade include taxes and tariffs, and other
non-tariff barriers, such as legislation and quotas.
Free trade includes:
1. Trade of goods without taxes (including tariffs)
or trade barriers (e.g., quotas on imports or subsides for producers).
2. Trade in services without taxes or other trade
barriers.
3. The absence of trade-distorting policies (such
as taxes, subsidies, regulations or laws) that give some firms, households or
factors of production an advantage over others.
4. Free access to markets.
5. Free access to market information.
6. Inability of firms to distort markets through
government – imposed monopoly or oligopoly power.
7. The free movement of labour between and within
countries.
8. The free movement of capital between and within
countries.
DEMOCRATIZATION PROCESS
Globalization is associated with global political reforms under the Process
called democratization. The democratization process is assessed by looking at
the following principles:
1. Free and fair political competition. There is peaceful, free and fair competition between parties for the right to control the government. In order to control such competitiveness, there ought to be the following requirements. First, permanent party organization at the local and national level. No opposition party can exist without continuous and permanent struggle against the ruling party. The goals of these parties should not be linked with the personal interests of particular party leaders. Second there ought to be continuous contact at all levels of a given political party. Thirdly, there should be determination of party leaders to hold political office. Fourthly, there should be determination of the party to gain popular acceptance for its programs. Fifthly, there must be constant search for more members. Such requirements can exist only in a multiparty system. Therefore, mono – party system cannot be democratic. It is a rejection of democracy and it leads to dictatorship.
2. Tolerance. This is the ability to bear with something unpleasant or annoying. Tanzania is a pluralist society. This means a society composed of different ethnics, racial and religious group. In this society Africans form the majority, compared with the negligible non-African minority groups. The right of the small groups does not depend on the number of people in a group. The majority group has a duty to respect the convictions and ways of life of the minorities.
3. Citizen participation. Participation is the major role of citizen in a democracy. It is both their right and duty. Citizenship participation includes standing for elections, debating issues, voting on elections, gathering for community meetings, joining parties and organization, protecting and ways of life of the minorities.
4. Equality. In a democracy all people are equal. This means people are valued equally. They have equal opportunities. No one is discriminated against. Moreover, groups are free to maintain their different cultures, personalities, languages and beliefs. When the majority deny rights to or destroy their opposition, they also destroy democracy. A democracy is enriched by diversity.
5. Accountability. In a democracy, elected and appointed officials ought to be accountable to the people. They must make decisions and perform their duties according to the wishes of the people, not for their own interest.
6. Smooth transfer of power. In democracy there is a well established and transparent system of transferring power from one political party to another.Economic freedom: In a democracy people must have economic freedom. This means that the Government allows people to own private property and businesses. People can chose what work to do and can join trade unions. There should be free markets. The state should not control the economy.
7. Control of power abuse. In a democracy, elected and public officials are prevented from misusing their powers. The most common form of power misuse is corruption. This occurs when officials use public funds for their own benefit, accept bribes in order to render services, or exercise power illegally. Protection against abuse of power has been achieved through various methods. For example, having independent courts with power to take action against corrupt officials, allowing for citizen in elections, and checking police abuse of power.
8. Inclusion of a bill of rights in the constitution. A bill of right is a list of rights and freedom guaranteed to all citizens in country. Many democracies include a bill of right because it limits the power of government with good intention. It may also impose obligations to individuals and organizations.
9. The rule of law: In a
democracy no one is above the law, not even an elected president. This is
called the rule of law. It means every one must obey the law. If they violate
it they must be held accountable or liable. Similarly the laws must be equally,
fairly and consistently enforced.
10. Sovereignty. Only a sovereign nation can practice democracy.
Sovereignty means the freedom to decide and execute domestic and foreign
policies without interference from another country. Therefore a neo – colony
cannot exercise true democracy. Neo-colonialism means the control of a weak
country by a more powerful one. The subject country loses control of its
destiny. The master nation controls both the domestic and foreign policies of
the neo-colony. In other words, the weak country loses part of its sovereignty.
It loses power and freedom to make its own decisions. It loses the ability to
practice democracy too.
By considering the above principles, any country in the world is considered
to be democratic if it abides with all or most of the principles discussed
above.
 |
| Democratization in Tanzania |
ECONOMIC INTEGRATION
Economic integrations have been emphasized today due to globalization.
Economic integrations refer to the combination or grouping together of several
countries for the sake of cooperating in various undertakings to as to enjoy economic
benefits. It is aimed at increasing the benefits of international trade and my
result in political integration, which can be national or inter-state.
Economic integration is
classified according to the levels or stages of development as follows:
1. A Free Trade Area: This is the type of integration whereby countries remove all trade
barriers such as tariffs, imports and export quotas or devices, so as to trade
freely among member countries but each member country maintains unilateral
right to impose tariffs on goods from the rest of the world. (Non-member
countries).
2. A Custom Union: This is a
stage at which, in addition to having abolished trade restriction among the
member countries as in a free trade area, the members have a common tariff against
non-members (third countries).
3. A Common Market: In this
stage, on top of what takes place in customs union, there is a free factor
movement among the member countries. This means that capital and labour are
free to move within the region. The nationals (people from member countries)
can find employment in any member country. For example, in East Africa a person
from Kenya can go to work in Uganda or Tanzania and one from Tanzania or Uganda
can go to any other member country and work.
4. An Economic Community (union): This embodies all elements of the common market; in addition the
member countries institute joint ownership of certain enterprises like roads,
railways and so on. All economic policies in this stage are harmonised or are
common.
5. Total Economic Integration: In this stage, not only there is free movement of commodities and
other factors of production among the member states as in economic union, but
also there is a unification of monetary, fiscal, social and other policies. The
members can start using a common currency. In addition, there is a
supra-national authority that makes decisions binding to all member countries.
 |
| East African Community |
Necessary
Conditions for a Successfully Economic Integration
1. Good infrastructure. In order for economic
integration to be successfully countries in the region of integration must be
having good infrastructures to facilitate movement of goods and people from one
area to another.
2. Political will and commitment. For a regional
integration to be successfully political leaders must be willing and committed
to implement various resolutions that are made and to make necessary decisions
for the betterment of the integration.
3. Common Language. Common language among the
people in the integration enables ease communication among the people in the
region when they engage in socio-economic and political activities.- Common
currency In order to smoothen exchange a common currency is very important in
the integration, absence of a common currency makes exchange to be difficult.
4. Differentiated products. Exchange cannot take
place if countries produce similar products, each country specializing in a
commodity of comparative advantage.
5. Trade gains. For integration to be successfully
each member country must be gaining from trade, if some member countries do not
gain from trade or any economic activity then the integration will not be
successfully.
6. Similar level of development. In order to reduce
uneven distribution of gains among the member countries, countries should have
similar level of economic development, if the levels of development are so
wide, rich members will gain more than poor countries.
7. Member countries must be neighbours. It is
easier for member countries to engage in economic activities and establish
joint institutions when they are close neighbours in terms of geographical
location than when they are located far distance from each other.
8. Cultural similarities. Cultural similarities
facilitate interactions among the people in various economic activities such as
trade and investments.
9. Trade creation. Trade creation is said to occur
when a country in an integration import goods from a low cost member country
after abolition of tariffs which it was importing from a high cost non- member
country.
Reasons for Economic Integration
The rationale behind economic integration in the world includes the
following:
1. To expand the market among the member countries
and attain a common voice on advocating the market for the goods of the member
countries.
2. Another reason for economic integration is to
establish good condition for industrial development among the member countries.
This happens due to the fact that the removal of restrictions facilitates the
movement of factors of production, distribution of products and fast spread of
technology. Also duplication of industrial products is avoided when the
countries decide to integration economically.
3. To promote transport and communication
development for easy distribution of goods and services as well as facilitating
information flow.
4. To intensify security, fraternity and unity
among the countries, which have long been disunited and conflicting over
various aspects, based on ethnic grounds.
5. To maintain peace and uphold the status of human
rights among individuals of the member countries in order that democracy can
prevail and discrimination of any kind can be brought to an end.
6. To promote comprehensive research activities on
various areas that range from economic, social, political and environmental
aspects.
7. Another reason for integration is to encourage
diversification of the economies of the member countries following the expanded
market and removal of trade restrictions. When countries decide to integrate
various needs for various goods and services crop up leading to the need for
producing a variety of goods and establishing various enterprises to cater for
the increased needs.
8. Countries integrate so as to promote the
capacity for rational or sustainable use of resources. This takes place after
the advancement of science and technology in the member countries. In
integration, people exchange ideas and experiences on how to better plan for
sustainable use the available scarce but valuable resources.
9. To formulate common policies geared towards
solving global problems like population explosion and migration, epidemic
diseases like cholera, Ebola and HIV/AIDS, as well as environmental problems
and challenges of globalization.
10. Economic integration also encourages heavy investment
on the available resources. When countries integrate, they create confidence
among the investors due to the fact that the market is expanded, peace and
security are assured and the resources are easily available due to removal of
restrictions or tariffs.
11. To promote the life standard among the member
countries as a result of increased production, easy movement of goods and
services and economic diversification.
12. To promote employment opportunities following
the diversification of the economy and development of industries among the
member countries.
13. Economic integration increases the opportunity
to borrow from outside since it is easy to borrow as a community rather than a
single country due to the fact that that the donor do not have high confidence
on individual countries.
14. To promote the quality of production among the
member countries through positive competition in the production process
15. To easily share common services such as Posts
and Telecommunications, railways, airways, medical services etc
16. To stimulate smooth development of trade using
a common currency and by removing tariffs. A common currency removes
complications of converting currencies, which sometimes tends to be cumbersome
and time-consuming leading to inefficiency and ineffectiveness in the
commercial activities.
17. Economic integration leads to political
cooperation and sharing of ideas and experiences which in turn bring
effectiveness in the production process and promotion of peace and security for
smooth development proces
Disadvantages of
Economic Integration
Economic integration has several disadvantages, which include the
following:
1. Trade diversion: Low cost trade can be replaced
by a high cost trade due to the geographical restrictions. A country can buy
goods at a higher price than it is used to buy from another country, which are
not members leading to the decline in profit or income generation. The other
countries can start enjoying economic advantages in trade.
2. Movement of goods can be in one direction
leaving other countries without goods. This can encourage the occurrence of
polarized development in which some countries develop at a higher speed than
other countries.
3. Countries may be compelled to buy goods of poor
quality within the region especially if the level of technology is low. This is
a great problem in African countries where there is low level of technology in
many countries. Agricultural products, for example, tend to be very poor due to
poor methods of cultivation and processing among the countries.
4. Because of uneven industrial development, one
country which is more industrialized. In the East African Community, for
example Kenya was developing faster and at the expense of Tanzania and Uganda
because of more industries that made her keep on exporting manufactured goods
of high quality.
5. Economic integration is usually associated with
political problems, as some leaders tend to be in need of holding positions
permanently so that they can keep on looting while in position.
6. Cultural disruptions, which tend to stifle
cooperation among the members, can occur following the multiple interactions of
people from different member countries. In East Africa for example, one can see
deterioration of morals, and prevalence of other unwanted behavioural aspects.
7. It is difficult to harmonise the common external
tariffs due to differences in the foreign policies.
8. Member countries tend to produce the same goods
and hence forces to loom for market outside the region.
Factors that can
Facilitate Economic Integration
1. Strong determination among the states can lead
to the fast pace of economic integration. This is due to the fact that when
people are determined they tend to be ready to work very effectively for the
purpose of bringing about common development.
2. Language which functions as a unifying force can
lead to fast economic integration. When people communicate intelligibly they
easily exchange ideas and experience as a result they cooperate easily in
solving common problems.
3. Readiness to cooperate among the leaders of
states also plays a great role in facilitating economic integration. This
happens when some of the leaders are ready to relinquish some of the leaders
are ready to relinquish some of their powers and work cooperatively.
4. External influences also play a great role in
integration. Some donors urge that they cannot provide assistance to individual
countries since there can be misuse of fund provided. Also experiences of
success in the integration from outside stimulate the need to integrate. For
example, the EU has been a strong dynamo in stimulating the formation of the
African Union (AU). Another external influence is related to the dynamics
within the international trade. The existence of poor trading system and
especially poor pricing in the world market make the developing countries join
to have a stronger voice in bargaining for better prices and also to pave the
way for the creation of the international market.
5. Well-developed infrastructure can also expedite
the pace of economic integration. If, for example, there is good transport and
communication network the movement of goods and services as well as the flow of
information takes place effectively.
6. Where the countries exhibit positive economic
performance can integrate very easily unlike the countries where there are poor
records of economic performances. Usually the countries, which are very poor
and have few resources, tend to take time to accept integration for fear of
losing freedom to the stronger nations. In Africa for example many countries
fear South Africa and Libya due to their stronger economics bases.
7. Existence of peace and security in the
countries, which intend to cooperate, can also hasten the pace of economic
integration. Where there are political conflicts integration is not attained
easily since people who are the major stakeholders of integrations ventures are
usually restless and some run out of their countries of origin to other
countries as refugees
8. Advanced level of technology can also act as
dynamo for facilitating smooth economic integration because the cooperating
nations produce high quality products which can attract market.
Constraints (setbacks) on Economic Integration in the
Developing Countries
1. Low Technology is one of the hindrances of
economic integration. This slows down the industrial development among the
member countries. Low technology leads to poor quality of product and hence low
market for the products leading to poor income generation.
2. Political instability characterized by wars and
other problems disrupt peace and security and keep people restless such that
they cannot settle and produce or interact effectively.
3. Balkanization (division) of the states is
another limitation. This leads to the poor cooperation in different economic
aspects since people of one country tend to feel as different in status and
belongingness from people of other countries.
4. Poor infrastructure network like roads, railways
make cooperation ineffective since movement of factors of production, as well
as goods and services can take place effectively between member countries.
5. High degree of poverty among the member
countries weakness the cooperation. Because of poverty people fail to move from
one country to another, they cannot invest properly in technology promotion and
production of high quality goods, and efficient provision services.
6. Problem of common market and the way the local
markets operate do not allow for the positive cooperation among the member
countries.
7. The resources are not evenly distributed since
some countries are naturally endowed with more resources than other member
countries. This also leads to poor cooperation as some countries are not ready
to share their resources with other countries, which lack such resources.
8. Environmental predicaments (problems) like
floods, such as those of Malawi and Mozambique; earthquakes, drought, diseases
like EBOLA that hit Uganda, and the HIV/AIDS pandemic disrupt cooperation due
to the fact that people are not physically and psychologically settled and
hence, cannot cooperate effectively.
9. Cultural differences are also setbacks to
economic integration. This is manifested through existence of many tribes,
religions and political ideologies. With different cultural orientations people
fail to easily reconcile their differences and work together smoothly.
10. Lust for positions among some of the leaders is
another problem as some of them do not like to relinquish some of their powers
to other leaders for the sake of promoting economic integration.
11. Some countries are reluctant or are not
committed to contributing for the development of the organization leading to
ineffective running of the various functions.
12. High illiteracy rate is also another
bottleneck. This obstructs the diffusion of technology among the member
countries.
13. Explosive population expansion creates pressure
for resources and forces the governments to concentrate on solving the problems
of population growth like food supply rather than focusing on then economic
integration among the member countries.
14. Exhaustion of resources caused by over
exploitation deters economic integration in the developing countries.
15. Inferiority among the small countries, which
fear being dominated by other countries, some of which are even more developed
than them, is a hindrance too. These small and poor develop feeling that they
can lose their freedom and the available few resources.
 |
| Political Instability |
EFFECTS OF GLOBALIZATION IN TANZANIA
The impact of globalization in Tanzania can be discussed under political, economic, social or cultural categories. Globalization has positive and negative effects as discussed below:
SOCIAL – ECONOMIC EFFECTS
On the economic point of view, globalization as
worldwide phenomena has both positive and negative effects on developing
countries like Tanzania.
Many economist support globalization because they
believe it is beneficial for all countries involved. Economists believe that,
if there is worldwide trade then there will be more efficient use of resources.
Each country can make money off of the product they
can most easily produce.Every country will be able to produce a maximum amount
of goods and services for a limited cost. If each country produces what it is
best at manufacturing then, it can trade that abundant product for other
products the country itself cannot produce.
This potentially means that every country can get
everything it needs, and get it at the best price. If you can cheaply produce
your product, then you can also sell it cheap.
This trade spreads environmentally beneficial
products and technologies to countries that otherwise could not have the
technology. In this way and in others, globalization gives a “helping hand” for
developing countries.
a) Positive Effects
1. Through trade liberalization and free – market
economy, globalization has stimulated much the utilization of natural
resources. There are many companies which are investing in natural resources
such as the mining companies at Mwadui, Bulyankulu, Geita, Nzega and Kahama.
Presence of these foreign companies enables Tanzania to utilize her resources
for development of her people.
2. Globalization has made production and
transportation of goods easier and faster than ever before. Therefore, it
enables Tanzania to get different varieties if goods in both quality and
quantity, from any corners of the world. These goods include electronic devices
(computers, mobile phones). Food, medicine, automobile and chemicals.
3. In some instances, globalization has created
employment opportunity to many people. For example foreign companies like
Vodacom, Zain, Zantel and Tigo have employed thousands of killed Tanzanians.
4. Through liberalization of social services there
is a wide spread of private schools, hospitals, dispensaries which contribute
much in providing services to people hence improving their wellbeing.
b) Negative Effects
1. For developing countries like Tanzania, free
trade causes a decline and underdevelopment of the industrial sector and local
technology. The decline of industrial sector and local technology is caused by
influx of goods from outside whose prices are low and are of higher quality
than our local goods.
2. Presence of multinational companies in Tanzania
if not well controlled may acquire super profits through exploiting the
citizens and the countries resources to the maximum.
3. Globalization sometimes creates unemployment.
With growth of technology, machines greatly replace human labour therefore
unemployment sometimes increases. The introduction of electronic devices like
computer technology and its programs have led to eviction of many Tanzanians
from their jobs.
4. Through privatization and capital mobility,
Northern countries (Europe, North America) undermine southern countries
(Africa, Asia, South America) through unequal exchange. Most of potential
natural resources in developing countries are owned by companies from developed
countries hence undermining local communities.
5. Advancement in technology causes environmental
degradation. More increase in the use of advanced machines and modern
equipments causes environmental degradation. Technological advancement in the
mining sector, agriculture, fishing, transport systems and industrial sector
threatens environmental quality in Tanzania. Moreover, poor countries like
Tanzania have been turned to a garbage bin of capitalist waste products.
Globalization has also made Tanzanians spend much of their resources in
recreation activities instead of investing it into productive programme. As an
adaptation from Western culture some Tanzanians, spend their money for buying
beer, pornographic materials, drugs and other useless materials.
 |
| Learning through computer and internet |
POLITICAL EFFECTS OF GLOBALIZATION
a) Positive effects
1. Globalization has brought about important
changes in the content of international law. Contemporarily states like
Tanzania makes laws which comply with international laws and therefore it abide
with them in such a way that it can no longer mistreat her citizens the way it
wishes. Issues like human rights, social justice are part of Tanzania‟s
constitution, by laws and statutes which effectively started to be used in
Tanzania in 1987.
2. Under globalization, Tanzania has integrated
itself into global politics through international agencies and organizations.
New forms of multilateral and global politics have been established involving
governments including the government of Tanzania.
3. Globalization has made it necessary for poor
countries like Tanzania to form strong political organization such as the
formation of the East Africa Federation.(iv) Globalization has speeded up the
democratization process in Tanzania. In order to promote democracy Tanzania is
adopting global democratic principles such as rule of law, transparency,
multiparty, accountability and it is trying to implement those aspects.
b) Negative Effects of Globalization
1. Negative Effects of Globalization(i) There has
been centralization of power political power in biggest capitalist powers. The
above situation has created an interstate situation whereby the poor nations
are made accountable to bigger countries like USA, UK, than to their citizens.
2. Tanzania has been affected by global political
disorders and terrorism. The bombing of the USA embassy in Dar es Salaam is a product
of global political conflict which involves USA and Al-Qaeda terrorists who
protest against USA imperialism.
3. Globalization is pushing down the efforts of the
poor countries like Tanzania to form strong political organizations such as the
African Union or East African Community due to spread of spheres of interest to
the regions by biggest powers from America and Western Europe. Countries like
Tanzania become more interested to cooperate with one of the capitalist
countries rather than her neighboring countries like Malawi, Mozambique, Zambia
etc. wishing to get more profit.
4. In some cases, globalization with its related
political propagandas such as multipartism, transparency, accountability, rule
of law and others create chaos in the country. There are some politicians who
manipulate the above agendas of democracy to jeopardize peace and security that
have existed in countries since independence
CULTURAL EFFECTS GLOBALIZATION
a) Positive Effects of Globalization
1. Globalization has made diffusion of good
international beliefs and values to the individual nations. Each community in
the world including Tanzanian communities are struggling to archive those world
cultural standards i.e. respect of human rights, and better living standards.
2. Through development of information and
communication technology like the internet, fax machines, satellite and cable
TV, globalization has managed to integrate all cultural practices in the world
and have common cultural practices in the world and have common cultural
practices such as sports, games and music.
3. Globalization has revealed out some bad cultural
practices which have been performed by some communities. For instance, the
issue of female Genital Mutilation (FGM) is globally condemned with great
emphasis from different international agencies.
4. The expansion of the great world religious
institutions particularly in Africa and Asia has transformed bad socio-cultural
value into modern and acceptable ones. In Tanzania, the speed of the country
plays a significant role in eradication of bad and unacceptable cultural
practices such as Female Genital Mutilation, forced marriages and harassment of
women.
b) Negative Effects of Globalization
1. Globalization has swept away cultural boundaries
which exist by the use of advanced information and communication technology
such as, the radio, TVs, internets and magazines. This situation has led to
destruction of interior cultures of Africans including Tanzania. Most
Tanzanians particular young men have been influenced by the Western ways of
life.
2. Cultural global ties have been responsible for
erosion of morals in societies. Immoral behaviours such as homosexuality, drugs
abuse, violence, prostitution, and other related behaviours have been brought
about by globalization.
3. African native languages including. Kiswahili
have been undermined by English language. English has become a globalization
language such that it is conceived by many80Tanzanians that speaking English is
a sign of civilization. By so doing, our local languages including Kiswahili
are being abandoned or left to be used by less educated people who also wish
they knew English.
4. Some effects of globalization have also been
experienced in the assessment of the existing African traditional songs and
ceremonies which are being replaced by Western ones.
 |
| Early sexual relationship among the youths and students |
IMPACT OF GLOBALIZATION ON ENVIRONMENT
Globalization has a huge impact on environment. World trade can bring about
many good things such as more efficient use of resources and aid to
underdeveloped countries. But globalization can also have damaging effects on
our planet.
Negative Impacts
1. Globalization can lead to shrinking forests and
fisheries as well as the extinction and wrongful transportation of animals.
2. Globalization has increased pollution due to the
constant emission of toxic gases from the heavy industries.
3. The high demand of natural resources which has
been caused by advance in science and technology goes together with
deforestation. Hundred thousands of hectares of forests are destroyed for
mining activities, construction of houses, railways, dams, industries and areas
for settlement.
4. Globalization has increase d global warming due
to gradual increase of atmospheric temperature caused by emission of gases and
smokes from industries and auto mobiles in the modern world.These gases prevent
the escape of heat from the earth‟s surface to the atmosphere.
CHALLENGES OF GLOBALIZATION IN TANZANIA
The following are challenges of globalization in Tanzania.
1. Low level of the use of communication system. In
Tanzania the use of global, communication satellites and telephone is still low
and under developed. Most of communication systems are confirmed to the urban
areas while a rural population which is bigger is still unconnected with the
world communication system. A problem of uneven distribution of communication
system where internets, mobile phones and others are only found in cities and
big towns will make the rural population become isolated (marginalized) from
this global village.
2. The other challenges which Tanzania faces is low
production, Tanzania‟s economic sectors such as agriculture , industry, mining,
fishing are not producing enough goods for export . The increase of
international trade as one among the fundamental characteristics of
globalization will leave Tanzania a buyer of foreign goods rather than a
manufacturer and exporter.
3. The low level of education in Tanzania is posing
big challenges to Tanzania under this world of globalization. The levels of
education among Tanzanians are very low compared to that in other countries in
the world. This level of education fails to meet intellectual demands of
globalization such as technological skills, managerial skills, entrepreneur
skill and marketing skills. Thus Tanzanians will not be able to compete in
employment opportunities with others from other countries.
4. Tanzania faces a problem of law serving and low
investment growth, low saving, lack of individual capacity and prolonged
vicious cycle of poverty among Tanzanians.
5. Moreover Tanzanians primary exports are facing severe
downward pressure of prices from world market. This trend is continuously
discouraging primary producers which are mainly the defenseless peasants.
POSSIBLE SOLUTIONS FOR CHALLENGES OF GLOBALIZATION
The following below are some of the solutions which Tanzanians can
undertake so as to combat the challenges associated with globalization.
1. Tanzania should create policies which focus on
its own problems and lay strategies to reduce poverty by focusing on
provisional health, education and social security to her citizens.
2. There should be well prepared environment and
conditions for investors so as to stabilize our macro economy. Attractions of
investors must go together with stated conditions which will make Tanzanians
benefit from foreign investments, rather than being the watchers of profit
transactions.
3. Education should be given a significant priority
and compulsory to all people. Tanzanians government should make sure that most
if not all Tanzanians get not only education but higher quality education which
will enable them to cope with challenges brought about by globalization.
4. There should be proper utilization of both
natural and human resource so as to boost the economic growth. Tanzania has
been experiencing the shortage of personnel like doctors yet there are many
doctors from Tanzania who are walking abroad, this is improper utilization of
human resources. Moreover, Tanzania faces a problem of shortage of food almost
each year but they are so many uninhibited areas with fertile soils but still
undeveloped.
5. For Tanzania to compete with other countries in
the world market, she should develop and promote researchers, providing
education to all the people on how to improve production of their goods so as
to have quality goods which can withstand competition.
6. Regional integrations and co-operations should
be encouraged so as to have a common say against exploitative practices done by
developed countries. Membership of regional integrations and co-operations like
SADC, and East Africa can enable Tanzania and other countries to at least fight
back against the negative effect of globalization.
7. The fighting against corruption should be an
endless war so as to prevent those few one who want to enrich themselves.
 |
| Poverty is one among the hindrance to globalization in Tanzania |
The work is good I apreciate it
ReplyDeleteThanks
DeleteJaman mbona mmetoa topics za Economics form five na six
ReplyDelete