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December 30, 2016

Do Not Keep Whining About Globalization, But Play Along With It

(This is my own contribution to an annual report of the ECPD, European Center for Peace and Development, a Belgrade based research center. Now that the US under Donald Trump opposed globalization, the discussion about it has lost efficacy. So this paper is a kind of epitaph for globalization)

Today many people talk or grumble about globalization, but the definition of the word is ambiguous. It seems that all evils in the world are attributed to "globalization".

In fact globalization is not a new phenomenon, but on the contrary all through the long world history strong individuals and strong countries always exploited others. Today globalization is almost a swearing word, when economically weaker individuals and countries curse the stronger with an implication that the culprit is the United States and the "Anglo-Saxon-Jewish alliance".

However, the reality is that the globalization benefits not only the US but also Germany and Japan as exporters of industrial goods, Switzerland and Luxemburg as exporters of financial services, and the Netherlands and Ireland as recipients of large chunks of foreign direct investments. And, amusingly enough, a large part of the American national today stand against globalization, bringing Donald Trump to the helm of the power.

The number of remedies for the globalization is limited. Shouting and whining do not save you. One has to take action against excesses of the globalization, but more importantly one has to build a viable economy for oneself which can benefit from international transactions.

The first "remedy" would be insurrection against the establishment and foreign capitals, or even war against stronger countries which attempt to subjugate you.

If you do not like such forcible means, then the second remedy would be to close your market against intrusion of foreign capitals. But this will surely lead your country to "sovietization", that is protection (fossilization) of one's own backward economy and technology.

I, therefore, recommend the third way: selective opening of your own market for import and investment from the outside world. Regardless of the size of the population any country can build a vibrant economy, using indigenous resources. Remittance from the countrymen working abroad and foreign direct investment will augment financial resources for investment.

A good example is Scandinavia. The population of each Scandinavian country is about five millions, and yet all of them possess distinct and robust economy. The example of NOKIA, Finland, especially deserves commendation. Since its start in 1865 as a paper producer NOKIA has changed its main product several times, always maintaining competition edge in the world. It is noteworthy that this was done in a country which lacks any particular natural resources and largely depended upon trade with the Soviet Union.

Mexico's experience also deserves attention for the Balkans; with a network of free trade pacts (with the US, the EU, Japan and Latin American countries) this country is now becoming a hub of industrial production.

Globalization has a different meaning in politics: penetration of "freedom and democracy" in the world or, if you call it by its own name, the "regime change".

Intervention from outside for "democratization" in most cases end up with creating chaos and instability in the country under experiment. One group of the elite may be overtaken by another group, but the overall unfair structure of society and economy lingers on.

Such irresponsible interference in others' life can be condemned and prevented by unilateral measures and by international agreements, for example, in the UN or G20.
However, in doing this, one has to keep in mind that attempts for regime change are done not only by the US but also by Russia. While the Soviet Union, Russia's former entity, used to incite the "international communism", today's Russia instead helps rightist and anti-immigrant movements to weaken the West.

These mutual attempts should be discarded as remnants of the Cold War. The fora in which this matter can be discussed and prevented would be the UN and resurrected Non-aligned Movement in which the Balkan countries could play important roles.

Last but not least a fight against globalization should not be misused by autocratic leaders and their cohorts who want to defend their vested interests based upon unfair structure of their society. Some international mechanism should be devised to conduct fair analysis of the situation and to make realistic proposals for correction.


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