Friday, May 13, 2005

Globalization and Under-developed Countries (by Malaysia's Mahathir)

Globalization and Underdeveloped Countries

Here's a caveat from Mahathir, the now retired and nationalistic PM of Malaysia who led it to modernity, on unquestioningly adopting or jumping on the bandwagon of globalization/WTO [the current euphemism and instrument of neocolonialism]. Of course, remember that the Philippines signed in at the very first day during the 1995 Ramos administration; then Senator Gloria Arroyo was one of the strong proponents for immediate membership. Now the Filipinos in the Philippines are in the worst predicament ever. ******************************************************************************************

By Mahathir Mohamad

Globalization can be a trap for developing nations. They should make every effort to retain control of their own fates, argues Dr. Mahathir bin Mohamad, Prime Minister of Malaysia, in this essay adapted from “Recreating Asia: Visions for a New Century,” edited by Frank-J├╝rgen Richter and Pamela Mar. The concept of “globalization” is deceptively simple. The free market must be allowed to function without interference. Governments must remove all barriers that prevent the full and free operation and movement of goods and services, capital, firms and financial institutions across borders.

Globalization is not a law of nature.

Globalization is not a God-given, iron-clad law of nature or humanity. It is a set of concepts and policies made by human beings. And therefore it can also be reconceptualized, reshaped and changed. In theory, globalization is supposed to be for the good of all. In reality, this concept was designed by the developed countries on behalf of their companies and financial institutions. The purpose: to overcome the regulations set up by developing countries to promote their domestic economy and local firms which had been marginalized during colonialism. In practice, following these policies can bring a country new opportunities for wealth creation. But it also brings new risks that can destroy prosperity in the twinkle of an eye — as we have seen recently in East Asia and later in Argentina.

Countries must make choices.The lesson of recent experience is that a country must carefully choose a combination of policies that best enables it to take the opportunity — while avoiding the pitfalls. That is a task easier said than done. A country that is still poor or developing may find that it is not wise to jump blindly into complete integration with the world economy, for this may open it up to many risks that can damage its local economy. It is wiser to engage in a selective and strategic integration with the world market. In this approach, the country itself chooses:— the way and degree it wants to open up,— the timing and sequence of opening up,— the form of cooperation and competition between its local firms and foreign firms,— the particular sectors it wants to liberalize— and those sectors that still need some protection, for the good of the country.

The breaking down of economic barriers as such may not be new (for example, it also took place in the laissez-faire era of the 19th century). What is new in the present age is the globalization also of the policy-making sphere itself. The role of global institutions increasingly, policies that used to be made by national governments are now formulated for developing countries through global processes and institutions, including the IMF, the World Bank and the WTO. In my view, their policies tend to favor the agenda of the richer countries that dominate them. Since the policies are usually set in a one-size-fits-all manner, they hinder the ability of the individual country to choose the particular set of policies that suits its own development needs. As a result, developing countries have found it extremely difficult to steer through the turbulent waters of globalization.

Choices for countries

National policies should largely be made by national governments — and not on their behalf by global institutions or other governments. What is important is that countries be given the right and space to review the impact of globalization. And they should be able to decide which aspects to make use of in future — and which aspects to discard. This is a rule of thumb that certainly has served my own country, Malaysia, very well in navigating the troubled waters of recent years.Importance of government.

As many of those recent events show, it is too dangerous to allow the so-called free market or global institutions, to usurp the role of governments. Allowing them to do so, I am convinced, may well lead countries to prolonged periods of economic slowdown, economic anarchy and social chaos.

“Nations whose NATIONALISM is destroyed are subject to ruin.” - Colonel Muhammar Qaddafi, 1942-, Libyan Political and Military Leader

“We shall be better and braver and less helpless if we think that we ought to enquire, than we should have been if we indulged in the idle fancy that there was no knowing and no use in seeking to know what we do not know..." – SOCRATES

"Upang maitindig natin ang bantayog ng ating lipunan, kailangang radikal nating baguhin hindi lamang ang ating mga institusyon kundi maging ang ating pag-iisip at pamumuhay. Kailangan ang rebolusyon, hindi lamang sa panlabas, kundi lalo na sa panloob!" -- Apolinario Mabini La Revolucion Filipina (1898)

"The selfish spirit of commerce knows no country, and feels no passion or principle but that of gain" - Thomas Jefferson, 1809

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