Globalisation: Winners and losers
View(s):Although I was not fond of any “card pack games”, since my childhood I wondered about some of the “Sinhala names” that were typically used by people when they play those games: One card is called “Buruva”, although there was no donkey there. Another card is called “Porova”, but the picture of the card is a queen and not an axe.
Sri Lankans who play the card games use such strange names, which did not make any sense: asiya, hera, buruva, porova, iskoppa, harata, kalabara, and ruhita. Prof. Madduma Bandara once clarified to me that they were all Dutch words, as we have borrowed the card pack and its games from the Dutch.
Dutch, Portuguese and English
The first time, it was a surprise to me when I saw a name board on a street in Amsterdam which reads as “Notaris Kantoor” which means Notary Office. After spending many years there I came to know that we Sri Lankans have borrowed a bulk of our Sinhala words from the Dutch language. Today these words are so engrossed in Sinhala so that we hardly recognise them as from another language.
I remember another incident in Amsterdam: One of my Sri Lankan friends got into an embarrassing trouble after he introduced (in Sinhala) his Portuguese friend as one of a “bebaddaā”, meaning a drunkard. The Portuguese friend who used to go to pubs every night to drink beer, in fact understood what he said, because “bebaddaā” is also among many words that we have borrowed from Portuguese language.
Just like Dutch words, we commonly and widely use Portuguese words in Sri Lanka without knowing that they are not actually Sinhala words. However, today we have adopted many English words into Sinhala too; it has gone to the extent that we can easily recognise even a different local dialect called “Singlish”.
Sri Lanka as a globalised nation
Although Sinhala is spoken by a small community of about 15 million people in the world, it was fascinating to think that it is really a “globalised” language. Before starting to write this column, I called my friend Prof. Sandagomi Coperahewa, a Sociolinguistic Professor at Colombo University and asked him about the “globalisation of the Sinhala Language.”
Integration with globalisation is how high end properties like this upcoming Cinnamon Life project will benefit.
Sandagomi confirmed that, despite Sinhala having some of its own words such as those that are used for mouth and belly, it has been historically a language made up of Northern and Southern Indian languages and, enriched later with some European languages. In addition, it has also been subject to the influence of Southeast Asian and Arabic languages as well.
Some scholars, however, think that it is Sinhala which enriched other languages in the world! We are not really getting into that debate here. Whichever the direction of influence, it doesn’t matter for our purpose, because either way it is a powerful effect of “globalisation”.
As Sandagomi also confirmed, throughout its history Sri Lanka has been a “globalised nation” and that globalisation got weakened only during the modern history after the mid-20th Century. If I translate that into an economic term, it means that throughout its history Sri Lanka has been an “open economy”, but its “openness” began to deteriorate only after receiving Independence from Britain in 1948.
Integrating with the global economy
Globalisation of a nation can be looked at from many different angles such as formation of a language, as explained above. From an economic point of view, globalisation can be viewed objectively as the formation of a “global economy”.
From a nation’s point of view, it is the integration of the nation into a global economy. It is obvious that globalisation is partly an outcome of a natural transformation and partly an outcome of our decisions and actions.
Policy reforms and institutional changes play a catalytic role in the case of the globalisation of a nation. From an economic point of view, globalisation would result in an expansion of trade and investment flows as well as greater movements of people, technology and resources. They are essential components of economic globalisation of any country.
Winners and losers
There are both winners and losers of globalisation, anyway: some people benefit, while some others lose; some professionals gain, while some others lose; some production activities expand, some others lose. Globalisation is beneficial to some nations, but costly to some other nations. While proponents of globalisation desire to look at the winners, opponents chose to look at the losers.
By saying that there are winners and losers, I don’t mean that there is 50:50 chance for anyone to be a winner or a loser of globalisation, unlike some may believe; it is not a gamble. What I mean is that it is a choice: whether we want to be a winner or a loser depends on what choices we make.
A peculiar nature of the winners is that they will continue to win even more. Similarly, the peculiarity of losing from globalisation is that the losers will continue to lose even more. In other words, the ones who got more will gather even more and, the ones who got little will lose even the little they got, both in the face of globalisation.
Globalisation offers both opportunities to exploit and challenges to face. The one who exploits the opportunities will have more opportunities to exploit and more capacity to exploit. As a result, they will continue to gain more and more. The one who got little will begin to lose even that little and lose the capacity to exploit, and become vulnerable to the challenges in spite of opportunities.
Rise of developing Asia
One of the major outcomes of the globalisation process during the time of our generation has been the ‘rise of developing Asia’: First in East Asia since the 1970s and, then since a few years ago our own region – South Asia.
Therefore, South Asia has today become the fastest-growing region in the world. However, Sri Lanka is not and, at least not yet, a part of that growth, although the country is geographically located in South Asia. In fact, we just annulled even World Bank growth forecasts for Sri Lanka: The World Bank has forecasted the rate of growth for Sri Lanka to be 4 per cent in 2018, while in actual terms it is much lower than that although the official growth figures are not yet released.
Rise of developing Asia: Though we argued as a unique result of the policy reform process, it was how many countries of Asia chose to grab the opportunities of globalisation process. It is the convergence of many divergent forces which were, perhaps, not even inter-connected and which constituted the globalisation process of our time.
Divergent globalisation forces
Rise of Asia and recession in the West were both linked to the global capital outflows in the form of foreign direct investment (FDI). FDI outflows from the rich countries grew exponentially and turned towards developing countries in Asia.
About 25 years ago the world FDI flows amounted to US$200-300 billion a year, but over the past 15 years the value of global FDI flows exceeded $1500 billion a year. Capital starts flowing out during recessions, while the recessions become faster with capital outflows; the world witnessed it at Global Financial Crisis.
To be accompanied by growing FDI flows, there are changes in trade patterns: Trade in goods and services increased four-times over the past 25 years from 5 trillion to over 20 trillion by 2016. Fastest growing trade pattern which has been a feature of Asian trade expansion is the formation of global supply chains; production of a commodity by many different countries.
It was mostly the global multinational corporations (MNCs), which were behind the changing FDI flows and trade patterns. Both these changes were facilitated by technological progress, carried out by the MNCs themselves.
They began to break up the value chain of commodities and outsource ‘parts and components’ among many different countries and, then assemble the final product in another country. This has been made possible by the revolutionary change in transportation and communication technology.
Prepare to be a winner
The effects of all these divergent globalisation forces could be accommodated in Asia, because of the policy reform process which is aimed at benefitting from the globalisation process and they were ready to exploit the opportunities emerging from globalisation.
The countries which were not ready for that became increasingly vulnerable to globalisation and its shocks, as we in Sri Lanka also began to experience. Though Sri Lanka started off as an open economy integrating to the global economy, despite rhetoric it lost its initial open economy vigour over the years so that it has become increasingly vulnerable to the shock waves of globalisation.
(The writer is a Professor
of Economics at the University
of Colombo and can be reached
at sirimal@econ.cmb.ac.lk)