“The Other Side of Globalisation by Sriyan de Silva” reviewed by Prof. N. A. de S. Amaratunga
The “Other Side of Globalisation” by Sriyan de Silva is a masterpiece on the negative impacts of globalisation and remedial measures to enable more countries to benefit from a new form of globalisation, and is a treasure trove of relevant information. While many others have concentrated on economic and business-related aspects, he has addressed the negative financial, economic, social, technological, environmental, political, and cultural impacts and issues of national sovereignty.
He explains the negative effects of globalisation and how they arose from a flawed theory and its management; highlights the pitfalls developing countries implementing globalising policies should avoid; explains how some countries have adapted them only at the appropriate stage of their development without falling prey to neoliberal traps; critiques the conceptual basis of neoliberal globalisation, and emphasizes the absence of a single universal path to economic development which the promoters of globalisation have refused to acknowledge. He critiques the neoliberal economic concept of the free market on which globalisation is based, which postulates that markets possess perfect information and competition ensuring the direction of resources most productively, making government intervention unnecessary. Such a market does not exist in reality. Markets are periodically subject to instabilities requiring external correction.
Neoliberal policies
Chapter 1 describes neoliberal policies, the Breton Woods Institutions at their inception, selective opening of markets and state intervention. It analyses how the East and South-East Asian economies developed avoiding neoliberal policy downsides, adopting globalisation policies sequentially only after developing capacity to benefit from them, lessons developing countries could learn from.
Chapter 2 discusses in-depth how and why globalisation was mismanaged. The underlying theme is that policy formulation was by the neoliberals, the corporate and financial sectors mainly in the US and the US Treasury. The IMF and World Bank were restructured, the WTO, the Washington Consensus and Structural Adjustment Programmes were all created to ensure that financial and corporate interests in only rich countries benefitted. He discusses fundamental globalisation policies – free trade, financial liberalization and FDI – explains how the several financial crises resulted from neoliberal policies, how markets were distorted, even inadvertently undermining capitalism. He explains the politicisation of globalisation, the intellectual and political backlash against it, highlighting the impossibility of global markets, sovereign states and democracy co-existing simultaneously. He links the unjustified wars and destabilizations of countries by the US to secure political domination, with economic domination being achieved through globalisation. Hence his references to Kissinger’s claim that globalisation is the Americanization of the world, and another by a top US official using the IMF as a “battering ram” to open economies of developing countries.
Globalisation
Chapter 3 underlines the inadequacies of globalisation relative to the universally accepted OECD definition of development, globalisation’s negative effects on human values, its responsibility for environmental degradation, and the initiatives being taken to mitigate environmental damage. He links this degradation and the emergence of deadly viruses and pandemics, and quotes from my article in The Island of 2 November 2020 on the link between environmental destruction and the emergence of new viruses. Globalisation and technology are discussed in Chapter 4.
Chapter 5 on the Social Dimension of Globalisation addresses the omission of social development in globalisation policies which he terms its ‘Achilles’ Heel’. He discusses sustainable development, social businesses and provides a summary of the conclusions of the ILO’s World Commission on the Social Dimension of Globalisation. He also addresses the link between globalisation and inequality.
Chapter 6 on globalisation’s impacton labour covers subjects rarely addressed, the unequal returns to labour and capital and the relationship between labour rights and trade, FDI and jobs. Globalisation’s impact on labour law and relations systems and the resulting changes are explained, why increased trade does not necessarily improve wages and create jobs, and how FDI sometimes does not benefit receiving developing countries. An Appendix provides an excellent framework for an Employment Policy which can be adapted to suit the needs of a country.
Sovereignty
Chapter 7 discusses globalisation’s erosion of sovereignty, and unsatisfactory proposals to achieve greater integration of countries through a global governance mechanism involving a global technocracy and an international regulator. These proposals would involve governments’ surrendering an unspecified number of rights and responsibilities. He argues that such a system would be captured and controlled by certain Western powers and used to subjugate developing countries.
The final Chapter 8 discusses several key issues, identifies a possible future relative to some of them, and summarises the weaknesses of globalisation. He offers useful suggestions as to how globalisation could be reformed to benefit the majority of countries. He addresses the importance of culture and civilization, how many Western countries display ignorance of and insensitivity to other cultures, and adopt an unjustified attitude of superiority of their cultures. He refers to China being the only unbroken civilization stretching over about 4,000 years, and explains why China is a ‘Civilizational State’ which became a nation much later. He discusses issues concerning democracy and individual and collective rights, and the conflicting Western and Asian views on some aspects of them. He argues for an inclusive globalisation, lists essential steps to achieve it and lessons to be learnt from the Scandinavian countries.