De – Westernization of Globalization
Introduction
Dr. Hassan Hanafi, a professor of philosophy at Cairo University and a severe critic of globalization, termed globalization as a western hegemony . He conceptualizes globalization as a channel for the west to express their imperial dominance by imposing their own ideologies and values on other nations. According to the OECD (Organization for Economic Cooperation and Development), globalization is the increasing inter-nationalization of markets, financial systems, competition, means of production, industries and technology . Globalization was a concept of the western states with the aim of opening up economies and reforming political systems of different states.
This western- inspired liberalization enabled the western countries to obtain cheaper capital and supply of tradable goods. This phenomenon led to rapid growth with low inflation in the western states. After the global financial crisis, western states inspiration on trade liberalization has dwindled and continues to dwindle. The economic slump has caused the west to abandon its focus on mutual gain and free markets in favor of the domestic market . This concept is now known as the de - westernization of globalization.
PEST Analysis of De-Westernization of Globalization
PEST analysis is a tool used to analyze Political, Economic, Socio-cultural and Technological changes in an environment. In this section, an analysis of changes these areas caused by the de - westernization of globalization shall be studied.
- Political factors
De-westernization of globalization has led to developing countries adopting new political ideologies. The discrediting of ‘Washington consensus’ and the success of China has encouraged developing countries such as Brazil, India, Russia etc. To look towards the ‘Beijing consensus’ . The ‘Beijing Consensus’ advocates for countries implementing local content rules and formation of ‘national champions’ from state-owned enterprises (SOE). These are enterprises used to propagate state interests. It has been successfully implemented by Russia.
De-westernization of globalization has also seen a formation of new allies. The rise of China is perceived as threatening by its neighbors in the East Asia. This has made it easy for the US to find allies in the region.
- Economic Factors
De-westernization of globalization has seen the rise of some economies and the failure of others. The western perspective on globalization has significantly changed with the advent of global financial crisis. The focus shifted from the advantages of globalization to the costs of globalization. The crisis exposed frailties in the economic structures of western economies and the world economy that relied heavily on western demand. This has led to regionalization of trade. For instance, in fiscal year 2010-11, Asian trade picked up faster than global trade. This signaled the regional integration of production chains, a phenomenon that is becoming popular with de-westernization of globalization .
- Socio – cultural Factors
Some cultures such as Islamic and African cultures felt threatened by the west-inspired globalization. At the beginning of the twenty-first century, universal free trade and globalization were seen as chief tools to spread western values abroad . With de-westernization of globalization and the global financial crisis, many countries in Africa, South America, the rest of Asia looks up to Eastern Asia. This is due to the East Asia’s better financial growth than the world’s growth. These Asian economic giants such as China do not export their economic models to other countries . As a result. There has been a change in attitude since the African and Islamic cultures do not feel under threat from the western globalization.
- Technological Factors
Global financial crisis coupled with de-westernization of globalization has seen a considerable shift in technological power-houses. Technology has been a facilitator of globalization. It is considered that whoever is in control of technology, holds the power. Information is power. With the recent advancements, technological companies from the east such as Samsung, Lenovo and LG have emerged as the powerhouses of consumer technologies . This has led to the loss of control by the west on consumer technologies.
International Business Concept Defining De-Westernization of Globalization
An international business concept that would represent the phenomenon of de-westernization of globalization is Internationalization. As opposed to globalization in which some countries feel it has been forced on them, internationalization is a more balanced approach to promote global integration. It allows the different countries to dictate the terms of their international agreements . This enables the countries to control their economies, a concept called state-controlled capitalism, which has successfully been practiced by China and has led to its rise. With de-westernization of globalization, the west’s influence is dwindling. The dying influence means that countries do not feel obligated to join the WTO (World Trade Organization), an organization used to promote globalization by the west .
Effect of de-westernization to international businesses in New-Zealand
The concept of west-inspired globalization was a way for the west to gain cheap capital and tradeable goods while sustaining a low inflation rapid growth. De-westernization of globalization implies that the west no longer benefits from cheap tradable goods and capital. De-westernization of globalization limits the free flow of capital and encourages state management of capital in certain situations . International businesses will be hailed as ‘National champions’ and will be closely monitored to provide crucial information to the government. In an attempt to retain control of the economy, foreign international businesses will be forced to form joint ventures with local partners in New-Zealand in order to transfer technology and financing along the way . Therefore, de-westernization of globalization will foresee the protection of local businesses.
Conclusion
The world economies are heavily networked. This dense network has produced new political strains. De-westernization of globalization has foreseen the loss of rule-setting power of the west in the global economy. No other player is ready to take up this role. The west has shifted from promoting liberalization to promoting local development. However, western multi-national companies are widely spread in foreign markets. East Asia is expected to embark on liberalization with China abandoning capital controls. China’s rapid ascendancy and its assertive policies on foreign affairs has caused the regional leaders to hedge their bets. This will present economic problems. The economic ascendancy of China and other developing countries will present political rivalries a situation that will result in increased conflicts.
Management of these potential conflicts and other emerging issues will depend on how the west will align themselves. To move forward, the leaders of the west will have to come up with a new consensus on economic governance if they will have to exert global leadership once more.
References
Carr, P. (2011). impactofinformationsystemsonsociety.wordpress.com. Retrieved April 28, 2013, from http://impactofinformationsystemsonsociety.wordpress.com/2011/01/14/week-3-technology-and-globalisation/
Grätz, J. (2013). The De-Westernisation of Globalisation. Center for Security Studies, 15-35. Retrieved from www.css.ethz.ch/publications/Strategic_Trends
Hanafi, H. (2009). en.qantara.de. Retrieved April 28, 2013, from http://en.qantara.de/Globalisation-Is-Western-Hegemony/9563c9662i1p666/
Skellett, R. (2011). www.alliedworldwide.com. Retrieved April 28, 2013, from http://www.alliedworldwide.com/it-outsourcing-consulting-insights-blog/global-model/globalisation-vs-international-model/
Warner, J. (2011). www.telegraph.co.uk. Retrieved April 28, 2013, from http://www.telegraph.co.uk/finance/comment/jeremy-warner/8940701/Globalisation-has-turned-on-its-Western-creators.html
