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The Future of Globalization

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The Future of Globalization

Where is the increasing integration of the world’s nations taking them? Will globalization ultimately lead to a “new world order”?

Learn the why behind the headlines.

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Have you noticed that the nations of the world have become increasingly interconnected? Think about it. At the supermarket you can buy products from all over the earth—oranges from South Africa, olive oil from Greece, wine from Italy. You can purchase clothes made in Indonesia, Sri Lanka, or Malaysia. In the evening you turn on your Asian-made television set to watch your favorite program. Every day you drive your American, Japanese, South Korean or German-made car to work. Call customer service to discuss your telephone bill and you may well be speaking to someone in India. If you live in a big city, you have likely encountered people who have immigrated to your country.

Surfing the Internet on your computer, you can keep up to date with news anywhere in the world, 24 hours a day, 7 days a week. Drought on the American and Canadian prairies affects the price of bread. Political unrest in the Ivory Coast influences the price of chocolate. Bad weather in Brazil affects the price of coffee. Acts of terrorism against the U.S. impact the New York stock markets. And political disputes between major oil-producing nations and their customers increase the price of gas.

Since the latter half of the 20th century, the international community has become more interconnected and interdependent in economic, cultural and environmental matters than ever. It seems the world is rapidly becoming a single community, a global village. Some see this as a good thing; others are not so sure.

Then there are those who believe integration is the first step toward a “new world order,” one in which sovereign nation states will be dissolved in favor of large trading blocs led by a super world government.

Where is this globalization trend leading? Will the world eventually become a single community?

History of Globalization

Globalization is the process by which nations become increasingly integrated. This is occurring primarily due to advances in technology that have enabled people, goods, money, data and ideas to travel the world much faster than before; and the reduction of trade and economic barriers, which has greatly increased trade between countries.

In recent years, globalization has become a hot topic, one that has been associated with trends such as the following:

• The rise and expansion of multinational corporations with business interests and employees in several countries, including McDonald’s, Coca-Cola, Toyota, Sony, IBM, Unilever, Nike and Shell.

• The emergence of global financial markets in centers such as New York, London, Frankfurt and Hong Kong, providing businesses around the world with easier access to financing.

• Greater levels of immigration, changing the ethnic, cultural and religious composition of several countries and leading to the establishment of multicultural societies.

• The erosion of trade barriers between groups of nations, leading to the emergence of powerful trading blocs, with names such as NAFTA (the North American Free Trade Agreement), the European Union and the ASEAN (Association of Southeast Asian Nations).

Globalization is not new. Historically, people have left their surroundings and traveled to distant lands for four main reasons: conquest (the desire to control other countries); prosperity (the search for a better life); exploration (the desire to discover new lands); and trade (the desire to sell goods profitably). The primary agents of globalization in the past were soldiers, sailors, traders and explorers.

For thousands of years, traders carried their goods across oceans and continents and armies launched invasions on their rulers’ orders. Powerful nations have brought new lands under their authority, integrating disparate nations, peoples and cultures into empires.

Earlier forms of globalization existed in the Egyptian, Medo-Persian, Babylonian, Greek and Roman empires. During the time of the Mongol empire in the Middle Ages, the famed “Silk Road” connected Central Asia and Europe, linking several civilizations.

The first steps toward globalizing as we know it today were taken in the 16th and 17th centuries when the Portuguese and Spanish empires spread into Africa, the Americas and Asia seeking gold, silver and spices. The Dutch, French and British empires soon followed, with the Dutch East India Company becoming the world’s first multinational privately-held company, in which ownership was divided into shares. This first wave of globalization was characterized by rapid growth in trade and investment between the European powers and their colonies, including the American colonies.

The first era of globalization began to break down with the advent of the First World War, and later collapsed between the two world wars, in part due to the raising of tariffs and increased immigration restrictions.

Globalization Today

The end of the Second World War brought renewed life to globalization. Since 1950, the volume of world trade has increased by roughly 20 times from $320 billion to $6.8 trillion (USD). Between 1980 and 2000, flow of foreign investment had increased approximately twenty-fold, from $57 billion to around $1.3 trillion. This increase in trade and foreign investment allows consumers around the world to enjoy a broader selection of products.

Animators at the animation firm Toonz Animation in Thiruvananthapuram, Kerala State, India, draw backdrops for animated films.

In the years since WWII, a defining feature of globalization has been an international industrial and business structure built by multinational corporations. Many governments have adopted free market economic systems, negotiating reductions in barriers to commerce and establishing international agreements to promote trade in goods, services and investment.

As a result of the explosion of trade and technology, the current rate of globalization is unprecedented. Author and journalist Thomas Friedman stated that today’s globalization is unique because what was once accomplished only by corporations is now being done by individuals, allowing them to reach around the world “farther, faster, cheaper, and deeper.”

Examples are everywhere, which we experience every day. Internationally, millions eat Kentucky Fried Chicken, drink Pepsi, drive Hondas, listen to music on Sony mp3 players, and play sports wearing Reebok sneakers.

Nowadays, many companies outsource their manufacturing operations to developing nations. For example, American and European clothing companies employ workers in Indonesia to produce their products to be sold back home. Technology firms employ programmers in India to write programming code. Telecommunication companies place call centers in India to handle customer service.

At the Crossroads “Down Under”

Few countries have used globalization as effectively as Australia—a market that has been transformed by a commercial link with Asia, particularly China. As a result, for the past 15 years Australia’s economy has grown at an average rate of 3.7% per year and shows no sign of slowing down—despite having one of the world’s highest minimum wages.

The Christian Science Monitor reports that in the early years of the 20th century, Australians were the richest people on earth, the result of the country’s vast natural resources. However, their standard of living steadily declined, leaving in its wake high unemployment and inflation during the early 1980s. This convinced the government to remove its protectionist policies and force Australian companies to compete globally.

This decision set in motion a period of reform. In 1983, the Australian dollar was allowed to compete with other world currencies. In the banking industry, regulations were changed to make it easier and potentially more profitable for foreign banks to do business in Australia. Also, trade tariffs were slowly dismantled from the clothing, auto and wool industries. Major state-owned firms were privatized and sold, the most prominent of which were the phone company and national airline. Citizens were encouraged to buy shares in privatized companies, to the extent that today 55% of adults own stocks—the highest rate in the world.

Interestingly, throughout all of the reforms, Australia continues to set minimum wages per industry. Benefits such as healthcare, pensions and prescription drugs are means tested, directing more to the poor than the wealthy.

Australia’s economy has grown because of skyrocketing prices for its iron ore, coal and aluminum, which fuel China’s factories. The cheaper prices of China’s toys, appliances and other household products and office supplies have also helped raise living standards.

Of some concern is the fact that even in the face of the overall rise in prosperity, the gap between rich and poor is growing. In 1995, the richest 1% of the population earned 5% of the national income, which increased to 9% by 2006. These trends and impending changes by the government to slow minimum wage growth are stirring misgivings and protests.

A Controversial Topic

Those who support globalization point out that free trade enables companies from the rich industrialized countries to invest in poorer countries, providing jobs to local citizens and improvements to infrastructure. Many multinational corporations now reduce labor costs by outsourcing portions of their business operations to countries such as India and China. This has been particularly true of the manufacturing sector.

Foreign companies also provide wealth to local economies in the form of foreign currency when they buy local products and services. In many cases, they have built schools, colleges and hospitals for the local residents, enhancing the quality of life.

Advocates also contend that globalization allows for the mixing of people and cultures, further enabling the sharing of ideas, experiences and lifestyles. People can experience foods and other products not previously available in their own country.

Overall, supporters of globalization argue that it has brought improved standards of living and quality of life to several countries. They point to examples such as China. As a result of opening its markets to the world, China’s economy can claim an increase in per capita personal income from $1,420 in 1980 to $4,120 by 1999. In 1980, Americans earned 12.5 times as much as the Chinese per capita. By 1999, they were only earning 7.4 times as much.

Anti-globalization protesters gear up for demonstrations around the G8 summit of industrialized countries in nearby Evian by sitting in the streets of Annemasse, France.

Supporters cite globalization as having benefited countries in a number of ways, particularly poorer ones. For example, the percentage of people in developing countries living below $1 per day has halved in only 20 years; life expectancy in the developing world has almost doubled since WWII and is closing the gap with the developed world; between 1950 and 1999 global literacy increased from 52% to 81%.

But globalization has equally vocal opponents. In recent times, globalization has been blamed for a host of ills, including poverty in the Third World, job losses in industrialized countries and even the “Americanization” of other cultures.

“Anti-globalists” contend that it operates only in the interests of the rich nations and multinational corporations. They argue that such corporations exploit workers in the developing world, subjecting them to poor working conditions in “sweat shops,” and paying them salaries that they would not be allowed to get away with back home. They contend that the multinational profits are repatriated and little is invested in the communities whose labor and resources they consume.

These critics also say that the gap between the rich and poor nations is growing, and that globalization has not benefited poorer countries. Figures used frequently to back their position come from a variety of sources, including a report from the United Nations Development Program. For example, the gap in incomes between the 20% of the richest and poorest countries has grown from 30 to 1 in 1960 to 82 to 1 in 1995.

By the late 1990s, the fifth of the world’s population living in the highest-income countries had:

• 86% of the world’s gross domestic product—the bottom fifth just 1%.

• 82% of world export markets—the bottom fifth just 1%.

• 68% of foreign direct investment—the bottom fifth just 1%.

• 74% of the world’s telephone lines—the bottom fifth just 1.5%.

These anti-globalists say this rising inequality is the result of market forces. They say that given free rein, market forces give the rich the power to add to their wealth. Therefore, they argue that large corporations invest in poor countries only because they can take advantage of low wage levels or so they can access their natural resources.

The Future

So what does the future hold? What will be the result of the increasingly interconnected state of the world’s nations?

While there are many opinions, there is only one source that can give us the true answer—the Holy Bible. In it, God accurately foretold the rise and fall of the major nations throughout history, including the Babylonian, Medo-Persian, Greek and Roman empires (Daniel 2). He even prophesied the sudden rise of the American and British people to world prominence.

And God has foretold today’s fast-paced interconnected world and its matchless advances in science and technology: “But you, O Daniel, shut up the words, and seal the book, even to the time of the end: many shall run to and fro, and knowledge shall be increased” (Dan. 12:4).

The Bible states that, in the future, a union of ten nations (or groups of nations) will arise, and replace America as the dominant world power. It will attack and defeat America and Britain, taking the survivors into captivity. This political, economic and military combine will be backed by a universal false church. It will become a world-leading trading bloc, possessing vast riches and trading all over the world in every product imaginable—even human beings! (See Revelation 18:3, 9-18.) This politically influential religious entity, led by a charismatic figure, will usher in a temporary period of great wealth. Globalization will thrive during its reign to levels unseen in human history—prosperity will flourish, but not for all.

However, shortly after the rise of this ten-nation union, it will be replaced by a world-ruling supergovernment that will usher in lasting peace, prosperity and security for all (Isaiah 9:6-7). Upon His triumphant Return, Jesus Christ will take over all the governments of men, and administer His government—the kingdom of God—throughout the earth. At that time, the world will become truly “one”—one with God.

True globalization will occur, but according to God’s just standards. No more inequality. No more poverty. No more exploitation. Peace will abound. What a wonderful picture—soon to become a reality!

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