The Effects of Globalization

globalization

What is Globalization?

Globalization in this context is defined as “a process of integration of the world’s economies in the international division of labor of the capitalist world system and a concomitant shift of power from nation states to multinational corporations and other organizations controlled by the core capitalist countries” (Dupuy 1989; pg. 46). It is based on the ideals of capitalism through the expansion of the international financial system, the primary focus on capital, the opportunity for profitable international production, and increase in competition amongst the strongest capitalist countries. Those that favor globalization argue that if a country opens up its economy and environment to the possibility of foreign investment, these countries will revitalize their economy by becoming producers of manufactured goods and services in the world market. Although due to the capitalist ideals that drive globalization, wealthy countries and wealthy multinational corporations desire to invest in countries who have an abundance of natural resources such as oil, indigenous labor markets, and various metals as a way to exploit profit. This is where many of the problems within globalization manifests. Poor countries who lack desirable resources or high-valued goods and services are viewed as insignificant, thus decreasing the country’s opportunity for profit from exporting goods and services into the world market. This ultimately leaves these poorer countries in a state of extreme dependence on foreign imports and support from the World Bank as a way to sustain themselves after surrendering their economies, natural resources, and labor market to neoliberal policies. Ultimately these countries become centers of exploitation from foreign powers, which is recognizable in Haiti’s current position. Also according to Hebron and Stack the gap between the rich and the poor has only seemed to widen since the expansion of globalization. For example Heron and Stack state in their text, Globalization: Debunking the Myths, “The richest fifth of the world’s population owns 80 percent of the world’s resources, while the poorest fifth owns barely .5 percent” (Hebron and Stack 2011; Pg. 55).

Globalization and Haiti

The influence of global policies on the economic well-being of Haiti can be traced back to the Haitian day of independence in 1804. By declaring independence from the French, Haiti was placed in a compromising situation. Former French slave owners demanded reparation for their loss of land and slaves after the Haitian Revolution. The French government argued that unless Haiti paid for these reparations they would continue to go unrecognized as an independent state. These reparations would come at a cost of 150 million francs (Higman 2011: Pg. 151). Haiti was only ever able to pay back a small portion of this due to its struggling economy. In accordance with the views of the French, many global powers such as the United States also refused to recognize Haiti as an independent state. The European view of negative portrayal of blackness greatly contributed to this. None the less, this globally excluded Haiti from any form of global trade. This exclusion was problematic in the sense that due to years of deforestation and environmental manipulation to make way for sugar plantations, individual agriculture was initially difficult. Ultimately global exclusion from the world market originally crippled Haiti’s newly established independent economy.

Workers stitch Hanes tee-shirts at a factory in the CODEVI free trade zone in Ouanaminthe, Haiti. Credit: Jude Stanley Roy
Workers stitch Hanes tee-shirts at a factory in the CODEVI free trade zone in Ouanaminthe, Haiti. Credit: Jude Stanley Roy

In addition to Haiti’s initial problem with global exclusion, the Washington Consensus greatly contributed to Haiti’s poor economic standing. The Washington Consensus is a series of neoliberal, structural adjustment reforms that were developed in the late 1980s. These reforms were developed in order to promote capitalist investment in third world countries as a way to spark economic growth within these countries. The Washington Consensus discredited central planning practices that supported state centered development and solely supported the expansion of economic policies into the global market (Dupuy 2005: Pg. 48). As previously discussed, it is the core capitalist countries that benefit greatly from these reforms rather than the impoverished countries in which these reforms have been enforced. After pressure from world powers to implement the reforms of the Washington Consensus, the Haitian government agreed to revamp its economic structure. The result of this, is shown through the economic instability that plagues Haiti today. Also due to the overwhelming amount of foreign involvement within the Haitian political structure, globalized development policies have had very real consequences on the poor population.