Process of globalization gathers economics at national levels, political systems, cultures and features of capitalism. Bretton Wood companies supported globalization in the name of elimination of cross cultural limitations and nurturing the concept of free market at a global scope but on contrary globalization agencies imposed policy reforms favoring particular economies. The observations has shown that globalization had several hidden outcomes that proved to be more adverse than its benefits.
The concept of globalization in order to reinforce a new political economic continuum specially on third world countries required minimal state interference and used the model of privatizing the public sector which afterwards diminished the state sovereignty.
This article discusses most the economic dimension of globalization which includes volume of trade, imports & exports, foreign direct investments, capital flow and number of MNC’s and all these things should be kept in mind with a reference of internationalization. The matter of fact is that globalization promised to boost all these economic measures and it did so very well but it has also delivered some outcomes which was never promised. Collapse of communist states and destruction of nationalism (Specifically in third world countries) are two of those adverse effects.
It should be understood that Neo-liberal perspective that modifies the concept of liberalism in favor of free-market capitalism, in this regard, directly targets the state protectionism that is most important in terms of culture, religion, civilization, ideology, values, beliefs and norms. Internet has played a vital role in spreading the information and making the world global village but unfortunately internet failed to educate the aspirants of free market economy in third world that they cannot hold equal status in world by diminishing their state sovereignty and protection.
New political economy holds a concept of utilitarianism and opportunism for the sake of limited interest. This concept doesn’t let it to perform for vast scope regarding public. After end of colonial era, the affected countries tried to provoke nationalism and state centric domination in order to be independent of foreign possessions. Basic public needs such as food, shelter, health, education and clothing were the matter of public institutions to be dealt with while taking public in the shadow of citizenship rather than being involved with them as they are customers and public institutions are private business entities. But unfortunately globalization demanded the replacement of public sector with privatization and pro market conceptions.
Diminishing the superiority of pubic institution’s monopoly, globalization enhanced the scope of market competition. And many third world countries adopted this model either willingly or forcefully. Equal opportunities to international organizations on basis of competition and effectiveness have abstracted the state role to be proactive in identifying the public needs and delivering them the solutions.
These economic reforms were accepted to boost economic efficiency, reduction in public sector mismanagement, guarantee of efficient allocation of resources but on the other hand, it has been observed that these claims are based on extremely narrow economistic criteria that overlooks the adverse and immensely negative effects of them such as increasing poverty, social inequality and external dependence of states. These reforms have made state to hand over all the public institutions to private sector and private sector is treating the citizens as customers. As a result, the income, basic needs and welfare of those countries who have accepted these reforms are getting worsening. Simply, it is just like that the rich will get richer and poor poorer.
Concluding the argument, it is needed to examine the process which creates the relationship between few international beneficiaries and the business like state activities because this relationship has certainly weaken the original beneficiaries of state orientations.