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МИНИСТЕРСТВО ОБРАЗОВАНИЯ И НАУКИ РФ ГОСУДАРСТВЕННОЕ ОБРАЗОВАТЕЛЬНОЕ
УЧРЕЖДЕНИЕ ВЫСШЕГО ПРОФЕССИОНАЛЬНОГО ОБРАЗОВАНИЯ
«ВОРОНЕЖСКИЙ ГОСУДАРСТВЕННЫЙ УНИВЕРСИТЕТ»
THE PHENOMENON OF GLOBALIZATION
Part 2
Учебное пособие для вузов
Авторы:
Н.В. Ильичева, А.А. Махонина
Воронеж 2012
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Утверждено научно-методическим советом факультета романо-германской филологии ВГУ 13 ноября 2012 г., протокол № 9 Рецензент канд. филол. наук, доц. И.Ю. Вострикова Учебно-методическое пособие подготовлено на кафедре английского языка в профессиональной международной деятельности факультета романо-германской филологии Воронежского государственного университета. Рекомендуется для студентов 3го курса факультета международных отношений. Для направления 030700 – Международные отношения и направления 032300 – Регионоведение
Unit 1
Players of Globalization
Lead-in
1. a. The world today is populated by a growing number of regional,
subnational and transnational actors, who actively contribute to the
globalization process and to the ongoing developments in global
infrastructure. Work in groups. Think what types of global actors take an
active part in promoting globalization nowadays.
b. What relation do states have to the activities of the players of
globalization?
c. How can these types of organizations be characterized? Look at the table
and fill in the gaps with distinctive features of the given global institutions.
An example of a description is given. Can you name any more
representatives of these kinds of organizations?
Types of Organizations Description Representatives
Intergovernmental organizations, also known as international governmental organizations (IGOs)
The United Nations (UN); Organization for
Security and Co-operation in Europe (OSCE);
International nongovernmental
International non-profit organizations
International Committee of the Red Cross; Médecins Sans
Frontières;
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organizations (INGOs)
International corporations, referred to as multinational (or transnational) corporations
A multinational corporation is a company which operates in more than one country, as opposed to a purely domestic business which has no operations abroad. There are now 63,000 multinational corporations in the world. They are responsible for two thirds of global trade and 80% of investment. They are the economic force behind globalisation.
The Coca Cola Company; Toyota;
d. Discuss in pairs what the mission of these organizations is? How powerful
are they? Can they be called “a characteristic tendency of the globalized
world”?
2. a. Intergovernmental organizations promote globalization by stating
common aims and promoting common development modes. They represent
supranational bodies with a mandate to work and regulate relations among
states, governments and corporations. Look at the emblems of different
global institutions below and decide what organization they belong to.
Brainstorm what the main activities of these organizations are.
1. 2. 3. 4.
5. 6. 7. 8.
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c. Now use the information discussed and fill in the table below. Add more
points to the suggested ones.
Global Institutions Purpose of Creation Main Achievements The United Nations (UN) to preserve peace through
5
international co-operation and collective security;
to promote international cooperation, justice, social equity and economic development;
to provide humanitarian relief and development services.
The World Bank
has given interest-free grants and interest-based loans to help economically vulnerable communities and countries;
has lent money for what it calls adjustment projects, which are to support governments undertaking policy reforms, such as improved public sector management.
The International Monetary Fund (IMF)
to secure global financial stability;
to maintain order in international finance markets;
to encourage stability in exchange rates and orderly systems for exchanging money between countries;
to foster global monetary cooperation.
The World Trade Organization (WTO)
supervises 95% of the world’s global trade, assists trade related issues of its member nations that produce, export and import goods and services in a smooth manner.
contributes to the growth of trade by lowering of barriers, such as tariffs and import quotas.
improved monitoring by introducing the Trade Policy Review and the World Trade Report
increased transparency by removing green room
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negotiations The North Atlantic Treaty Organisation (NATO)
to unite Europe and North America in an alliance to safeguard the freedom and security of all its members using political and military means;
to evolve its role beyond the Euro-Atlantic area in dealing with the growth of global terrorism.
The International Court Of Justice (ICJ)
has settled legal disputes between states in accordance with international law.
is effective in territorial disputes between countries such as "Fisheries" case when the court settled a long-standing dispute between the United States and Norway involving British fishing vessels operating inside Norwegian claimed waters.
in its role as an advisory body, the court has given some important opinions with regard to the costs of peacekeeping, which could be reckoned as normal expenses.
G8 to secure political commitment to action on key global issues such as cancelling the debt of the world's poorest countries or making safe nuclear facilities.
to foster consensus on global issues such as economic growth and crisis management, global security, energy, and terrorism.
The Organisation for Economic Cooperation and Development
has offered peer reviews to member nations about their performance.
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(OECD)
has offered expertise and ideas to over 100 non-member countries for their economic development.
shifted to ‘Think global, act local’ to maximize new opportunities for democratic participation.
continued focus on economic growth through innovation.
The Organisation of the Islamic Conference
to consolidate cooperation among member states in economic, social, cultural, scientific, and other fields of activity.
to endeavor to eliminate racial segregation and discrimination and to oppose colonialism in all its forms.
to support all Muslim people in their struggle to safeguard their dignity, independence and national rights.
The World Economic Forum (WEF)
the Investment Climate Facility for Africa was launched in Cape Town with secured seed funding of US$ 100 million and a strong, business-led mandate to improve Africa's investment climate.
ensured access to education. For instance The NEPAD e-Schools Initiative project operates in 16 African countries and funded e-access in 120 schools by completion in mid 2007.
has worked out guidelines for large companies to support the HIV/AIDS programmes of smaller companies in their supply
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chains. International Chamber of Commerce
to serve world business by promoting trade and investment, opening markets for goods and services, and the free flow of capital.
to endorse globalisation and efforts to lower barriers to international trade and investment.
to lobby for open trade, business self-regulation, fights corruption and commercial crimes.
Other
d. Work in groups. Discuss the following.
• How do these organizations shape the world order?
• What is their contribution to the proliferation of globalization?
3. a. International organizations are considered to be useful in harmonizing
national and international policies, avoiding potential trade and investment
disequilibria, dealing with problems of overlapping jurisdiction, and
encouraging the development of multinational corporations by means of
regulatory legislation and decision-making. Multinationals are believed to be
another type of promoters of globalization due to their activities. Study some
activities of multinational corporations and match them with the beneficial
outcomes given below. Note that there is always more than one beneficial
outcome of an activity.
Activities of multinational corporations
Beneficial outcomes
1. …
Multinational companies are sensitive to global opportunities.
2. …
3. …
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Multinational companies invest in an area.
1. …
2. …
3. …
Multinational companies may provide training and education for employees.
1. …
2. …
3. …
Multinational companies purchase existing national assets through the privatisation process.
1. …
2. …
3. …
A. Management and entrepreneurial skills learned from multinationals are an
important source of human capital.
B. Multinationals provide jobs directly or through the growth of local ancillary
businesses such as banks and insurance.
C. Multinationals are able to sell far more than other type of company.
D. Multinationals can avoid transport costs.
E. Multinationals support better financial market regulation and supervision.
F. Multinationals can achieve great economies of scale.
G. Multinationals generate more income as newly employed workers spend their
wages on consumption.
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H. Multinationals create a higher skilled labour force.
I. Multinationals lead to a more efficient allocation of the worlds’ resources.
J. Multinationals contribute tax revenue to the government and other revenues.
K. Skills trained by multinationals may be transferred to other areas of the host
country.
L. The injection of multinationals into the local economy is significant.
b. Work in groups. Discuss the following.
• What stimulates the activities of multinational corporations?
• Why do you think multinational corporations are considered to be weighty
in promoting globalization?
Listening
4. a. You are going to listen to several political observers analyzing the role
intergovernmental organizations and multinational corporations play in
promoting globalization. Before you listen, study two opposing points of view
on their activities and decide which one you agree with more.
1. Intergovernmental organizations and multinational corporations have
become increasingly prominent in the development of international collaboration.
Harmony and progress have not only been fostered by free trade, but have also
been proven by the evidence of our times. Shared economic interests beget
friendships and alliances between formerly antagonistic nations. Wars and
conflicts are avoided, lives are not put at risk. Thus, all these players of
globalization are no longer seen as merely advisors and observers to international
cooperation, but they take a more active role as a source of expertise.
2. Hypermobile global players are moving around the world in search of
territories with higher subsidies and lower labour costs. Governments compete
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for multinational favor by offering attractive terms, including concessions, tax
holidays, advantageous depreciation, low cost land for factories and other
incentives. The owners and managers of global corporations in their turn view the
entire world as their factory, farm, supermarket, and play-ground. As a result the
prize won by governments in granting short-term advantages brings devastation
in the long run since improvements in the material aspects of the human
condition are not worth the social cost.
b. Growing activism of globalization promoters does not mean that they
operate flawlessly. Together with beneficial outcomes of their activities,
there are many detrimental consequences. Match positive effects of the
activities of multinational corporations with possible negative results.
Positive effects
1 Investment and increased export income improves a country’s balance of payment.
2 Multinational corporations introduce otherwise unavailable goods and services that are essential for diversifying production.
3
Transnational corporations increase productivity of labor by supplying foreign technology and training a skilled workforce.
4 Workers of multinational corporations receive wages that are often substantially higher than those earned from traditional jobs in developing countries.
5 Multinationals stimulate local entrepreneurship by subcontracting to local industries and enhancing competition.
6 New domestic industries appear due to an opportunity for technology transfer.
7 Host government consider multinationals to be a source of tax revenue.
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Specialization of production creates economies of scale, making exports more profitable and competitive, which increases national income.
Negative effects
A Transnational companies exacerbate income inequality by generating jobs and producing goods that primarily benefit the richest portion of the population.
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B Transnational corporations limit the transfer of patents, industrial secrets, and other
technical knowledge to local subsidiary.
C Growth is concentrated; investment in infant industries is neglected.
D Multinational corporations repatriate profits and restrict exports by a subsidiary when they undercut the market of the parent company, which worsens a country’s balance of payments.
E Multinational corporations require the subsidiary to purchase inputs from the parent company even when domestic supplies are cheaper.
F Labor-saving technology increases unemployment.
G Multinationals often demand tax concessions and subsidies, and what is more they can evade taxes by overpricing inputs transferred from another subsidiary or underpricing outputs sold by the multinational to another country.
H Multinationals introduce inappropriate products, technology, and consumption patterns (Nestle infant formula).
c. Owing to a possibility of pernicious aftereffects of the global players’
activities these organizations are facing severe criticism. According to the
data given below, guess what the grounds for the criticism are. An example
is given.
Data on the activities
of multinationals
Grounds for
criticism 1. The WTO makes decisions by “consensus” among
its members rather than by voting. In practice this
means that the rich nations band together and
negotiate policies which they then impose on other
member states. The WTO tradition is to present
various deals as a fait accompli that other
countries must accept if the multilateral trading
system is to survive. In practice, this would mean
that many smaller developing countries (the
International
organizations
are
undemocratic.
13
majority of the WTO’s members), that have been
excluded from the negotiations, could be forced
into accepting a deal that could wreak havoc on
their economies and the environment and
undermine their democracies. All decisions at the
IMF and World Bank are taken on the basis of
“one dollar one vote”, which guarantees the
world’s richest countries an inbuilt majority.
2. The rules of international organizations like the
WTO are written by and for corporations with
inside access to the negotiations. International
organizations sign treaties that facilitate fiscal
cross-border operations and reduce tariff barriers
aiming to support domestic producers. In reality
only multinational corporations benefit from such
agreements as local companies aren’t competitive
on the global market. The WTO has become the
vehicle for liberalisation, with the multinationals
at the wheel. It has the power to punish
governments who “interfere” with free trade,
leaving the field wide open for multinationals in
pursuit of profit. The WTO agreement on
intellectual property rights (TRIPs) also benefits
corporations. It imposes strict rules protecting
patents, copyrights and trademarks – most of
which are held by multinationals. This increases
the monopoly control some multinationals have,
preventing local firms from developing similar
products. It also allows multinationals to own
rights to the use of plants and natural derivatives,
like the natural pesticide from the Neem tree,
which has been used for hundreds of years by
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farmers but has now been patented by a US
corporation.
3. Workers in poor countries may have to work 12
hours a day, seven days a week with few
protections for health and safety. In some
countries, globalization leads to the exploitation of
child, and prison labour. The rules of international
organizations don’t protect workers’ rights to
organize, which leads to workers’ exploitation and
lack of defense by trade unions. For example, a
woman who sows a $200 Liz Claiborne jacket in
El Salvador is paid just 74 cents. In the US, the
labour cost to sew a garment is typically 10 per
cent of the retail price.
Coca-Cola is said to be one of the most
discriminatory employers in the world. In the year
2000, 2,000 African-American employees in the
U.S. sued the company for race-based disparities
in pay and promotions.
In Colombia, the IMF complained in January 2003
that labor market reforms do "not go far enough"
because the minimum wage is still indexed to the
cost of living.
Even for Germany, the IMF has recommended
“wage moderation”, an “aggressive elimination of
spending on active labor market policies” and
reduced unemployment benefits.
4. Multinational and intergovernmental organizations
promoting trade consider environmental
protections to be “barriers to trade”. Some
countries’ officials are bribed to give permissions
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to fell rainforests, to use cyanide heap leach
technology for mining, to increase the amount of
GMO seeds in agriculture. The petrochemical
company Chevron left more than 600 unlined oil
pits in pristine northern Amazon rainforest and
dumped 18 billion gallons of toxic production
water into rivers. The toxic crude oil and
formation water seeped into the subsoil,
contaminating surrounding freshwater and
farmland. As a result, local communities suffered
severe health effects, including cancer, skin
lesions, birth defects, and spontaneous abortions. It is known that the WTO is negotiating an
agreement that would eliminate tariffs on wood
product, which would increase the demand for
timber and escalate deforestation.
5. International organizations like the WTO are
responsible for violating national and individual
independence by promoting mass homogeneity,
sameness, and standardization which erases
individuality, specificity and difference. Mass
consumption of standardized goods brought up by
international trade and Foreign Direct Investment
in cultural and other sectors may be seen as
negative because it crowds out self-produced,
traditional and locally manufactured goods and
services or tends to reduce the perceived value of
these goods to their so-called “pure” market value.
The growth of sameness and a presumed loss of
cultural autonomy is viewed as a form of cultural
imperialism of international organizations and
multinational corporations.
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Companies like McDonald’s popularize similar
patterns of consuming food all over the world.
MTV, the television rock music station, was
launched in 1981 when it reached 1.5 million
householders. By 1991 it reached 201 million
householders in 77 countries, across 5 continents.
Given the global reach of MTV and the nature of
popular music, this example might be regarded as
a good illustration of cultural homogenization.
6. The IMF and World Bank practice ideological
interference and determine development paths of
countries. WTO rules mean that governments are
not allowed to “interfere” with trade. Increasingly
this is being interpreted to mean that governments
cannot even make normal domestic policy if it
might have an impact on an overseas company
wishing to sell its goods. Even government rules
to protect the health of their citizens have come
under attack.
The processes of apartheid – declared a crime
against humanity by the United Nations in the
1960s – witnessed close collaboration between
foreign corporations including mining, banking,
technology, automotive and energy corporations
such as Fujitsu Ltd, Barclays, IBM, Daimler AG
and the Ford Motor Company among others,
intentionally financing, aiding and abetting the
regime, in exchange for access to natural resources
such as gold and diamonds, and deliberately
cheapened human resources or labour. The
reasoning – business as usual – was quickly
justified by corporations such as Ford who stated,
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“Why are we in South Africa? We would not be
there were there not an opportunity to make a
profit.”
7. Free trade pitches powerful rich countries against
the Third World. Developing countries are
prohibited from nurturing their industries in the
way that industrialised countries did during their
own development. The significant impact on
power disparity is due to the profits extracted by
the multinationals that take over developing
country systems. For example, the 20% of world’s
richest population devour 86% of world’s natural
resources while the 80% of the underprivileged are
left with 14% of the resources.
Global trade rules, and especially International
Monetary Fund and World Bank conditions, have
required developing countries to remove tariffs on
agricultural imports. That has left them vulnerable
to accepting the international market price – even
if it is the product of a rigged system, and even if
it impoverishes the countries’ farmers and drives
them out of their livelihoods. One of the World
Bank’s present fads is water privatization. Clean
drinking water is a basic need for survival, but
widely unavailable in poor countries. Privatization
in water and sanitation has led to much higher
fees, sometimes overnight and sometimes with
disastrous consequences. Diarrhea kills more than
a million children a year in developing countries,
simply because their families lack access to clean
drinking water.
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d. The following words and phrases appear in the passage you are going to
hear. Explain their meaning in your own words. Choose five words or
phrases and make up sentences using them.
●a modification ●sovereignty over natural resources ●to wield power ●to
constrain from ●the plight of individuals ●to hamper ●a reprisal ●pervasiveness
●to pose a threat ●presumably ●a subsidiary ●hazardous ●to retain an image
●ambivalently ●to penetrate new markets ●to adhere to the standards ●to curb
child labor ●a hindrance ●to amplify the timber demand ●to trigger deforestation
●a disparity
e. Now listen to five political observers analyzing the role intergovernmental
organizations and multinational corporations play in promoting
globalization.
Task 1
Fill in the table putting a tick to show whether the speakers approved or
disapproved of their activities.
speaker
1 2 3 4 5
approved of the activities disapproved of the activities
Task 2
Now listen to the recording again. Decide which of the statements (A-I)
matches what the speaker says. There is one extra statement which you do
not need to use.
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A MNC are forced to think about social protection of
their workers.
B International organizations widen the gap between
the rich and the poor.
C International organizations deal not only with
political and economic problems.
Speaker 1
D The activities of multinationals are detrimental for
the world’s future.
Speaker 2
E Although the role of multinationals is controversial,
they are active participants of international
relations.
Speaker 3
F International organizations do their best to meet
peoples’ needs.
Speaker 4
G The appearance of international organizations can
be traced back deep in history.
Speaker 5
H There are examples of different organizations which
oppose the activities of multinational corporations.
I The activities of multinational corporations are
beneficial for developing countries they operate in.
f. Discuss in groups.
• Do intergovernmental organizations and multinational corporations think
globally or are they motivated by their own interests?
• How can these actors of globalization be made fairer?
Reading
5. a. Read the information about the influence of international organizations
on the domestic policy-making and comment on the role these organizations
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play in the formation of national policy. Do you believe nation-states should
coordinate their policies in accordance with the view of international
organizations? Are they partners or competitors in their effort to form and
guide national policy?
The IMF contributes to promoting good governance in member countries
through different channels. First, in its policy advice, the IMF has assisted its
member countries in creating systems that limit the scope for ad hoc decision
making, for rent seeking, and for undesirable preferential treatment of individuals
or organizations. To this end, the IMF has encouraged, among other things,
liberalization of the exchange, trade, and price systems, and the elimination of
direct credit allocation. Second, IMF technical assistance has helped member
countries in enhancing their capacity to design and implement economic policies,
in building effective policymaking institutions, and in improving public sector
accountability. Third, the IMF has promoted transparency in financial
transactions in the government budget, central bank, and the public sector more
generally, and has provided assistance to improve accounting, auditing, and
statistical systems. In all these ways, the IMF has helped countries to improve
governance, to limit the opportunity for corruption, and to increase the likelihood
of exposing instances of poor governance. In addition, the IMF has addressed
specific issues of poor governance, including corruption, when they have been
judged to have a significant macroeconomic impact.
b. Study two points of view on the relations between governments and
multinationals below. Compare them and decide which one you agree with
more. Tell your partner.
“We're supposed to have a government of, by and for the people.
Instead we have a government of the Exxons, by the General Motors and for the
DuPonts” (Nader)
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“The heart of the issue at stake is the policy regime that allows
countries to capture most successfully the benefits of the activities of
multinational companies. If, and only if, we get this right can we be confident in
saying that such companies are our servants and not our masters” (Roger Kerr)
c. You will read an article about the relations between governments and
multinational corporations. Before you read, look at the title of the article.
What do you think the message of the article is?
d. Read the text. Six paragraphs have been removed from it. Choose the
most suitable paragraph from the list (A-G) for each part (1-5) of the text.
There is one extra paragraph which you do not need to use. There is an
example at the beginning (0).
The Nation-State and the MNE
A Struggle for Power Michael J. van Lierop
At the dawn of the 21st century, the roles, influence and capacities of the
nation-state are increasingly under scrutiny as the importance of the multinational
enterprise gains ever greater prominence in world affairs. While views
currently span the entire spectrum, from that of nation-state abolition to that of
trade and financial de-liberalization, it is abundantly clear that after already a few
decades of rising corporate presence at the international level the state is under
considerable and mounting pressure. It is universally recognized that the
multinational enterprise bears at its core an endemic need for not only MNE-
friendly state policies and certain natural, human and capital resources, but also
carries with it the value-laden preference for small government and liberal
democracy. Within this context, clearly, the nation-state has been undermined by
the MNE in almost every vital area as the unchallenged authority within the
international system. In this regard, the nation-state has become subservient to the
needs and free-market hegemony of the multinational enterprise.
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0 C Integral to the argument that MNEs pose a growing threat to the state, and
in fact are acquiring a unique stature among international actors which pushes the
MNE closer to the extreme opposite of the subservient nation-state, that of the
masterless corporation or international overlord, is the very size, power and
pervasiveness of the multinational firm.
Currently, there are over 2,000 large MNEs (operating in more than six
countries) and over 37,000 smaller MNEs throughout the world, which
collectively control some 270,000 subsidiaries, are worth tens of trillions of
dollars, and employ over 35 million workers world-wide. General Motors, the
world’s largest MNE, with a GCP (Gross Corporate Product) of more than $170
billion, ranks it twenty-second among all global economic entities, governments
included. Indeed, multinational enterprises represent fifty-one of the world’s one-
hundred largest economic entities, the remaining forty-nine being nation-states. 1
Part and parcel of the argument that the nation-state has become
subservient to the MNE are the aspects in which governments aim to, or are
succumbed to, serving the needs of multinational corporate investment. Indeed,
Mathew Horsman and Andrew Marshall indicate the three golden rules states
must adhere to in order to lure and maintain MNE interests, the cornerstone of
these being the open economy, which is characterized by the open market, open
regulation, and open capital markets. Accordingly, the TNC thus places a certain
degree of limitation upon the state by virtue of its political needs, demanding
security, stability, and efficiency aside from the resources it ultimately requires
and utilizes. 2
An integral component to the MNE versus nation-state struggle is that of
the inherent flexibility and mobility of the multinational firm. Put succinctly, the
domestic enterprise relies on an internal market and resource base, which
23
generally restricts its mobility within the confines of any given state, whereas
the multinational enterprise relies on a global, transnational market and has at its
disposal resources from its home and, quite possibly, other host countries. As a
result, the MNE has the ability to move to benefit its bottom line just as much as
it can move to undermine unfavourable or simply disliked host-country policy.
The commercial flexibility of the MNE as one of its key characteristics has
been acknowledged unanimously for quite some time; concomitantly, this is what
poses the greatest threat to nation-state supremacy. As Stephen H. Hymer noted
in the early 1970s:
“Multinational corporations, because of their size and international
connections, have a certain flexibility in escaping regulations imposed in one
country. The nature and effectiveness of traditional policy instruments –
monetary policy, fiscal policy, anti-trust policy, taxation policy, wages and
income policy – change when important segments of the economy are foreign-
owned.” 3
The authority and capabilities of national policy are drastically challenged
by the manner in which the MNE chooses to invest and how it can readily alter
capital inflows to the detriment of the host-country. That is assuming a state can
lure the MNE in the first instance, but what of national policy once they have
landed on home soil? 4
Still, the balance of power between MNEs and government remains
precariously disequilibrium. The size and global reach of the biggest
multinational enterprises have given rise to fears that decision-making powers
are passing from governments to boardrooms. These powers of policy-
creation remain strongly vested in government hands, but the extent to which
MNE interests lobby government suggests that while the nation-state may still
create the policy, it is the MNE spearheaded by the business lobby that ultimately
24
shapes the policy. At the global level, MNE interests are represented before such
integral international bodies as the WTO, EC, ISO, and the UN Commission on
Sustainable Development. Given any perspective, it is evident that MNE interests
can easily undermine national policy initiatives or plans, either through these
aforementioned international organizations, various NGOs or through MNE-
based direct pressuring. 5
A consequence of this erosion of sovereignty is, ultimately, a breakdown in
national capacities to dictate terms of engagement in the commercial
multinational theatre. But does a breakdown translate into subservience? Can one
suggest that because state supremacy is under attack that its ability to act
independently and make policy within its own domain to suit its own needs has
been completely or sufficiently undermined to imply subservience? Arguably,
yes. Without complete control and sovereignty over its own future, the nation-
state has acquired a substantially weakened position vis-a-vis the multinational
enterprise. The needs of the MNE supersede those of the domestic populace
simply because the domestic electorate need the money, the jobs and the
resources supplied by incoming MNE investment. By waving fat carrots at
MNEs, nation-states now serve as go-between match-makers linking corporate
interests from abroad with those from at home, acting as the elected middle-man
for FDI and the intended target, that being domestic enterprise. One thing
remains clear: the capacities of the nation-state have been challenged, eroded and
ultimately undermined by the actions and interests of the MNE, the result being a
diminution of state stature and power, positioning it as little more than a caterer,
at best a matchmaker, for the needs of multinational corporations.
A. Arguably, the competition between states to offer the best possible
environment for MNE investment indicates the ultimate extent to which this
subservience can be illustrated. From tax breaks to low wages, subsidies to rent-
25
free locations, submissive workers to sector deregulation, nation-state
governments fall over themselves to offer the best incentives to FDI (foreign
direct investment) and in so doing capitalize on one of the last domains which
they can affect internally - the maximization of the state’s preparedness and
openness to multinational enterprise dominance.
B. The TNC may increase or decrease employment based on shifting
patterns of comparative advantage, making employment less stable and
therefore undermining domestic policy by threatening to eliminate jobs.
C. Foreign-owned mega-corporations, be they willing to integrate locally
or not, play a consistently expanding role in international politics and continue to
challenge, with ever-increasing strength and persistence, the capacity of the
nation-state to act as a sovereign power, that is, to make policy and take action
according to its needs and desires regardless of external factors.
D. An examination of the magnitude of this issue and its implications for
the nation-state will begin, firstly, with an introduction of the multinational
enterprise, varying perspectives on its existence, and reasons for its
omnipresence; secondly, through an overview of the ways in which states serve
MNEs; thirdly, by analyzing the degrees of MNE flexibility and mobility that are
central to the state-MNE relationship; fourthly, by examining national policies
and their relation and impact on MNEs; fifthly, through a discussion of the state
of sovereignty under the MNE-onslaught; and lastly, with a conclusion spanning
the entire issue, offering a comprehensive evaluation pertaining to the subservient
position states have acquired vis-à-vis the multinational enterprise.
E. Accordingly, the ability of MNEs to move in line with overall corporate
agendas and remain flexible in their choice of location represents both a struggle
and a shift in the balance of power from the nation-state to the MNE, and from
the local human interest to the global corporate interest. The implications of this
capacity for choice and ultimately the capacity to take action are immense insofar
26
as the nation-state is left at the mercy of MNEs that may or may not enter, and
may or may not leave. The capital, skills and technology a MNE can carry with it
upon entry are, for many states, priceless commodities that domestically they
cannot afford, train for, or develop.
F. At the same time, however, MNEs are restrained to some degree and
with varying success by a number of agents; international laws, national laws,
WTO trade rules, compliance with OECD, ICC or UN codes or practice,
shareholder pressure, market competition, employee pressure, public interest
groups, and law suits can all influence, affect and alter MNE decisions and
practices within host or home countries. Nevertheless, MNEs continue to carry
out their commercial activities with increasing impunity to actual nationally-
oriented policy, again, due in large part to their desirability, and their overall
flexibility and mobility. Undeniably, the MNE poses the greatest threat to the
nation-state and its sovereignty, arguably as much so as any traditional territorial
encroachment. Essentially, the MNE derives this strength from commercial
power and the general lack of international corporate law.
G. According to sales alone, GM (US), Ford (US), Mitsui (Japan),
Mitsubishi (Japan), Itochu (Japan), and Royal Dutch/Shell (Netherlands) occupy
the top six positions, each with sales well-exceeding $125 billion in 1996. In
relation, Turkey, Norway, South Africa, Poland, Portugal, Malaysia, among
several-dozen others, each have GDPs that compare or fall below those of the
aforementioned MNEs.
Vocabulary Practice
6. a. Fill in the gaps with the appropriate word(s) from the list below in a
correct form. There is one extra word which you don’t need to use.
impunity unanimously, to spearhead, pervasiveness, encroachment, to lure,
shareholder, endemic, diminution, ultimately
27
1. “We need strong and sustained political commitment from all countries where
malaria is ..............., and from the global health community, to see this fight
through to the end,” says Dr Robert Newman, Director of Global Malaria
Programme. (belonging or native to a particular people or country, common in a
particular area or field)
2. Some ............... of Minnesota’s most well-known companies call for
disclosure of political giving because enterprises make contributions to
controversial candidates and it can hurt the company’s reputation. (one that holds
or owns a share in property or company)
3. Frustrated by expensive and slow shipping abroad and wanting more control
over the manufacturing process, companies ............... U.S. production back to the
United States. (to persuade smbd to do something by offering some pleasure or
gain, attract actively and strongly)
4. The House of Representatives ............... opposed more United Nations control
over the Internet, wanting to keep the Internet free from government control and
prevent the U.N. unprecedented power over Web content and infrastructure.
(being of one mind, acting in agreement with everyone)
5. Effectively implemented, humanitarian diplomacy can persuade governments,
organisations, business groups, community leadership and public to act
differently and ............... to change in some way approach to further sustainable
development agenda. (in the end, eventually)
6. During its 2001 legislative session, the US Congress devoted a great deal of
time and focus to the topic of ..............., defined as the real or perceived conflict
between the military training mission and the physical environment of habitat,
species, people and communities. (an action of siezing and taking over the place)
7. Among the main achievements has been the U.S. support for and participation
in the emerging multilateral frameworks of international justice and the global
28
campaign against ............... for war crimes and crimes against humanity. (a
release or freedom from punishment, harm)
8. Enhanced media power due to technological advances is a potent new tool of
diplomacy that is why its immediacy and ............... raise major challenges for
political leaders intent on shaping the conduct of foreign policy. (an ability to
spread through every part of smth)
9. The death of the ideology of Marxism Leninism means the growing “common
marketization” of international relations, and the ............... of the likelihood of
large - scale conflict between states. (a reduction in size, importane, or intensity)
b. Match the words in columns A and B to form word combinations from the
text and give their Russian equivalents. Then make up your own sentences
as in the example.
A B
1. mounting a. commodities
2. priceless b. entity
3. to eliminate c. authority
4. an economic d. a unique stature
5. to acquire e. the entire spectrum
6. to span f. preference
7. unchallenged g. pressure
8. value-laden h. jobs
Under mounting pressure from UN and international aid agencies, Israel
temporarily opens the border crossings at Karni and Kerem Shalom to allow
food, fuel, and medical supplies to enter.
c. Find the odd word out.
1. wordily succinctly verbosely talkatively
2. concurrently simultaneously concomitantly asynchronously
29
3. to substitute to supplant to establish to supersede
4. incentive impetus incitement deterrent
5. stably precariously uncertainly doubtfully
d. Fill in the gaps in the following text with the suitable words and phrases
from the box in their correct form.
to the detriment of, drastically, part and parcel, to benefit its bottom line, to
move in line, under scrutiny, law suits, to bear at its core, immense
implications, cornerstone, to place a certain degree of limitation
With the issues of nuclear disarmament and nuclear power ..................
around the world, it has become axiomatic among Middle East watchers,
nonproliferation experts, Israel's national security establishment, and a wide array
of U.S. government officials that Iranian proliferation is held ..................... our
national security and will lead to a nuclear arms race in the Middle East.
Iran and six major powers – the permanent members of the UN Security
Council and Germany (the P5+1) – will hold another meeting the .................. of
which is to “look further at how existing gaps in positions could be narrowed and
how the process could be moved forward.” While one may have .................... that
the narrowed focus of these talks will somehow produce a .................. different
result than the previous sets of both substantive and technical negotiations,
experience demonstrates that such negotiations benefit Iran alone and are .............
of a comprehensive Iranian strategy, which ..................... 3D strategy of denial,
deception and delay. Simply put, the whole will ........................ with an Iranian
strategy of using negotiations as a means for advancing uranium enrichment and
the nuclear weaponization program itself.
While the comprehensive economic sanctions authorized by UN Security
Council resolutions ..................... , the Iranian government is already finding ways
30
to circumvent some .................. and .................. by forging strong trading
relationships with countries not in the pro-Western camp.
e. Match the two parts of the sentences and fill in a necessary preposition.
The example is given. Make up your own sentences with the italicized
expressions.
1. Democracy is a form of
government in which the supreme
power is vested
2. According to dependency
theory, even as developing countries
make economic advances, they remain
weak and subservient
3. A neoliberal institutionalist
approach suggests that states adhere
4. Why is it that the U.S., Britain and
Japan, despite their huge debts and
other economic problems, have not
succumbed
5. Although the UN has created expert
treaty bodies to assess compliance
6. The power of municipal
governments to enact ordinances is
derived
A. … the financial crises that are
threatening national bankruptcy for
Greece, Spain and Italy – and perhaps
soon for France?
B. ... the state constitution or statutes or
through the legislative grant of a
municipal charter.
C. ... core nations and corporations in
an increasingly integrated global
economy.
D. ... international norms when they
help resolve functional coordination
problems with other states.
E. ... the treaties, the key to successful
monitoring has been the contribution of
non-governmental organizations.
F. ... the people and exercised directly
by them or by their elected agents under
under a free electoral system.
Democracy is a form of government in which the supreme power is vested in
the people and exercised directly by them or by their elected agents under a free
electoral system.
31
f. Explain the highlighted words and phrases in the text in your own words.
Discussion
7. a. Discuss in groups.
• What are the grounds to state that MNEs undermine state sovereignty?
• Does the power of MNCs in the international arena give them the right
to displace national governments as the sole desicion-makers and agenda setters?
• Can the nation-state survive the onslaught of MNEs?
• Will the MNE remain the dominant economic force in the international
system, or will governments, resentful of the subservience, rise up and clamp
down on the rogue MNE?
• How can multinational corporations be effectively regulated without
infringing upon national sovereignty? Can they be made fairer?
b. Comment on the statements.
• There is something extremely stupid with the idea that opening trade
routes is necessarily a conspiracy by multinational corporations merely because
they are the only beneficiary. It is a persistent truism that when someone profits
everyone else must lose. This is simply not the case. Countries that trade various
resources also benefit. Of course if you open up trade MNEs are going to profit,
but their profit isn't at any one’s expense.
• An alternative to MNE monopoly seems to be nationalization of
resources as a means to protect certain resources which some regard as a dubious
pretext to get rid of private ownership.
32
Use of English
8. For questions 1-8, read the following text and choose from the list (A-I)
given below the best of the phrases to fit each gap. There is one phrase which
does not fit in any gap. There is an example (0).
A polycentric world is inherently complex due to its extreme diversity.
According to the statistics, the already 250 million-strong Chinese middle class is
expected to double in size in the coming decade 0) ……F…… As a result there
will be a massive increase in the diversity of the customer base 1) ………… To
effectively serve such a highly heterogeneous customer base 2) ………… many
multinationals will need to fundamentally redesign their monocultural and
ethnocentric organizations. They will need to learn to juggle multiple business
models, organizational practices, management structures, 3) …………
To effectively compete and win in the emerging polycentric world
monolithic 4) ………… that reflect internally the growing external diversity and
are able to learn and adapt continuously. Polycentric organizations not only tame
but even capitalize on global complexity. They operate as a network integrating
creative talent and ideas from employees, suppliers, 5) ………… Moreover,
polycentric organizations are highly adaptive which means they aren’t wedded to
a single European or U.S.-centric business model or organizational practice, but
employ a diverse portfolio of strategies 6) ………… and adapt to new
opportunities and threats in different regional markets. Additionally they boast a
global mindset, i.e. they don’t believe in a single “corporate culture”, and allow
multiple perspectives 7) …………
The monocentric global economic order is rapidly being eclipsed by a
polycentric world. Rather than keeping their enterprise locked into 20th century
organizational structures 8) ………… to accelerate their firms’ evolution into
33
polycentric organizations that harness the diversity and capitalize on the
complexity of the 21st century.
A and even leadership styles in order to harness the growing diversity in the
unpredictable global business environment.
B and customers across regions to meet the global demand for innovative
products and services.
C and workforce of multinationals on a scale they have never experienced
before.
D and value systems to co-exist within the same enterprise.
E and ethnocentric multinationals must evolve into what we call polycentric
organizations
F and one global worker in four will be an Indian by 2020.
G and manage a highly multicultural employee base,
H and processes, multinationals must leverage the Millennials
I and approaches that allow them to quickly learn
Speaking Activity
9. Get ready to debate the problem if multinational corporations should be
reformed or abolished. Before it we should study the scenario of debates.
Read the following scenario and pay attention to picture 1 showing the
positions of the participants. Choose the team you are going to join.
Should multinational corporations be reformed or abolished?
The scenario Stage 1
Chairperson’s introductory speech
Stage 2
34
Statement of position of the “Reformed”-team
Argumentation of the speakers of
the “Reformed”-team
Speakers and supporters of the
“Abolished”-team
Speakers of the “Reformed”-team
Questions by supporters of the
“Abolished”-team
Stage 3
Statement of position of the “Abolished”-team
Speakers and supporters of the
“Reformed”-team
Argumentation of the speakers of
the “Abolished”-team
Questions by supporters of the
“Reformed”-team
Speakers of the “Abolished”-team
Stage 4
Concluding remarks of the “Reformed”-team
Refute arguments and evidence of the “Abolished”-team, present comparative analysis of the team’s position to intensify and prove the “Reformed”-course
Stage 5
Concluding remarks of the “Abolished”-team
Refute arguments and evidence of the “Reformed”-team, present comparative analysis of the team’s position to intensify and prove the “Abolished”-course
Stage 6
Jury’s final remarks
35
Picture 1. The position of the participants.
Make up two teams.
The “Reformed”-team proves the statement:
Multinational corporations can’t be abolished, they should be reformed.
The “Abolished”-team proves the statement:
Multinational corporations are completely unfair, they should be abolished.
Think of three or four arguments and/or examples to substantiate and
illustrate your position. Get ready to defend it against criticism. Be ready to
ask some questions to clarify the position of the opposite team. Make sure
you use the conversation patterns given in Functional Bank.
The jury decides which team was the best.
36
Unit 2
Globalization and Regionalization
Lead-in
a. Read the abstract given below. Guess what political trend in the
international society it describes.
Interdependence, interconnectedness, and globalization is what
increasingly characterizes our world today. The era of the end of geography is
based on the idea of the creation of a global social system and implies a tendency
towards a borderless world in which territory has lost all importance. However,
since the early 1990s an explosion of various forms of regionalist projects can be
witnessed all over the world. According to the Comparative Regional Integration
Studies Programme, out of a list of 58 regional groupings, 20 were created after
the end of the Cold War, and out of the 191 Member States of the United
Nations, only 9 are not part of regional arrangements.
b. The concept of regionalism is based on the notion of a region. Look at the
maps and say why there are different approaches to the vision of what a
region is. What can be an impetus to make up a region?
1. 2.
37
3. 4.
5.
Now study the information below and see whether your ideas were correct:
There is no commonly accepted definition of what a region is. Most would
agree that a region implies some geographical proximity and contiguity, and
mutual interdependence. Others would add a certain degree of cultural
homogeneity and a sense of community. Regionbuilding presupposes closer
economic, political, security and socio-cultural linkages, regional cooperation and
integration.
c. In an age of rapid globalization, regionalism might seem to be a notion
better suited to the nineteenth century than the early twenty-first. Far from
vanishing, however, regionalism has actually flourished in the last half
century. Discuss in pairs why there is a tendency towards regionalism in the
era of globalization. What contributes to the development of regionalism?
38
A: I am inclined to believe that the phenomenon of regionalism appeared largely
due to the growing gap between the North and the South as a result of
globalization.
B: I agree with you. Besides, there is another crucial point. The international
society is strengthening the moves to seek regional conflict resolution through
organizations of regional cooperation and to establish dialogue between regions.
A: I don’t share your point of view because …
d. Study the quotations about the relations between global moves and
regional moves and say which one you agree with more.
“The two processes of globalization and regionalization are articulated
within the same larger process of global structural transformation. The process
of regionalization can only be understood within the context of globalization.
To deal only with regionalization would be to miss the other side of the coin,
which is globalization.” (Björn Hettne)
“Regionalization can be seen as a response to the process of globalization
and the social eruptions and inequalities associated with this process.
Regionalization stimulates the emergence of a political will to halt or to reverse
the process of globalization, in order to safeguard some degree of territorial
control and cultural diversity.” (Carolina G. Hernandez)
2. a. There is no consensus on the definition of regionalization. Read the
definitions of this phenomenon and think which best describes it. Discuss
with your partner.
“Regionalization can be defined as politicoadministrative process by which
regions emerge as relevant units of analysis for economic and political activity
and welfare and service provision. In many cases this notion of regionalization
can be equated to notions of ‘regionalization from above’ or devolution, i.e.
regions being the objects of governmental reforms designed to recognise a
39
particular regional space along defined economic and political lines.” (Björn
Hettne)
“The concept of regionalization is reserved for more spontaneous processes
of region formation by different actors – state or non-state. Regionalization is
clearly a political process, but it is obviously not necessarily state-led, as states
are not the only political actor around . . . we clearly believe that, within each
regional project (official or not), several competing regionalizing actors with
different regional visions and ideas coexist.” (Morten Bøås)
b. Using your general knowledge and the information given above, say which
of the suggested options characterize regionalization:
●growth of societal integration within a region ●incentives for economic linkages
●convergence of interests ●sharp distinctions within a region ●demarcation of
regions ●division of an area into segments ●reinforcement of domestic
authoritarianism ●dissolution of international ties
Listening
3. a. You are going to listen to an abstract about the development of
regionalism. Before listening think if regionalism can be regarded as a
phenomenon of the XX century or a centuries-long process. Then read the
information given below and say whether you agree with it.
It is quite difficult to define when the history of regionalism begins, since
there is no single explanation that encompasses the origins and development of
the regional idea. Criteria such as the desire by states to “make the best of their
regional environment” are regarded by certain analysts as elusive; they prefer to
consider the history of regionalism in terms of the rise of modern institutions. If
formal organization at the regional as opposed to the international level is to be
the yardstick for the onset of regionalism, it is difficult to place its origins much
before 1945.
40
b. Look at the data presented in the table and decide what waves of
regionalism can be distinguished since 1945. Which of them is termed “Old
Regionalism” and “New Regionalism”?
Source: Tanja A. Börzel, Comparative Regionalism/ A New Research Agenda. Freie Universität Berlin: No. 28, August 2011, p. 11.
c. Below you can see some facts about Old Regionalism and New
Regionalism. Work with your partner and choose those which refer to each
form of regionalism, then fill in the table.
• started with the establishment in 1957 of the forerunner of the EU
• was formed in and shaped by a bipolar cold-war context
• marked the first step towards the creation of regional trade agreements
(RTAs) initiated “from above”
• is characterised by shallow integration which involved only reducing or
eliminating barriers to trade in commodities
• started during roughly the second half of the 1980s
41
• is taking place in a multi-polar world order
• can be described as “open” and thus compatible with an interdependent
world economy
• is a process of deep integration which includes trade and economic
integration, environment, social policy, security and democracy
• led to a “domino effect” of renewed interest in regional trade
agreements (RTAs) with deeper integration in the EU and the establishment of
NAFTA
• is characterized as conservative, resistant to change, dominated by
politics of identity and separatist sentiments
Old Regionalism New Regionalism
• •
• •
• •
... ...
d. The following words and phrases appear in the passage you are going to
hear. Explain their meaning in your own words. Then make up sentences
using them.
●global in scope ●decline of hegemony ●a room-for-manoeuvre ●compatible
●discernible ●to tackle challenges ●inward oriented ●to supplant the old order
●a building block ●a stumbling block ●to deter ●a multidimensional process
e. Now listen to the radio talk. While listening, mark the sentences given
below as I (for the Interviewer), M (for Dr. Chris Milner), or G (for Prof.
Helena Greenway).
Which speaker:
• asserts that the modern society is subject to large-scale ..........
42
alterations?
• says that recent regional arrangements presuppose
cooperation between rich and poor states?
..........
• explains that the new regionalism goes hand in hand with the
multipolar nature of the present-day world?
..........
• believes the new regionalism couldn’t progress at the time of
Soviet-American confrontation?
..........
• affirms that the new regionalism helps countries to deal with
the problems they face together?
..........
• adds that it is not simple for countries to manage their
difficulties in the era of globalization?
..........
• puts emphasis on the idea that the word “regionalism” is
used with reference to all types of partnership?
..........
• mentions that in the era of New regionalism a region
assumes the role of an independent and active player of
regional relations?
..........
• draws attention to the fact that regional arrangements
contribute to further development?
..........
• states that in comparison to the Old regionalism the New
regionalism is a multifaceted phenomenon?
..........
• tends to think that the players of the New regionalism vary
greatly?
..........
f. Discuss in groups.
• Can the New regionalism be considered as a more profound process than
the Old regionalism? Why/why not?
• Does the tendency towards regionalism allow new forms of regional
arrangements and regional policy to respond to new global pressures?
43
Reading
4. a. The past years have witnessed a resurgence of regionalism in world
politics and an increasingly important role for regional institutions. These
institutions are intended as vehicles of development assistance. Thus the
contribution of regional institutions to enhanced national and international
prosperity seems to be significant. Work in groups and brainstorm the
regional organizations you know.
b. Look at the abbreviations of some prominent regional organizations and
match them to their names.
APEC European Free Trade Area
ASEAN Asia-Pacic Economic Cooperation
LAS Economic Community of West African States
NAFTA League of Arab States
ECOWAS Association of South East Asian Nations
EFTA Common Market of the South
MERCOSUR North American Free Tarde Agreement
c. Fill in the table with the necessary information about the organizations
given below. An example is given.
Title Main aims Member countries APEC • to support sustainable economic growth
and prosperity in the Asia-Pacific region • to build a dynamic and harmonious Asia-Pacific community • to championing free and open trade and investment • to promote and accelerate regional economic integration • to encourage economic and technical cooperation
Australia, Brunei Darussalam,
Canada, Chile, People's
Republic of China, Hong Kong,
Indonesia, Japan, Republic of
Korea, Malaysia, Mexico, New
Zealand, Papua New Guinea,
Peru, the Philippines, Russia,
Singapore, Chinese Taipei,
44
• to enhance human security • to facilitate a favorable and sustainable business environment
Thailand, The United States,
Viet Nam
ASEAN LAS NAFTA ECOWAS EFTA MERCOSUR
d. Regional institutions are believed to promote integration within a region.
Work with your partner and think what factors encourage regional
cooperation and integration. Then write them down. Are there common
forces which stimulate collaboration of countries in very different
geographical areas and at very different moments in history?
• economic development
• promotion of national interests
• .............
• .............
e. Study the quotations given below and say which one you agree with more.
“It appears that the surge in regionalism during the WTO years has been
largely driven by economic reasons. Regional groupings often focus on so-called
matters of “low politics,” emphasizing regional economic cooperation and
growth. Focusing on functional bread and butter issues, many developing
countries have to seek participation in Free Trade Agreements with developed
countries as a defensive necessity against a possible exclusion from their
markets.” (A. McCovnik)
“Trade may well be secondary to political or security objectives or a tool
rather than an objective: it is difficult to find any groups which have only a
strictly trade agenda”. (C. Ibid)
45
f. Now read the text and learn about more reasons why countries choose the
strategy of regionalism. Read the text. For questions 1-10, choose the best
answer (A,B,C or D).
The Supply of Regionalism: Interests, Power, and Norms
It is universally acknowledged that in the era of globalization and
proliferation of multilateral decision-making international cooperation requires
political leadership and international institutions to work. The ability of global
institutions to consolidate power is unrivaled and allows to overcome market
failures and collective action problems. Nevertheless there are systematic
attempts to prove that demand for regionalism is sufficient for it to emerge.
Although everyone agrees that political factors that shape regionalism are of
primary importance, there are a number of other determiners why states choose to
pursue regional collaboration strategies. The decision to enter a regional
institution or agreement rests partly on the preferences and political power of
various segments of society, the interests of state leaders, and the nature of
domestic institutions. But states do not make the decision to form alliances on the
regional level in an international political vacuum. On the contrary, interstate
power and security relations as well as multilateral institutions play key roles in
shaping regionalism.
Studies addressing the links between power and regionalism have placed
primary stress on the effects of political or hegemonic leadership. Various
scholars argue that international economic stability is a collective good,
suboptimal amounts of which will be provided without a stable hegemon. This
argument is also invoked by many economists who maintain that the current
wave of regionalism was triggered or accelerated by the U.S. decision to pursue
regional arrangements in the early 1980s, once its economic power waned and
multilateral trade negotiations stalled.
In contrast to this point of view, there is evidence that over the past fifty
46
years the erosion of U.S. hegemony has stimulated a rise in the number of
regional trade agreements and states entering them. Some observers argue that as
a hegemon’s power recedes, it has a reason to behave in an increasingly
predatory manner. To buffer the effects of such behavior, other states might
form a series of political or trading blocs, thereby setting off a wave of
regionalism. A number of scholars believe that this sort of process began to
unfold during the 1980s, giving rise to a system of loose regional economic
blocs that is coalescing around Western Europe, the United States, and Japan.
They also point out that because of the inherent problems of ‘‘pluralist’’
leadership, these developments threaten the unity of the global trading order.
Hegemonic stability theory points to powerful states, which are willing to
and capable of acting as regional paymasters, easing distributional tensions and
thus smoothing the path of integration. Yet, they supply regionalism for
different reasons. According to these teachings, the US, China, Russia, South
Africa or Nigeria supported and engaged in region-building for their geostrategic
and economic interests in strengthening military alliances, promoting stability in
neighboring countries, or securing access to new markets, cheap labor, water, and
energy resources. The US played a key role in the creation and prevalence of the
European Community and ASEAN by mitigating the security dilemma in the
region. It has also acted as a regional hegemon for NAFTA to counterbalance the
Single European Market. Likewise, Brazil and Venezuela have championed
MERCOSUR to make it a regional power and to contain US influence in Latin
America. A similar competition for containing external and exercising regional
hegemonic power through promoting different forms of regionalism can be
observed between Iraq and Egypt in the League of Arab States, Malaysia and
Indonesia in ASEAN, Japan and China in East Asia, Nigeria and South Africa in
Sub-Saharan Africa, and Russia and Uzbekistan in Central Asia. Regional powers
can be engines of integration, as France and Germany have been in the EU and
47
Brazil and Argentina are in MERCOSUR, although the latter have been criticized
for not providing sufficient regional leadership. Conversely, the absence or
ineffectiveness of regionalism in the Middle East or Asia is often blamed for the
absence of a regional or external hegemon.
However, while using regionalism to establish and affirm their regional
hegemony, powerful states are reluctant to bind themselves by regional
institutions. The intergovernmental nature of MERCOSUR and NAFTA and their
limited scope of regional integration are largely explained by the unwillingness
of Brazil and the US to delegate authority to regional institutions. At the same
time, the US has agreed to a highly legalized and inflexible agreement that does
not leave much levy to the member states. This degree of self-binding goes far
beyond what other regional powers have committed to and poses a puzzle to
power-based approaches. Powerful states do not always get what they want as
the case of Nigeria in ECOWAS seems to suggest. Nigeria’s role as a state power
comes hand in hand with growing doubts about its poor capacity to elaborate and
implement public policies, provide conflict management and integration agenda.
One of the most obvious drawbacks of power-based theories of
regionalism is that they have little on offer to explain the differential commitment
of small states. Paraguay, Uruguay, Mexico and Canada may seek to bind their
regional hegemon. However, by joining MERCOSUR and NAFTA, respectively,
they also become even more vulnerable to its dominance. Moreover, it is not
clear why some former Soviet republics decided to bandwagon with Russia and
Uzbekistan while others are engaged in attempts to counterbalance their regional
dominance.
Another explanation for the supply of regional institutions is based on the
idea of regional distinctiveness or the existence of a collective identity which are
connected to the political expression of regional interests and thus become central
to the emergence of a regionalist movement. Regional identity seems to be a
48
prerequisite of regionalism because cultural heterogeneity requires construction
and maintenance of a regional community as well as politicisation and
mobilisation of its members. An explicit example of how cultural identity
impacts the process of regionalization is American strategy in forming regional
alliances. The US was less enthusiastic to exercise hegemonic leadership in Asia
than in Europe because of the lower cultural affinity. Cultural difference is also to
account for the distinct approach ASEAN states have taken towards regional
integration. The “ASEAN way”, which is based on informal consensus-building,
organizational minimalism, and thin institutionalization, is incompatible with
Western models of legalized institutions.
Regionalism also emerges due to the processes of diffusion. The supply of
regional institutions can stem from other regions or international actors, which
actively promote or passively provide blue-prints for region-building. “Pax
Americana” and “Pax Europaea” are two “global scripts” on regionalism. The
first one is based on regional trade cooperation promoted by the US and
international organizations, including the World Trade Organization, the World
Bank, and the International Monetary Fund. The second is advocated by the EU,
striving for regional integration, which is broader in scope and infringes more
strongly on the sovereignty of states.
Furthermore, market pressures or diplomatic barriers may increase the
demand for regional institutions. But even if certain institutions effectively serve
specific functions and help solve similar problems, states always have choices.
Institutions can be “contagious” under conditions of uncertainty, policy failure
and dissatisfaction with the status quo. Regional organizations that struggle to
become more effective may look to other organizations that are considered as
success cases for policies and rules that effectively solved similar problems and
are transferable into their context. Next to lesson-drawing, regions may also
emulate others for normative reasons, to increase their legitimization or to simply
49
imitate their behavior because its appropriateness is taken for granted. Seeking
international legitimacy and signaling commitment to trade liberalization
motivated ASEAN to set-up a dispute settlement mechanism (DSM) that has
been hardly used so far. Emulation also might be driving the recent deepening
and broadening of ASEAN, whose new Charta bears some striking resemblance
with EU institutions. Likewise, ECOWAS and LAS might be following a global
script that entails the establishment of certain regional institutions and for which,
at least in the case of ECOWAS, the EU provides a reference model. With the
establishment of the Euro, the EU has become an example to follow for countries
in Latin America, Africa and Asia, which may defy supranationalism but see a
common currency as an anchor of regional stability. Whether the EU will
continue to inspire other regions to seek economic and monetary integration will
depend on the EU mastering the current financial crisis.
The comparative evaluation of mainstream theories reveals important
drivers of regionalism. However, none of them is capable of fully explaining
variation across time and regions. Nor have they much to say about why such
diverse regional organizations as LAS and ECOWAS appear to develop similar
institutions. Yet, different ontological assumptions could be seen as compatible
since they shed new light on old puzzles, give rise to new questions and form the
basis for new approaches that can account for the spread of regionalism.
1. The tendency to regionalism is due to develop
A because there is no proper political leadership.
B notwithstanding the proliferation of globalization.
C in spite of decreasing demand for it.
D but countries are unwilling to enter regional agreements.
2. Regional coalitions are created
A without participation of other external actors.
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B even if states do not want to follow collaboration strategies.
C on the basis of their relations with international partners.
D in case multinational institutions allow them to do it.
3. According to advocates of hegemonic leadership theories, on condition
that there is a powerful hegemon
A other international actors will prosper.
B other countries will never be provided with enough benefits.
C it is sure to prevent the neighbouring countries from further development.
D multilateral agreement are impossible.
4. Some opponents of hegemonic leadership theories give grounds for the
opinion that
A weaker countries seek integration with a powerful partner.
B a hegemon jeopardizes the development of its allies.
C failed leadership makes other countries collaborate.
D any regional arrangement presupposes equal status of its members.
5. Geopolitical interests as well as stronger economic ties are among
principal reasons
A for developing countries not to cooperate with powerful states.
B underlying the dominance of prosperous countries in regional arrangements.
C for multilateral trade agreements to appear.
D why mighty states choose the path of regionalism.
6. Affluent countries are disinclined to follow obligations imposed by
regional organizations
A due to their resistance to share power.
B in case they are not ready to enter a regional arrangement.
C to show their superiority.
D because they are not powerful enough to implement the policy of these
organizations.
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7. If small states enter a regional agreement,
A they are eager to assume the role of regional hegemons.
B they are willing to dominate other partners.
C they risk to be manipulated by more powerful members.
D regional hegemons are ready to collaborate with them on equal terms.
8. Regional blocks can also be established
A in order to lessen cultural differences.
B on the basis of cultural integrity and common heritage.
C in case there is low civilizational affinity.
D to protect the uniqueness of incompatible cultures.
9. International institutions, multinational companies as well as reputed
regional organizations
A take a stand against regional expansion.
B advocate universal unification policies.
C derive from the process of diffusion.
D stimulate regional integration processes.
10. On condition that an orginizations on regional collaboration flourishes, it
may
A resolve integration problems of other alliances.
B make other countries of the region join in.
C set a precedent for other regional blocks to pursue similar policies.
D claim international legitimacy and authority.
Vocabulary Practice
5. a. Match the words from the text to their meaning.
A B
1. emulation a. smbd who pays and therefore controls
2. diffusion b. a precondition, requirement for smth to happen
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3. an affinity c. an action of spreading through
4. prevalence d. an imitation, a copy of smth
5. a paymaster e. the state of being dominant, accepted
6. a prerequisite f. likeness, similarity, common origin
b. Now use these words to complete the sentences below.
1. The United States announced a $10 million reward for information leading to
the arrest of a Syrian national said to be operating as an al-Qaida ............... from a
base in Iran.
2. Today the crossnational borrowing can range from simple copying of new
stand-alone technologies to more complex forms such as nuclear proliferation
and ............... of industrial policy.
3. Speaking at a conference at the Center on Global Counterterrorism
Cooperation, Raphael Perl said enhanced diplomacy was a ............... for effective
use of all tools in the counter-terrorism toolkit.
4. The Gulf of Aden, notoriously known for its ............... of piracy attacks, has
become the focal point for ongoing surveillance and protection operations.
5. Among the most striking phenomena in the area of public policy are the waves
of ............... that sometimes sweep across important regions of the world or
across the states of a federal country, such as the U.S.
6. Religion is one primary ethnic characteristic that may be so strong as to
determine a definitive boundary within an .............. group, thus constituting a
sufficient reason for a separate ethnic entry in a listing.
c. Fill in the appropriate word from the list below. Use the word only once.
Then give Russian equivalents to the word combinations you have made up
and use them in your own sentences.
53
to pursue to exercise to provide
to smooth to bear to master
to mitigate to delegate to entail
1. …………… hegemonic leadership 6. …………… striking resemblance
2. …………… authority to regional
institutions
3. …………… the path of integration
4. …………... the establishment of
regional institutions
5. …………… the security dilemma
7. …………… the current financial
crisis
8. …………… blue-prints for region-
building
9. …………… regional collaboration
strategies
d. Fill in the gaps with the words from the text in the correct form. The first
letter of each word has been given.
1. The economic crisis plaguing many countries in the European Union has
forced Central America to look at preventive measures to b............ its effects in
this region, which could include a decline in tourism, migrant remittances,
exports and investment. (to protect from harm, to soften an effect)
2. When a disaster strikes and a humanitarian crisis u............, international aid
generally arrives via naval ships – often the very same military vessels designed
to put troops and materiel ashore during military conflicts. (to develop, expand,
evolve)
3. The Security Council has imposed four rounds of sanctions on Iran for refusing
to halt its prohibited nuclear program, and Iran continues to d............ the
international community through illegal arms shipments to the murderous Assad
regime. (to challenge to do something, to confront, withstand)
4. According to the UN, the measures adopted by some States in their fight
against terrorism i............ basic standards of fair trial and due process, and have a
54
disproportionate and excessive negative impact on human rights. (to violate,
break, restrict smth)
5. As the nation-states w............ under the transforming power of globalization,
multinational corporations are growing in power, filling in the spaces being left
vacant by nation states. (to decrease in smth, to diminish in intensity)
6. While the EU has c............ "effective multilateralism" and experienced a
dramatic internal reform process to improve its performance in external relations,
broader multilateral processes have also undergone dramatic change. (to protect,
defend, support, advocate smth)
7. Multilateralism was seen as a vehicle for securing an effective voice for
Canada on the international stage as well as an instrument for constructing the
necessary alignments of interests with other states which could serve
to c............ the dominant influence of the United States. (to balance with an equal
weight or force, to compensate, neutralize)
e. Match the underlined words and expressions in the sentences with their
meaning in the box below.
A violate C trigger E exert much effort
B depend D originate F explain
1. The roots of the Iraq War stem from the fact that a brutal and unstable dictator
Saddam Hussein insisted on having an illicit and aggressive nuclear weapons
program, which led to U.N. sanctions and ultimatums that ultimately prompted
the coalition invasion.
2. International diplomacy strives for preventive actions which undoubtedly
strengthen the new role of multilateral institutions as a safety net for crisis and
conflict.
55
3. She added that politicians should explain to the electorates their goals and
aspirations because the fate of the constituency rests on the delegates who are
going to make a choice for the rest of the people.
4. The Affordable Care Act case itself demonstrates how trite the familiar law
versus politics debate can be, failing to account for what the justices must
actually do when presented with a politically charged legal controversy in which
the decision could go either way.
5. The decree was applauded by supporters who believed the court’s decision to
disband parliament was political, but it set off a fire storm of criticism from
opponents who accused the President of overstepping his authority.
6. The theory of the concurrent majority states that great decisions are not merely
a matter of numerical majorities but require agreement or acceptance by the
major interest in society, each of which had the power to block federal laws that
it feared would seriously infringe on their rights.
f. Explain the highlighted words and phrases in the text in your own words.
Discussion
6. a. Discuss in groups.
• Should regional governments be regarded as a threat to local autonomy
and national sovereignty? How does the delegation of policies and political
authority impact back on the domestic structures of the states involved?
• Do you believe that it is possible for regional governance to control local
affairs effectively or are such issues best addressed by smaller local
governments?
• Can the process of regionalization be called more sustainable, viable and
easy to implement than the process of globalization?
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• Is regionalism a stumbling block or a stepping stone in the process of
globalisation?
b. Comment on the statements.
• Regional governance is criticized for being a useless tool for combating
metropolitan poverty. It is said to be currently unworkable because the focus is
on “things” regionalism, when “people” regionalism is what is actually needed.
Things regionalism is based on systems maintenance, while people regionalism is
based on lifestyle.
• There can be distinguished benign and malevolent strains of
regionalism. On the one hand, regionalism can promote international economic
stability, multilateral liberalization, and peace. On the other hand, it can have a
mercantilist tenor, degrading economic welfare and fostering interstate conflict.
Use of English
7. In most of the lines of this text there is an unnecessary word. For
questions 1-18, find the unnecessary words and write them on the lines
provided. If you think a line contains no unnecessary words, put a tick next
to it. There are two examples (0), (00).
According to the contemporary theories of regionalism, it is the 0 the
region that is supposed to represent the most complete unit of 00 V
economic, social and ecological structure. This fact points out to 1
the logic of establishing of regional governance. The primary 2
challenge for regionalism which is the establishment of legal and 3
political structures to represent their constituting areas. Certain 4
special purpose bodies exist by now but are unlikely to be able to 5
integrate different public concerns, and also cannot keep it up with 6
57
the too rapid changes that take place on a regional level. As a first 7
step, regionalists call for new regional processes, structures, or 8
institutions that they can identify regional problems, formulate 9
regional solutions, implement those solutions, and coordinate 10
regional actions. However, resistance to regionalism is more 11
widespread. This resistance is believed to be due to only the fact 12
that people tend to see regionalism as well a step toward 13
centralization and a shift of power from local governments. 14
Therefore, resistance to regionalism usually stems out from 15
the self-interests of local officials, firms, and other interest groups 16
who benefit from a strong local autonomy and regional 17
fragmentation. On the other hand, advocates of localism argue that 18
decentralization of power must enhances efficiency and self- 19
determination. Localism is said to promote democracy by making 20
citizen participation more than accessible and increasing the sense 21
of either community and ownership. 22 Speaking Activity 8. Get ready to discuss the problem of the influence of globalization and
regionalization on cultural identity at a round-table talk. Before it we should
study its scenario. Read the following scenario and the list of participants.
Chose the part you are going to play.
Do the processes of globalization and regionalization erode indigenous
cultures?
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The scenario.
Stage 1 Chairperson’s introductory speech
Stage 2
Debating Statement of position on the
1st problem
S1 S2 S3 S4 S5
Clarifying the position
Discussing
Conclusions on the 1st
problem
Statement of position on the
2nd /3d /etc. problem
S1 S2 S3 S4 S5
Clarifying the position
Discussing
Conclusions on the 2nd /3d
/etc. problem
Stage 3
Chairperson’s concluding remarks
List of participants
Chairperson, journalist, diplomat, human rights activist, culture exper,
the UN representative, film producer, regional studies expert, politician,
ASEAN representative .
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Study your role card and think of a number of arguments, examples
and illustrations to prove your stance. Get ready to defend it against
criticism. Make use of the conversational patterns given in Functional Bank. Diplomat Journalist
“In the past we thought about Western culture, Chinese culture, Japanese culture, or Eastern culture as of separate cultures belonging to big civilizations over broad geographical regions. In the era of globalization they are increasingly cross fertilizing each other. However, they are still maintaining . . . If you’re in the United States, you don’t think you’re in India. You don’t even think you’re in Canada necessarily. I mean there’s still regional differences, and I think those will remain. But they’ll become more subtle. And they will become fertilized by other people often in weird ways so that the person who is from India will not necessarily recognize as their religion the weird, Westernized version of their religion. But you see that sort of cross fertilization”.
“Globalization can be called a profoundly enriching process, opening minds to new ideas and experiences, and strengthening the finest universal values of humanity. Universal global culture is formed on the basis of indigenous cultures which transend national borders with the help of mass media. In the era of globalization mass media have proven a powerful means of spreading and imposing traditional cultures and values. It is a medium through which cultural practices and ideas otherwise unknown outside a region are transmitted globally. The globalization of the production and distribution of goods and services is a welcome development for many people in that it offers them access to products that they would not otherwise have. "
Human rights activist
“Globalization is a threat to traditions. Globalization means many cultural changes, the loss of traditional existence, the marginalization of indigenous groups, and the problems associated with rapid urbanization and industrialization — pollution, increased crime rates, dramatic inequalities, and a location for a hotbed of social and political instability and
60
upheaval. Such problems can be resolved only within a region. So regional approach seems to be more effective in dealing with contemporary problems and less destructive for cultural identities”.
Culture expert The UN representative
“The impact of regionalization on culture seems to complement that of globalization since regional indigenous cultures determine cultural values of the whole world. Have you ever heard the expression: "American mass culture goes global"? What is meant by it? It's quite obvious that the US mass culture has influenced the shape of the world's entertainment industry and tastes. So strong is the impact of American culture on people's values and lifestyles all over the world that the US culture and global culture should be regarded as synonymous”.
“Indigenous groups are becoming increasingly assertive in term of maintaining their local identity. Globalization has made it easier for indigenous people to organize, raise funds and network with other groups around the world, with greater political reach and impact than before. The United Nations declared 1995–2004 the International Decade for the World’s Indigenous People, and in 2000 the Permanent Forum on Indigenous Issues was created. Thus national and local communities are becoming more prominent possessing more power and opportunitites to promote their cultures at regional and even global levels. In this case the fact that national and local identities compete for the world dominance becomes obvious”.
Film producer “Although the United States
may play a dominant role within the phenomenon of cultural globalization, it is important to keep in mind that this is not an entirely one-way street. Many other countries also contribute to global culture, including American culture itself. Just as
61
American popular culture influences foreign countries, other national cultures are influential within the United States and also increase their presence worldwide. Most people would think of Hollywood as something entirely American. However, while Hollywood dominates world cinema, American movies are subject to foreign influence. According to The Economist, "one reason for Hollywood's success is that from the earliest days it was open to foreign talent and foreign money." From this perspective, it can be argued Hollywood is a multicultural institution.”
Regional studies expert Politician
“Regionalism is concerned with an increase in political and economic cooperation based on shared interests, norms and cultural values in a certain region. It is true that cooperation is a lot easier among smaller and more similar groups of states. For instance, indigenous Asian culture is popularized by a conclave of countries situated in Asian region. Common cultural background allows the nations of the region to collaborate effectively in the realm of economy. Strong business bond unites countries of a region in terms of taking care of their aboriginal cultures and preserving their national identity.”
“When global flows of goods, ideas, people and capital lead to cultural exclusion, multicultural policies are needed to manage trade, immigration and investments in ways that recognize cultural differences and identities. The cultural impact of such goods as films and the cultural identity of immigrants needs to be explicitly recognized. The aim of multicultural policies is not to preserve tradition, but to protect cultural liberty and expand people’s choices – in the ways people live and identify themselves – and not to penalize them for these choices. Unfortunately, today’s debates about globalization and the loss of cultural identity have often been argued in terms of upholding national
62
sovereignty, preserving the ancient heritage of indigenous people and safeguarding national culture in the face of growing inflows of foreign people, films, music and other goods. But cultural identities are heterogeneous and evolving – they are dynamic processes in which internal inconsistencies and conflicts drive change”.
ASEAN representative “Despite recent progress in
terms of regional integration and a wide spread perception that the concept “unity-in-diversity” plays a role of a driver of regionalism, differences between cultural values and political systems impede the creation of a common identity. In ASEAN, for example, the discrepancies have become more pronounced since its enlargement, and after the financial crisis when it became obvious that “Asian values” were no guarantee to economic success. The processes of regionalism and identity building to some extent create a divide between the member states.”.
Chairperson
Stage 1 Ladies and Gentlemen, I now declare open the round table devoted to the subject "Do the processes of globalization and regionalization erode indigenous cultures?". On behalf of the University allow me to express our great appreciation for your presence here today and for the contributions you are ready to make to the coming discussion. The questions to be debated today are highly controversial and allow for a variety of opinions. The attacks on globalization are many and come from various angles; its public defenders
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are few and unimpressive, though they are not extremely unattractive. Yet, all those who assembled here today feel that the young generation needs to know the answers. The questions are as follows:
1. Does globalization dilute national identities and “transnationalize” cultures?
2. Is creation of global monoculture possible? 3. How can societies attempt to manage globalization and
become developed while maintaining a viable national identity? I propose a time limit on statement of position of 2 minutes and one minute for all оther speakers during the debate. Is that agreed? Thank you. Stage 2 Will participants please identify themselves clearly to the Chair if they wish to speak or ask a question. I call Mr. ... Mr. ..., thank you for that stimulating speech. I now welcome Mr. ... Mr. ..., you have the floor. Мay I remind the participants to identify themselves clearly to the Chair if they wish to ask a question or make an objection. Does anyone else wish to speak? We can't all speak at once; Mr.... Would you like to speak first? I shall have to call you to order, Mr. ... Now let me summarize the points of view on the first/second/third problem expressed by the participants. According to the majority of the opinions …, though we should mention … Stage 3 To sum up our discussion today, it seems we all agreed that... The discussion revealed that… We weighed the pros and cons of … Consequently, we took a closer look at … Basing on the discussion we have had and the facts and arguments you’ve presented to us today, I’d like to point out that … I declare the discussion closed. Thank you, Ladies and Gentle-men.
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Appendix 1 Tapescripts
Unit 1
Speaker 1
The formation of international organizations has been a 20th-century
phenomenon. Nowadays there are more than 2,500 international organizations.
Among them are more than 130 intergovernmental unions.
The influence of the international organizations is great. They deal with
political, social, and economic problems. They are concerned with the
environmental problems as well. For example, such international organization as
the United Nations is aimed at modifications of the national and international
laws for the good of the people.
The results of the activity of the international organizations are significant.
It can be proved by the fact that the UN General Assembly passed a number of
resolutions and declarations that dealt with crimes against peace, war crimes, and
crimes against humanity; genocide; human rights; the right of peoples and nations
to self-determination; permanent sovereignty over natural resources;
denuclearization; and non-intervention.
Speaker 2
The concerns about the activities of multinational corporations are valid,
and abuses have undoubtedly occurred, but many forces are also at work to keep
multinational corporations from wielding unlimited power over their operations.
Increased consumer awareness of environmental and social issues and the
impact of commercial activity on social welfare and environmental quality have
greatly influenced the actions of all corporations in recent years, and this trend
continues.
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Multinational corporations are constrained from moving their operations
into areas with low labor costs. Social welfare organizations take into
consideration the plight of individuals in countries with repressive governments
and try to hamper the removal of multinational businesses to areas where legal
protection of workers is minimal.
Similarly, consumer awareness of global issues lessens the power of
multinational corporations in their dealings with government agencies.
International conventions of governments are also able to regulate the activities
of multinational corporations without fear of economic reprisal.
Speaker 3
While no one doubts the economic success and pervasiveness of
multinational corporations, their motives and actions have been called into
question by social welfare, environmental protection, and labor organizations
worldwide. Certainly, the activities of multinationals have introduced a number
of favourable changes, however they pose a threat to the future development of
the world community.
National and international labor unions have expressed concern that
multinational corporations in economically developed countries can avoid labor
negotiations. They simply move their jobs to developing countries where labor
costs are lower. Offshore outsourcing, or offshoring, is a term used to describe
the practice of using cheap foreign labor to manufacture goods or provide
services only to sell them back into the domestic marketplace.
Social welfare organizations are similarly worried about the actions of
multinationals, which are presumably less interested in social matters in countries
in which they maintain subsidiary operations.
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Finally, environmental protection agencies oppose the activities of
multinationals, which often maintain environmentally hazardous operations in
countries with minimal environmental protection laws.
Speaker 4
Multinational corporations have existed since the beginning of overseas
trade. They have played a pivotal role in the business scene throughout history.
By the end of the 19th century, advances in communications had more closely
linked world markets, and multinational corporations retained their positive
image as instruments of improved global relations.
In the recent times when multinational corporations have grown in power,
they have come to be viewed more ambivalently by both governments and
consumers worldwide. Indeed, multinationals today are viewed with increased
suspicion because of their manner to penetrate new markets and power they have
gained in relation to national governments.
Despite these worries, the corporate social performance of multinationals
has been surprisingly favorable today. The activities of multinational
corporations encourage technology transfer from the developed to the developing
world. The wages paid to multinational employees in developing countries are
generally above the national average. When the actions of multinationals do
cause a loss of jobs in a given country, it is often the case that another
multinational will move into the resulting vacuum, with little loss of jobs in the
long run. Subsidiaries of multinationals are also likely to adhere to the standards
of environmental protection and in most cases create less pollution than similar
indigenous industries.
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Speaker 5
Anti-globalization supporters feel that the economic growth does not only
make people happier but can often make their lives depressing since such
organizations as the World Trade Organization, the World Bank and the
International Monetary Fund make the rich richer and the poor poorer. These
organizations get their share of profit by ignoring nature and human interests.
The brightest example is that the WTO norms only serve the interests of
multinationals. The guidelines of the WTO are formed by and for institutions that
are influential in the world arena.
The WTO is known to ignore labor and human rights. At the official level
the WTO offers probable solutions to curbing child labor and human rights
abuses. In reality the organization is ruled by the ideas that it can not prohibit a
product because of the way it is manufactured. It doesn’t take the behavior of
companies into account even if they perform business with brutal despotism.
Moreover the WTO terms the environmental policies as “hindrance to
trade” and encourages firms to break them. The WTO practices such as removing
tax on wood products amplifies the timber demand which eventually triggers
deforestation.
In addition the WTO is increasing social disparity. The phenomenon of
free commerce is not helping the majority of the world. Social disparity worsens
both internationally and within nations.
Unit 2
Interviewer: Over the last decade the issue of regionalism has once again been
brought back in, though in a different form compared to the debate on regional
integration some three decades ago. The changes that we are undergoing are
global in scope, and in content revolutionary, fundamental and structural. What
we are witnessing now is conflicting trends in scientific approaches to the way
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the world should be developed. Here with us to answer some important questions
about the tendencies of the modern world and their historic backgrounds are well-
known researchers in the field of international relations Dr. Chris Milner and
Prof. Helena Greenway.
Dr. Chris Milner: Thank you. It’s great to be here.
Interviewer: Considerable interest has been expressed in how regional
arrangements formed after World War II have affected and will subsequently
influence the global economy. We focus primarily on this era, however, it is
widely recognized that regionalism is not just a recent phenomenon. Analysis of
the current situation is inspired by the historical background of regionalism which
includes several stages. What are they?
Dr. Chris Milner: Historically, one can distinguish different degrees of
integration among countries, from “shallow” to “deep.” The first 20-30 years
after World War II can be seen as a period characterized by shallow integration
and is called “old regionalism”. Many regional agreements introduced in the past
10 – 15 years have involved elements of deeper integration, and many of them
have linked developing and developed countries - the twin characteristics of “new
regionalism.”
Interviewer: What is the historic background of old and new regionalisms?
Prof. Helena Greenway: Whereas the old regionalism was formed in a bipolar
Cold War context, the new is taking shape in a multipolar world order. The new
regionalism and multipolarity are, in fact, two sides of the same coin.
Dr. Chris Milner: I’d like to add that it is the decline of US hegemony and the
breakdown of the Communist subsystem that created a room-for-manoeuvre, in
which the new regionalism could develop. It would never have been compatible
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with the Cold War system, since the “quasi-regions” of that system tended to
reproduce bipolarity within themselves. This old pattern of hegemonic
regionalism was of course most evident in Europe before 1989, but at the height
of the Cold War discernible in all world regions.
Interviewer: Sounds interesting. But what do you mean by hegemonic
regionalism?
Dr. Chris Milner: Oh, yes. The old regionalism is called hegemonic because it is
believed to have been created “from above”, often through superpower
intervention, the new one is a more spontaneous process from within the regions,
where the states now experience the need for cooperation in order to tackle new
global challenges.
Prof. Helena Greenway: Errr... Besides, the old regionalism was inward
oriented and protectionist in economic terms, the new one is often described as
"open". And that is why new regionalism is one way of coping with global
transformations in the era of globalization, since most states lack the capacity and
the means to manage such a task at the “national” level.
Interviewer: Thank you. Still, can you, please, clarify the notion of new
regionalism. It is striking that not only are there diverse views on its meaning,
contents and operation in practice but there are also very different applications of
the term to any form of cooperation amongst countries. What in your opinion are
the key characteristic features of New Regionalism?
Prof. Helena Greenway: Well, yes, the ‘New Regionalism’ means many things
to many people. However, first of all, New regionalism is a response to new
economic realities when the globalisation of market and political integration
supplanted the old order of separated national economies and policy-making.
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New regionalism is characterised by regions which are behaving as new, dynamic
political and economic actors entering regional trading and political
arrangements.
Dr. Chris Milner: Let me point out here that the concept of new regionalism
assures that such regional agreements will be building blocks for further global
liberalization rather than stumbling blocks that deter the progress. Thus another
characteristic of new regionalism is that it is compatible with an interdependent
world economy.
Interviewer: And what about the objectives of new regionalism? Do they differ
from those of the old regionalism?
Prof. Helena Greenway: The objectives of the two forms of regionalism vary
greatly. The objectives of the old regionalism were specific. For example, some
regional organizations were security oriented but others were economically
oriented. In contrast, the new regionalism is a more comprehensive,
multidimensional process. The goals of this process include not only trade and
economic development, but also environment, social policy and security.
Interviewer: Aha, now it’s clear. Now tell us how we should go about the
participants of this process? There is an opinion that the old regionalism was
concerned only with relations between nation states while the new one includes
non-state actors such as different types of institutions, organizations and
movements.
Dr. Chris Milner: That’s right. The new regionalism is a complex process of
transformation resulting from global, regional, national and local interactions and
it involves not only nation-states, but also non-state, market, and society actors.
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Interviewer: Such as?
Dr. Chris Milner: In this multi-actor system the size of regionalism extends
from mega-regions, such as APEC, macro-regions, such as EU or NAFTA, and to
sub-regions (micro-regions), such as ASEAN.
Interviewer: Dr. Chris Milner, Prof. Helena Greenway, thak you very much
indeed for coming in today ...
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Appendix 2
Word Lists
Unit 1 abet abolish abolition abundantly accountability acknowledge ad hoc adaptive adhere to adjustment advisory aforementioned aftereffect agenda alliance allocation alter ambivalently amplify ancillary antagonistic arguably assets assist assistance asynchronously at disposal at stake at the expense at the mercy balance of power band v barrier to trade bear at the core beget beneficial beneficiary boardroom bottom line bribe v campaign capacity
capitalize on circumvent collective security commitment to commodity comparative advantage compete competitive competitor complexity compliance with comprehensive concession concomitantly concurrently consolidate constrain from consumption pattern contaminate contribute controversial cornerstone crowd v cultural autonomy cultural homogenization cultural imperialism curb decision-making de-liberalization deliberately denial depreciation deregulation derivative derive the strength from desirability determine deterrent detrimental devastation development mode development path
dignity diminution disarmament disclosure discriminatory disequilibrium disparity displace diversity domestic policy doubtfully drastically dubious eclipse by economically vulnerable economies of scale eliminate elimination emerging encourage encroachment endeavor endemic endorse enhance entity entrepreneurial skills erase erosion of sovereignty establish ethnocentric evade ever-increasing evidence evolve exacerbate expenses extent facilitate fad fall over oveself financial stability
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fiscal fiscal flawlessly flexibility flexibility flexibility and foreign direct investment foster foster gain prominence generate global mindset go-between match-maker green room negotiations hamper harness hazardous heterogeneous hindrance homogeneity host country host country human capital humanitarian relief ideological interference impetus implement implication impose impose on impoverish impunity incentive incentives incitement income inequality increasingly prominent indicate infant industry infringe upon inherent inherently initiative injection into economy insofar integral integral intellectual property rights interest-based
interest-free intergovernmental juggle labor-saving technology law suit leverage likelihood likelihood lobby long-standing lure lure lure mandate market competition market value maximize opportunities meet the needs mobility modification monolithic mounting mounting pressure move in line move in line multinational nationally-oriented neglect nonproliferation nurture an industry omnipresence ongoing onslaught onslaught overlapping jurisdiction overprice parent company part and parcel pattern peer penetrate pernicious pertaine pervasiveness pervasiveness pervasiveness plight policy reform policymaking
policy-making polycentric populace popularize portfolio pose a threat pose a threat pose a threat power disparity precariously precariously preferential preserve peace presumably presume pretext priceless promote put at risk racial segregation rank reckon reduce tariff barrier regardless of repatriate reprisal resentful restraine retain rogue safeguard sameness scope scrutiny settle a dispute severe criticism shape the policy shared economic interests shareholder shareholder shifting patterns simultaneously smooth manner social cost social protection sovereignty span span span
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spearhead spearhead specificity stably stature stature subcontract to submissive subnational subservience subservience subservient to subsidiary subsidiary subsidy subsidy substantially substantive substitute succinctly succinctly succumb succumbed to supersede supersede supervise supervision supplant supremacy
supremacy sustain sustainable talkatively tame tax concession tax revenue tax revenue think globally threaten to the detriment to the detriment of trace trade related trade union transnational transparency transparency trigger ultimately unanimously unanimously uncertainly unchallenged unchallenged authority undeniably under scrutiny undercut
undermine undermine underprice underprivileged undertakу undesirable unfavourable unprecedented value-laden value-laden verbosely vest violate virtue vis-a-vis vulnerable to wage moderation wave fat carrots at wed to weighty well-exceeding wide array of widen the gap wield power within the confines within the domain wordily
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Unit 2 aboriginal affinity affluent alignment alliance alteration anchor of stability appropriateness articulate assertive bandwagon benign bipolar blue-print bond borderless bread and butter issue buffer v champion v coalesce coalition coexist commit to commitment comparative compatible complement conclave confrontation consolidate power contain contiguity contribute to counterbalance cross fertilize crossnational cultural affinity decentralization decline defy demarcation derive from deter devolution differential diffusion dilute discernible
discrepancy disinclined disproportionate dissolution distinction distinctiveness diversity divide dominance driver elaborate elusive emerge emergence emulate emulation encompass enhance enriching entail eruption excessive explicit explicitly external flourish focal point forerunner halt homogeneity impede implement policy imply in scope incentive inclined incompatible inconsistency indigenous infringe on inherent integrity interstate invoke jeopardize legitimacy legitimization lesson-drawing
levy linkage mainstream maintenance malevolent marginalization mitigate mobilisation monoculture multidimensional multifaceted murderous onset paymaster plague v politicisation power-based approach precondition predatory prerequisite prevalence preventive profound profoundly prominent proximity pursue recede regionalization regionbuilding reinforcement relevant reluctant remittance reputed rest on room-for-manoeuvre roughly safeguard self-binding sentiments set a precedent set off shallow integration shed light on shift smooth smooth v
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societal sovereignty stall v stem from stepping stone strain strengthen strive stumbling block suboptimal subtle superiority
supplant supranationalism surge surveillance sustainable sustainable tackle take a stand take for granted toolkit transferable transmit
transnationalize trigger underly unrivaled uphold vanish vary vehicle viable vulnerable wane yardstick
