Globalisation: Issues in World Change.
The patterns of World trade that have been established in the post war years certainly indicate an increasing trend towards international interdependence. To modernisation theorists, convergence theorists and the International financial institutions this is an indication of a continued, if cyclical growth and of extensive assimilation into a world system. Indeed the recently agreed NAFTA and GATT agreements are explicit attempts to accelerate this process by further "equalising" the terms within which nations trade goods and services between each other.
That remains as the outstanding problematic in this process (and has dire practical consequences for the governments and people of the South) is the obvious imbalance in trade that exists in the relationship between the Advanced Industrial economies and the developing world.
The imbalance in trading relations between the First and Third Worlds, far from showing a tendency towards greater equalisation have in fact demonstrated a continuing and accelerating dominance of the Industrialised world. In the 1960s up 40% of all their manufactured goods were traded by the Third World within the Third World, by the early 1980s this had contracted to 25% and has continued to shrink.
Almost three quarters of the all the manufactured goods produced in the South are traded to just a handful of the Industrialised Nations. Nearly ninety percent of the mineral resources gained from the mines of the developing world go to the same destinations.
In 1985 a major survey of proposed air routes linking 16 African Capitals with each other was carried out. Whilst all of these, without exception were served direct by air routes from Europe and some even direct from the USA, only 10 of the 120 proposed routes were considered financially viable and even these routes were restricted to the relatively prosperous area of West Africa.
Brazil and Nigeria are major trade partners with innovative attempts to circumvent dependency on metropolitan economies including the direct exchange of Brazilian Volkswagen cars and Kits for Nigerian Oil. Despite these ventures however Africa as a whole only accounts for 1% of Brazil's overseas trade, with 25% of this with Nigeria, howeversuch arrangements can incur the disapproval, even obstruction of the International Financial Institutions, and of the WTO .
Trade between the nations of the Third World, including the Middle income countries and the NICs is continuing to contract despite much political and diplomatic agitation by South Organisations as the Non-Aligned movement, the OAU, Caricom and other. Ironically the headquarters of the commission set up by the Non-Aligned Nations to target South- South trade is in Geneva.
Whilst the influence and conditionality of the development funding organisations in directing trade away from "collective self- sufficiency" is undoubtedly considerable, it is impossible to discuss world trade at all without reference to the major players in the practice of the exchange of goods and services across national boundaries.
Trans-National Corporations control and organise 65% of all of the trade in the world. The annual turnover of the worlds four or five TNCs routinely exceeds the GNP not just of one nation but the whole continent of Africa. The few thousand companies that employ well over thirty million employees around the world, have, in the post war years, increasing come to play a powerful role in the economic and social development of many developing Nations. By the early 1980s Trans National Corporations controlled 25,000 plants or other facilities (mines, transport, services) in the Third world amounting to a quarter of the total manufacturing base.
In the case of Latin America the dominance of the TNC is all the more obvious with over a third of all maufacturing output produced in Central and South America emanating from the plants of Multi-nationals. Within the developed world itself a complex system of cross linkages has operated for some period, Britain, for example was a substantial investor in both Imeprial Russia and Germany before the Great War (1914). UK companies invest now in Japan, the US and Europe as well as the South and many organisations with their base outside the UK own plant or other assets in the UK economy.
The spread of micro-electronic based communications systems have facilitated the development of a system of inter-relationships at a financial level that allows for massive flows of captial to take place in virtual real time- and with no regard for national boundaries. This internationalisation of the flow of Capital has given the Trans-national Corporations both enhanced flexibility and yet greater power.
For individual National Governments the size and power of the multi-nationals has effectively constrained development options.
