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6. Conclusion
This paper has attempted to provide an integrated and
global perspective on adjustment and globalization. These two processes are seen as
interdependent and mutually reinforcing. The dynamics of global integration in the
post-war period interacted with the economic crisis in the post-1973 period to strengthen
the forces and pressures for adjustment policies. The latter, reflected in liberalization,
deregulation and privatization, in turn reinforced the thrust of global economic
integration in the 1980s. Structural adjustment policies originated in the industrial
countries and then spread to other regions of the world. In the former, they represent
both elements of continuity and break with the economic and social policies pursued in the
post-war period. In the developing countries, they constitute a sharp break with the
earlier policies of state-directed modernization and growing reliance on administrative
methods for resource allocation. The pace and pattern of liberalization show considerable
country and regional variation in the Third World reflecting socio-economic structures,
the severity of the crisis, the intensity of foreign pressure and the interplay of
contending social groups.
The 1980s witnessed a marked acceleration of the
globalization process which extended beyond economics to embrace science, technology,
culture and lifestyles. In the economic domain, it was reflected in rapid growth of trade
in goods and services, of foreign investment, technology transfers, foreign exchange
transactions and telecommunications. With some notable exceptions, the role of the
developing countries in the global exchanges has tended to shrink in recent years. This is
due in part to discrimination in the pattern of liberalization. In an era of extensive
deregulation, the protection accorded to agriculture was enhanced, non-tariff barriers
multiplied on some manufactured goods of export interest to developing countries and
controls on immigration of unskilled persons were tightened. Nevertheless, the world moved
strongly in the direction of an integrated market for goods, capital, technology and
skills. The process was fueled by technological progress and mediated by transnational
enterprises that increasingly became the vehicle for trade and investment and access to
technology, skills and markets.
The processes of adjustment and globalization have been
associated with wide-ranging social and political changes. They contributed to
intensification of inequalities nationally and internationally and an increase in the
incidence of poverty in most countries. The slowdown in economic growth in the post-1973
period played a major role in this. However, changes in relative product and factor prices
and in patterns of taxation and expenditure exacerbated poverty and inequalities. The
groups which suffered most include the unemployed, new entrants to the labour force, urban
workers and sections of the middle class. The chief beneficiaries include those deriving
their income from capital, especially those engaged in financial, manufacturing and
commercial enterprises in the export business. The intensification of poverty and
inequalities has severely strained social fabrics and accentuated social conflicts
world-wide.
These changes reflect important shifts in power at the
national and international levels. Internationally the balance of power has shifted
further away from developing countries in favour of foreign creditors and investors,
international financial organizations and industrialized countries. Everywhere the power
and the reach of the state have declined. Internally, there has been a shift of power in
favour of capital, especially that linked with the international economy, and away from
the organized working class and to some extent the middle class.
These developments have undermined the social alliance and
national consensus on economic and social goals and policies established in the post-war
period in both the industrialized and developing countries. Together with intensification
of poverty, they have generated a wide array of social problems. They pose serious threats
to political stability and sustainable growth. Social problems need to be addressed not
only in the interest of national cohesion and solidarity but also as a necessary
investment for future growth. Unfortunately, nation states are increasingly both unwilling
and unable to cope with the social crisis. At the same time, the economic power wielded by
the new dominant forces nationally and internationally has not been matched by a
corresponding shift in their political and social responsibilities for global welfare or
in their accountability to the peoples of the world. It is a task of the highest
importance to explore the political, social and economic configurations of new
arrangements to articulate and implement an agenda of reform addressing the major social
problems of the era.
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