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Globalisation is making the world smaller, but also increasing economic inequity and pressures on the environment. Understanding and controlling the phenomenon is vital to CEE countries, whose transition economies are especially vulnerable. By Tom Popper As technological advances help improve communication and transportation, and peaceful negotiation helps reduce trade barriers, the world becomes a smaller place, and its people are brought closer together. While many have hoped that these changes will unite the planet in common prosperity, it is becoming increasingly clear that unchecked globalisation has many negative effects. The phenomenon can replace national borders with more insurmountable boundaries — between the haves and the have-nots — and encourage dangerous abuses of the environment. The countries of Central and Eastern Europe (CEE), which have been eager to join in the bounty promised by globalised free-market capitalism, are learning that the world market is not as free as some would have us believe. Large parts of CEE may be left out of the economic benefits that globalisation is supposed to bring, and the region’s environment faces serious threats from a profit-run system that appears to operate independently of democratic forces. The impact of globalisation in CEE has become stronger and more obvious in recent years as multinational corporations have increased their presence here. Although the region has received some benefits from the improved communication, commerce and international cooperation that come with globalisation, there are also many drawbacks to the system. If CEE countries want to preserve their environments and their economies, and achieve sustainable development, they must fully appreciate the concerns raised by globalisation, so that they can join in efforts to alleviate these problems. The ill-effects of globalisation in the region are not always clear, as John Horvath noted in an article for “Telopolis” online magazine: “The general feeling of the (Hungarian) government, most politicians and assorted pundits is that multinationals have done good for the Hungarian economy. By all paper indicators, they have increased exports, contributed to GDP growth, introduced new products and production methods and have provided jobs. What they fail to mention, however, is that more jobs have been lost than created.” In a constantly changing world, it is sometimes hard to identify what trends are caused by globalisation, or even to agree on exactly what globalisation means. Artists use the term to describe unrestricted cultural interaction, and economists recommend it as a self-regulating world-market system. When environmental and social activists express concerns about globalisation, they are generally referring to a phenomenon, facilitated by free exchange of international finance, wherein immensely wealthy multinational corporations, supported by worldwide financial and trade institutions, achieve dominance over the world economy and manipulate the market to their own advantage — thereby circumventing democratic institutions. Although the globalised economy is supposedly a natural product of free-market democracy, multinational firms, which are purely for-profit entities with no strong incentives to care for the planet or its people, appear to operate in a non-competitive environment, within which they can easily seize control of specific world markets. This state of affairs is apparently indirectly sustained through the activities of international financial and trade organisations, like the World Bank, the International Monetary Fund (IMF) and the World Trade Organization (WTO). The result is a system where unelected corporate managers wield unprecedented power, income is unfairly distributed and the environment is abused. Globalisation in its present form poses a general threat to the environment because the profit motive, which is the rarely questioned driving force behind the system, encourages infinite growth. As environmentalists, and most laymen, know, it is impossible to sustain infinite growth in a finite world — the planet’s natural resources will eventually run out. Development encouraged by globalisation is already depleting the planet’s forests, wetlands, coral reefs and other habitats and resources that are vital to our survival. Globalisation can also pose specific threats to the environments of developing nations, including those of CEE, because multinationals find that poor environmental practices are more tolerated in lessdeveloped, investment-hungry countries. This was apparently the situation in Romania, where Esmerelda, a mining company based in Australia, started a joint venture with the Romanian government to run a mining facility in Baia Mare. The practices used there were risky, and might have been illegal in Australia. When a leaching pond full of cyanide at the Baia Mare facility overflowed in January 2000, the fish, and most of the eco-systems, in the majority of the Tisza River were destroyed in one of Europe’s worst environmental disasters. Aurul SA, the Romanian subsidiary of Esmerelda that handled the Romanian mine is using new methods — but still operating. Yet there are aspects of globalisation that may help the environment. The internet and other developments facilitating global communication mean that environmentalists can share information worldwide, and activists can work together. The United Nations Environment Programme and the propagation of the European Union’s environmental regulations are also beneficial manifestations of a global approach to environmental matters. Furthermore, important agreements, like the Kyoto Protocol for controlling climate change, the Ramsar Convention on Wetlands of International Importance or the Convention on International Trade in Endangered Species of Wild Fauna and Flora, would not exist without a certain level of globalisation. Critics of such international environmental efforts might argue that they are not enough to undo the damage caused by the type of business that globalisation engenders. Anti-globalisation protests at meetings of the WTO, the World Bank and other international bodies have helped encourage a broader public debate on globalisation. The IMF meeting held in Prague in September 2000 brought the debate directly into the region, and allowed CEE organisations that have already been raising concerns about globalisation to spread their views more broadly. The week before clashes between police and more raucous anti-globalisation demonstrators put 65 people in the hospital, CEE Bankwatch Network and Friends of the Earth Czech Republic held a September 20-21 seminar in Prague for representatives of NGOs monitoring the activities of the World Bank and the IMF. The region has seen other protests against globalisation, including one in Gyor, Hungary, that met with apparent success. Danone, a multinational food company, had been given tax incentives to purchase a 100-year-old biscuit factory in Gyor, and had reportedly promised to keep the factory operating. Danone announcement in April that they would close the plant sparked a nation-wide boycott of Danone products. The boycott, which was largely organised via the internet, reportedly resulted in a 10 percent reduction in Danone sales in Hungary by the end of the month, and Danone decided not to close the factory, saying that its management had never realised how important the site was to the town. The victory may be short lived, because it’s likely that there will be eventual cut-backs at the Danone plant, but any kind of concessions from a multinational are unusual. For the most part, globalisation goes unchecked in the region, and multinational corporations seem able to close local businesses without questions. “Basically, what multinationals have done in the post communist nations of Central and Eastern Europe is they have bought markets and closed factories,” writes Horvath. “For example, Hungary used to have 12 sugar factories; now only five remain. The rest had been bought by multinationals and then shut down because they were not needed. In other words, the new owners were only interested in buying themselves into the market, and not in running the companies they acquired. What is more, they flooded the newly acquired markets with their own products from abroad.” It seems clear that globalisation of the economy tends to increase the concentration of wealth in favour of those who already have money. Given their position and their mandate, managers of multinationals strive to amass wealth for the small group of shareholders who own the corporations, while using market power to cut others out of the profits of globalisation. Apparently as a result of this trend, the disparity in incomes worldwide has been steadily increasing for the last 50 years or more, as scores of different statistics indicate: Between 1970 and 1985, worldwide gross domestic product increased by 40 percent while the number of poor people grew by 17 percent, according to the United |
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