VOLUME 1 (1999), ISSUE 2 (WINTER), EDITORIAL
A BRIDGE TO THE FUTURE
Patrick HUNOUT is the President and the Founder of The International Scope® Review.
Let me present this second issue of The International Scope® Review Review devoted to economic internationalization. In the last two decades, commercial barriers between the countries have been broadly abandoned, and capital markets have been deregulated - that means that capital can circulate freely from one country to another, depending on decisions of its holders, the confidence they have in the respective economies, and their prospects for making more profits locally. This evolution was pushed forward notably by the United States, both through an aggressive commercial policy and through pressures on the other capitalist countries, such as Japan and Germany, in order to make them adopt the American type of capitalism, based on the role of stock-exchange, short-term profitability, and individualistic social behavior. This so-called "globalization" has huge consequences for the countries, their economies, and their people. This is why we decided to focus on it in this issue.
The article by two Australian authors, Thomas Clarke and Stewart Clegg, published in this issue, emphasizes that the major casualties of globalization appear to be primarily low-skilled workers in traditional manufacturing countries who either see their jobs slip away overseas, or experience a painful slide in their wage rates as their employers strive to reduce costs. Whole countries and regions find they have been sidelined by the forces of international trade and investment, and instead of experiencing a growing involvement and benefit from the global economy, may encounter a greater sense of dependence and isolation. Particularly vulnerable are the relatively unskilled and under-educated, especially in labor market systems such as the USA which do not have very active interventionist labor market policies. Secondly, one other projected loser has often been the nation-state, yet rumors of its imminent demise have been greatly exaggerated. Nonetheless, there are major implications of global markets, especially in capital and finance, for the nation states that the authors analyze in their conclusion. The winners and losers are likely to be stratified within nation states and regions as well as between them. In dealing with the most profound economic and political phenomenon at the turn of the millennium, they argue, recognizing the significance of enhanced international opportunities involves improving investment in internal and collaborative research and development, investing in human capital, and ensuring world class processes and state-of-the-art products and services in order to compete. New international opportunities bring new responsibilities; respecting these in terms of international social and environmental regulations, as well as the integrity of different cultures, is an essential prerequisite to becoming a global corporate citizen.
Among the possible negative effects of economic internationalization, David Barkin, in an article dedicated to the impact of financial globalization on economic development in Mexico, shows that financial globalization has a negative impact on environmental issues. As the first Latin American nation to join in the United States' project to forge a "Free Trade Area of the Americas," the Mexican authorities wholeheartedly assumed a new role for themselves as ideological and political marshals. This process, which began with the North American Free Trade Agreement (NAFTA), is an example of the heightened sensitivity of its leadership to the demands for greater "environmental responsibility" as part of the process of international integration. This article discusses some of the environmental impacts resulting from globalization. Mexico's remarkable reversal from its historic position of inward-oriented development to the wholehearted embrace of international integration was never subjected to domestic debate. From Barkin’s analysis, it is clear that, in spite of Mexico's heightened awareness of and sensitivity to environmental problems, the increased volume of international financial flows is having a significant deleterious impact on the environment.
Christine Doran and Jim Jose focus their analysis on the effects of "globalization" on a single society: the Singaporean one. Their approach suggests that the impact is global, involving not only the economy, but also interethnic, gender and interpersonal relationships. For more than two decades, Singapore’s economy has been one of the success stories of industrializing Asia. Economic development has been outward looking and oriented to international markets, such that the Singaporean experience can be said to epitomize internationalization. For that reason Singapore is a useful case study of the stresses and transformations which internationalization can generate, highlighting both the benefits and the pitfalls. The authors suggest that the erosion of the cultural values regarded as crucial for economic success (acceptance of authority, deference to elders, self-discipline, community and concern for others) can be shored up only partially and short-term by cultural containment policies. Indeed, responses to economic internationalization seem rather weak and show less imagination apart from the old call for more ‘state intervention’ that both reassures people and, when it is applied, makes the effects of the transformations temporarily more sustainable without deviating from their central directions. As the failure of the World Trade Organization (WTO) negotiations in Seattle has shown in December 1999, it is difficult to organize economic internationalization so as to thwart its negative effects.
As our first issue has shown, such statist ideas inspire European policymaking, with the project of a single currency supposed to push forward a European construction revisited by the reactionary ideas of the French State. The European Central Bank (ECB) is taken in a vicious circle: in order to push forward the "euro", it was necessary to depress the economy; in order not to worsen the high unemployment rate resulting from this policy, the ECB now has to maintain comparatively low interest rates - hence the weakness of the euro, which has lost a substantial part of its value since its launching at the beginning of 1999. Nevertheless, campaigns have now been launched by the Establishment in Britain, to push forward the participation of the UK in the European Monetary Union. For EMU supporters, this participation should be decided ‘as soon as possible’, which is understandable given that a deepened reflection on the subject might show all the possible advantages that Britain - as well as Switzerland - could draw from not subscribing to the euro.
In an opportunistic way, the article by Michael Leicht shows all the importance of ‘social capital’ for Europe. "How can globalization be made socially sustainable?", asks Leicht. Social capital is a measure of social cohesiveness. It is about the ability of people to cooperate, encompassing moral values (justice, trust, civic engagement) and institutional capacity. Several tendencies have led to a destruction of social capital (neoliberal ideology, unchecked markets, unemployment, technological change, etc). Policy initiatives fostering social capital accumulation can start at several levels (micro, meso, and macro). At the center stands a revival of civic culture and a transformation of the welfare state into a social investment state. Business on the international level is influenced by the new economic conditions.
The article by Maya David, a linguist from Malaysia, raises the interesting question of how people behave when selling in an intercultural context. With globalization and internationalization, it is inevitable that trade encounters between peoples of different nationalities, ethnicities, and languages will further increase. As English is an important second language in multilinguistic Malaysia, there should in principle be minimal problems for outsiders when communicating with Malaysians. David’s research sets out to determine who initiates the discourse in a trade setting which cuts across ethnic groups, cultures, and languages. Whose language will be used in such trade transactions, is it the vendor’s language that dominates the trade transaction or the buyer’s? With these questions in mind, her article examines the linguistic choices made by Malaysian buyers and sellers in service relationships in Malaysia. China is, among the developing countries, the one which attracts the most Western investments.
The article by Zhan Su shows that these investments have been achieved principally by creating sino-foreign joint-ventures. However, an international joint-venture is, above all, a "marriage of reason" which oscillates between competition and cooperation. Managing a joint-venture with China is a still bigger challenge because of the complexities of the Chinese environment ; Western managers are therefore the key players in the successful integration of the international joint-venture in China. Based on an analysis of sixteen case studies, the article outlines the major professional and personal qualities that are required of Western managers to achieve success in China, and puts forward some recommendations to Western companies for improving their joint-venture expatriates’ management.
The article by Boiral and Dostaler shows the emergence of a new standard of reference in matters of environmental management, especially in Europe and in Asia : the ISO 14 001 standard. Like the ISO 9 000 series of quality standards, ISO 14 001 tends to be used increasingly as a supplier-selection criterion, particularly in the case of transborder trade. The article addresses the extent to which ISO 14 001, as the result of a lengthy international concertation and negotiation process, is really going to impose itself as an unavoidable step which corporations should take, thereby transforming the standard into a kind of ‘passport’ to the global market. The article does this by examining the standard’s underlying principles as well as the main forces contributing to its international development.
Cant and Brink, in an article devoted to Black retailing in South Africa, focus on the problem of interrelationships between business and race relations in a country imbued with its racial history. Their research results reveal various prominent gaps in the black township retailer's perception of marketing. The most significant findings are that successful township retailers have certain unique characteristics and perceptions and follow specific marketing practices ; for example, those retailers who are successful, keep an extended product range, train their staff, have self-service store operations, and accept their role in society at large. These findings were used to develop a 10-point plan for success in black township retailing in South Africa.
Another aspect of internationalization is approached with our study on migrations to France and Germany. The book that we published in our first issue in its French version, is now accessible to our German readers in their own language. This collective work shows that the objectives of the immigration policy were to have a new working class available, like in the 19th century, in terms of labor costs as well as in terms of submission to authority and methods of government. This was consistent with the other aspects of the Power’s policy for the restoration of the ancient order, all the more so because this ethnic new class had no consciousness of the issues at stake, and did not have the same progressive models as the local one. Thus, the call for immigration was taking a less economic and more sociopolitical, reactionary character. The book examines, among the numerous questions posed by immigration to our societies, the intergenerational conflicts of values among migrants and their behavioral effect on new generations of migrants, and the effects of migrations on the consistency of values in our societies. In the last few years, the policy of the Power has triggered everywhere a moral crisis and a collective feeling of uneasiness. This has been especially perceptible in France in the period 1995-1997. Hence the campaign of the political power in order to manipulate public opinion and restart an artificial feeling of satisfaction, on the basis of improved short-term economic indices and...of the enhancement of the victory of the national team at the Soccer World Cup - (the victory of a multiethnic team... over another multiethnic team!). Thus, everything has been done to convince people that the policy carried on by the Power, including the systematic ethnic mixing that today characterizes most Western countries and notably France and the United States, was the right policy.
This gladiators democracy, however, hides all the time less the failure of the Power’s policy, and the fragility of the situation that it created at the turn of the new century. No doubt some of these aspects will continue to be explored by The International Scope® Review in the next years, building, as is its aim, a bridge to the future.
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