G lo b a lis a tio n , d e v e lo p m e n t

a n d u n d e rd e v e lo p m e n t
The term ‘globalisation’ has increasingly come > Explores the links between globalisation and
to be associated with the era in which we live development, looking at arguments about
and reflects the degree to which our lives and both the negative and positive aspects of
the societies in which we live are influenced by the relations between the two;
processes and trends which are global as > Examines the realities of a shrinking world
opposed to national in origin. This chapter as an increasingly unequal world and the
seeks to explore the implications of persistence of ‘unequal geographical
globalisation for the process of development. development’;
On the one hand, there is the essentially neo­ > Presents an updated picture of the global
liberal argument that for development to occur digital divide showing just how unequal the
there has to be globalisation - to allow world is in terms of communications;
countries to buy and sell goods and to buy into > Reviews economic aspects of globalisation,
new forms of technology, cultural change and especially what is referred to as 'global
the like from anywhere in the world. At the shift’ in the manufacturing sector and the
other extreme are those who are far less happy emergence of what are referred to as
with the outcomes of contemporary processes ‘global production networks';
of globalisation, who argue that the process is > Defines and explores the realities of the
‘distorting’ patterns of development and joint processes of global convergence and
creating ever-increasing global inequalities and global divergence as key systems leading to
reinforcing ‘uneven geographical development’. homogeneity in patterns of consumption for
At the extreme, globalisation has been branded those who can afford it, and heterogeneity
as neo-modernisation, a renewed twenty-first in respect of production and ownership;
century faith in the notion that modernisation > Reviews aspects of cultural globalisation;
will progressively develop the world in a benign, > Considers political aspects of globalisation;
efficient and positive manner. At their extremes, > Overviews protests against the current forms
these two arguments are associated with pro- that globalisation is assuming in the form of
globalisers/ultra neo-liberals on the one hand, the anti-globalisation and anti-capitalism
and anti-globalisers on the other. This chapter: movements, including urban social movements.
Conceptualising development

Defining globalisation Schech and Haggis (2000: 58) define globalisation as

the intensification of global interconnectedness, a pro­
Just as the first pictures of the whole earth from cess that they see as associated with the spread of
outer space made us aware of the interdependence capitalism as a production and market system. In an
and ecological fragility of the planet, so the events of essentially similar manner, Kiely (1999a: 3) suggests that
11 September 2001, the 2008 Global Financial Crisis ‘globalisation refers to a world in which societies, cul­
(GFC) and the more recent downturn in the Chinese tures, politics and economies have, in some sense, come
economy have served to show just how globalised closer together’. The same author goes on to note, how­
and socio-politically and economically fragile the ever, that globalisation involves substantially more than
world is today, certainly in respect to major events interconnectedness. The process also involves the inten­
and strategic upheavals. sification of worldwide social relations, serving to link
Over the last 40 years or so, one of the major trends events in widely geographically separated places (see
has been that the world in which we live is being seen as Schuurman, 2001; Murray, 2006; Conway and Heynen,
ever more global in character and orientation. This 2006; Dicken, 2015). Dicken (2015: 1) argues that this is
trend has been witnessed in increasing actual and part of ‘an inevitable and inexorable process of increas­
potential interactions between different parts of the ing geographical spread and increasing functional
globe. People are increasingly thinking in terms of an integration between economic activities’.
‘era of global change’ and a ‘globalising world’, and Contemporary globalisation is also associated with
claiming that we live in a ‘global village’. While commu­ changing experiences of time and place and with the
nication and technological advances, and greater levels development of new communications technologies and
of global interaction through the investment decisions the rise of what has been referred to as the ‘information
of the large corporations, undoubtedly have advanced society’ (Castells, 1996). Governments in their turn fre­
global ‘development’ in financial terms, the impact of quently stress that globalisation involves enhancing the
such growth is distributed unevenly across the Earth. In free movement of goods, services, capital, information
the South, being included and excluded from globalisa­ and, in some instances, people across national boundar­
tion processes can be a major catalyst or hindrance to ies. The process of globalisation is, therefore, inescapably
development, but even for well-integrated places this plugged into the neo-liberal world order that was dis­
form of development comes with associated costs. cussed in the previous chapter, which benefits countries
Such global change is intimately connected with a and places within them on a differential basis, running
battery of developments which define our age, includ­ the risk of creating and even reinforcing what Harvey
ing e-mail, the internet, social media and the digital (2015: 146) refers to as ‘uneven geographical develop­
world in general, along with older technologies which ment’. Within this context the poorest nations run the risk
are still acting as agents of diffusion and change, of being ‘integrated’ into a world system, but in a precar­
including the telephone, fax, television, DVD recorders ious and marginalised position as a result of unequal
and wide-bodied jets. The spread of global brands, power, trading and financial arrangements (Bond, 2006;
international media, air connectivity, the work of global Collier, 2008). Within this context it is interesting to
bodies such as the UN, and dissemination of fashions observe the emergence of global protest against the dom­
and music have all accelerated these processes. Critical inant capitalist system, as expressed in the annual
in this process is the emergence in manufacturing of demonstrations at meetings of the world’s main economic
what is known as ‘global production networks’ (GPNs) leaders in Davos in Switzerland, the rapid spread of the
which source inputs globally, manufacture in different ‘Occupy’ movement protests in 2011 and emerging
parts of the world and sell their products internation­ moves to link social movements internationally.
ally relying on low trade barriers, reducing transport In addition, on occasion, globalisation is directly
costs and integrated operations, production and sales as equated with a distinctly post-modern world within
a result of integrated logistics and digital technology which states and boundaries are becoming less-
(Coe and Yeung, 2015). powerful agents of change.

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 Chapter 4 Globalisation, development, underdevelopment

Yet, there remains much controversy about the likely had in the past (Knox et al., 2014), and those who have
developmental consequences of the diverse strands which ready access to the technology have much more up-to-
make up globalisation (Murray, 2006; Conway and date information at their disposal.
Heynen, 2006). Thus, the major theme of this chapter is Third, the ascendancy of global corporations and
that these global tendencies are highly uneven, both spa­ global marketing activities is resulting in the availability
tially (between places and regions), and socially (between of many standardised and globalised products (Dicken,
peoples and groups). The impacts of globalisation vary 2015) and global media throughout the world, again for
from region to region, and group to group, in ways that those who can afford them. In addition, not only do we
are clearly contributing to the further development of live in a world of near ubiquitous Big Macs, Coca-Cola,
diverse and plural geographies of development at the Levi jeans, Starbucks, Amazon, eBay, Facebook and
beginning of the twenty-first century. The overall diver­ Google, but we are also witnessing the emergence of
sity and plurality of these processes is contingent upon global financial markets and the integration of global
globalising tendencies and the risk of creating or reinforc­ financial systems and stock exchanges. The rapid and
ing ‘uneven geographical development’ (Harvey, 2015) profound effects felt around the world of the near col­
which is a major theme in this chapter. An issue that we lapse in 2008 of elements of the western banking system
touch on several times in this chapter is that, however we in the so-called ‘Global Financial Crisis’ are profoundly
define it, globalisation has, in fact, been around in differ­ illustrative of both the reality of global integration, but
ent forms for many centuries. However, it is a frequently more importantly of our global vulnerability to crises
heard assertion that over the last 40 years or so the rate of often outside our national borders, over which we have
globalisation and its intensity have both increased dra­ minimal control. This is associated with a dramatic
matically - and it is the developmental connotations of acceleration in the speed of financial flows and transac­
this claim that form a focus of this chapter. tions, with money now moving in purely electronic
form, so that it takes only fractions of a second to send
sums from one part of the world to another.
Globalisation and development:
‘for and against’/'solution or S tra n d s o f g lo b a lis a tio n :
problem’? e c o n o m ic , c u ltu ra l a n d p o litic a l

in tro d u c tio n Following this argument, Allen (1995) has recognised

three broad strands to globalisation: the economic, the
There are at least three distinct aspects to the current cultural and the political.
processes of global change that we are witnessing. First, in respect to economic globalisation, distance
First, the world is effectively ‘shrinking’ in terms of has become less important to economic activities, and
the distances that can be covered in a given period of large corporations frequently subcontract to branch
time, due to faster and more efficient transport, although plants in far distant regions, effectively operating within
this process works more for the affluent ‘jet-set’ than for a ‘borderless’ world through their ‘global production
everyone else. Rapid improvements in digital technol­ networks’ (Coe and Yeung, 2015).
ogy have led to the integration of financial and Secondly, the stereotype of cultural globalisation sug­
production activity, and have facilitated constant global gests that as Western forms of consumption and lifestyles
networking from the activities of stock exchanges to spread across the globe, there is an increasing conver­
personal contacts. gence of cultural styles on a global norm, with that
Second, better communications, such as cable and norm being codified and defined by the global capitalist
satellite television, mean that many - though by no system. Figure 4.1a takes a look at this apparent ten­
means all of us - hear about what is happening else­ dency towards global homogenisation.
where in the world more swiftly than we ever did before. Thirdly, as already noted, in the arena of political
The global web now has far more connections than it globalisation, internationalisation is regarded as leading

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Conceptualising development

‘We've got a wide variety o f destinations'

(a)

Figure 4.1 C ontrasting views o f globalisation as:

(a) the homogenisation o f the whole w orld - or a t least its cities
Source: Private Eye (2000)

(b) the conflagration o f th e S outh by the N orth

Source. David Simonds, Copyright Guardian News & Media Ltd 1999

to the erosion of the former role and powers of the process in any sense of the term. Is there any sense in
nation state. The role of the EU, UN, World Bank and which globalisation means that the entire world is
WTO are indicative of these trends, as are regional eco­ becoming more uniform? Is there any chance that it
nomic agreements which foster free-trade and economic means that the world will become progressively more
integration and harmonisation. equal over time? If not, is it the case that such a process
of accelerated homogenisation will come about in the
forseeable future? This accords with the view of’
Globalisation and development/ pro-globablisers’ and the proponents of the benefits of
underdevelopment: a contentious neo-liberalism, who argue that globalisation, while hav­
issue ing its flaws, will bring the greatest benefit to the
greatest number of people globally through freer trade
Following the overview of development theories and and integration of economic activity (see Dicken, 2015).
strategies presented in Chapters 1 and 3, the present Or does the available evidence point to increasing
account focuses on the question of what development inequalities between the Global North and the Global
means in a contemporary context that is dominated by South as a result of current global change? This less than
processes of globalisation and global change. positive view of globalisation is depicted in the cartoon
One of the important questions to be addressed is reproduced in Figure 4.1b. In short, does globalisation
whether contemporary globalisation is in fact a new mean that change and development will ‘trickle down,

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 Chapter 4 Globalisation, development, underdevelopment

and that this will occur with more speed than in the and 3). Such a perspective tacitly accepts that the world
past, or will it be associated with increasing polarisa­ will become progressively more ‘Westernised’, or, more
tion? This standpoint resonates with the arguments of accurately, ‘Americanised’ (Massey and Jess, 1995).
Harvey, who argues that ‘uneven geographical develop­ The approach stresses the likelihood of social and cul­
ment is not a mere sidebar to how capitalism works, but tural homogenisation, with key American traits of
fundamental to its reproduction (Harvey, 2011: 213). consumption being exemplified by the ‘coca-colonisation’
Geographical differences - such as natural resources or or ‘coca-colaisation’, and the Hollywoodisation or
socially constructed endowments, are ‘magnified and Miamisation of the Global South, replete with McDonald’s
consolidated not eroded by free market competition’ golden arches. Thus, Westernisation is seen as a natural
(Harvey, 2006: 98). Cumulative causation ensures and desirable reflection of the globalised spread of devel­
enhanced growth of the richer areas and decline of the opment. Globalisation is seen by those subscribing to
poorer and ‘capital accumulation creates not only spaces, modernisation theory as the outward flow of Western
but different forms of spatiality’ (Harvey, 2006: 77). know-how, capital and culture to the rest of the world. It
Territorial competition is key in capital accumulation is in this connection that globalization studies can be
and in the disparate structures which emerge. Uneven seen as one step on from modernization’ (Schech and
development is thus seen as a product of the develop­ Haggis, 2000: 57).
ment of capitalism and is critical to its operation. This is very much the view of globalisation within the
These are just a few of the basic, but highly conten­ United Kingdom Government’s White Paper on
tious issues that will be addressed in this, the fourth and International Development presented at the start of the
concluding chapter of Part I. twenty-first century under the title Eliminating World
In other words, globalisation has to be seen as a Poverty: Making Globalisation Work for the Poor
highly contentious issue involving the current operation (Department for International Development, 2000a). In
of the neo-liberal world order. This has clearly been the words of Clare Short, the then Secretary of State for
witnessed in the ‘anti-globalisation protests’ that have International Development, contained in the foreword:
occurred outside major international financial gather­
T h is secon d W hite Paper analyses the nature o f
ings since 1999, and most profoundly with the 2011
glob alisation . It sets out an agen da for m an agin g
Occupy Movement protests in many cities around the
the p ro cess in a way that could en sure that the new
world. These anti-capitalist and anti-globalisation pro­
wealth, technology and know ledge bein g generated
tests are more fully considered later in this chapter. On
brings su stain ab le b en efits to the on e in five o f
the other hand, many governments and world financial
hum anity who live in extrem e poverty.
organisations such as the World Bank, International
(D ep artm en t for In ternational
Monetary Fund and World Trade Organization (WTO)
D evelopm en t, 2000a: 7)
have repeatedly stated the positive case they see for the
role of globalisation in enhancing the overall process of It is also noted in the White Paper how ‘encour­
global development. agingly, in recent years we have seen the beginnings
Thus, as already intimated, two generalised views of a serious political debate about the equitable
concerning the relationships between globalisation and management of globalisation’ and that ‘making glo­
development have emerged over the last decade, and balisation work more effectively for the world’s poor
these are outlined below. is a moral imperative’ (Department for International
Development, 2000a: 14).
G lo b a lis a tio n as d e v e lo p m e n t In overall terms, the White Paper is clear in its claim
that, managed carefully, globalisation will bring specific
The first view is the familiar claim that, to all intents and benefits to the world’s poor: ‘The UK Government
purposes, places around the world are fast becoming, if believes that, if well managed, the benefits of globalisa­
not exactly the same, then certainly very similar (see tion for poor countries can substantially outweigh the
Figure 4.1a). This view essentially dates from the 1960s’ costs, especially in the long term’ (Department for
belief in the process of modernisation (see Chapters 1 International Development, 2000a: 19).

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Conceptualising development

G lo b a lis a tio n a n d China, India and South Korea challenges the notion of
m a rg in a lis a tio n uniformity in the South and has led to a scenario in
which they in turn have developed their own economic
However, even the White Paper is aware of the counter­ linkages in the South which may in turn favour their
argument, noting of globalisation in respect of own corporate and national goals.
developing societies that, ‘managed badly . . . it could Even in regard to cultural change, it may be argued
lead to their further marginalisation and impoverish­ that, although the hallmarks of Western tastes, con­
ment’ (Department for International Development, sumption and lifestyles, such as Coca-Cola, Disney,
2000a: 15). The UK Government goes on within the McDonald’s and Hollywood are available to all, such
same account to set out the beginnings of the anti­ worldwide cultural icons are reinterpreted locally, and
globalisation argument that the process is little more take on different meanings in different places (Cochrane,
than one of neo-modernisation: 1995). Further, it is obviously the case that access to
them varies sharply by virtue of income and social
For som e, glo b alisatio n is inextricably linked with
standing. This view sees fragmentation and localisation
the neo-liberal econ om ic p olicies o f the 1980s and
as key correlates of globalisation and postmodernity.
the early 1990s. F or them , glob alisation is syn on y­
A further major point substantiates this view.
m ous with u n leash in g m arket forces, m in im isin g
Evidence shows that globalisation is anything but a new
the role o f the state an d letting inequality rip. Th ey
process - it has been operating for hundreds of years.
d en oun ce the in creasin gly open an d integrated
The process of globalisation can be seen as having
global econ om y as an ad d ition al m ore potent source
started with the age of discovery (Allen, 1995; Hall,
o f global exploitation , poverty an d inequality.
1995). This argument has been clearly summarised by
(D ep artm en t for In ternational
Stuart Hall (1995: 189):
D evelopm ent, 2000a: 15)
Sym bolically, the voyage o f C o lu m b u s to the New
This cautious perspective regards globalisation as
W orld, which in au gu rated the great p ro ce ss o f
akin to the spread of advanced capitalism. Rather than
E u ropean exp an sio n , occu rred in the sam e year as
suggesting that the net outcome is a more equal and
the expu lsion o f Islam from the Span ish sh ores and
more homogeneous world, the stance emphasises the
the forced conversion o f Span ish Jew s in 1492. T h is
reverse view, that globalisation is resulting in greater
. . . [is] as convenient a date as any with which to
flexibility, permeability, openness, hybridity, plurality
m ark the b egin n in gs o f m odernity, the birth o f
and difference, both between places and between cul­
m erch ant cap italism as a glob al force, and the d e c i­
tures (Harvey 2006, 2015; Massey, 1991; Massey and
sive events in the early stages o f globalizat ion.
Jess, 1995; Potter, 1993b, 1997; Robins, 1995). Following
on from this perspective, far from leading to a uniform This perspective usefully highlights how globalisation
world, globalisation is viewed as being closely con­ has always been intimately connected with power differ­
nected with the process of uneven development, and entials and changes in culture. Early globalisation was
the perpetuation and exacerbation of spatial inequalities associated with the conquest of indigenous populations,
(Harvey, 2015). great rivalries between the major European powers in
This view of globalisation argues that, by such pro­ carving up colonial territories, and the eventual estab­
cesses, localities are being renewed afresh. This is lishment of the slave trade, as detailed in Chapter 2.
particularly so in respect of economic change, where While ancient empires such as that of Rome were early
production, ownership and economic processes are forms of international integration, the later emergence
highly place- and space-specific and these processes of European trading empires, such as those of France,
may not necessarily favour countries, places and people Britain, Belgium, Spain, Holland and Portugal led to the
in the Global South who often exist and operate in a creation of what was termed an ‘international division
‘dominance-dependence’ relationship with the corpora­ of labour’ in which colonies supplied labour and raw
tions and institutions of the Global North. The relatively materials to the European powers through a process of
recent economic ascendancy of countries such as Brazil, subservience.

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 Chapter 4 Globalisation, development, underdevelopm ent

Thus, globalisation has always been associated with with new transport and technological advances. This
increasing differences between peoples and places, process of time-space compression, through which
rather than with evenness and uniformity. Further glo­ improvements in transport technologies have effectively
balisation has been a gradual, as well as a partial and changed the relationship between places vis-a-vis one
uneven process, which has spread heterogeneously another within the settlement system, was first described
across the globe. by Janelle (1969). To give a national example, in 1779 it
This overarching theme is addressed in the contem­ took four days or 5,760 minutes to travel the 330 miles
porary context in this chapter, first in relation to that separate Edinburgh from London. By the 1960s the
economic aspects of globalisation, and then in relation time taken to travel between them had effectively been
to cultural change. First however, we turn to examine reduced to less than 180 minutes by plane, so the two
the overarching conceptualisation of a shrinking world places had been converging’ at the rate of approximately
as one of the fundamental cornerstones of contempo­ 30 miles per year.
rary globalisation. Digital technologies have meant that global links can
now be instantaneous and space has effectively disap­
peared as a barrier to communication in this regard
Global transformations: a shrinking (Knox et al., 2014). At the global level, this is illustrated
world or a more unequal world? by the much-reproduced representation of the world
shown in Figure 4.2. In the period between 1500 and
1840 the best average speed of horse-drawn coaches and
A s h rin k in g w o rld ?
sailing ships was about 10 miles per hour. In 1830, the
Whatever the respective arguments for and against glo­ first railway was opened between Liverpool and
balisation as an agent of development, both critics and Manchester, and the first telegraph system was patented.
proponents point to the major changes that have By 1900 a global telegraph system was in place, based
occurred in the fields of transport and communications on submarine cables, giving rise to the world’s first
as technological advances have brought places closer global communications system. By the end of the period
together. 1850-1940 steam trains averaged 65 miles per hour and
Thus, over the past 40 years there has been much talk steamships around 36 miles per hour. But, as shown by
about the world becoming a ‘global village’, and the asso­ Figure 4.2, the real change came after 1950, with propeller-
ciated ‘compression’ or ‘annihilation’ of space by time, in driven aircraft travelling at 300-400 miles per hour.
the context of what is referred to as the ‘shrinking world’. After the 1960s commercial jet aircraft took speeds into
The phrase ‘annihilation of space by time’ is com­ the 500-700 miles per hour range. As a result of these
monly attributed to Karl Marx (Leyshon, 1995: 23). progressive changes, the Earth, in relative terms, has
Leyshon (1995) credits Marshall McLuhan (1962) with effectively been shrunk to a fraction of its effective size
the first use of the expression global village’, noting that over some 500 years ago (Figure 4.2 and Plate 4.1).
the world was becoming compressed and electronically From the 1960s, there was an exponential increase in
contracted, so that ‘the global is no more than a village’. the number of scheduled international flights globally.
McLuhan went on to observe that due to the evolving At the national level, large-scale highway construction
electronic media, humans were beginning to participate proceeded in North America and Europe in association
in village-like encounters, but at a global scale, thereby with rapidly increasing levels of car ownership. Between
cogently anticipating the development of electronic mail 1950 and 1960, domestic television was disseminated,
and the internet (see Chapter 8). followed by the exploration of space and the launch of
The main aspects of this change were outlined at the communication satellites (Leyshon, 1995).
start of the present chapter. First, the world has effec­ At the beginning of the 1970s, Janelle (1973) referred
tively become a ‘smaller’ place than it was 50 years ago, to the ‘30-minute world’, this being the time it would
in terms of the time it takes to travel around it as a result take for an intercontinental missile to travel from its
of a process known as ‘time-space compression, accord­ launch site to its target on the other side of the world,
ing to which the time to cross physical distance reduces and, hypothetically, lead to planetary annihilation.

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Conceptualising developm ent

1500-1840

Steam locomotives averaged 65 mph

Steam ships averaged 30 mph

300-400 mph

Jet passenger aircraft

500-700 mph

1976

<S >
Supersonic aircraft
>1450 mph

Figure 4.2 T h e shrinking world

Source: adapted from Me Hale, J. (1969) The Future of the Future. New York: George Braziller.

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 Chapter 4 Globalisation, development, underdevelopm ent

Plate 4.1 A 3 8 0 A irbus ‘dou b le -de cke r’ a irc ra ft

(photo-. Jennifer Elliott)

Of course, the world is also shrinking in another sense, is not unrelated to the observation that the global mass
in that many of us are potentially increasingly aware of media frequently tend only to refer to the Global South
what is happening in other far-distant places, without the when reporting natural disasters, social disturbances,
need to move from our home localities. This is now poverty, mass starvation and other crises and mishaps.
achieved via the mass media, social media and the instru­ Some writers, especially those concerned with Africa,
ments of the digital age which facilitate real time visual have observed how this is leading to the notion that
and audio communication around the world. As Leyshon Africa is literally ‘bad news’, gradually desensitising the
(1995: 14) notes, it is ‘in the area of news and current relatively wealthy from the real daily plight of Africans
affairs that televisions ability to shrink space is best illus­ (Harrison and Palmer, 1986; Milner-Smith and Potter,
trated’, as was all too clearly first demonstrated by the 1995). This is turn exacerbates the risk o f ‘development
coverage of the Gulf War by cable news early in 1991. fatigue’ referred to in Chapter 1, in which the North
But cable news depends on relatively sophisticated and becomes blase to the seemingly never improving plight
expensive technologies, so the relatively rich have also of the South. Such an opinion leads to the implication
tended to become the information-rich (Leyshon, 1995), that parts of the Global South are literally viewed as a
and a ‘digital divide’ separates them from the residents of disaster zone, and this serves to emphasise its status as
poor countries in terms of costs and technology, a point something quite separate, representing the global
to which we shall return at several junctures in this chap­ ‘Other’. However, as we noted in Chapter 1, the real
ter. There are other development-related implications to geography of the Global South is far more complex.
this set of changing circumstances in that they invite a
redefinition of our ethical and moral responsibilities in A s h rin k in g w o rld , b u t an
relation to people who live far away from us in the North in c re a s in g ly d iffe r e n tia te d o n e
or South dependent on your place of residence.
Such ‘responsibility to distant others’ (Corbridge, It is all too easy to conclude that, as the world shrinks,
1993b; Potter, 1993a; A. Smith, 2002; D.W. Smith, 1994) all parts of the global village’ share in the benefits of

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Conceptualising development

global development. However, this leads to a vital argu­ which are marginal to it, or which are hardly on the
ment, namely that the places in the South that derive network altogether, such as many countries in Africa,
the largest share from development are generally those are by definition massively disadvantaged. This is a
that are already the most well connected in the global fundamental point, and pursuing it at the sub-global
network, such as SE Asia, Mexico and Brazil. Places level makes a very telling point about the differential

Figure 4 .3 T im e-space convergence and divergence: (a) the conventional projection o f

the P acific; (b) tim e -sp a ce m ap o f the P acific based on travel tim es by scheduled airline
in 1975
Source: adapted from Haggett, P. (1990) The Geographer’s Art. Oxford: Blackwell.

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 Chapter 4 Globalisation, development, underdevelopment

impacts of developmental and economic interventions Pacific appear to have moved north, apparently now
and investments globally. As well as relative distances existing outside the Pacific Basin altogether. This clear
being reduced by the process of global development, example of the differential realities of overall time-
distances to other places can increase in relative terms space convergence shows that the process is far from
within the overall context of a shrinking world, partic­ homogeneous. In fact, it is sufficiently heterogeneous to
ularly between marginal countries. This is illustrated by produce instances of what may be called relative time-
the complexities of air travel in West and North Africa space divergence.
where flying between two countries in that region can The idea that globalised improvements in transport
often involve having to transit London or Paris. and communications are leading to the intensification
Figure 4.3 gives a specific and very telling example of the functional importance of certain places or nodes
of this. The maps show the Pacific Basin. Figure 4.3a is confirmed if we look at world airline networks even as
shows the conventional cartographic projection, early as the 1990s. Figure 4.4 shows the density of air
whereas Figure 4.3b has been redrawn according to traffic movements in the world. While the figure clearly
travel times between places by scheduled airline. The shows high levels of global connectivity, the higher lev­
figure is adapted from Haggett (1990b) and Leyshon els of connectivity between and within regions in the
(1995). At first sight, North America has ‘moved’ Global North is abundantly clear.
closer to Asia, and Australia has ‘drifted’ north towards Tables 4.1 and 4.2 indicate where the busiest airports
Asia. If we look in a little more detail, we find that in the world are, first in terms of aircraft movements in
places like Tokyo, San Francisco and Sydney have 2014 (Table 4.1) and then passenger numbers in 2014
indeed ‘moved’ closer to one another. (Table 4.2). While the historical dominance of air travel
But if we look at Figure 4.3b more carefully, it is evi­ centred on key Northern cities - particularly in the
dent that some places have in fact become more ‘distant’ USA, UK and Japan is apparent, the relatively recent
from each another. Thus, South America has ‘trailed rise to prominence of air traffic in selected Southern
behind’ North America in its convergence on Asia. countries, namely China, Dubai and Indonesia is clear.
Specific places seem to have ‘moved’ quite substantially While this does show global integration, ultimately
relative to one another. In particular, it is noticeable that certain countries are better connected than others in an
poorer and less frequent air transport links mean that uneven world system. The peripheral status of Africa
Papua New Guinea appears to have moved to the south and South America is apparent from these Tables and
of Australia, away from Asia, and many islands in the from Figure 4.4. In 2011 the busiest 100 airports in

Figure 4.4 Global air tr a ffic flo w s

Source: 0penflights.org. https://openflights.Org/data.html#route (accessed 20 January 2016)

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Conceptualising development

Table 4.1 •••

Rank Airport Location Total Fligli

1 O’Hare Chicago 881 933
2 Hartsfield Atlanta 868 359
3 Dallas / Fort Worth 679 820
4 Los Angeles 646 706
5 Beijing 581 773
6 Denver 565 525
7 Charlotte 545 178
8 McCarran Las Vegas 522 399
9 George Bush Houston 508 935
10 Heathrow London 472 817
11 Charles de Gaulle Paris 471 318
12 Frankfurt 469 026
Source: Airports Council International (2014). Accessed 23 December 2015. http://www.theguardian.com/news/datablog/2012/
may/04/world-top-100-airports

Table 4.2 Finally, a commonly experienced feature associated

with the phenomenon of time-space compression, as
noted by Harvey (1989), is that the capitalist system
Rank Airport Location Total Passengers demands efficiency and this leads to the economic logic
1 Hartsfield Atlanta 97,178,899 of reducing barriers to movement and communications
2 Beijing 86,130,390 over space, as time costs money. This leads to the pro­
3 Heathrow London 73,408,442
4 Haneda Tokyo 72,826,862 gressive acceleration in the pace of life that seems to be
5 Los Angeles 70,665,472 universally experienced in the 'modern’ world, and
6 Dubai 70,475,636 which seems to affect countries whether in the North or
7 O’Hare Chicago 70,015,746
8 Charles de Gaulle Paris 63,80,796 the South, although perhaps in contrasting and locally
9 Dallas-Fort Worth 63,523,489 specific ways. For those who are part of the network,
10 Hong Kong 63,148,379 communication with far-distant others can be a daily
11 Frankfurt 59,566,132
12 Soekarno-Hatta Indonesia 57,005,406 reality for hours at a time.
The next section looks at current examples of this in
Source: based on Airports Council International (2010)
the field of information flows, and essentially compara­
ble conclusions are reached concerning global trends
and uneven processes and patterns of development.
the world processed 3.2 billion people including
998 million in Europe and 989 millon in North America.
A final, but important example of the concentrated G lo b a lis a tio n a n d th e
nature of global transport, is provided through an exam­ in fo rm a tio n s o c ie ty : th e d ig ita l
ination of the global shipping network. The pattern d iv id e a n d an u n e q u a l w o rld ,
reveals once again the three-centred structure of the a n d e f f o r t s to c lo s e th e d iv id e
world economy, with the highest volume flows occur­
ring between Western Europe, North America and SE Another major trend over the past 25 or so years has
Asia. This sharp polarisation reflects the evolution of been the increased information exchange between peo­
the network of specialised cargo traffic which links the ple and organisations located in different parts of the
key ports of the world and plays a critical role in the world. Where once letters, telegraphs and the occasional
operation of global production networks’ and the global telephone call were the principal means of communica­
economy more broadly. Once again, the unevenness of tion, now social media, mobile telephone calls, text
connectivity is evident. messages and e-mail are dominant in the business

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 C h a p te r 4 G lo b a lis a tio n , d e v e lo p m e n t, u n d e r d e v e lo p m e n t

world, and increasingly outside it, in education, com­ people having access to it in 2007 (World Internet Usage
merce, entertainment, leisure and social life. The ability Statistics, 2007). By 2014 usage had risen to 2.9 billion
to move information and data quickly and cheaply has (UNDP, 2015). Similarly, many argue that new techniques
been greatly facilitated by the rapid expansion of the in information processing offer poor nations new oppor­
internet and the mobile telephone networks and the tunities (Department for International Development,
corresponding fall in set up and operational costs. We 2000a). Table 4.3 shows total use and annual rates of
have already noted how some refer to the coming of the growth globally for a range of key digital technologies.
‘information society! Figure 4.5 indicates the rapid Some commentators have pointed to what they see as
growth of mobile phone and internet access globally the internet’s potential for democratising development.
since 1995. Since its inception in the early 1970s, the Others have even referred to it as allowing nations to
growth of mobile telephone adoption means that there ‘leapfrog a stage of development’, in what sounds like a
were 6 billion subscribers in 2014 significantly up from direct reference to the Rostowian framework (Chapter 3).
1.5 billion subscribers in 2006, and more than five times While the uptake of mobile phones is significant, there is
the number of landlines in existence. Significantly, more a lag in terms of the ability to adopt more complex and
than 80% of new mobile subscriptions are from the expensive internet based systems, particularly in the
South (Dicken, 2015). It has been observed that in many poorer and infrastructurally weak parts of the South. As
parts of Africa, mobile phone technology has led to a result, caution needs to be exercised in respect of opti­
technological ‘leapfrogging’, with many countries now mism about of the uptake and spread of such new
having high rates of mobile phone access, despite never technologies. Equally important are weaker economies
having developed extensive land-line connections. It is and education systems which are often unable to ade­
estimated that in Africa in 2013, 36% of the population quately prepare people for full participation in the
(311 million) were mobile phone subscribers and this internet age. For example, even the previously referred to
figure could rise to 49% (504 million users) in 2020 UK Government White Paper in 2000 noted that at that
(UNDP, 2015). point in time more than one-half the population of Africa
The internet is seen by some as an optimistic possibility had never used a telephone, and that fewer than one in
for global change and development with 1.13 billion 1,000 Africans had access to the internet at that time

Figure 4 .5 Mobile phone and in terne t uptake, 1 9 9 5 -2 0 1 5

Source: adapted from UNDP, 2015.

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C o n c e p tu a lis in g d e v e lo p m e n t

T a b le 4 .3

Category Number of users (billions) and % New device users (millions), 2014-15 Growth of new users (% )

World population 7.357 177 2.5

Internet users 3.175 43% 225 7.6
Social media 2.206 30% 176 8.7
Mobile phone 3.734 51% 124 3.4
Source: http://wearesocial.net/blog/s015/08/global-statshot-august-2015/. Accessed 16 December 2015.

(Department for International Development, 2000a). Figure 4.7 is a cartogram which vividly depicts the
Indeed, by 2007 this figure had only increased to around nature of what is referred to as the global ‘digital divide’.
3.6 per cent. Others have warned that the internet may In this map the size of countries has been scaled to
well serve to Westernise the Global South, so that ‘e- reflect the number of internet users. The percentage
imperialism’ will be the outcome rather than any simplis­ variations in the number of internet users is shown in
tic and comfortable notion of e-democracy’. Table 4.5. It should be borne in mind that many parts of
In terms of what is known as the ’digital divide’, in Africa and elsewhere lack access to electricity, which is
2005 only 7.7% of the population of the South had a major barrier to participation in the digital world.
access to the internet but this had risen to 24.4% in On a positive note, many of the countries in the
2011, but was still low compared with 70% in the North. South are now starting to participate in the digital world
While the scores have since risen in both regions, a clear more fully, which does go some way to ensuring the
gap still persists in access and use rates as shown in benefits of this aspect of globalisation are being accessed.
Table 4.4. It is, however, important to note that within In India, one of the leading nations in the South, the
the South, Asia and to a lesser degree South America, number of internet users has risen significantly from
are achieving faster rates of internet access than other 137 million in 2012 to 354 million in 2015 (Internet and
parts of the South, and Africa in particular. By 2012, Mobile Association of India, 2015).
some 1 billion of the nearly 3 billion internet users in the Despite the relative ease with which computers can
world were in Asia (Dicken, 2015). be linked through the internet, undue optimism regard­
The massive global inequality in access to telephones, ing the role of the internet in the Global South would be
for example, is exemplified in Figures 4.6a and b, based misplaced. Even the pro-globalisation White Paper of
on data from the World Bank (2015c). The graphs show the UK Government acknowledges that ‘there is a real
mobile telephone and internet access per 100 of the risk that poor countries and poor people will be margin­
population up to 2013 for a range of world regions. alised, and that the existing educational divide will be
Once again, the digital divide between the high income compounded by a growing digital divide’ (Department
(North) and low income countries (South) is apparent. for International Development, 2000a: 40).

T a b le 4 .4 ■•
T a b l e 4 .5
Subscriptions per 100 habitants

Land line Cell-phone Internet users Africa 26%

phones subscriptions N America 88%
S America 58%
2005 2011 2005 2011 2005 2011 E Asia 51%
SE Asia 33%
North 58 42 55 120 37 70 S Asia 19%
South 12 12 11 78 5 25
Source: http://www. mobileindustryreview.com/2015/
Source-. Dicken, 2015 (accessed 16 December 2015)

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 C h a p te r 4 G lo b a lis a tio n , d e v e lo p m e n t, u n d e r d e v e lo p m e n t

F ig u r e 4 .6 Global access by region to (a) Mobile phones and (b) The internet
Source: World Bank, 2015c.

F ig u r e 4 .7 T he digital divide
Source: Dicken, 2015

Others have referred to the massively unequal South is poorly linked to the key backbone of the
global distribution of communications. Quite sim ­ global internet, namely the network of submarine
ply, without telephones and computers, areas of the fiber optic cables which link the world (Figure 4.8).
South cannot race ahead as an outcome of the exis­ Instead, they have differing levels of access and
tence of technologies such as those associated with bandwidth which will in turn impact on the capacity
the internet and e-mail. A key limitation, aside from of the internet to serve as a key tool of business and
cost and weak technological capacity in many parts communication. Figure 4.8 shows the worlds sub­
of the South, is the basic reality that most of the marine cable system.

155
C o n c e p tu a lis in g d e v e lo p m e n t

>1000 Cable capacity

{glqabytes/second)
E ] 200-999
\i>m \ 50-199
I | 1-49
A
't / ------
>soo
50-500
□ <1 — 10-50

Figure 4 .8 T he w o rld ’s subm arine cable system

Source: Dicken, 2015

As noted previously, a large proportion of business impacting on the potential scale of personal and eco­
communications is now made through the internet, nomic spinoffs and interactions.
and information is available on a huge array of topics In the near future, the greatest growth in internet usage
via the World Wide Web. For those with access to the will occur in Asia, which already has the largest total number
technology, personal communication via e-mail has of users. In 2012, North America and Europe accounted for
become the preferred form of daily communication. some 70% of all registered domain names (Dicken, 2015),
For those people and places with limited access and and the reality is that the growth of the internet and its con­
smaller bandwidth, the digital divide will persist trolling systems is reflecting already well-connected places.

Global interconnectivity, social media and the internet

If you will be using the internet, e-mail, social media, classify and count them by continent, or broadly by the
chat-rooms or social networking sites during the coming ‘North’ and ‘South’ categorisation. What does the list say
week, keep a list of the people you are in communication about your own global interconnectedness? Does the
with, and the sites you have visited. Where in the world outcome of this reflection accord with the patterns
are these various contacts and sites based? You could outlined in this section of the book?

Thus, just like improvements in transport technolo­ to improve conditions for the poor and moderately poor
gies, improvements in communications are tending to in the Global South.
emphasise global and regional differences in the first However, the situation is changing quickly, and
instance, and privileging certain areas, namely those mobile phones especially can act as powerful agents of
with the greatest involvement in global production sys­ change, particularly in the more marginalised parts of
tems. Notwithstanding the claims of governments, the South. It is undoubtedly the case that mobile phones
much has to be done if these aspects of globalisation are and the internet can help those who are in marginal

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 C h a p te r 4 G lo b a lis a tio n , d e v e lo p m e n t, u n d e r d e v e lo p m e n t

locations to do their shopping, communicate with fam­ countries would associate development with industrial­
ily, establish and run businesses or, indeed, gain isation and, by implication, the broader concept of
education by distance learning programmes (Unwin modernisation. This was hardly surprising given that
and de Bastion, 2008). the conventional wisdoms of development economics
For instance, Urbach (2007), in the context of stressed so cogently this very connection (Potter and
Botswana, notes how mobile phones can reduce com­ Lloyd-Evans, 1998; Chapter 3).
munication costs, increase labour mobility and afford For many Third World countries, decolonisation
enhanced access to banking facilities and information afforded political independence and promoted the
on market prices. Although only 20 per cent of the desire for economic autonomy to go with it. In the
population have access to mains electricity, enterpris­ words of Friedmann and Weaver (1979: 91), such
ing village entrepreneurs offer recharging services nations:
using car batteries. The growing use of mobile phone
took it for granted that western industrialised coun­
technology by village farmers in Africa to access mar­
tries were already developed, and that the cure for
ket information and arrange sales is a significant
‘underdevelopment’ was, accordingly, to become as
advance in local empowerment. Equally significant is
much as possible like them.
the recent growth in the development of mobile phone
applications or ‘apps’ in Africa and Kenya in particular. This section explores the role which industrialisation
The growth of phone-banking and cash transfer sys­ has played in the processes of global production and
tems such as MPESA has revolutionised individual development.
financial access in a continent were formal banking
systems and capacity is limited (Williams et al., 2014).
Im p o rt s u b s titu tio n
This system promotes savings and financial transfers
from migrant workers to their families. In respect to
in d u s tria lis a tio n (ISI)
learning and education, the UK Governments Imfundio In the immediate post-independence phase, the trend
Programme sought to use information technology to towards industrialisation in the Global South was closely
improve primary education in Africa (Department for associated with the policy of import substitution indus­
International Development, 2000a). However, despite trialisation (ISI). This represented an obvious means of
the role which mobile phone systems can play, the increasing self-sufficiency, as such nations had tradi­
evidence suggests that without stronger and more tionally imported most of their manufactured goods
all-embracing intervention, the digital divide is likely to requirements in return for their exports of primary
exacerbate further the differences between the world’s products such as minerals, sugar, bananas, coffee, tea
haves and have-nots although there is huge potential and cotton. Such developments were encouraged by
where the infrastructure can be provided. national governments, which pursued Keynesian-based
economic thinking favouring high levels of state inter­
vention in national economies.
Econom ic aspects of globalisation: During the era of import substitution industrialisa­
industrialisation, TNCs, world/ tion, key industrial sectors for development were those
global cities and global shifts which were relatively simple and where a substantial
home market already existed, for example: food, drink,
tobacco, clothing and textile production (Plate 4.2).
In d u s tria lis a tio n
While many countries of the South have followed
As explored in Chapter 3, the pursuit of industrial this path towards import substitution industrialisa­
development as a matter of policy came to affect the tion, as Dickenson et al observed in 1996, few countries
newly independent, formerly colonial territories in the outside of SE Asia have managed to progress much
1960s. It was almost inevitable that in seeking to prog­ beyond it and develop robust industrial structures with
ress during the post-colonial era, newly independent the capacity to export significant volumes of product

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C o n c e p tu a lis in g d e v e lo p m e n t

P late 4 .2 Im port su bstitu tion industrialisation in Burkina Faso: th e Brakina brew ery
(photo-. Panos)

internationally. Significant exceptions are to be found Furthermore, the product competition from devel­
in Asia. In Taiwan and South Korea between 1953 and oped nations, along with capital and infrastructural
1960 the ISI policy was put into practice, focusing on shortages, and problems of uncertain investment, lim­
textiles, toys, footwear, agricultural goods and the like. ited technological transfer and requirements for capital
During this era, manufacturing output increased by rather than labour intensity, also militate against such
11.7 per cent per annum. Only after the 1960s did heavy industrial development. An exception, however,
countries develop export-oriented manufacturing, and is provided by India, which has achieved a high level of
after 1980 the focus was on technologically advanced, industrial self-sufficiency since 1945 (Johnson, 1983)
high-value added manufacturing, so as to stay ahead in and is now the eleventh largest industrial producer in
the industrialisation stakes (Knox et al., 2014). the world (Dicken, 2015).
However, for most countries in the Global South,
with limited exceptions, such as in parts of Asia, Brazil
and South Africa, the expansion of heavy industries E x p o rt o rie n ta te d
such as steel, chemicals and petrochemicals, along the in d u s tria lis a tio n (EOI) a n d
lines of the former Soviet model, has not been possible. in d u s tria lis a tio n b y in v ita tio n
Such a policy - which might seem attractive when fol­
(I b y I)
lowing Rostows (1960) linear model of development
(Chapter 3) - requires investment and a level of popula­ From the 1960s onwards a number of countries of the
tion and effective demand not normally present in Global South embarked upon policies o f‘light industri­
much of the Global South. alisation’ by means of making available fiscal incentives

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 C h a p te r 4 G lo b a lis a tio n , d e v e lo p m e n t, u n d e r d e v e lo p m e n t

to draw in export focused foreign companies (Potter T a b le 4 .6

and Lloyd-Evans, 1998; Chapter 3). This policy of
so-called ‘industrialisation by invitation’ was strongly
recommended by the Caribbean-born economist Sir Type Development Example
Objective
Arthur Lewis (1950, 1955). Reviewed in Chapter 3,
industrialisation by invitation involved the establish­ Free Trade Zone Support trade Colon, Panama
Export Processing Support Karachi,
ment of branch plants by overseas firms, with the Zone exports Pakistan
products being exported back to industrialised coun­ Free Port Integrated Aqaba, Jordan
tries. EOI has played a critical role in global integration development
Enterprise Zone Urban Chicago
and the fostering of global production networks help­
revitalisation
ing to make the world more economically integrated Single factory Support Mauritius
(Dicken, 2015). This became more evident from the EPZ exports
1970s when deindustrialisation in many countries in Source: adapted from Knox et al., 2014.
the North created production opportunities in the
South. The establishment of dedicated trade and man­
ufacturing zones, often called SEZs (Special Economic According to Hewitt et al. (1992), the first EPZ estab­
Zones) has helped propel many Southern countries lished in the South was at Kandla in India in 1965, and
from a reliance on primary production activities to a this was quickly followed by further such developments
position in which their economies become more robust in Taiwan, the Philippines, the Dominican Republic and
and diversified. on the United States-Mexico border.
The approach became closely associated with the In the case of Mexico during the 1960s, legislation
setting up of variants of SEZs, and the most common was enacted permitting foreign, especially American
zones types are free-trade zones (FTZs) and export­ companies, to establish ‘sister plants’, called maquila-
processing zones (EPZs). FTZs are typically an area doras, within 19 kilometres of the US border, for the
located in or near to a major port, in which trade is duty-free assembly of products destined for re-export
unrestricted and free of all duties (Plate 4.3). The EPZ (Figure 4.9). By the early 1990s, more than 2000 such
is normally associated with the provision of buildings assembly and manufacturing plants had been estab­
and services, and amounts to a specialised industrial lished, producing electronic products, textiles,
estate. Firms locating in EPZs frequently pay no duties furniture, leather goods, toys and automotive parts. In
or taxes whatsoever, and may well be exempt from aggregate, the plants generated direct employment for
labour and other aspects of government legislation. over half a million Mexican workers (Dicken, 2015;
The approach is often known as enclave industrialisa­ Getis et al., 1994).
tion. FTZs and EPZs had their historical roots in the Returning to the global context, by 1971 nine coun­
Free Ports of the Hanseatic League in late Medieval tries had established EPZs, and this increased to 25 by
Europe. After World War II, the establishment of free 1975 and 52 by 1985 (Farole, 2011). In that year, it was
trade and manufacturing zones in Ireland and Puerto estimated that there were a total of 173 EPZs around the
Rico re-established the concept. Since then there has world, which together employed 1.8 million workers. By
been rapid growth, throughout the world of a range of 2011 this had risen to 600 EPZs, and when one adds in
special zones, variously referred to as FTZs, EPZs, other types of zones such as FTZs and SEZs, the total
Industrial Development Zones (IDZs), Special had risen to 3,500 operating in 130 countries. China,
Economic Zones (SEZs) and maquiladora. Zones dif­ whose global economic penetration was greatly assisted
fer in the degree to which their focus is on trade, by the establishment of SEZs, had over 200 zones in
usually duty free and manufacturing - often under­ 2011, established as a direct result of its open door’ pol­
taken in the context of low or zero tax, and the icy from the 1970s. India has declared several hundred
operation of unique legal systems where national laws zones, but many are not operational, and many others
often don’t apply (Farole, 2011). Table 4.6 lists the most have been associated with controversy as a result of the
common variants of SEZs. displacement of resident population and poor working

159
C o n c e p tu a lis in g d e v e lo p m e n t

P late 4 .3 T he Shanghai Free Trade Zone

photo: Getty

conditions which prevail in them (Farole, 2011). China’s were established, all within the existing urban system
main SEZs are shown on Figure 4.10. Note their coastal (Clayton and Potter, 1996). Recently, data processing
location, which facilitates global sourcing of raw materi­ and the informatics industry have become very import­
als and other inputs and the export of products. ant on one of the central Bridgetown industrial estates.
Frequently, programmes of industrial development However, such schemes are not without their very real
have been strongly urban-based, as in the case of challenges, and the International Labour Organization
Barbados from the 1960s, where ten industrial estates has branded EPZs ‘vehicles of globalisation’, arguing that

Figure 4 .9 T he principal m a q u ila d o r a ce n tre s on the U nited S tate s-M e xico border
Source: Adapted from Dicken (1998)

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 C h a p te r 4 G lo b a lis a tio n , d e v e lo p m e n t, u n d e r d e v e lo p m e n t

F ig u r e 4 . 1 0 The distribution o f the main Special Economic Zones in China

S o u rc e : a d a p te d fro m h ttp :/ / w w w .lib .u te x a s .e d u / m a p s / m id d le _ e a s t_ a n d _ a s ia / c h in a _ e c o n 9 6 .jp g . A c c e s s e d 1 8 A u g u s t 2 0 1 6 .

few have meaningful links with domestic economies, expire, and the fact that there are often low levels
and that most involve large numbers of low-waged, low- of upskilling of workers and technology transfer to the
skilled workers. While the macro-benefits of trade, host country.
employment and economic diversification are self-evident,
as is the degree to which these processes have accelerated G lobal s h ift a n d th e e m e rg e n c e
global integration, zones have often been directly associ­
o f g lo b a l p ro d u c tio n n e tw o rk s
ated with a range of negative aspects. These include the
payment of low wages, worker exploitation, especially of Through pursuing EOI, certain countries in the South
young female labourers, the loss of potential taxation have increased their overall level of industrialisation
revenue to host countries, and ultimately the potential and, by implication, the size of their economies and
subservience of Southern countries to corporate their role in the world economy. From 1938 to 1950, the
demands from the North, which has the potential to South experienced a 3.5 per cent growth rate of manu­
reinforce uneven geographical development. Other chal­ facturing per annum, and from 1950 to 1970 this annual
lenges include the accusation that firms often relocate to rate increased to 6.6 per cent (Dickenson et al., 1996).
zones in another country when available incentives By 2015 this figure stood at 5.2% per annum for these

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C o n c e p tu a lis in g d e v e lo p m e n t

countries, compared to a world average of 2.5%, while characterised by several features. The first has been its
that of the traditional industrial leaders (North America, highly unequal global distribution, and in the post-war
Europe and Japan) was only 0.7% (UNIDO, 2015). period this has been associated with major changes in
Critical within the globalisation of manufacturing the global distribution of industrial production. These
production has been the falling net costs of global changes have been in selected areas in particular coun­
transport, which occurred through the introduction of tries, such as Mexico, Brazil and much of SE Asia. These
much larger, more fuel efficient ships and planes and changes are referred to as giving rise to a global shift’ in
associated improvements in logistics systems associ­ patterns of manufacturing and the parallel emergence
ated with containerisation (see Figure 4.11 which and rising significance of global production networks
shows falling transport and communications costs (Coe and Yeung, 2015; Dicken, 2015). The latter concept
over time). Equally important are differential wage refers to ‘organizationally fragmented and spatially
rates across the world, which, in an era of global sourc­ diverse production networks (which) constitute a new
ing, encourages corporations to place or relocate form of economic structure that increasingly drives the
labour-intensive manufacturing activities in low wage complex global economy and its uneven development’
countries. Figure 4.12 illustrates how hourly wage rates (Coe and Yeung, 2015: 1). According to this process,
vary across a range of countries. corporations deliberately choose to make different parts
While the growth rates of manufacturing activity in of a finished product in scattered parts of the world,
the South are impressive, it is important to note that dependent on where particular parts can be made most
growth has been spatially selective, with SE Asia and cost-effectively, but also where the appropriate skills and
China experiencing the most rapid growth, while in resources exist to ensure that necessary quality stan­
many other parts of the South such growth has not kept dards are met. Final assembly then takes place at a single
pace with the rate of urbanisation, leading many coun­ point followed by global sales and distribution of the
tries to face significant employment challenges (see product. An example is the Boeing 787 ‘Dreamliner’
Chapter 9). Furthermore, industrial growth has been aircraft, the parts of which are made in 11 different

F ig u r e 4.1 1 R eductions in tra n s p o rt and com m unications co sts over tim e

S o u rce: a d a p te d fro m K n o x e t a l., 2 0 1 4

162
 C h a p te r 4 G lo b a lis a tio n , d e v e lo p m e n t, u n d e r d e v e lo p m e n t

F ig u r e 4 . 1 2 Global hourly wage rate d iffe re n tia ls betw een selected countries
Source-, adapted from Dicken, 2015.

countries, with final assembly taking place in the USA characterise the motor-car industry. This has, in many
(Knox et al., 2014). Figure 4.13 shows the production industries, laid the basis for what is called an ‘intercon­
network for the iPhone 5 smartphone. Parts or raw nected world of production’, which is assisted by flexible
materials are sourced from 16 different places globally. production systems, the search for low cost production
The production system, which is typical of many high- centres and vertical specialisation. From a development
tech production networks, clearly shows the key role perspective, regional strategic coupling with global pro­
played by SE Asia and N America and the relatively duction networks is a defined strategic choice which
marginalised role of much of the South, beyond that of translates into national support for innovation hubs,
the supply of raw materials. global cities, assembly platforms, logistics hubs and
This system forms the backbone of many core SEZs (Coe and Yeung, 2015).
industries - cars, aircraft, computers and IT. Fragmented This process is illustrated in Table 4.7, which deals with
production processes and global value chains have the period from 1948 to 2010. Britain, Western European
become critical to the operation of the world’s manufac­ countries and then America dominated the core-periphery
turing economy. Historically, while raw materials were pattern of manufacturing production for over 300 years. But
sourced in one part of the world, all elements of produc­ from 1948 the traditional industrial nations, such as the
tion tended to then take place in a single location. A USA, the United Kingdom, Germany and France, along
classic example would be the motor car industry in with other countries in the North, all showed reductions in
Detroit from the 1930s, with most components being their percentage share of world industrial production.
produced in the city. This stands in stark contrast to the This went hand in hand with rising industrial pro­
globally connected production systems which now duction in Japan, which by 1985 had increased its share

163
Figure 4.1 3 The global production n e tw o rk o f th e iPhone 5
Source: adapted from: http://blog.ewmfg.com/uncategorized/global-sourcing-pharma-to-fashion-and-everything-in-between/attachment/iphone5-source-map/. Accessed 18 August 2016.
 C h a p te r 4 G lo b a lis a tio n , d e v e lo p m e n t, u n d e r d e v e lo p m e n t

of the world total to 8.2 per cent. From 1948, industrial to by Dicken (1998, 2007) and others as global shift’,
production also rose sharply in what were then referred whereby economic activity is becoming increasingly
to as ‘centrally planned economies’ (i.e. the former internationalised or globalised. This is sometimes
Socialist states of E Europe and China). A key feature regarded as the latest phase in the New International
has been the increasing importance of the ‘newly indus­ Division of Labour (Gilbert, 2002). The earlier
trialising countries’ (NICs) (SE Asia and parts of Central International Division of Labour was largely based on
and South America primarily) and China. By 1984 the the links within Empires, e.g. raw materials were sourced
NICs (excluding China) accounted for 8.5 per cent of in colonies and processed in the colonial core. The New
global production. By 2010 this figure had risen to International Division of Labour refers to the post­
13.8% of global manufacturing, while that of China had colonial world in which global sourcing of raw materials
risen to 15.3% (UNIDO, 2010). and manufactured goods takes places largely indepen­
However, it is notable that during this period from 1984 dent of political systems and selectively draws on aspects
to 2010 the remaining less-developed nations actually such as the cheapest/best quality products, the ideal
showed a declining proportion of total manufacturing labour inputs (often influenced by cost) and the distribu­
production, from 9.1 per cent in 1948 to 5.4 per cent in tion of global manufacturing and markets. An example
1984 and 2.7% in 2010 (Table 4.7). of the complex changes that are occurring is given in Box
The emergence of the NICs, such as China, Brazil, 4.2. However, once again, this changing global pattern
India, South Korea, Mexico and Taiwan, is shown by has been highly uneven in terms of its geography.
their inclusion among the top 25 industrial nations in The present-day culmination of these global trends
the mid-1980s (Courtenay, 1994; Dickenson, 1994). can be seen in Figure 4.15. The Figure shows the world’s
The global distribution of manufacturing production top 15 industrial nations in 2013 ranked by manufactur­
in 2013 is shown in Figure 4.14, and, although the USA, ing value added (World Bank, 2013a). It is very significant
Western Europe and Japan between them account for to note that, compared with Table 4.7 which was based on
two-thirds (down from three-quarters in 2005) of total data from 2010 that, by 2013, China had overtaken the
production, the importance of what are known as the USA to become the worlds largest manufacturing power.
‘Asian tigers’ (Hong Kong, Korea, Singapore, Taiwan, While the USA retains a key role, the rise of Asia and
Indonesia and Malaysia), together with China, Brazil China in particular marks a significant realignment of
and Mexico, is clear from the Figure. The major change global production, but one which only selectively benefits
in the last 25 years or so has been the rapid growth of the countries of the South. As Dicken (2015) notes, some
manufacturing in China, and to a lesser extent in India. are suggesting that in the not too distant future the world
It is this process of change in the world manufactur­ economy will be dominated by what has been ‘Chindia’.
ing and distribution outlined above that has been referred The changing geography of manufacturing employ­
ment (shown in Table 4.8) exemplifies two core
processes, First, the declining role played over time by
T a b l e 4 .7
manufacturing as an employer in the North and sec­
ondly the growing significance which manufacturing is
playing in Asia and to a lesser extent South America.
Country Percentage of World Industrial Although the data exemplify the emergence of a
Production
growing interconnectedness within the world economy,
1948 1984 2009/10 as we have seen for the immediate post-war period, it
USA 44.6 28.2 18.8 remains the case that manufacturing production is
Europe /rest of OECD 31.4 24.3 24.7 highly uneven and clustered in terms of its spatial distri­
China - 10.5 18.1 bution globally. Thus, 80 per cent of global manufacturing
Japan 1.6 8.2 10.1
NICs 4.9 8.5 13.8 and service production is presently concentrated in just
Rest of South 9.1 5.4 2.7 15 nations and 90 per cent of outward FDI (Foreign
Source-. Chandra (1992); Knox et al. (2014); UNIDO (2015) Direct Investment i.e. funds made available to invest in
economic activity in other countries) stock originated in

165
Figure 4 .1 4 Global distribution o f m a n ufa cturing p roduction, 2 01 3
Source-, calculated from http://wdi.worldbank.Org/table/4.2
 C h a p te r 4 G lo b a lis a tio n , d e v e lo p m e n t, u n d e r d e v e lo p m e n t

Figure 4 .1 5 T he w o rld ’s leading m a nufacturing nations (% o f w orld total M anufacturing

Value A dded)
Source: adapted from Die ken, 2015

Table 4 .8 W orld tra d e , fin a n c e a n d

s e rv ic e s
Fundamental to the globalisation of manufacturing and
Region /Country 1980 2010 % Change globalisation more generally has been the key role
played by significant growth in overall levels of world
USA/Canada 21.4 15.8 -26
Japan 12.1 trade and associated global financial flows. As the world
10,4 -13.2
Western Europe 28.2 23.8 -15.6 becomes more interdependent and reliant on the global­
South Asia 60.5 63.1 +4 isation of production, trade has grown faster than
SE and East Asia 68.6 126.7 +84.7
Latin America 8.7 manufacturing output. This is a reflection of two pro­
22.5 +158
cesses: first, the degree to which global production now
Source: Knox et al., 2014
involves the movement of semi-produced items to fur­
ther processing facilities around the world, and secondly,
the degree to which we, as consumers, both desire and
15 countries. Just seven East Asian countries - Hong are able to purchase goods from around the world. In
Kong, China, Singapore, Korea, Thailand, Malaysia and the second half of the twentieth century world merchan­
Taiwan - account for 50 per cent of all FDI received in dise trade increase 20-fold while production increased
the South, this level of concentration having increased six-fold (Dicken, 2015). Trading patterns, however,
from 33 per cent in 1990 (Dicken, 1993). reinforce the economic dominance of the leading econ­
In comparison, other less developed countries remain omies, which in turn enhances their connectivity and
more poorly integrated into the global economic system. continued growth, particularly as bulk supply tends to
The story is once again of concentrated deconcentration reduce costs. While this brings about certain efficien­
within the globalised economic system. cies, it also marginalises the less connected parts of the

167
C o n c e p tu a lis in g d e v e lo p m e n t

Total merchandise
trade ($ billions)

Trade flows ($ billions)

700

350
100
-------------------------------- ► 20
<20 billion not shown

Figure 4 .1 6 N e tw o rk o f w orld tra d e by region

Source: adapted from Dicken, 2015

planet, as is shown in Figure 4.16, in which the trading which usually involves private or corporate invest­
dominance of Asia, Europe and North America is ment in another country, typically to set up operations
apparent, while other world regions clearly play a far there or take a controlling share in an already existing
more minor role. operation. The scale of FDI has accelerated dramati­
In value terms, far more important than the value of cally since World War II and is critical to the operation
movement of goods are global financial transactions, of transnational corporations (see below). FDI clearly
including foreign exchange dealings, investments - both favours what are perceived as the lucrative market
in banking/financial/stock exchange systems, and in opportunities of Asia, as shown in Figure 4.17. While
fixed property/manufacturing and migrant labour Europe and North America are clearly also important
remittances. It was estimated that in 2010 the daily FDI destinations, Africa is largely side-lined by these
global foreign exchange turnover was US $3,874 billion, processes. The total value of FDI in 2014 was esti­
with daily volumes of trade now exceeding 25% of the mated at $1.2 trillion, with just over half going to a
US annual GDP. Added to this are migrant labour select group of leading manufacturing countries in
remittances which in 2011 exceeded US $372 billion, a the South, the NICs (UNCTAD, 2015). This is re­
figure larger than the value of aid received by countries emphasised by what is shown in the map (Figure 4.18)
of the Global South (Knox et al., 2014). of inward and outward investment (i.e. the source and
International financial flows are closely connected recipient countries). At present 22% of all investment
with the concept of FDI (Foreign Direct Investment), is sourced from the USA, some 7% from the UK and

168
 C h a p te r 4 G lo b a lis a tio n , d e v e lo p m e n t, u n d e r d e v e lo p m e n t

Developing Europe Latin America North America Transition Africa

Asia and Caribbean economies

Figure 4 .1 7 FDI inflow s by region

Source: adapted from UNCTAD, 2015.

6% from Germany, while the role of NICs and China dangerous or less profitable. Figure 4.19 shows where
as investors is slowly increasing. the key global service providers are based, and
Of critical importance in the operation of the global Figure 4.20 shows the percentage of activity in each of
economy is the role of the international service industry. the major countries in the world. These Figures re­
Within almost all countries in the North the service emphasise the degree to which North America, Europe
industry is now the biggest sector both in terms of and parts of Asia dominate yet another key economic
employment and value added, far exceeding in size and activity both to meet their own internal and also the
value the primary sector (mining, agriculture, forestry global demand for such services.
and fishing) and the secondary sector (manufacturing).
The service sector is a very diverse sector, comprising
T ra n s n a tio n a l c o rp o ra tio n s
activities ranging from education, to law, government
operations, banking, finance, transport, trade, mainte­
(T N C s )/M N C s
nance, leisure and tourism, retail and personal services, A further characteristic feature of post-1945 industrial
such as hairdressing, etc. change has been the rise in prominence of transnational
At a global level, international banking and invest­ corporations (TNCs) (sometimes called MNC or Multi-
ment services, the provision of legal service, National Corporations), which now represent the most
employment recruitment, advertising, logistics and important single force creating and shaping global
transport, tourism and retail have increased dramati­ changes in production systems (Dicken, 2015). TNCs are
cally in size and scale as banks, retail chains and the key source of FDI and they use Global Production
airlines, etc. seek new market shares globally. These Networks to operate and make a profit globally. Global
processes create local employment, boost corporate adherence to neo-liberalism and support for EOI and
profits and reinforce the dominance of key corporates. SEZs in the South has aided in their growing significance,
On the negative side, patterns of growth are selective, such that many of the world’s largest TNCs now have
favouring the most lucrative investment and operating turnovers which are bigger than some individual coun­
destinations and marginalising places perceived to be tries in the world. Dicken (2015) notes the remarkable

169
Figure 4.18 Map of inward and outward FDI, 2014
Source: adapted from UNCTAD, http://unctadstat.unctad.org.
Figure 4.19 Global service production, 2014
Source-. Calculated from http://wdi.worldbank.Org/table/4.2.
C o n c e p tu a lis in g d e v e lo p m e n t

Figure 4 .2 0 T he m ajor service providing nations

Source: adapted from Dicken, 2015.

statistic that 51 of the 100 largest economies in the world world - General Motors, Wal-Mart, Exxon Mobil, Ford
are in fact corporations, and, for example, the turnover of and DaimlerChrysler all exceeded the GDPs of 182 coun­
General Motors is more than the size of the economy of tries. Box 4.2 presents the example of a particular
Denmark, while sales of each of the biggest five TNCs in the manufacturing process

G lobalisation a n d th e p ro d u c tio n o f a th le tic fo o tw e a r

The footwear industry is labour-intensive, but it is also sales in the USA have the vast majority of their
highly dynamic. In a paper published in 1993, Barff production based there. However, the details of this
and Austen show how sales tripled in the USA over the pattern are quite volatile, and many producers of
preceding ten-year period. And they also show the athletic footwear have developed a complex set of
industry’s volatility, measured in spatial and long- and short-term subcontracting agreements with
geographical terms. In 1989, US market leader Nike other firms that change from year to year as a result of
Inc. had about 2 per cent of its shoes made by factory improvements, market fluctuations and
Chinese-based subcontractors. Just four years later, in technological change (Donaghue and Barff, 1990).
1993, almost 25 per cent of Nike athletic shoes came On the other hand, several athletic footwear firms
from Chinese factories (Barff and Austen, 1993). still manufacture in the USA. In particular, the
Although characterised by such dynamism, the cheapest sport shoes continue to be produced in the
majority of athletic footwear production continues to USA, whereas the more complex, expensive models
occur in Southeast Asia. The three US companies tend to be manufactured in Asia. Barff and Austen
which account between them for over 60 per cent of (1993) show that, in order to understand this complex

172
 C h a p te r 4 G lo b a lis a tio n , d e v e lo p m e n t, u n d e r d e v e lo p m e n t

global geography, one must move beyond the basic This example of global-scale production therefore
consideration of international labour-cost differentials. demonstrates how processes of globalisation are based
By means of case studies, the authors demonstrate on subtle aspects of differentiation between world
that domestic production involves very different regions, and suggests that new forms of economic
labour processes from those of production based in localisation may well be the outcome.
other countries. As in many sectors of the economy,
domestic producers gain advantage by carrying
Critical reflectio n
smaller inventories via faster lead times. However, the
best explanation for the globalised pattern of Make a list of where in the world the goods you use
differential production centres is the nature of shoes regularly and the food you buy day to day are
themselves. The athletic shoes produced in the USA produced. Are there particular kinds of goods and
tend to have far fewer stitches in them than those services that are associated with particular world
manufactured elsewhere, and this minimises the most regions? What are the implications of transporting
expensive component of the production process. manufactured goods so far around the world to
Furthermore, the authors explain how tariffs on reach you? What are the benefits and what are the
athletic shoes massively discriminate against costs? Think who gets the benefits - and who gets
imported shoes of a particular construction. the costs.

The establishment of TNCs can be traced back to limited geographically, and focuses on Southeast Asia,
before the nineteenth century, having their origins in South Africa, Mexico and parts of South America. Only
early trading companies such as the Hudson Bay South Africa stands out within Africa as a whole. The
Company and the British East Indies Company. To pattern is a very concentrated and uneven one. This is
begin with they focused on accessing agricultural, min­ evidenced from data depicted in Figure 4.21 and Table
ing and extractive activities for sale primarily in Europe, 4.9, which indicate both the home base and the size of
but in the period since 1950 they have become increas­ the assets of first, the world’s 20 largest TNCs, and sec­
ingly associated with manufacturing and EOI in ondly, (in Table 4.9) the largest non-financial TNCs in
particular (Jenkins, 1987, 1992; Dicken, 2015). the South. Evident from Figure 4.21 is the sheer size of
By 2009 there were an estimated 82,000 ‘parent’ the largest firms in terms of their asset base with many
TNCs operating in the world, controlling the operations having close to US $300 billion of assets, with General
of some 810,000 affiliated local companies. TNCs now Electric being nearly double the size of the next largest
account for at least two-thirds of global trade in goods TNC. It is noteworthy that all of the largest TNCs are
and services. It is important to note that at least one- based either in the USA or Japan, or a Western European
third of all trade is now intra-firm trade, as a result of country. That said, as Figure 4.21 shows, most of the
the operation of the GPNs which TNCs largely control asset base of these firms is not in the home country
(Dicken, 2015). The 100 largest TNCs employ some 15 which is indicative of their international reach. It is
million workers, while the total number of workers in important to note that since 2000 there has been a shift
the affiliated companies of all the TNCs is in the order within this leading core group, since in that year six of
of 90 million. The total manufacturing output, referred the largest firms were based in the US, this has since
to as Value added’, of the TNCs in 2015 was an esti­ fallen to three as a range of European companies have
mated US $7.9 trillion (UNCTAD, 2015). risen in significance. The product focus of these firms is
The largest TNCs are headquartered in a handful of distinctive with oil, cars, communication and manufac­
countries, namely the USA, Japan and in Europe. The tured products clearly being the lead sectors. The first
location of TNCs based in the Global South is very part of Table 4.9 shows more recent data on the 20 largest

173
C o n c e p tu a lis in g d e v e lo p m e n t

Assets, 2011 ($ billions) Foreign sales as % of total

0 150 300 450 600 750
General Electric (US) 52.6
Royal Dutch Shell (Netherlands/Britain) 60.1
BP (Britain) 79.8
Exxon Mobil (US) 73.0
Toyota (Japan) 60.8
Total (France) 76.9
GDF Suez (France) 65.6
Vodafone (Britain) 88.3
Enel (Italy) 60.5
Telefonica (Spain) 72.1
Chevron (US) 59.0
E.ON (Germany) 57.9
Eni (Italy) 69.2
ArcelorMittal (Luxembourg) 99.7
Nestle (Switzerland) 97.8
Volkswagen (Germany) 78.3
Siemens (Germany) 85.3
Anheuser-Busch InBev (Belgium) 89.5
Honda (Japan) 77.7
Deutsche Telekom (Germany) 55.1

I I Foreign I I Domestic

Figure 4.21 The w o rld ’s largest TNC s, 2 0 1 0

Source: adapted from http://www.economist.com/blogs/graphicdetail/2012/07/focus-l. Accessed 18 August 2016.

TNCs, and it is important to note the sheer size of their dominates the list, their relatively small asset size com­
workforce which numbers hundreds of thousands of pared to that of the 20 largest TNCs in the world and the
people, making them larger than the number of govern­ fact that all eight TNCs are NIC/BRICS countries, once
ment employees in many countries. The German again emphasizing the skewed nature of production in
Volkswagen company for example has a staggering the South.
573,800 employees, with the majority working in affili­ The spatial bias in terms of the location of the head­
ated companies around the world. The second part of quarters of global corporates is re-emphasised when
the Table shows the eight largest non-financial TNCs in we examine the service sector and finance and banking
the South. It is important to note that these are the only in particular. Table 4.10 shows the world’s 10 largest
TNCs from the South to be included in the list of the financial TNCs, showing the degree to which the
100 biggest TNCs globally according to assets. European banking and financial system is able to exert
Distinctive features in this part of the Table include their a controlling hand over the operation of world finances.
relatively low ranking in the Global 100 TNC listings, Nine of the 10 biggest financial TNCs are based
the fact that China (including Hong Kong), unsurprisingly in Europe, with three in France and one in the USA.

174
 C h a p te r 4 G lo b a lis a tio n , d e v e lo p m e n t, u n d e r d e v e lo p m e n t

Table 4.9

Assets Sales Employment

Rank Corporation Home economy Industry c US $mn US $mn Foreign Total
1 General Electric Co United States Electrical & electronic 656560 142937 135000 307000
equipment
2 Royal Dutch Shell pic United Kingdom Petroleum expl./ref./ 357512 451235 67000 92000
distr.
3 Toyota Motor Japan Motor vehicles 403088 256381 137000 333498
Corporation
4 Exxon Mobil Coporation United States Petroleum expl./ref./ 346808 390247 45216 75000
distr.
5 Total SA France Petroleum expl./ref./ 238870 227901 65602 98799
distr.
6 BP pic United Kingdom Petroleum expl./ref./ 305690 379136 64300 83900
distr.
7 Vodafone Group Pic United Kingdom Telecommunications 202763 69276 83422 91272
8 Volkswagen Group Germany Motor vehicles 446555 261560 317800 572800
9 Chevron Corporation United States Petroleum expl./ref./ 253753 211664 32600 64600
distr.
10 Eni SpA Italy Petroleum expl./ref./ 190125 152313 56509 83887
distr.
11 Enel SpA Italy Electricity, gas and 226006 106924 37125 71394
water
12 Glencore Xstrata PLC Switzerland Mining & quarrying 154932 232694 180527 190000
13 Anheuser-Busch InBev Belgium Food, beverages and 141666 43195 144887 154587
NV tobacco
14 EOF SA France Utilities (Electricity, gas 353574 100364 28975 158467
and water)
15 Nestl6 SA Switzerland Food, beverages and 129969 99669 322996 333000
tobacco
16 E. ON AG Germany Utilities (Electricity, gas 179988 162573 49809 62239
and water)
17 GDF Suez France Utilities (Electricity, gas 219759 118561 73000 147199
and water)
18 Deutsche Telekom AG Germany Telecommunications 162671 79835 111953 228596
19 Apple Computer Inc United States Electrical & electronic 207000 170910 50322 84400
equipment
20 Honda Motor Co Ltd Japan Motor vehicles 151965 118176 120985 190338
The Largest TNCs in the South (2014)
27 Hutchison Whampoa Hong Kong, China Diversified 105169 33035 215265 260000
Limited
36 CITIC Group China Diversified 565884 55487 25285 125215
41 Hon Hai Precision Taiwan Province Electrical & electronic 77089 133362 810993 1290000
Industries equipment
62 Petronas - Petrol iam Malaysia Petroleum expl./ref./ 163275 94543 5244 46145
Nasiona distr.
65 Vale SA Brazil Mining & quarrying 124289 47130 15894 83286
67 Samsung Electronics Korea, Republic Electrical & electronic 203671 209727 149298 240000
Co., Ltd equipment
73 China Ocean Shipping China Transport and storage 56126 29101 4400 130000
(Group)
98 China National China Petroleum expl./ref./ 129834 83537 3387 102562
Offshore Oil distr.

Source: UNCTAD, 2014 World Investment Repo unctad.org/Sections/dite_dir/docsAIVIR2014A/VIR14

175
C o n c e p tu a lis in g d e v e lo p m e n t

Table 4 .1 0 Table 4.11

Rank Corporation Home Country

Company / Country Revenue / GDP (US$bn)
1 Alliannz Germany
2 Citigroup USA Norway 414
3 BNP Paribas France Wal-Mart Stores 408
4 UBS Switzerland South Africa 364
5 HSBC UK Greece 305
6 Assicurazioni GS Italy Exxon-Mobile 285
7 Soci6t6 GSnerale France Chevron 164
8 Deutsche Bank Germany Romania 162
9 UniCredit spa Italy General Electric 157
10 AXASA France Peru 154
Bank of America 150
Source: adapted from Knox et al., 2014. Philips 140
Ukraine 138
AT&T 123
Ford 118
Out of the top 20, with the exception of one in Japan
Source: adapted from Global Policy Forum/Forbes, 2010.
and two the USA, all of the rest are based in Western
Europe, with the UK, France, Germany and Switzerland
being the evident leaders. In parallel, in service indus­
tries such as legal firms and advertising, which are annual turnovers that greatly exceed the gross national
equally significant in terms of the smooth operation products of some smaller nations.
of our globally connected economic system, similar An additional key feature of TNCs is the indirect
patterns of control are discernible. nature of their operations, through a reliance on affili­
As noted at the start of this section, many of the ated companies with which they form direct relationships
world’s largest corporates are in fact larger than the as part of the solidifying of GPNs and the extension of
economies of some of the smaller nation states, which service-related activities. For example, in 2011 the UK
indicates both the degree to which TNCs have become headquartered HSBC banking corporation worked with
key role players in the global economy, and relative 816 affiliated overseas companies (Knox et al., 2014). A
change in the position of the nation-state in a global manufacturing company like Ford was operating through
era. Table 4.11 is included for comparative purposes 270 affiliates internationally by 2010. Most of these affil­
and shows how, in 2010, in terms of turnover the then iates were, however, in a select group of countries in the
12 largest TNCs compared with the GDP of six North and South: Canada, countries in Western Europe,
middle-sized economies in the world. Note that the India, Brazil, Mexico, China, Argentina and Venezuela.
ranking of the TNCs differs from that in Figure 4.19, The result is the emergence of what have often become
owing to the different year in which the comparison is distinctive supply chains (GPNs) between corporate
based, and the fact that in Figure 4.19 assets are headquarters and production, assembly, research, mar­
ranked while in Table 4.11 turnover is the measure­ keting and administrative facilities scattered around the
ment criterion employed. world. The Toyota car manufacturing company serves as
Given the sheer size of TNCs, their investment and an example of a complex GPN. In 2015, Toyota was oper­
production decisions have a significant influence over ating through 53 companies in 28 countries and selling
the operation of national economies, particularly those its products in 170 countries. Thirty-five of the 53 com­
of smaller countries in the South. It follows from this panies actually assembled cars, in addition to making
that the decision to base production in one nation components which were redistributed through the pro­
rather than another will have considerable impact on duction network, with the balance of the companies
the geography of uneven development and change, making a range of components for exports to other
especially when it is remembered that many TNCs have Toyota affiliates (Toyota, 2015). Figure 4.22 shows the

176
Figure 4.22 To yo ta’s global production network, 2015
Source, adapted from https://www.toyota-europe.com/world-of-toyota/this-is-toyota/toyota-in-the-world. Accessed 18 August 2016.
C o n c e p tu a lis in g d e v e lo p m e n t

distribution of Toyota’s global production network in wages paid, the often limited technology transfer to
2015. The fact that only six of the 53 companies are the host country and ultimately, the subservient rela­
located in South America or Africa once again shows the tionships which exist, cast doubts on the nature of the
degree to which global production systems are biased in actual benefits to the host country.
their operations.
The supply chains set up between globally dis­ T h e w o rld o r g lo b a l c ity
persed manufacturing and assembly plants are concept
selected to maximise profit and efficiency, through
deliberately seeking the best quality inputs at the The types of developments outlined in the last sec­
most cost-effective prices from around the world. By tion have been given expression to and reinforced
working with affiliates, the financial liability and the concept of the world city or global city. Although
commitment of TNCs can be reduced with the onus not determined by the size of the city in population
of dealing with local labour demands and govern­ terms, the basic idea is that certain cities dominate
ment requirements devolved to local affiliates, leaving world affairs.
the parent company free to relocate with relative ease At one level, this is a very straightforward and obvi­
to another more compliant national setting should ous proposition, but its contemporary relevance has
operating conditions not be deemed to be ideal in a been elaborated by Friedmann (1986), Friedmann and
particular location. Labour-intensive parts of the Wulff (1982) and Sassen (1991, 2002). Friedmann
production processes tend to be based in low-wages (1986) put forward six hypotheses about world cities,
economies as a result of this process. While it could observing that they are used by global capitalism as
be argued that such countries are ‘developing’, the low ‘basing points’ in the spatial organisation and articulation

Plate 4 .4 A w orld c ity - Cape Town

{photo: Tony Binns)

178
 C h a p te r 4 G lo b a lis a tio n , d e v e lo p m e n t, u n d e r d e v e lo p m e n t

of production and markets, and that they act as centres Wallerstein saw as entrenching a hierarchical system of
for capital accumulation (see also Potter, 2008b). dependence and difference globally.
Friedmann also suggested that the growth of world Quite simply, the world is highly centred. This argu­
cities involves social costs which in fiscal terms the ment has been reviewed in the case of poor countries
state finds hard to meet. World cities have large popu­ by Lasuen (1973). He started from the premise that, in
lations, but more important, they have large and/or the modern world, large cities are the principal adopt­
complex manufacturing bases, sophisticated finance ers of innovations, so that natural or spontaneous
and service complexes, and they act as transport and growth poles become ever more associated with the
communication hubs, and the locations for corporate upper levels of the urban system. Lasuen also observed
headquarters, involving TNCs and NGOs (Simon, that the spatial spread of innovation is generally likely
1992a, 1993; see also Friedmann, 1995; Knox and to be slower in the Global South, due to the frequent
Taylor, 1995; Potter, 2008). existence of single plant industries, the generally poorer
The principal world cities, such as New York, Paris, levels of infrastructural provision and sometimes the
London, Frankfurt and Milan, are located in the devel­ lack of political will.
oped world. But Singapore, Hong Kong, Bangkok, Thus, countries in the South facing spatial inequali­
Taipei, Manila, Shanghai, Seoul, Osaka, Mexico City, ties have two policy alternatives. The first is to allow the
Rio de Janeiro, Buenos Aires and Cape Town (Plate 4.4) major urban centres to adopt innovations first. The
have all been recognised as part of an emerging network second option is to attempt to hold and delay the adop­
of world cities (Friedmann, 1995). tion of further innovations at the top of the national
This emergence is given spatial expression in Figure urban system, until the filtering down of previous
4.23. In short, world cities may be seen as points of growth-inducing changes has run its course.
articulation in a TNC-dominated capitalist global sys­ This may sound somewhat theoretical, but these
tem. But data show that world cities exhibit a very options represent the two major practical strategies
centric (or centred) structure, with major world cities that can be pursued by states. The first option will
such as London at the core (Taylor, 1985). result in increasing economic dualism but classical and
The concept of global or world cities has been criti­ neo-classical economists and neo-liberalisers would
cised for focusing academic and global attention on an argue there is a chance of a higher overall rate of eco­
elite group of cities in the North, and largely marginal­ nomic growth. On the other hand, the second option
ising developments in hundreds of smaller cities around will lead to increasing regional equity, but potentially
the world which do not host large corporations or have lower rates of national growth. Most countries of the
international airports. Robinson (2006) in her book Global South have adopted policies close to the first
Ordinary Cities presents a very clear argument on the option of unrestrained innovation adoption, seeking to
need to see all cities as playing a role in the global sys­ maximise growth rather than equity. This theme is
tem, and to recognise that what is happening in them is re-examined in Chapter 9.
an equally valid focus of attention if we are trying to The account presented in this section has shown that
understand how the world operates. industrialisation in the South has been far from charac­
Despite this, the implication of the economic domi­ terised by uniformity and homogeneity. In fact, it has
nance of a core set of elite cities is that uneven been associated with global shifts, non-hierarchic adop­
development is likely to be perpetuated to the disadvan­ tion sequences and the growth of global or world cities.
tage much of the South, and that the paths to development In short, globalisation is leading to increasing differ­
pursued by their cities and countries in the twenty-first ences between regions and places, for example giving
century will be infinitely more difficult to pursue than rise to centres, peripheries and semi-peripheries at the
those which the cities and countries of the North fol­ broadest scale, as noted in Chapter 3 from a theoretical
lowed earlier. This is because of the entrenched nature viewpoint. In reality, however, global patterns of differ­
of global control, which was recognised by Wallerstein entiation and localisation are much more complex than
(1980) in his ‘World Systems Theory’, which relates this in the contemporary context. This chapter now
closely to the map depicted in Figure 4.23, which turns to consider this argument in further detail.

179
Figure 4.23 T h e contemporary system of world cities
Source: Adapted from Friedmann, J. (1986) The world city hypothesis. Development and Change, 17, Wiley-Blackwell Publishing Ltd.
 C h a p te r 4 G lo b a lis a tio n , d e v e lo p m e n t, u n d e r d e v e lo p m e n t

E c o n o m ic c h a n g e a n d g lo b a l of reindustrialisation as a result of specialist market

d iv e rg e n c e needs and rising labour costs in China.
In the South, since the 1970s, productive capacity
The preceding discussion leads to a major conceptual­ has been channeled into a limited number of countries
isation of what is happening in the contemporary and metropolitan centres, or particular resource cen­
world as a result of the acceleration of processes of tres such as mining regions, like the Zambian
globalisation, increasing connectivity and the opera­ Copperbelt or zones of high agricultural productivity.
tion of TNCs, and what this means for growth and The increasing global division of labour and the
change in the South. enhanced salience of TNCs are leading to greater het­
The basic argument is that the uneven development erogeneity or divergence between and within nations
that has characterised much of the South during the with respect to their patterns of production, capital
mercantile and early capitalist periods has been intensi­ accumulation and ownership.
fied post-1945 as a result of the operation of what may Thus, divergence leads to differentiation in the South
be called the dual processes of global convergence and between the industrialising export economies of China
global divergence, terms which originate in the work of (including Hong Kong), Taiwan and South Korea, along
Armstrong and McGee (1985; see also Potter, 2008). with the larger internally directed industrialised coun­
Together, these processes may be seen as characterising tries, such as Mexico, raw material exporting nations,
the outcome of processes underlying globalisation. In like Nigeria, and low-income agricultural exporters,
this section, divergence is the focus of attention. We such as Bangladesh, and so on.
turn to convergence in the next major section. As argued in the previous section, in the contempo­
Divergence relates to the sphere of production and rary world such changes are highly likely to be
the observation that places which make up the world non-hierarchic, in the sense that they are focusing
system are becoming increasingly differentiated, i.e. development on specific localities and settlements.
diverse and heterogeneous, as discussed in the first Armstrong and McGee (1985: 41) state that, ‘Cities
part of this chapter. Such differentiation, particularly are . . . the crucial elements in accumulation at all
in production, and the commodity supply terms lead levels . . . and the locus operandi for transnationals,
to both specialisation, which may enhance income, local oligopoly capital and the modernising state’. It is
and can also lead to vulnerability to price fluctuations these features that gave rise to the title of their book,
and the decisions made in global cities and corporate which characterised cities as ‘theatres of accumulation’
headquarters. Starting from the observation that the or ‘global palladiums’.
1970s witnessed a number of fundamental shifts in the
global economic system, not least the slowdown of the
major capitalist economies and rapidly escalating oil G lob al c o n v e rg e n c e :
prices, Armstrong and McGee (1985) stressed that p e rs p e c tiv e s on c u ltu ra l
such changes had a notable effect on the dispersion of
g lo b a lis a tio n
labour-intensive manufacturing industries to a few
selected low-labour cost locations, and the increasing Other commentators point to what initially appears to
control of trade and investment by TNCs. It is this be the reverse trend: the increasing similarity which
trend which has witnessed the establishment of Fordist seems to characterise world patterns of change and
production line systems in the NICs, whereas smaller development (Figure 4.24).
scale, more specialised and responsive, or so-called There are at least two major respects in which a pat­
‘flexible systems’ of both production and accumulation tern of what may be called ‘global convergence’ is
have become more typical of advanced industrial occurring. This is, first, in the sense of the emerging
nations. The North has tended to retain high-tech global class links. Most obvious are the growing ‘global
industries, such as aero-space, bio-tech, pharmaceuti­ middle class’ - i.e. a core of middle class, educated and
cals, luxury products and R & D intensive production highly mobile professionals in all countries, albeit to
and has, in recent years, started to experience a degree varying degrees and scales, who have become key agents

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C o n c e p tu a lis in g d e v e lo p m e n t

Figure 4 .2 4 Globalisation and T hird World societies: Rip K irby airs the stereo typ ical
argum ent
Source: Yaffa Advertising and King Features

in the neo-liberal world through their pursuit of middle where technology allows this, may well lead to a mis­
class values and aspirations, which often link them with match between extant lifestyles and aspirations (Miller,
the middle class in other countries, and this in turn 1992, 1994; Potter, 2000, 2008a; Potter and Dann,
distances them from the poor majorities in their own 1996), although there is equally the chance that such
countries. In parallel, more marginalised people are also events will be reinterpreted and reconstituted from a
linking globally through social and protest movements local perspective. This argument is developed in Case
(discussed below). Secondly, a convergence can be study 4.1. Within this context, the role of global media
noted in the sphere of consumer preferences and habits. broadcast networks such as CNN, A1 Jazeera and BBC,
Of particular importance is the so-called ‘demonstra­ in terms of news coverage and a range of commercial
tion effect’, involving the rapid assimilation of North and music satellite channels, has the power to influence
American and European tastes and consumption pat­ values but also shape public perceptions of events and
terns in the South (McElroy and Albuquerque, 1986). news coverage, particularly through the subjective
The influence of the mass media, in particular tele­ interpretation of events conveyed by media presenters
vision, social media, newspapers, magazines and based in particular countries. The privileging of knowl­
various forms of associated advertising, is likely to be edge from the North in the global media runs the risk
especially critical in this respect. The televising and of marginalising equally important events in the South
internet streaming of North American soap operas, through a process of cultural imperialism.

Global mass media, metropolitanisation and

cultural change
British anthropologist Daniel Miller examined the Miller was researching on households and culture in
popularity of soap operas produced in metropolitan Trinidad in the Caribbean, but he observed that ‘for an
regions of developed countries in a study published in hour a day, fieldwork proved impossible since no-one
1992. This phenomenon can be seen as part of the evo­ would speak to me, and I was reduced to watching peo­
lution of‘global forms’. Such global forms have received ple watching a soap opera The author goes on to note
a good deal of attention in relation to shifts in global that much of the relevant research has been carried out
production, but less has been written concerning the on the pioneer coloniser of this type of television
parallel process in global mass consumption. programme, Dallas. However, the programme that was

182
 C h a p te r 4 G lo b a lis a tio n , d e v e lo p m e n t, u n d e r d e v e lo p m e n t

receiving so much attention in Trinidad was The culture’, and ‘Trinidad is largely the recipient of
Young and the Restless. This has been produced since global discourses for which the concept of spatial
1973, and has always had a strong emphasis on sexual origin is becoming increasingly inappropriate’, how­
relations and associated social breakdown. ever different they may be in terms of the physical
It is noted that many people went to extreme environment. But Miller also stresses it would be
lengths to watch the programme. Those with low wrong to assume that such developments mean an
income, e.g. a large squatter community, were found end to Trinidadian culture, which has always been
to be the most resourceful in gaining access to the derived from here, there and everywhere - Africa,
programme. Although most householders had neither India, France, Jamaica, USA and UK among others.
domestic electricity nor water, many homes had tele­
Source: Miller (1992)
visions connected to car batteries so they could watch
the show. The car batteries were recharged for a small
fee per week by those residents who had electricity.
Critical reflection
Although the programme has little to do with the
environmental context of Trinidad, Miller notes that How do you respond to this example? To what extent do
it was regarded as realistic in portraying key struc­ you feel that television programmes can promote new
tural problems of Trinidadian society and culture. In realities? For example, it has been common for people to
particular, in fashion- and style-conscious Trinidad, blame rising violence in society on the incidence of vio­
local audiences identified with the clothing worn by lence on TV. How much can TV promote the demand
the characters. Thus, a retailer observed: ‘What is for new goods and services, new lifestyles and, indeed,
fashion in Trinidad today? The Young and the new forms of development? What about the sorts of
Restless is fashion in Trinidad today.’ The pro­ houses that people live in and their lifestyles as depicted
gramme was also seen to match with the local sense on TV - do these have implications for development, do
of truth, as revealed by exposure and scandal. you feel? Or is it more the case that TV reflects reality in
The author concludes that ‘Trinidad was never, one place and is then re-interpreted to suit local circum­
and will never be, the primary producer of the stances? This is worth thinking about - and perhaps
images and goods from which it constructs its own discussing as a group if you are in a classroom situation.

Other aspects of the wider trend of convergence individuals, and it suggests that established traditions
involve changes in dietary preferences, and the rise of are dislocated by the invasion of foreign influences and
the ‘industrial palate’, whereby an increasing proportion images from global cultural industries.
of food is consumed by non-producers (Drakakis- The implication is that such influences are perni­
Smith, 1990; MacLeod and McGee, 1990). cious and are extremely difficult to reject or contain
Developing cities in the South may be seen as the (Hall, 1995). Following this line of argument, Hall
prime channels for introduction of such emulatory and (1995: 176) has observed that the view is expressed
imitative lifestyles, which are sustained by imports from that ‘global consumerism, though limited by its uneven
overseas, along with the internal activities of transna­ geography of power (Massey, 1991), spreads the same
tional corporations and their branch plants. These in thin cultural film over everything - Big Macs, Coca-
turn are frequently related to collective consumption, Cola and Nike trainers everywhere’ (Plate 4.5).
indebtedness and increasing social inequalities. These However, once again the suggestion of homogene­
changes towards homogenisation are ones that are par­ ity looks fragile when subjected to closer scrutiny. The
ticularly true of very large cities. impact of standardised merchandising is likely to be
Such a view sees globalisation as a profoundly unset­ highly uneven, especially when viewed in terms of
tling process both for cultures and the identity of social class.

183
C o n c e p tu a lis in g d e v e lo p m e n t

P la t e 4 .5 M cD onald’s in Nanjing Road, Shanghai

(photo: Getty images)

It stands to reason that it is only the urban elite and Global convergence and
the urban upper income groups who are most able to divergence: patterns of hierarchic
adopt and sustain the goods’ provided by standardised
merchandising - health care facilities, mass media and
and non-hierarchic change - a
communications technologies, improvements in trans­ summary
port and the like.
It may be conjectured that the lower income In tro d u c tio n
groups within society disproportionately receive the
‘bads’ - for example, formula baby milk and tobacco A direct and important outcome of the above discussion
products. Thus, once again, forces of globalisation is a strong argument that the form of contemporary
may be seen to etch out wider differences on the development which is to be found in particular areas of
ground. This heterogenising effect is true within the South is the local manifestation and juxtaposition of
urban areas too, with the residential subdivisions of the two seemingly contradictory processes of conver­
the rich contrasting with those extensive areas gence and divergence at the global scale.
that are inhabited predominantly by squatters and In terms of examples, Armstrong and McGee (1985)
low-income residents of the city. look at the ways in which these trends are played out in
The capitalist system must inevitably be recognised Ecuador, Hong Kong and Malaysia. Potter (1993c,
as having a vested interest in globalising the expecta­ 1995a, 2000) has examined how well the framework fits
tions of consumption and tastes. This, of course, can the Caribbean, where it has been argued that tourism
be related directly to the theme of the articulation of has a direct effect on the trends of convergence and
the modes of production under capitalism, as outlined divergence. This is another way of saying, via changes in
in Chapter 3. production and consumption, that globalisation is not

184
 C h a p te r 4 G lo o a lis a tio n . d e v e lo p m e n t, u n d e r d e v e lo p m e n t

leading to uniformity, but to heterogeneity and differ­ the diffusion of underdevelopment rather than develop­
ences between places. ment, as outlined in Chapter 3.
This is also reflected in contexts where the South is
represented in the North as in connections with music,
A g ra p h ic a l s u m m a ry
fashions and the like. Thus, it is necessary to acknowledge
that the ‘flow’ is not one way, and although the North to The key elements of the argument presented above are
South flow is dominant, it can be argued that the nature of summarised in Figure 4.25. On the one hand, the cul­
the South to North flow is of increasing salience. Examples ture and values of the West are potentially being
are found in Asian influences in high-street fashion, music diffused on a global scale. By such means, patterns of
and food, and in many other arenas. The spread of inter­ consumption are spread through time (Tl, T2, T3, etc.),
national cuisine, particularly from Asia is a particular case and there is an evolving tendency for convergence on
in point, as is the attraction of Eastern religions and what may be described as the global norms of con­
philosophies to people from the North. sumption’. The figure recognises that such consumption
aspects of global change are primarily expressed hierar­
C o n s u m p tio n a n d c o n v e rg e n c e chically, and are essentially top-down in nature.
In contrast, cities appear to be accumulating and cen­
We are now ready to reconcile a number of closely linked tralising the ownership of capital, and this process is closely
arguments. It can be argued that it is the key traits of associated with differences in productive capabilities.
Northern consumption and demand that are potentially The tendency towards divergence is expressed in a
being spread in a hierarchical manner within the global sporadic manner, which stresses unique activities in
system, from the metropolitan centres of the core world area and by region (Al, A2, A3). TNCs and associated
cities to the regional primate cities of the peripheries and industrialisation are the most important agents involved
semi-peripheries, and subsequently down and through the in this process. This goes a long way towards explaining
global capitalist system. But the actual impact of these the plural and sometimes contradictory nature of the
trends will be highly specific to localities, and be influenced postmodern world system.
by age, class, gender, religion, etc. It is interesting to observe Cities and urban systems have to be studied as import­
that the innovations cited by Berry (1961; 1972) and others ant functioning parts of the world economy. In such a role,
in the 1960s and 1970s as having spread sequentially from cities act as agents of both concentration and spread, at
the top to the bottom of the urban system of America were one and the same time. Similarly, it is far too simplistic to
all consumption-oriented - for example, the diffusion of ask whether cities spread change in a hierarchical or
television receivers and stations. But the spread is one of non-hierarchical manner, for in fact they are doing both
potential, and many real differences are evolving. simultaneously. In this regard, it is tempting to argue that
the breaking down of rigid hierarchical systems at a global
P ro d u c tio n a n d d iv e rg e n c e level is very much part of the postmodern world. What we
can certainly conclude is that globalisation has much to do
In contrast, aspects of production and ownership are with new and perpetuated forms of uneven development.
becoming more unevenly spread; they are becoming
concentrated into specific locations, or what may be
referred to as ‘spatial nodes’. This process involves Political aspects of globalisation:
strong cumulative feedback loops. Hence, considerable the anti-globalisation and anti­
stability is likely to be maintained at selected points capitalist movements
within the global system, frequently the largest world
cities, production facilities and tourism centres. In other
In tro d u c tio n : c o m m u n itie s a n d
words, key entrepreneurial innovations are likely to be
th e s ta te
strongly concentrated in space, and are not likely to be
spread through the urban system. This argument has The principal theme of this chapter has been that it is a
parallels with the view that sees dependency theory as gross oversimplification to think in terms of enhanced

185
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 C h a p te r 4 G lo b a lis a tio n , d e v e lo p m e n t, u n d e rd e v e lo p m e n t

globalisation and the unfolding of the neo-liberal world many of which have taken direct action at major capitalist
order as giving rise to a more equal and uniform world. summits and meetings throughout the world (Murray,
As evidence presented to Chapter 1 showed, the wealth 2006), most notably at annual meetings of world leaders
ratio between rich and poor countries in 1830 was 1:3, and the business elite such as the WTO (World Trade
but by 2015 it was estimated to be 1:80. Organization) discussions, G8 meetings (the heads of the
In virtually every instance, spread at one scale or in ‘leading’ countries) and meetings of the World Economic
one arena seems to have been matched by polarisation Forum. The first major expression of mass opposition to
at another. At one level the selective privileging of the global system was the ‘Battle of Seattle’ from 29
which countries, regions, cities and individuals are November to 2 December 1999, when the WTO held its
privileged or marginalised by global and national pro­ major conference in Seattle. This became the focus for
duction systems reinforces class and social differences. some of the largest protests seen in the USA since the
Marginalisation within societies and growing opposi­ Vietnam War, involving some 600,000 protesters
tion to homogenising tendencies from the North is (Madeley, 2000; Murray, 2006).
encouraging growing dissatisfaction from grassroots The anti-globalisation movement can be seen as part
groups and communities in all countries. This can be of a wider anti-capitalist movement against what are
expressed in actions ranging from support for ‘transi­ regarded as the excesses of neo-liberalism. A wide group
tion towns’ movements, with their focus on trying to of environmentalists, anarchists, feminists, consumers,
ensure sustainable living, to alignment with global unionists, workers and peasant farmers are brought
peasant movement such as ‘via campesina. together by the movement. The ‘Occupy’ movement
A frequently cited view is that globalisation is wit­ protests in many cities of the world against the capitalist
nessing the erosion of the former role and power of the system in 2011 were a particularly profound expression
nation state. This view emanates from the fact that cer­ of popular dissatisfaction and rejection of the neo­
tain large TNCs have annual turnovers that are liberal system which has privileged business elites - the
substantially larger than the GDPs of small nations of 1% as alluded to in the common discourse, at the
the South (see above). expense of the 99% - the workers around the world.
It also relates to the transnational movement of capital While it would be difficult to assert that the protests
and the ascendancy of uncensored forms of global com­ brought about change, they nonetheless expressed the
munication, such as the World Wide Web. Thus, in reality that large numbers of people globally were dissat­
reviewing the changing role of the state in the field of isfied with the global neo-liberal system, and we are
development, Batley (2002) has noted that, while for the likely to see a resurgence of such activity as future capi­
first quarter of the twentieth century states held clear talist expansion variously privileges select groups at the
authority within their borders, the period since 1975 has expense of others (Williams et al., 2014). It is interesting
seen the evolution of a more porous nation state, with that such protest movements exist in both the North
fewer directly performed functions, and more partnerships and South and, while holding often differing and even
with other actors. Indeed, the notion of public-private competing agendas, such as environmental protection,
partnerships has become one of the common concepts of opposing cheap imports and land sales, to trying to pre­
our time and which neo-liberalism actively encourages. serve industrial jobs, they do represent a degree of
popular dissatisfaction with the prevailing economic
T h e a n ti-g lo b a lis a tio n a n d a n ti­ order and its global operations and ramifications.
c a p ita lis t m o v e m e n ts A particular target of protest is the WTO, which is
responsible for formulating the rules that govern the con­
The foregoing observations are also reflected in what duct of world trade. Its predecessor was known as the
may be described as the anti-globalisation movement’, General Agreement on Tariffs and Trade (GATT) (see
which since the 1990s has mounted resistance to what is Chapters 8 and 10). The philosophy of the WTO is almost
seen as the negative consequences of globalisation. wholly based on free trade. Indeed, the WTO has been
In fact, the anti-globalisation movement refers to a staunch in arguing that wider issues, such as those per­
very broad array of interest, lobby and protest groups, taining to labour conditions and labour rights, health and

187
Conceptualising development

safety issues at work and environmental pollution and with the Global North being as responsible for this as
degradation, cannot be allowed to stand in the way of the Global South. Elliott (2001) emphasises that the
large TNCs trading freely and efficiently. Its efforts at then British Chancellor Gordon Browns statement in
various negotiating rounds of proposed new global trade November 2001, that, if managed badly, globalisation
deals to lower trade restrictions globally and protect intel­ will lead to ‘wider inequality, deeper division and a dan­
lectual property rights have met with popular protests gerous era of distrust and rising tension’.
and increasing dissatisfaction from Southern countries The linking of globalisation, inequalities, division and
aggrieved by the way in which they tend to be worse off danger in the post-11 September 2001 world is highly
from a Northern-dominated trade system. A classic point salient. On the one hand, a few writers have pronounced
of dispute is Northern government subsidies to their the anti-capitalist/anti-globalisation movements to be in
farmers, which make the farm produce from the South tatters in the aftermath of the terrorist attacks on the
uncompetitive, which should, strictly speaking, not be Twin Towers of the World Trade Center in New York. On
permissible in terms of global trade, particularly since the other hand, one of the movement’s leaders, Naomi
subsidies to manufacturing from the South would contra­ Klein (2001: 31), has warned that the ‘debate about what
vene WTO regulations by comparison. This critique kind of globalisation we want is not “so yesterday”; it has
merits attention in Chapters 7 and 8. never been more urgent’. Such a stance argues the need
At the regional level, current negotiations over the for new forms of multilateralism/internationalism,
Trans-Pacific Partnership agreement and the Transadantic occupying the space between what Klein (2001) refers to
Trade and Investment Partnership have been particularly as ‘McWorld and Jihad’. The mass protest in multiple
controversial, as they are regarded by opposition move­ countries associated with the ‘Occupy movement
ments as a way to legally enshrine the rights of Northern in 2011 are indicative that a strong undercurrent of
corporates to protect and advance their interests in other resistance persists.
sovereign states. The counter-argument is that enhanced As we saw in Chapter 3, in the scholarly world the
trade will benefit all signatories. same kind of argument is being presented in calls for
Madeley (2000) cited Walden Bello, Co-Director of the increasing localisation and territorialisation of
the NGO ‘Focus on Global South’ in explaining why the development. This is often linked to the concept of
WTO arouses so much protest: neo-populism and the operation of selected regional
closure (Chapter 3).
I think it’s because it’s seen as stan d in g for the su b ­
In the political domain, it is increasingly allied to the
ordin atio n o f so m any a sp ects o f hum an existence
call for the relocalisation of production and reductions
to trade, as an organ ization that represents p rim a r­
in ‘food miles’ (see also Chapter 7 on resources and
ily the interests o f tran sn ation al co rp o ratio n s, and,
development). This has been strongly advocated in
from the South, as an organ ization with a very
respect of food production by the British Green Party
anti-developm en t philosophy.
(see Lucas, 2001a, 2001b). Lucas argues that the ever
Some commentaries, particularly those in newspa­ more international nature of the food trade is serving to
pers, have suggested that as a result of these types of increase greenhouse gases and leading to global warm­
protests, views on globalisation have started to show a ing. She also argues that it forces down food and animal
change since the turn of the millennium. Thus, Elliott welfare standards, and contributes to disasters such as
(2000: 27) suggests that: Foot and Mouth Disease.

globalisation is no longer viewed as a force of nature . . .

but som ething that can and m ust be shaped by hum an
A g lo b a l s o lu tio n to g lo b a l
endeavour and integrity. It has been recognised that p ro b le m s ? T o b in -ty p e ta x e s
there are inherent problem s in a system where capital
Critics of globalisation argue that it is characteristic of
calls all the shots . . . while labour is voiceless.
the extreme pro-globalists that while they argue for
The clarion call is that globalisation must be more global free trade, they are often noticeably less global in
people-friendly, and must build core labour standards, their outlook on other important issues. For example,

188
 C h a p te r 4 G lo b a lis a tio n , d e v e lo p m e n t, u n d e r d e v e lo p m e n t

such commentators are frequently far less keen on the Tobin (see Key thinker box), Professor of Economics at
unrestricted movement of labour across borders. There Yale University, suggested what he saw as the need for
is a major area where this argument seems to fit: and the global taxation of financial speculation. Tobin once
this is in relation to the proposal for globally based taxes commented that the initial idea sank like a rock’. But in
in order to fight world poverty and underdevelopment. 1978 he formalised his proposal, and in 1981 he was
Some people argue that what is urgently needed is awarded the Nobel Laureate for Economics for his work
strong forms of global redistribution. In 1972, James on global taxation.

James Tobin and Tobin-type taxes on speculation

P late 4 .6 P ro fe sso r Jam es Tobin, E conom ist

(p h o to : G e tty Im a g e s / A F P )

Born in 1918, and educated in economics at Harvard Initially at least, Tobin himself seemed to regard
University from 1935, James Tobin had a long interest the funds raised by such taxation as a mere
in financial markets and investment decision-making by-product. But even at 0.1 per cent, around half
extending back to the 1960s (Simon, 2006). It was in the rate initially suggested by Tobin, between US
this context that Tobin suggested the need for global $50 and US $300 billion would be raised annually,
currency speculation to be taxed. Tobin referred to this a sum broadly equal to existing levels of
as potential ‘sand in the wheels' of international development assistance.
financial markets, which would serve to reduce their In the late 1990s, the NGOs War on Want and
overall volatility. At first this suggestion was ignored Oxfam, as well as the governments of Canada, France
both by professional economists and policy makers, and Belgium, moved to support the introduction of
who were generally against any market interference Tobin-type taxes. Anti-globalists also find it relatively
(Simon, 2006). easy to align with Tobin taxes as there is a strong
>

189
Conceptualising development

argument that they would serve to dampen down GNP and income per head alone. Thus, in the 1970s,
aspects of financial globalisation. James Tobin proposed what he referred to as a
Tobin formally retired in 1988 and died in 2004 Measure of Economic Welfare (MEW). This can be
aged 84 years. As Simon (2006) points out, as a key regarded as a forerunner of the United Nations' Human
thinker he was also associated with the suggestion that Development Index (HDD, which we reviewed in
development needs to be defined and assessed in Chapter 1, and serves to confirm James Tobin as a key
terms of human welfare rather than by measures of thinker in the field of global development.

Over US $3 trillion is traded daily on foreign At the start of the 2000s, the British NGO War on
exchange markets. It is believed that only 5 per cent of Want ran a very strong and extensive campaign sup­
this sum is actually necessary to finance global trade. porting the introduction of a Tobin-style tax. At the
The remainder effectively amounts to speculative trad­ same time, the Canadian Parliament voted two-to-one
ing, that is making profits from changes in currency in favour of introducing such a tax, which was staunchly
rates. Tobin-type taxes would involve a levy of around advocated in the mid-1990s by the French President
0.20 to 0.25 per cent on such global financial activities. Francois Mitterand, shortly before his death.
This would presently yield US $250 billion per annum. However, it appears that, in general, those very
This is over five times the total amount that is given in politicians who espouse globalisation are those who
aid around the world. Although formidable issues dismiss out of hand a globalised tax to tackle world
would have to be faced in collecting and allocating poverty. Thus, in 1995, the then Managing Director of
such monies, it is generally argued that revenues the International Monetary Fund, Michel Casessus, is
should be collected by national central banks and then reported as having commented that ‘financing an
deposited with a United Nations body, such as the attack on poverty should be left to governments’.
United Nations Development Programme (UNDP), or Notably, the possibility of global taxation is not
United Nations Educational, Scientific and Cultural even mentioned in the UK Government’s White Paper
Organization (UNESCO) (see also Chapter 7). in dealing with globalisation and poverty reduction. In
The US $250 billion that could be raised each year the words of L. Elliott (2001: 15): ‘It is politics that is
only makes sense when we consider it alongside what the killer . . . the political will for a Tobin tax is absent
might actually be achieved with such tranches of money. in the places which matter: Washington, London,
For example, it has long been estimated that as little as Tokyo, Frankfurt’.
US $8 billion per year would be enough to establish More recent concerns have focused on the morality
universal primary education on a global basis. of corporations which operate globally and which,
Meanwhile, UNDP has calculated that US $80 billion is through the questionable system of tax avoidance
needed to eliminate the worst forms of global poverty. known as ‘transfer pricing’, incur profits and losses as a
Further, the Jubilee 2000 campaign argued that US $160 result of trade of goods internationally between branches
billion per annum would be the cost of wiping out the of the same corporate and its affiliates, leading to losses
Global Souths unpayable debts (see Chapter 8). or low profits being declared in many countries, while
But there is another reason for the introduction of significant profits are declared in tax havens such as
global Tobin taxes, over and above poverty alleviation. Caribbean. Similarly, the ability of TNCs to avoid taxa­
A major consideration is that it would also serve to tion in countries with weak monitoring structures, and
promote greater financial stability by damping down their setting of establishment conditions favourable to
financial markets, rather than the extreme volatility themselves in countries desperate for investment, is
which seems to have characterised them over the regarded as blatant exploitation of weak national sys­
years (Rigg, 2002). tems which perpetuates poverty and corporate greed.

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 Chapter 4 Globalisation, development, underdevelopment

Concluding comments: new globalising system we are encountering many

incidences of what, viewed historically, is a reverse or
globalisation and unequal
counter flow. Again, such conflations can be inter­
development preted as typical of the postmodern condition.
There is also the important argument that increasing
Throughout this chapter it has been argued that the globalisation and time-space compression in the end
notion of a basic sameness in respect of global culture is make us value more strongly than hitherto the notion of
clearly a distortion and a gross oversimplification. place as secure and stable. Thus, it can be posited that
Clearly, we live in a more globalised world, in which globalisation may well serve to engender localisation.
TNCs are, increasingly, coming to dominate world pat­ This is sometimes described rather inelegantly as glo-
terns of consumption and production. But there are calisation’, where there are multiple global-local
many reasons why it is wrong to regard the outcome as relations through which locality becomes more salient
increasing uniformity. than hitherto within the world system.
First, strong resistance is sometimes shown by local Furthermore, we have witnessed all too clearly that
and national cultures, especially to the influences of culture has always been characterised by hybridisation,
North America. The idea of a single global culture is difference, rupture and clashes, so it is possible to argue
clearly misplaced. As an example, the opening of that nothing very new, strange or different is currently
McDonald’s was fiercely contested for some time in happening. Western European nation states may be seen
Barbados, despite its status as a leading tourist destina­ as masters of modernity, whereas hybridised forms of
tion for North Americans and Europeans. When those culture are characterising the postmodern world. This,
in power relented, the fast-food chain only lasted six of course, reflects the fact that culture can never be seen
months, largely because Bajans prefer eating chicken to as settled, finalised, complete and internally coherent
red meat. This is a simple and direct example illustrating (Hall, 1995).
that local customs and tastes can run directly across, It has to be appreciated that cultures (systems of
and indeed against, apparently hegemonic global trends. shared meanings), products and lifestyles will inevitably
The regionally based fast food outlet Cheffette/Barbeque spread, and sometimes contract, in a highly heteroge­
Barn is strongly based on chicken meals, and is very neous manner. But aspects of production and ownership
popular - but does also serve beef burgers. are far from evenly spread, due to the process of diver­
Second, rather than serving to erode local differences, gence and differentiation reviewed in this chapter.
global culture often works alongside them; and some­ Finally, the economic competition between places is
times it even works via them. Particular groups within now intense, given that major corporations can select
society may be targeted for the sale of certain products. In between them, and this is leading to the possibility of
this manner, local differences may be explored and ever-sharper differences between areas, regions and
exploited wherever possible (Robins, 1995).
places. Thus, trade liberalisation has brought a wave of
Furthermore, increasingly within the global econ­ anti-globalisation protests.
omy cultural products are being assembled from all
For all these reasons, we can conclude that uneven
over the world, and are being turned into commodities
and unequal development are still characteristic of
for an emerging cosmopolitan marketplace. This is
the global capitalist system. Globalisation is not all-
particularly true of fashion, music and tourism (Crang,
encompassing and there is much that remains uneven
2000). Thus, from reggae to soca to African indigenous
about global relationships and global processes. All of
music, Asian politics and menus, and in respect of
these aspects of dynamic change are strongly skewed
Rastafarianism, the flow is not a one-way movement,
towards the developed North (Allen, 1995). The world
and Southern products are being promoted and sold in
may effectively be getting smaller, but the majority of its
Northern marketplaces. Thus, globalisation has
population do not share in the benefits of globalisation,
brought the possibility of the colony ‘invading’ the
which many (but not all) residents of the North have
colonial power, and the periphery taking on and ‘win­
enjoyed, with some interruptions, for the last 50 years -
ning against’ the centre (Robins, 1995). Hence, in the
growing incomes, improving social conditions and

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Conceptualising development

access to globally sources goods, often from low-waged of global divergence (Armstrong and McGee, 1985;
producing countries through TNC networks. Cochrane, 1995; Potter, 1993c, 2000) and uneven
In considering development, it has to be rec­ geographical development (Harvey, 2006, 2015). In
ognised that places in the globalising world system the words of Cochrane (1995: 276), ‘Globalisation
are not linked together in a uniform way. They are and localisation are not the polar opposites which
interrelated in very unequal ways, and such basic one might expect them to be’, because globalisation is
inequality would seem to be poised to increase rather underpinned by the realities of uneven development’
than decrease in the near future. Competition (277). One might even go further and say that uneven
between places for global capital is making the world development is actively being promoted by contem­
more uneven and differentiated, reflecting the trends porary processes of globalisation.

> The single word ‘globalisation’ seems to summarise our contemporary age, even though, in reality, globalisation has
been a feature of the world economy and development patterns since the 1400s.
> The precise relationships that are envisaged to exist between globalisation and processes of development are central to
thinking about planning and change.
> Some analysts, especially neo-liberals, see globalisation as the mechanism that will spread growth in the twenty-first
century, so that neo-liberalism can be regarded as akin to neo-modernisation.
> The world is effectively getting smaller for those who have the resources to travel and use the most up-to-date
communications technologies.
> But when diverse aspects of globalisation are viewed - be it digital technology, transport, manufacturing, cultural
globalisation - while certain spread effects are recognisable, at a higher resolution the outcome appears to be a
sharper polarisation - between both places and people.
> TNCs and the role of FDI are critical in the operation of the global economy, and manufacturing relies increasingly on
the emergence of GPNs (Global Production Networks). World/global cities are key basing points for the control of the
global economy and their operation tends to enhance the economic control of the North.
> The framework of global convergence and divergence suggests that while patterns of consumption are promoting
greater homogenisation for those who can afford it, global patterns of production are creating greater diversity and
differentiation among world regions.
> The anti-globalisation and anti-capitalism movements argue forcefully that the effects of globalisation urgently need to
be controlled, and in some respects, curtailed.
> The benefits and costs and the inclusionary and exclusionary effects of globalisation are differentially experienced
across the world, reinforcing patterns and processes of ‘unequal geographical development’.

F u rth e r re ading Conway, D. and Heynen, N. (2006) Globalization’s

Contradictions: Geographies of Discipline,
Bond, P. (2006) Looting Africa. London: Zed Books. Destruction and Transformation. London and New
A critical review of the impact on neo-liberalism on York: Routledge.
Africa A critical overview of globalisation and neo-liberalism.
Coe, N.M. and Yeung, H.W-C. (2015) Global Production Department for International Development (2000)
Networks: Theorizing Economic Development in an Eliminating World Poverty: Making Globalisation Work
Interconnected World. Oxford: Oxford University Press. for the Poor, Cmnd 5066. London: The Stationery Office.
A detailed explanation of key economic processes Worth reading as a strong template for the argument
linking manufacturing globally. that globalisation is the way forward in delivering
countries from poverty.
Collier, P. (2008) The Bottom Billion. Oxford: Oxford
University Press. Desai, V. and Potter, R.B. (2014) The Companion to
A critical examination of the impact of globalisation and Development Studies, 3rd edn. London: Routledge.
related processes on the world’s poorest. An accessible source book that brings together over 100

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key essays dealing with all aspects of the field of W ebsites

development studies.
Dicken, P. (2015) Global Shift: Mapping the Changing www.dfid.gov.uk
Contours of the World Economy, 7th edn. London: As noted at the end of Chapter 1, the DFID site gives
Sage. direct access to a range of development items, including
A must read for those concerned with the realities of those on globalisation and related topics.
economic globalisation. www.eldis.org
Harvey, D. (2006) Spaces of Global Capitalism: Towards a The site aims to share the best in development policy,
Theory of Uneven Geographical Development. London: practice and research.
Verso. www.waronwant.org
This book, and the next two, critically examine the The site contains details concerning War on Wants ‘Its
operation of capitalism and its spatial and economic time for Tobin’ campaign.
contradictions.
www.internetworldstats.com
Harvey, D. (2011) The Enigma of Capital and Crises of Provides updated figures on internet usage levels.
Capitalism. London: Profile Books.
Harvey, D. (2015) Seventeen Contradictions and the End of www.unctad.org
Capitalism. London: Profile Books. Provides access to data on FDI, trade and TNCs
Knox, P., Agnew, J. and McCarthy, L. (2014) The www.undp.org
Geography of the World Economy, 6th edn. London: Provides access to the annual Human Development
Routledge. Report.
A detailed overview of the evolving world economy.
www.unido.org
Murray, W.E. (2006) Geographies of Globalization. London Provide details on global manufacturing trends.
and New York: Routledge.
An overview of globalisation processes for the www.worldbank.org
undergraduate student market. Provides access to a range of statistical sources, policy
reports and annual World Development Report and the
Schenk, S. and Haggis, J. (2000) Culture and Development: key statistical source: World Development Indicators.
A Critical Introduction. Oxford: Blackwell.
Endeavours to fill a gap by focusing attention
specifically on cultural aspects of the development
process.
Schuurman, F. (2001) Globalization and Development > Consider the statement that contemporary
Studies: Challenges for the 21st Century. London: Sage. globalisation is bringing forth new forms of
A good collection of readings dealing with globalisation. localisation.
UNCTAD (United Nations Conference on Trade and > Assess the view that while the world may be shrinking,
Development) (2014) World Investment Report. Geneva: it is also becoming noticeably more unequal.
UNCTAD. >• ‘Globalisation dates back over 500 years.’ What do
UNCTAD (United Nations Conference on Trade and you see as the development implications of this
Development) (2015) World Investment Report. Geneva: statement?
UNCTAD. > Explain the basis of Tobin-type taxes and consider
The UNCTAD reports detail the nature and scale of their potential for changing the face of international
global trade, FDI and TNC activity. development.
UNDP (United Nations Development Report) (2015) > What drives the anti-globalisation movement? Is it
Human Development Report. New York: United sustainable?
Nations. >■ What are the ethical implications of the operation of
An annual report which details key human development TNCs and the WTO in the poorer parts of the South?
issues, barriers and opportunities.

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