Globalisation needs harnessing for greater good

Paradigm shifts were rampant at the social, cultural and economic levels through the early 1980s. Globalisation was in its nascent stages, taking shape and gaining momentum mainly through the efforts of Western nations to champion the notion of a unified global market.

Some see globalisation as a positive that creates a genuinely open society; others argue it is a hindrance to national development, where big countries persuade their developing counterparts to remove customs barriers.

The Arab economy has been heavily weighing the advantages and disadvantages of globalisation, a rapidly spreading phenomenon that the region could not afford to ignore. While the 1980s and ‘90s bore witness to a wave of optimism characterised by a level of economic liberalisation that helped enhance the efficiency of natural and human resources, improve standards of living, create new job opportunities, reduce unemployment and support developing economies.

It also revealed an ugly side that poses future threats to developing economies — including within the Arab community. One that distorts prevailing patterns of consumption and promotes an entertainment-driven consumer mentality.

Security

Economic globalisation has many other implications that warrant closer inspection, such as weakened economic security due to the total openness of local economies and susceptibility to fluctuations in international markets. Arab industries could end up being major losers in the drive towards globalisation as they face higher operational costs and reduced productivity.

Small enterprises in the Arab world that do not have a strong foundation or are not adequately prepared to weather the storm of globalisation stand to incur the most damages.

In light of the prevailing economic conditions, Arab nations must reconsider their customs policies to strike a balance between economic openness and the protection of the interests of the national economy. There are critical issues to address, such as how SMEs are at risk when they go head to head with international companies. And there are key goals to pursue, such as the creation of a safe and conducive environment for boosting national industries and improving their global competitiveness.

Uneven climate

While eliminating import restrictions and trade barriers, the reality is that such actions could unintentionally create an uneven climate that poses huge threats to developing economies. Arab nations must be aware of the consequences of engaging with the global economy and plan on how to leverage opportunities and effectively deal with risks.

As the UN itself warns: “The greatest challenge we face today is to ensure that globalisation becomes a positive force for all the world’s people, instead of leaving billions of them behind in squalor.”

The writer is the managing director of Orient Planet.