Globalisation, Work and Regional Integration

• Author: Willi Momm
• Pages: 17-32

17

EMPLOYMENT RELATIONS

Globalisation, Work and Regional

Integration

Since the end of the cold war, the policies of global economic integration

have triggered a rapid worldwide transformation of the economic and

social environment. This has forced all societies, in one way or another, into

a process of fierce competition and economic interdependence. Willingly or

unwillingly, everyone is becoming part of this global market place whose

only recognisable rule seems to be that the stronger, the smarter, the faster

players will survive. It is now increasingly difficult for any economy, large or

small, to escape the requirements of the process of globalisation.

The era of the primacy of politics of independent nation states that has

dominated much of the nineteenth and twentieth centuries thus seems to

have come to an end. Today, the impact of the decisions of the global economic

players far outweighs the impact of economic policies of governments whose

power to influence economic outcomes is drastically reduced in both rich

and poor countries. The forces of the global market seem to have taken over.

While most countries resign themselves to the fact of globalisation and

hope that the process will give them a fair opportunity to improve the welfare

of their people, it has become apparent that the risks, opportunities and benefits

that result from globalisation are not evenly distributed. International reports

are pointing to the fact that, contrary to the arguments of the neoliberal

proponents of unregulated globalisation, the majority of the world’s population

has suffered negative economic and social consequences, while a few companies

or individuals have amassed enormous riches. This observation is more than

the usual complaint that the new world order is fundamentally unjust.

Globalisation, in particular owing to its uncontrolled financial flows, has not

only damaged the welfare of the notoriously disadvantaged, such as workers,

but has led to the demise of well functioning financial institutions and

industries; and in the process destroyed value and shareholder income. In this

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18 HUMAN RESOURCE DEVELOPMENT

regard, the Asian crisis has brought a sort of awakening and has resulted in a

renewed attempt on the part of the world’s political leaders to shape national

and international policies that would define more clearly the terms under

which globalisation should take place in the future.

This struggle to regain political control over global market forces is far

from over and who will win this battle is far from clear. However, efforts are

indeed intensifying to ensure that certain regulations and standards are in

place to prevent a worldwide backlash against globalisation. One of the major

problems with the current form of globalisation is the asymmetry of risks and

benefits between capital and labour. The high mobility of capital puts labour,

which is relatively immobile, at a disadvantage. Another problem is that capital

appears to move where it can reap most benefits, and this is often achieved by

seeking locations for business where the costs of labour are lowest and the

rights of workers least guaranteed.

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In this context, the International Labour Organisation (ILO) has recently

undertaken steps to put fundamental principles and rights at work at the

forefront of the ongoing political efforts to define the terms for globalisation.

Supported by a general sympathy for policies that encourage upward

harmonisation of working conditions as a prerequisite for a functioning and

sustainable global economy, the ILO’s new strategy to become a player in the

debate about the rules of globalisation is starting to bear fruit. Governments,

the international and regional financial institutions, a growing number of

multinational corporations and a vast array of non-governmental organisations

and consumer groups are now slowly, but definitely moving towards an

understanding that globalisation needs to have a ‘social floor’ and that the

recognition and application of fundamental international labour standards is

required to ensure that all abide by the same set of rules without having to

sacrifice competitive advantage or to suffer from any labour market rigidities.

However, the ILO has also recognised that it may not be sufficient to

introduce a constraining element into the process of globalisation. It must, in

addition, have policies and instruments to offer that provide the economic

stakeholders with better means to participate successfully in global competition

and, in particular, to enable local businesses and labour to derive greater and

more equal benefit from globalisation. This aspect, which permits the ILO to

make a constructive contribution to the advancement of globalisation and to

strengthen the economic potential and competitive advantage of the weaker