Economic Terrorism as a Ramification of Globalization

Economic Terrorism as a Ramification of Globalization

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The world incorporating globalization is increasingly facing a grim situation, amidst all the chaos orchestrated by the Trump regime. The process that was generated around 25 years back made it imperative for countries to generate a response. Some responded, others missed the bus like us. Globalization was unleashed by Regan to enhance US corporate profits and to put shackles on the ever-growing world, trying to neutralize US hegemony and moving towards a more multilateral world than a unilateral status quo, presently in question.

Globalization essentially requires increased flow of goods, services, money, people and ideas among different states leading to increased parity between countries. However, as so it may be enticing on paper, reality precludes one from such enthralling perks, leading more towards opening weaker states’ industries towards completion, not surprising what so ever was their bleak surrender. Apparently, however, US infant industries like agriculture were vigorously protected through tariffs. This is nothing less than terrorism but in economic terms.

Globalization was unleashed by Regan to enhance US corporate profits and to put shackles on the ever-growing world, trying to neutralize US hegemony and moving towards a more multilateral world than a unilateral status quo, presently in question.

Other US policies are also nothing less than appalling for poor or third world states in comparison to high tariffs on goods from developing states rather than rich sates, and then restriction imposed on textiles and clothing imports. Trade and services, global intellectual rights and investments were all orchestrated to bury the already burdened states, while the rich capitalists were milking away abnormal profits. Thus, to legitimize US claims, neoliberal globalization emerged, encouraging all types of flows in all directions. Except flows benefiting corporate America came first.

Neoliberal globalization has produced both winners and losers. The rich have as usual won big, concurring from the increasing number of billionaires in the world. The offshore companies also depict the same picture all together. To some extent middle class in India and the East Asia have benefited. However, millions and trillions in a lump sum have gone down the drain with inexplicable speed. People living in Bangladesh, Indonesia and other developing countries have lost their livelihood altogether.

Although this can be seen as an East Asian problem, US middle class has also been an ardent advocator of the vices caused by globalization. Surprising as it may be, the middle class of the richer states have been more vocal; mean while their fortunes getting stagnant.

Trump tapped the acrimonious fervor of the working class by demonizing globalization being against US interests. This has surely made global order rest on a delicate balance. US as a global hegemon, drives maximum benefits from it. But it should also make it a point to not squeeze the weaker states way too much, putting them out of their comfort zones. This could in turn become hazardous for the US economy altogether.

Trump tapped the acrimonious fervor of the working class by demonizing globalization being against US interests. This has surely made global order rest on a delicate balance.

However, to oblige, the US has to maintain large trade and fiscal deficits. Deficits have emerged as US companies have moved abroad to avail lower labor and regulatory costs. Though, this deficit helps run the global economy, in the absence of any global currency, dollar fills the boat. Hence, deficit helps supply the world with dollars. However, in the end, these dollars are repatriated by giant US companies through profits. But here is not where the conundrum actually ends. Ironically, this is where it starts. This has made the rich even richer, while the poor finding it impossible to feed their children, let alone living a respectable job. This horrendous merry-go-round, enhancing the plight of people has made globalization a questionable policy. Therefore, the unexpected triumph of Mr. Trump should not be considered as unexpected after all.

Another interesting aspect is that trade deficits of the global hegemon US, are purchased by states like China and Japan with excess dollars earned from their trade surpluses. Without adequate and safe option prevailing for investment, states like these incur these debts at low interest rates. Again this spiral effect materializes causing US trade deficits.

It can be fairly said that the volatile and unfair global capitalist system run by the US perpetuates global inequality as well as economic volatility. Subsequently, this system should be replaced by a more progressive leftist approach altogether. However, by Trump holding the reins, World is moving further rightwards apparently, to serve US interests. But in all this chaos of bringing back US jobs and reducing world deficit, US threatens to unravel the delicate balance, unleashing global trade wars and subsequent global recessions in the long run.

While still acknowledging towards the prowess of US and its subsequent hegemon in the new world order. Though it lacks the killer punch to budge countries to submit easily to its desires on economic issues. This further is true in light of the growing power of the BRICS. Fruitless ranting of US would not heel the world whatsoever.

These issues can only be solved by building a fair economic system with a progressive tax system in place. However, such a system cannot be manufactured if US is ruled by its extreme right. Unfortunately, US is better at creating global crises than finding amicable solutions for it.

Ammar Alam
is a graduate of School of Economics, Quaide- Azam University Islamabad. His field of expertise is political and development economics. Currently, he is working as a research associate at Voice of Balochistan, a project of CSCR. He is also managing the Academic and Publications of VOB.

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