Globalization vs economic sovereignty Pang ZhongyingChina Daily Updated: 2005-11-30 06:19
Almost all countries in the world have accelerated their tempo of economic
opening up since the beginning of the 21st century.
With the initiative, they expect to inject a new driving force into domestic
economic development, and to create new market opportunities. They hope to
integrate their domestic economy into the global market, and to develop economic
muscles that can punch a worldwide weight.
However, for any country, opening the economy to the outside world is by no
means a free lunch. The policy will inevitably come at a cost.
The cost can be perceived to be a weakening of the nation's "economic
sovereignty," namely the erosion of permanent and exclusive privileges over its
economic activities, wealth, and natural resources.
A review of the world's history will find it is common that economic
sovereignty of an individual member is from time to time influenced by global
economic trends.
The increase of the number of international organizations and the expansion
of their functions have undeniably restricted an individual country's
sovereignty to certain extent.
The most typical example is the increasingly extensive involvement of the
world's three leading financial institutions the World Bank (WB), the
International Momentary Fund (IMF) and the World Trade Organization (WTO) in
domestic economic affairs of their members.
The 60,000-plus transnational corporations, which developed rapidly in the
latter half of the last century, are now sharing or "encroaching upon"
individual country's "sovereignty" in the economic domain.
Owing to disorderly domestic economic establishments, many underdeveloped
nations even have to resort to foreign assistance and intervention, leading to
their governments being deprived of the control of their own economy.
Due to this, some scholars predicted the loss of their economic sovereignty
under this form of neo-colonialism. More importantly, some of the world's
leading economic entities, such as the United States, the European Union and
Japan, by taking advantage of their predominant economic status, are affecting
or infringing upon other countries' economic sovereignty.
Under these circumstances, an increasing number of scholars have concluded
that the economic dominion of individual nations has come to an end.
Basing this assertion upon the penetrating systems and rules of the world's
financial organs, some of them insist on a kind of theory such as state economic
sovereignty being eroded. Some deny the long-existed doctrine of the "national
entity being in a central position," by citing trade liberalization and economic
integration tendency and thus advocate "ambiguity of economic sovereignty."
Also, some even assert that in the greater globalization picture, a country's
economic sovereignty should be discarded and state sovereignty should be
replaced by supranational law.
As the academic debate of the economic rights of a state reaches boiling
point, the era of globalization begins.
However, while stressing the possibility of a nation's economic sovereignty
being enfeebled in the course of economic globalization, many of these scholars
have obviously forgotten that individual nations also have the ability to
produce and mould international frameworks, rules, systems and orders, the
ability that has been called a "structural power."
Late British international economist Susan Strange believed that this kind of
power is embodied in the four basic international structures which are the
security, knowledge, production and financial, as well as in some sub-structures
such as trade.
After an analysis of the "structural power," we can see that in the economic
globalization era, sovereign states have never lost control of their
sovereignty. The power of international economic organizations originates from
its transfer from individual members in the world community. And their birth is
exactly the product of sovereign states' self-restriction and self-restraints in
the economic realm.
Also, economic activities of transnational corporations have not brought
about any essential restrictions on state sovereignty of individual nations.
So far, transnational corporations have not changed their legal status as
legal entities under the jurisdiction of the state. And their worldwide business
activities also have not changed individual countries' right to exercise their
full sovereignty.
For this, the United States' move to disintegrate the Microsoft corporation
years ago could serve as an example. Despite its economic strength being even
larger than a number of individual nations, the world's largest software
producer still lacked an effective means to influence American economic
sovereignty.
Possibly, for the ones who strongly advocate the "end of economic
sovereignty," the most convincing evidence is the debilitating of sovereignty of
a host of economically weak nations.
However, this phenomenon is just the product of developed nations' unfair
treatment of developing nations in the era of economic globalization.
Most of the time, developed countries turn to double standards in economic
affairs and apply their self-concocted theories like "human rights being
superior to sovereignty" and "economic integration outweighing sovereignty" to
force weak nations into conceding some of their inherent privileges. However,
these countries repeatedly stress that they should not accept international
economic regulations at the sacrifice of weakening, infringing upon, and harming
their own decision-making rights.
Thus, it can be concluded that the dispute about economic sovereignty is
essentially a hidden power struggle on the world stage. Under the current
context of "economic openness," outside economic influences upon individual
nations are distributed in an unbalanced manner. Similarly, their ability to
weaken the economic sovereignty of different nations also varies.
The author is a professor with Tianjin-based Nankai University
(China Daily 11/30/2005 page4)
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