Published by Otim Ivan

Alumni Member -Youth4Policy

National Chancellor-International Association of Educators for World Peace
Publishing member-Milestone Africa

Abstract

Globalization and trade imbalances of emerging market economies put into context the changing
dynamic of markets influenced by trade imbalances continuing to undermine emerging markets.
In the globalization of African countries within the 54 member‟s states, we question whether the
economic free trade treaties are rising or crumbling economies. In the reality that we increasingly
view globalization as a process whereby people, communications, trade, investments, and
markets are trending more cross-national boundaries.1 The world-wide interconnectedness
between nation-states becomes supplemented by globalization as a process in which basic social
arrangements like power, culture, markets, politics, rights, values, norms, ideology, identity,
citizenship, solidarity become disembedded
from their spatial context.2

In the global trend, we observe globalization

and the policies of economic liberalization
dominating the international debate, the
political globalization dominated through the
economic dimension of free markets puts
reality the political impact of globalization as
many countries especially in Africa are
losing their sovereignty.3 Whereas Africa
launches itself into an Africa continental free trade through an agreement that establishes the
African continental free trade area with it is objectivity to support the realization of Africa's
Agenda 2063 with purpose of widening the internal markets, build up Africa's economic
clout in dealing with emerging mega-regional trade agreements in other parts of the world,
engagement in trade negotiations at the global level such as the WTO with the strengthened
purpose of harmonization or coordination of a continental-wide economic space that would
spur the achievement of agenda 2063.4

The history of globalization in free trade at the World Trade Organization partnership (1995)
where Nigeria as the strongest market in „ECOWAS‟ was a signatory, but by then China among
other countries refused to sign the World Trade Organization partnership not until 2000 as noted
by the new telegraph (2018). Today there is a shift especially at the time China promise to Africa
with over $60billion of financial support in form of government assistance, investments and
financing existing amidst the global risks with the rise of regional unevenness and unbalanced
financial markets.

With the promise of the Africa continental free trade agreement, only 44 Africa countries as
signatories, we question Africa regional power like
(SADC) South Africa and Nigeria (ECOWAS) why
they relentlessly held signing onto this agreement.
With this perspective, however, question whether
free trade exists or its a hype for industrialized
countries working on either a negative or positive
reality of economies rising or economies falling?

Keywords; Free Trade, Globalization, Africa free

Trade, Trade agreements
Introduction

For globalization to exist in the area of free trade and free markets connectivity must work and
Wolfgang Kasper (2005) notes that both internal and external institutions that support economic
success in the era of globalization have to be homegrown.5 With globalization known from the
deeper perspective of international market integration, regional blocks of countries, trade,
Multinational Corporation, international politics, Geopolitics and international finance,6 today
this has stretched from the social, political, and economic activities across political frontiers,
regions, and continents. Globalization in the reality of free trade and development has existed in
the eyes of multinational corporations in developed countries where incentives, huge capitals,
and assets exist.

With the hope of free trade and free markets, this context encompasses the need and the means
by which governments are able to provide a better living condition for people including aspects
of progressive growth like health, nutrition, education.7 In the context highlighted of free markets
existing, the reality of globalization has been observed with contrasting trend highlight both the
problems and negative progress associated with the process.

Today, development has resulted in serious inequities between states and people impoverishing
in poverty and this has been so because of the different nature of economic activity taking place
in different parts of the world. This has persisted due to the different accounts of measurement of
progress used to undermine low developed countries. In many developing countries in Africa, we
observe china companies established as Multi Corporation coming with a development angle but
end up maximizing profit; getting established with cheap labor and tapping into available raw
materials, in the end, requesting for tax holidays that undermine development in the first place.

This uneven equal equation of free trade and assumption of free markets undermines the reality
of globalization as many companies continue influencing the decision-making processes that
undermine the balance of trade with the potential to repatriate back the profits to their home
country while moving capital from one country to another.

Foreign direct investment brought about by the reality of globalization plays an important role in
transforming economies while contributing to reducing poverty levels. The foreign direct
investment brings along large-scale capital able to increase government revenues through taxes,
royalties, licenses fees, increase in direct and indirect employment opportunities and community
support through corporate social responsibility.8 However thou, in the arguments of free trade
and globalization, anti-globalists believe that there is increasing exploitation of the world‟s poor
by large, multinational corporations bringing on competition and undermining locally produced
products viewing them as substandard.

Foreign Direct Investment; Through aspects like foreign direct investments, bringing resources
to direct impact on development on low development countries, the foreign direct investments
come with negative impacts like high-interest loans and not able to transfer technological skills
to the local population. This limitation undermines the ability to transfer skills creating
competition among the local companies which in the process creates the absence of markets for
local products.

Economic Development Policies; The economic development policies in the reality of trade
globalization are evaluated according to how many jobs created through trade and investments.
According to Dwight R. Lee (n.d), the aspect of restricting imports is a way to protect domestic
jobs and increase employment.9 With the existence of free trade and free markets, the analysis
should be about how to protect domestic jobs and increase employment with the potential of
saving small scale industries in many developed countries. With this drawn perspective, the
analysis is how then can free trade be supported without conflicting the establishments of
available opportunities and affecting SME,s who equally need the same market to thrive.

Measurement of development and progress; The measurement of development and progress,

with both developed and developing countries is the Gross domestic product. The GDP as the
world greatest number is widely used to determining economic growth and development. The
fair question is how the measurement of growth as not inclusive given the fact that the standards
of living are not significantly improved even when the GDP seems to increase.

In reality „‟GDP‟‟ is seen as a political tool that focuses more on measuring economic growth
rather than economic development. This comes into context because there is poor auditing or
exaggeration of numbers, high level of economic exploitation by foreign companies in terms of
tax holiday as an incentive for investment with high ended cost like repatriation of profits.
This state of affair has increased due to the unfair trade policies enabling world divisionism as
countries brand themselves as world powers like “G8”, “G20” and “BRICS”.

This divisionism continues to measures progressive growth in the perspective of GDP as an

unrealistic not determining different countries context and nature of growth trajectories. Today
many countries development policies are primarily aimed at achieving economic growth rather
than economic development.10 Whereas „‟GDP‟‟ is a standard measurement of macroeconomic
indicator meant to capture economic activities, this is the reality of free trade has disregarded the
value of natural resources ignoring the costs benefits of the environment of which many of these
developing countries thrive.11

Africa fallacy growth trajectory; According to Richard Gibb (2009), regional integration has
remained an integral part of Africa's development strategy and has underpinned most pan-
African development policies for the past 50 years. With Africa economy growing very rapidly
with sub-Saharan Africa amongst the six of the world‟s 10 most rapidly growing economies. In
reference to the Africa Progress Panel (APP) (2014) report, the faces of Africa‟s growth have
been presented as Africa with robust economic growth and on the other, poverty levels that have
hardly shifted.12

Whereas the doubled sided growth trajectory is observed, Kajuju and Chiwanza. (2015) narrate
that amongst the world‟s six fastest-growing economies on the continent of sub-Saharan African;
one observed is that the global economy has been shifting from the developed to the developing
world according to the Economist Corporate Network (ECN).

However, with the trend of Globalization in the eyes of free markets and free trade, we can
conclusively state that the globalization theory has contributed to altering countries‟ growth
trajectories, with grave implications for the poor by affecting their access to markets. Where
African countries need to translate the opportunities offered by globalization into inclusive
growth, poverty reduction, and sustainable development, we question the reality of free markets
and free trade. In developing and developed countries, the “GDP growth propelled by the
dynamic development of the productive forces like by increased productivity has been uneven
over time and has failed to narrow the inequalities between peoples and regions in a globalizing
world.13
Many developing countries even with the increasing narrative of globalization existing amidst
free trade and free markets still echo inequality, unemployment sustained by to trade imbalance
of economies.14

Among the international power, structures are the spread of trade and globalization that has been
one of the main reasons for a reduction in global poverty. According to the World Bank, trade is
an indispensable means of increasing human welfare. Today we observe the progress against
poverty as most dramatic in countries that have most aggressively opened their economies to the
rest of the world.15

Whereas World trade has continued to bring financial stability amongst different economies
leading to social, economic progress, in the perspective that globalization of markets enables
people in low developed economies to improve their welfare through trading of products into the
international market16 . The unfair global policies created by globalization have had an effect on
local economies because developed economies trade products whose raw material exists in the
countries that they later return them as finished goods in the end negatively impacting on the
breakdown of value addition and jobs creation in service industries.

Under looking at the reality of globalization and local development, there has been an increased
feeling among low development countries that for any development to happen, it should come
from the reality of foreign investors rather than local investors. Because companies in countries
with developed equity markets are less dependent on bank financing; which can reduce the risk
of a credit, they are able to receive large sums of debt equity financing for large-scale projects
and yet local investors cannot borrow to finance large-scale projects. In Uganda, small-scale
enterprises and local investors to find difficulty in obtaining long-term finance undermining the
growth of locally establishes companies.17

Finally, with the hope of expansion of free trade and free markets has been the establishment of
infrastructural development project whose agenda has risen paving for new roads and
infrastructural development established with support from development aid.
In the attempts to create a globalizing „modern life‟, this has displaced the poorest and the most
powerless societies to make way for „new roads and buildings leading to growing inequity.18 The
question underlying is in whose interest the infrastructural development project is undertaken if
its existence displaces the poorest and powerless societies.

Conclusion; Globalization as a process has contributed to reshaping human life. with the
limitation and positive trend, we have reason to rethink the trend of globalization and free trade.

Where we observe many supper power questioning free trade and free markets in the globalized
world, we ask whether governments ought‟s to be protectors or provider?, The reality of
government in Africa asking for free markets but are unable to bail out indigenous business
when they collapse is something to ponder on.

Its therefore important in the perspective of pushing for fairer free trade and free markets that
developed countries should support developing countries to enhance innovation ripples across
the rest of the economy while facilitating production, value addition, 21st century skills and
competencies transfer, smart workforce readiness of young people and among others technology
advancement enabling the operationalization of a 24 hour economies that would facilitate fair
trade policies and competition thus enabling free trade markets.

1
In Defense of Global Capitalism (AB Timbro 2001) Johan Norberg

2
Globalization: Definitions and Perspectives (Composed by Eric Beerkens, 2006

3
The impact of globalization in emerging market economies, Published: (2016)

4
New York and Geneva, (2016), African continental free trade area: Policy and negotiation
options for trade in Goods
5
Economic Freedom and Development (2005)by Wolfgang Kasper emeritus Professor of
Economics, University of New South Wales, and Senior Fellow, Centre for Independent
Studies (www.cis.org.au) Sydney, Australia

6
The Cause of Globalization Geoffrey Garrett Yale University

7
Development and Globalization http://www.globalization101.org

8
Research on Poverty Alleviation (March 28-29, 2012) 17th Annual research workshop
foreign direct investments -roles in economic Transformation for Poverty Reduction: What
Does it Take in a Tanzanian-type Economy? Honest Prosper Ngowi
9
Creating Jobs vs. Creating Wealth Dwight R. Lee Dwight Lee is Ramsey Professor at the
Terry College of Business, University of Georgia, and an adjunct fellow at the Center for the
Study of American Business at Washington University in St. Louis. Government policies

10
Follow up Dialogue on GDP and beyond –‖( August 21st to 23rd 2014) ―The power of GDP
and the underlying growth paradigm in the Ugandan context : A regional conference on the
African perspective of the global discourse about development, growth and the power of the
Gross Domestic Product (GDP) was organized by FES Uganda at Lake Victoria Hotel,
Entebbe

11
Lorenzo Fioramonti (2014) citing Lorenzo Fioramonti (2013): "Gross Domestic Problem:
The Politics behind the World's most powerful number. Zed Books Ltd. London. Pp. viii.

12
Africa Progress Panel (APP) (2014) report, ―Grain, Fish, Money—Financing puts into
context that ‗‘Africa‘s Green and Blue Revolutions
13
The growth obsession Elmar Altvater

14
Demos (Daly, Lew & Stephan Posner (2011): ―Beyond GDP‖. Demos. Sustainable
Progress Initiative. New York, p.1

15
A Beginner's Guide to Liberty (2009)Edited by Dr. Richard Wellings by The Adam Smith
Institute
16
foundations of a Free Society Foundations of a Free Society EAMONN BUTLER The
Institute of Economic Affairs

17
Destro mugabi (2011) The influence of local investor‘s perception of stock market
incentives, stock market regulations and level of awareness on the intention to participate in
Uganda securities exchange: dissertation report submitted in partial fulfillment of the
requirement for the award of masters of business administration of Makerere University

18
Globalization: Threat or Opportunity to Women in the Developing World? Jo Kwong
Director of Institute Relations at the Atlas Economic Research Foundation in Fairfax, VA.
June 2004