“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us…”- Opening paragraph from “A Tale of Two Cities”
In 1973, E.F. Schumacher wrote a book entitled Small Is Beautiful. The book was well reviewed and was read by many people concerned with the global ecological disaster, but perhaps it was a bit ahead of its time.
That was after all the time of agribusiness and the widely held idea that “big is always better.” That in turn was integral part of a positivist approach which believes that progress is inevitable, it is always scientific and what comes at the end and is most modern is always the best of all possible worlds.
Now we are more likely to be persuaded by those who insist, as Schumacher did, that a more localized decentralized approach to economics may be the more sensible and humane approach.
The question arises: why is that? Quite simply because economic globalization has taken center stage while global warming is often derided and ignored, more often than not by those who are supposed to be our leaders. Some say that globalization actually began with the era of Western colonialism and imperialism and it is unstoppable like the idea of progress. Closer to us, in modern times, while welcomed and seen as a panacea at its inception in the last quarter of the 20thcentury, it has by now transmuted into a great debate on whether globalization is capitalism at its most pernicious or a promising way to reduce poverty world-wide. The sad truth is that while wealth has been increased it has mostly gone to the one per cent on top of the economic pyramid while the poor and middle class have seen no economic process.
Laissez-faire liberal capitalists of various stripes and assorted entrepreneurs searching for world-wide market opportunities a la Trump naturally support globalization and argue that becoming part of the world economy is the only chance for developing countries and those living in abject poverty at grasping economic opportunities and lift themselves out of poverty. They see absolutely nothing wrong with globalization per se; at best they suggest some reforms in its methods and its side effects on regional cultures. They may pay lip service to regional cultures and even religious heritages and tradition while at the same time deriding them as retrograde but necessary superstitions to keep the people docile and exploitable (hence Marx critique of religion as the opium of the people), but essentially they have reduced human beings to mere consumers within the global market place.
As William James used to quip: do not pay attention to what people say, pay attention to what they do and you will know what they really believe in. People willing to ruin reputations and impugn the professional integrity and career of their critics for an ideology reveal with their ad hominem attacks better than with their scholarly treatises the extreme measure to which they are willing to resort to in defense of their pet unexamined ideology.
And that may indeed be the reason why, on the other hand, the protesters believe that globalization is merely an excuse for big business to run roughshod over the developing world. For them “free trade,” so called, simply enables multinationals to dominate developing markets and push out local enterprise. They call for alternative ways of reducing poverty that prioritize environmental and human rights. They argue that by reducing ancient heritages and cultures to their lowest common denominator one dissolves most conflicts and distinctions among them and trivializes them.
The protesters, who have been at it for the last twenty years or so are convinced that Global capitalization is all about getting the rich to be even richer. They cite examples such as this: ten years ago a US company director got 40 times the wages of an average blue collar worker – their wages are now over 400 times as much. Just 400 families have more than half the world’s theoretical wealth. Yet calling this insanity is sneered at. Capitalism requires expansion, there has to be year on year growth, and that’s simple math: if you must expand your economy by an average of 3% a year, in a hundred years you need to consume in a day what we currently consume in a year.
In the world of culture a dichotomy seems to exist between the world of science and that of the liberal arts and the humanities, something I have written at length in previous articles. Indeed, a novel by a great novelist such as Dostoyevsky or Joyce, or a poem by Dante or Shakespeare represents a world rooted in numerous particularities where people from different backgrounds encounter one another and are trying to connect and influence each other; a world complicated by memories and ambitions and multiple connections and displacements. It’s a world wherein its unique rounded characters refuse simplifications.
On the other hand, what Globalization with its reductionistic tendencies seems to produce is the disembowelment of the complexity of world cultures, forcing their differences into the blender of consumerism and accumulation of wealth, to then regurgitate shallow formulaic platitudes, reducing the narrative of those cultures and their heritage of millenarian religious traditions, to a singular outcome; that of universal consumerism and happiness, Disney or McDonald or soccer games style, where business need not be responsive to the people or to truly democratic institutions but to the happiness of its shareholders. This is achieved by moving factories and businesses to the cheapest labor markets and keeping pays low.
According to this severe critical view, history has taught us that globalization means only one thing: the rich get richer, the poor get poorer. Corporate globalization and financial globalization without a buttressing ethical value system which sees the unity of humanity and its nexus to the earth, inevitably becomes dominated by greed and the profit motive. The critics also point out that those societies with the highest standard of living are those which allow some degree of capitalism, but combine it with a strong sense of social justice as exemplified by their social programs designed to help the less privileged and the least fortunate. The richest country in the world may not necessarily be the country with the highest standard of living. It appears that the element of distributive justice, whether it is taken seriously or it is simply ignored and considered unimportant, makes all the difference
Obviously there are two contrasting ways of looking at Globalization and the question arises: are the two views irreconcilable or is a synthesis of sort possible? While the developing world needs help from the developed world, does such help have to come at the price of pollution and unsustainable technologies under the title globalization? Does globalization have to imply that transporting goods and foodstuffs thousands of miles using valuable fossil fuels and creating massive pollution is a good thing? It appears that Globalization as envisaged by the visionless current world leaders and economic pundits measuring wealth and ignoring justice is likely to damage the developing world more than help it.
What the developing and the developed world need are initiatives that allow countries to be self-supporting and less dependent on the vagaries of world exchange rates, transport costs and international sanctions. However those promoting world trade and entrepreneurial capitalism do not want this, they want to the developing world be dependent on to their technologies and trade tie-ins. The problem is not free trade as such, but the unfair way with which it is implemented. It is apparent to any dispassionate observer that far from upholding the principles of democracy, the exigencies of commerce has served often to thwart them. All one has to do is recall that Britain’s colonial adventures in India, China and the East Indies were perpetuated by what was felt to be an inalienable right to force nations half way across the world to trade with them on their own terms.
Some have suggest that socialism is the solution, but socialism is often seen historically tied to the ideology of communism, adhered to by China’s ruling party, and this despite the fact that it is practiced in genuinely democratic countries in Scandinavia as well as in most industrialized democratic countries of the world which have social services that can only be characterized as socialistic, including the US which has social programs such as Social Security, Welfare benefits, Unemployment benefits, Medicare, Medicaid etc.
The Chinese are out to prove that democracy is not necessary for material prosperity; it is mere frosting on the cake, never mind Marx’s injunction that power ought to always proceed from the people, that is to say, from the bottom up and not from the top down. Hence ideological cultural battles invariably and regularly ensue and as it can be expected they become not part of the solutions but part of the social problems of our global village.
In point of fact, the battle between capitalism and anti-globalization, socialism, communism and all the other -ism’s one can think of is quite pointless – none of these ideologies stand up in extremis. A harmonious balance between regulation and freedom in the markets seems to be the only way forward to benefit all with at least a minimum of egalitarianism and distributive justice while preserving and enhancing freedom and democracy.
There is one glaring example that can be brought to bear to better illustrate the unfair business practices of the developed world toward the developing one. Both Britain and the US make strenuous efforts to sell cigarettes to poor countries. They give no health warnings against smoking as they do by law in their own countries. One can easily imagine how the precarious health services of these developing countries are going to cope in 20 year time with all the smoking related diseases we in the West are imposing upon them. I suppose that at that point in time the rapacious entrepreneurs of our brave new world will get busy selling them expensive medicines manufactured and developed in the West.
The major issue with globalization seems to be that corporate chairmen have power without representation. One of them is all set to become the next US Secretary of State. If we were to think of consumerism as a new political idea, corporate chairmen are the politicians, advertisements are the party broadcasts or propaganda, and the products are the manifesto. The result as advertised is happiness, fulfillment and wealth for everyone concerned. Donald Trump has promised as much to the ignorant and gullible and many are now waiting for the check in the mail. Good luck!
This analysis points to the fact that in effect we live in a semblance of democracy but in reality we live in a deterministic universe wherein we have been reduced to consuming automatons and our personhood and our very humanity has been robbed. It is now impossible to vote a corporation out of power. There is something fundamentally wrong in this situation. Branding globalization protesters as “anarchists” playing at revolution, as the media tends to do, will not lead to any solution either. Schumacher made similar points in the above mentioned book.
In this article I have simply outlined the problematic of Globalization as presented by those on opposite sides of its analysis. Those readers who may wish to further deepen their knowledge and even attempt a solution to the conundrum would be well advised to peruse a seminal and influential article by Steven Weber, Naazneer Barma, Mathew Kroenig and Ely Ratner titled “How Globalization Went Bad” which appeared in Foreign Policy of Jan/Feb 2007.
In conclusion let me say this on the present perplexing and ambiguous age of globalization, the era of the so called interrelated “global village” with its Facebook and Twitter and the Internet: it is both the best of times and the worst of times. The outcome, I suppose, will depend on how well we can hold together in our mind those two contrasting notions and wrap them around our minds as a paradox. I sincerely doubt that logical positivists and assorted entrepreneurs will be of much help here, but I would suggest that the novels of a Dickens or a Dostoyevsky, not to speak of sages and philosophers, may provide some hints on how best to bridge the chasm.
Conversion of Local Business into E-Business by Effective Use of Social Media
The spread of coronavirus (Covid-19) has affected almost all areas of life. The whole world is facing a crisis because of this pandemic issue. A lot of people have lost their jobs and many are struggling to survive in this situation. All businesses whether working at a large scale or a small scale are facing problems due to the unavailability to resources to operate businesses successfully. The developed countries are somehow managing this situation because of the successful implementation of online businesses from a long-time period. So, for those countries both customers and businesses are relatively ok with the situation by not going in the markets to buy things and place orders online and get it delivered at the doorsteps easily.
Whereas many developing countries like Pakistan have certain barriers in the full acceptance of e-business offered by the local and international companies. As per many studies on this topic, there are a lot of factors that pose hindrances in full acceptance of e-commerce in Pakistan. However, there is one thing worth mentioning that these hindering factors are related to all stakeholders. A few of those factors include insufficient technological resources, Government Policies, legal issues, social acceptability of the online shopping trend because of trust issue between companies and customers whether in terms of provided customer information at online shopping platforms, payment security, or the difference in shown and finally delivered product at customers doorstep, etc. But there has been seen a change in this trend in a couple of years with the development of the telecommunication industry. As most of the people now days have internet access at their places and are following social trends all around the world. So, the trend on online shopping from official brand stores’ websites has developed rapidly due to the trust of customers in brands’ shown and delivered products on their official online websites. But as far as local businesses and third party online shopping websites are concerned they are still a certain group of people consider taking a chance to shop online.
In the pandemic situation, as all the markets were closed due to the lockdown in the country, everyone was worried about the situation whether a businessman or a customer. In this crucial time of survival, there has developed a new trend of conversion of local businesses into e-businesses by using social media effectively. Here are those businesses are under discussion who are owned by the people who are not mostly educated enough to know the value of effective use of social media or those people who even being educated at a certain level didn’t think before that they can utilize social media for their businesses to operate when everything was closed. Talking about the customers who were conscious about all the factors of trust and all before were just considering one thing and that was the availability of their desired products at their doorstep in their required time frame. Somehow, like big brands and businesses, many small businesses managed it quite well and provided online shopping facilities to the customers.
In the period of locked down, these small local businesses used social media i.e. Facebook, Instagram, what’s app, LinkedIn, etc. to display their products online offering discounted prices and free home delivery. This step not only provided them the opportunity to earn money in the time of crisis but also put the foundation of new trends in online shopping i.e. the acceptability of online shopping in the society even in the smaller and backward areas of Pakistan. We hope that this conversion of local businesses into e-businesses will continue to flourish successfully in the future and the acceptability of online shopping in Pakistan will grow over time. Here, in the end, one thing that matters is that all the stakeholders should play their effective role in this growth especially the Government should make policies to support the effective implementation of online business trends in Pakistan.
Impact of COVID-19 On Somalia’s Economy: Will the virus be a springboard to severe crisis?
The COVID-19 pandemic imposed unprecedented challenges to global health systems and economies and transferred to Somalia one of the poorest and susceptible to crisis economies of the world. The economy of Somalia was already severing due to structural deficiencies and lack of unity. The federal-level economic institution such as the ministry of finance, ministry of trade, and central bank are mainly residing in Moqdisho and have no capacity to extend their services to other regions. The central bank is not yet ready to function properly. It does not have the capacity to innovate suitable economic policies to stabilize the country’s currency value, prevent hyperinflation, and keep unemployment lower. In addition, the nation’s taxation procedures and revenue collection policies are not unitary. The regional states have autonomous economic and political institutions with different taxation and revenue maximation policies. In terms of employment, the state employs to a small fraction of the nation’s labor force compared to the private sector. Therefore, considering all these facts one may conclude state plays a negligible role in the economic activities of the country.
The nation’s economy has been massively relying on foreign aid, remittance revenues, and import. The budget of the federal government and running costs are mainly financed through budget supports and other forms of assistance from donors. Almost every Somali household receives income from her overseas family member, especially Europe and the USA. Hence, remittance revenue is the lifeblood of the Somali household’s economy. On the other hand, Somalia is one of the countries with the largest trade deficit in the world, imports extremely surpass over exports. Since the livestock industry, the nation’s export backbone has been blemished by continual export bans from Saudi Arabia, the nation ended up an entirely import-dependent economy.
The foreign aid, remittance revenues, and import are not reliable sectors because they are prone to global shocks such as political clashes, trade wars, and pandemics. For instance, COVID-19 pandemic adversely affected Somali remittance firms. The Somali remittance firms source funds from western countries where COVID-19 is massively damaged both human and economic. These countries have been executing a complete lockdown to fight against and attenuate the spread of the virus among the community. The business, schools, universities, and public transportations were completely closed. So, this instigated Somali immigrants in Canada, the USA, and EU countries to lose their jobs and not able to send money back home. Remarkably, Somali immigrants in Europe and the USA are one of the highest deadly effected diasporas by COVID-19.
The World Bank estimates show that Somalia receives nearly US$1.4 billion remittance annually which contribute 23% of the nation’s GDP. Although Somali remittance firms in western countries have been victimized by money laundering and terrorism involvement allegations, however, still remain dominant in the nation’s basic financial service and recently annexed to banking and real estate. The lockdowns in western countries due to COVID-19 have reduced the smooth follow of remittance funds and this may have a deleterious effect on household’s livelihood, families may not able to pay utility expenses. The reduction of remittance funds means people will have no cash to buy things and small business which employ a significant share of the nation’s formal and informal workers will face critical financial crisis.
Most affected areas
It is very difficult to capture the impact of COVID-19 on economy like Somalia where financial data is hardly available in public. However, the World Bank expressed concern that the pandemic may reverse decades of economic progress and poverty alleviation in the world’s poorest regions like Sub-Saharan African countries. World Bank recently estimates projects that the Sub-Sahara region could lose around $79 billion in output in 2020. In fact, Somalia will be one of the highly affected states in the region. Somalia could not impose a complete lockdown strategy, but schools, universities, local and international flights have been closed. The Khat or Qat (stimulant and flowering plant native to East African and Arabian Peninsula) import was temporarily banned.
The education sector of Somalia which is 95% private has been extremely devastated by Corona Virus (Covid-19). The primary, intermediate, and secondary school teachers have lost their salaries since tuition fees are paid monthly. The Madarasa (Koranic School) teachers also have lost their jobs and the lives of their families are endangered to die for hunger and underfeeding. There are no safety packages, food, and cash distribution to ameliorate the deteriorating economic situation of Somali teachers.
The Federal government of Somalia has banned the import of Khat in a bid to reduce the spread of Corona Virus across borders with neighboring countries, this sends a paroxysm of anger and frustration to thousands Khat traders, and street based Khat small business. The Khat is a paradoxical business, on one hand, it employs a significant share of the nation’s informal workers, and it is the only source of income for many destitute and vulnerable families like internally displaced families, and widowed women with children. It is also the mainstay of the government’s source of tax revenue. On the other hand, anti-Khat campaigners argue that Khat drains the economy and destroys the family. In fact, the ban of Khat import policy immediately impoverished thousands of families whose livelihood depends on directly or indirectly to Khat business. The government has not yet come up with any initiative to refurbish the lives of these hopeless families and workers.
The health impact of COVID-19 on Somalia is not as nasty as predicted and expected. Somalia has confirmed only 2944 cases and 90 death cases so far, although the testing rate is very limited and some of the fatuous test result cases were reported in the media. However, a country like Somalia where social protection programs, unemployment insurance benefits, and other welfare schemes are not even in the dictionary of the society deep economic downtown is imminent and unavoidable amid COVID-19 pandemic. As long as the 23% of the GDP of the country is remittance revenues from the west so any possibility of second wave pandemic that can outburst and prolong lockdown in western countries will have a catastrophic short- and long-term impact on Somali Economy.
China is the Africa’s main trade partner, especially Somalia’s business community extremely depend on Chinese markets. The full lockdown on Chinese economy and ban of international flights significantly reduced imports from china to Somalia. This skyrocketed the most of food and basic stuff prices. Somalia cansimply face food insecurity, if second wave of COVID-19 hits China again and Chinese officials prolong lockdown period. By the time I’m writing this opinion essay, china is struggling a new swine flu virus. This is not only bad news to Chinese economy but also to Somali economy.
Possible options for economy refurbishment
COVID-19 pandemic presenting aberrant challenge to the Somali Economy amid Somalia is expecting full debt relief from the international creditors. The debt relief program will enable the country to get developmental aid, and non-concessional loans. The government should speed up the debt relief program to get loans and developmental aid to improve the lives of citizens impoverished by the COVID-19 pandemic.
The government should consult with individual donors and international financial institutions to design the kind of foreign assistance Somalia needs for economic recovery in the post-COVID-19 pandemic era. The government should allocate a significant amount of foreign assistance it received to income generation projects for internally displaced people (IDP). The government cooperating with local business communities and international NGOs should set food distribution packages to vulnerable workers such as teachers, unskilled construction workers, widowed women with children, Kat workers, and so on.
Policymakers should direct international NGOs to implement small business development and income generation projects in villages, districts, and regions where poor and susceptible communities are inhabited.
The government in partnership with international donors and local investment banks should prepare soft loans and investment mechanisms suitable to poor farmers to promote local production efficiency. Small business development, fishing and agriculture, training and skill development, and empowering women and poor farmers oriented international and local projects will lead to favorable economic growth in the post-pandemic era.
Transformation of E-Commerce Businesses and their Future after COVID-19
World has witnessed an unprecedented human destruction caused by Covid-19.As on 7th July 2020, the virus has taken 533,780 lives and 11,419,529 have been tested positive worldwide. It started in December 2019 when Wuhan Municipal Health Commission China reported cluster of pneumonia cases which was eventually identified as novel coronavirus. On 5th January 2020, World Health Organization (WHO) made a flagship technical publication for Global Media as well as scientific and health communities on the first ever aperture on disease outbreak of new virus. Later on WHO declared health emergency worldwide and issued public health advisory when a large number of cases were reported outside China.
Subsequently, governments across the globe started taking precautionary measures to contain the infection rate which included lockdowns, border restrictions and even economic activities were strictly restricted. People themselves started opting for social distancing to avoid potential contagion and physical proximity. On the one hand this strategy has proved as the best measure to reduce the rate of infection but on the other, due to minimal economic activities, economies of many countries have been badly affected. Barring essential businesses like food and grocery etc., every other business got effected. Thousands of traditional style businesses and companies were severely affected and lot of them even went bankrupt.
In these circumstances, E-Commerce appeared as a promising major pillar in fight againstCOVID-19 as it helped reduce the rate of infection by offering online delivery of commodities and services. Supermarkets started online delivery of groceries by providing door-to-door services to their customers, preventing risks of in-store visits and subsequently online payments obviated in-person cash transactions.
Moreover, E-Commerce helped economies in preserving jobs during crisis. Online businesses strived to maintain the basic revenue stream which helped them to get their businesses afloat through the crisis. Restaurants and famous food chains started offering online takeout services. Almost all famous brands of clothing, shoes and many others, transformed their business from traditional to online.
Many companies changed the nature of their businesses and were successful in creating new jobs as consumers shifted towards online offerings. Recently a Dubai based raw coffee supply company transformed its business from B2B to B2C due to emerging demand of consumer products.
Interestingly many new small level ventures were set up during this period. People started delivering homemade food and home grown fruits and vegetables to meet the needs at both ends and the response from their customers is most encouraging. These continued availability of consumer goods helped the governments to increase the acceptance of persistent physical social distancing measures among masses.
Lockdown orders will definitely be lifted eventually but there are thousands and millions of customers whose patterns of purchase have changed drastically for a more comfortable way of getting what you need at your doorstep. They are comfortable with the online system not only for their convenience but also for getting into any risk of catching the virus. According to a recent survey on social media, young consumers are more motivated than ever to maintain social distancing and shop online while staying at home. This trend is creating ideal market conditions and great motivation for newly entrant digital entrepreneurs.
The trend of changing customers’ buying habits and behavior is an opportunity for digital entrepreneurs. Now how they react,it is the future of e-commerce that will be the deciding factor. Once the situation improves, sales of E-Commerce industry may stabilize at low growth rate than today but the changing behavior of customers is already in action to overall change the retail and commerce for years to come.
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