CHAPTER FOUR: GLOBALISATION

Key words
International
Population
Diplomacy

Interdependency
Dependency
Imports
Exports
Foreign aid
Multinational corporations
COMESA

PTA
NGOs
CBOs
Communication
Technology

In this chapter, the learner will be able to;

a. Understand the key terms related to globalization
b. Know the advantages and disadvantages of globalization in Uganda.
c. Appreciate the impact of globalization on Uganda.
d. Understand the concept of foreign aid

e. Analyze Uganda’s imports and exports

The meaning of globalization

Globalization is the process by which people, their culture, money, goods and information can be
transferred between countries with few or no barriers.
Globalization is also the increased connectivity in the world which involves exchange by human beings
that’s to say exchange of goods and services, capital, technologies or cultural practices all over the
world.
Globalization is also the speeding up of movements and exchange of goods and services, capital,
technologies, or cultural practices all over the world.
It has increased and promoted connections between different religions and populations around the
world.
Globalization enhances;
 Competition where companies and people now compete globally.
 Technology that enables companies to sell their goods and services globally.
 Removed national borders from limiting nations from investment, production and innovation.
 Relationships among family and friends have rapidly become organized around a much more
compressed view of space and time using internet and social media.

Types of globalization
There are three types of globalization and these are economic, political and cultural globalization.
 Economic globalization
 Political globalization
 Cultural globalization
1. Economic globalization. This is mainly focused on the unification and integration of international
markets and multi-national corporations that have a significant influence on international markets.

2. Political globalization deals with policies designed to facilitate international trade and commerce and
the institutions that implement these policies. These include national governments and international
institutions such as the international monetary fund (IMF) and the world trade organization (WTO)
3. Cultural globalization focuses on the social factors that link people of different cultures together such
as increased ease of communication and transportation brought about by technology.
NB. All the three types of globalization influence each other and they are all influenced by advancement
of modern technology

Factors that have influenced the process of globalization.

 Improvement in transportation where the movement of goods between countries has improved with
the development of larger cargo ships reducing the cost and time.

 Formation of trading blocs has promoted free trade between countries removing the barriers to trade
between countries. Organizations like the world trade organization (WTO), ECOWAS, East African
community (EAC) promote freedom of trade.
 Improvement in communication networks. The development of the internet and mobile technology
has allowed effective communication between people in different countries. (People get information on
time).
 Availability of skilled labor has enabled the establishment of labor-intensive industries (industries take
advantage of cheap labor)
 Technological advancement especially in the transport and telecommunications has influenced
globalization. Money, technology, materials and even people flow more swiftly across national
boundaries today than they have been in the past.
 The rise of new electronic payment systems like e-wallet, pre-pay etc. that have eased transactions
across the globe.
 Growth of multinational companies like stanbic bank, MTN, Coca-Cola, Pepsi among others
 Socio-cultural convergence has promoted globalization due to access to information through online
newspapers.
 Favorable political policies adopted by governments have facilitated cross border trade and influence
e.g. china offers long term loans to most of the east African countries.
 Financial liberalization where by its now easy to exchange money to global currencies such as US dollar
and British pound.
 Reduced tariff barriers.

 The growth of NGOs and community based organizations has promoted globalization
 Presence of globalization agencies like the UNO, AU, EU among others.
 Increase capital/ investment
 Labour force, countries have first class business school besides some have abundant labour force
 Containerization which has cut down the cost of ocean shipping making transportation of bulk goods
more efficient.
 The intense competition among firms where by firms are looking for new markets across borders
making the world a global village.

Benefits / importance of globalization

Globalization has several benefits as the conduct of business has changed many different ways. The
benefits include;
 Globalization has led to the spread of technology and innovation to many countries around the world.
The world has remained constantly connected.
 It has allowed easy access to foreign culture like food, movies, music, and art. Without one moving
across the borders.
 The cost of production has been lowered and this has allowed companies to source for lower costs of
production. This has increased competition in the production of goods and services and eventually
bringing down the prices.
 Because of globalization, people can access new markets. Easy access of information on the products
on the market has enabled creation of new customers beyond borders.
 It has allowed access to new talent. Nations and companies look for new specialized talent that is not
available in their market.
 It has allowed nations to employ workers without necessarily having a legal entity abroad thus making
global hiring easier.
 It has enabled consumers have a variety of choices of a product which has improved on the lives of
people to live better on less money.
 It has enabled companies to look for flexible and innovative ways to grow their businesses overseas. In
Uganda, Multinational companies have made it easier to employ workers in other countries. There is no
longer need to establish a foreign entity to expand overseas.
Impacts or effects of globalization
 Globalization has led to increase in foreign direct investment and global trade in the world.
 It has also led to emergence of multi-national governance organizations such as European union (EU),
United Nations and World Bank which exercise economic or political power directly or indirectly globally
for example millennium development goals, environmental treaties etc.
 It has exert influence beyond geographical borders on certain forms of development assistance this is
through international agreements and conventions such as education for all, millennium development
goal declarations, environmental treaties, human rights instruments and others.

 Globalization has changed the power dynamics between the more developed and developing
countries. The industrialized nations and multinational corporations largely set the terms of engagement
and development assistance for developing countries through their multinational institutions and the
economic mechanisms which they control in terms of trade, development, loans and foreign aid.
 It has highly created inequalities in nations in the world. This is because different countries are at
different levels of development in terms of capital, resources, knowledge and control of information.
 Globalization effects have been manifested in the dependency of some nations on others in such areas
like technology and information, the flow of foreign direct investment and global trade, the flow of
capital and existence of multinational corporations.
 Globalization has led to the destruction of cultural identities and undermined many local norms and
rituals governing important social spheres. The African traditional institutions of marriage and its
practices, parenthood or child relations and the women submission in marriage have been eroded.

Impacts of globalization in Uganda.

 It has enabled people to access global tools such as the internet, technology and telephones. It has
opened up opportunities for people to access information, markets, better health services, education
and exposed to new cultures and traditions.
 The socio-economic improvement as a result of globalization has improved the lives of Ugandans and
specifically the rural people in Uganda since many of these areas were characterized by lack of
necessities like schools, health centers, roads and difficulties in communicating with the outside world.
 Technological improvement in communication has made communication easy through the innovation
and invention of cell phones that have been accessed in rural areas through international and regional
companies such as MTN, Airtel among others.
 Ugandans use global facilities such as internet, telephone, transport to find market for their products.
Globalization has made it easy to conduct cross border training with neighboring countries such as
Rwanda-Kenya-Tanzania and Sudan.

 It has enabled traders in Uganda to export more goods and services in many countries and earn some
income which has changed their socio-economic position.
 It has also enabled the government to partner well with other countries and international
organizations to improve the standards of people in Uganda.
 It is now easy for consumers to access market information. Before globalization, traders were taking
advantage of the ignorance of market trends to cheat producers of goods and specifically agricultural
produce at a low cost and sell at a higher price.
 The increase in mobile telecommunications across the country has also provided employment to the
rural and urban. Ugandans are involved in gainful employment as mobile money agents or vendors for
major telecommunication companies.
 It is now easier to transfer funds from one person to another from rural areas to urban areas and vice
versa with ease and in time.
 Due to globalization, the government liberalized the media. This led to the establishment of several
radio and television stations in the market.

 The rural people in Uganda have started to change their traditional way of life to be modern in order
to cope with the pace of global life. The pastoral communities and subsistence farmers in the rural areas
of Uganda are changing to modernize their farming techniques.
 Global organizations such as World Bank and World Health Organization (WHO) have been funding the
Ugandan government to improve the education and health services especially in the rural and
disadvantaged areas.

Advantages of globalization

 Access to labour

 Access to resources
 Transfer of technology
 Better services
 Improved standards of living

 Development infrastructure
 Economic growth
 Affordable products
 Extensions of market

Disadvantages of Globalization
 Growing inequality
 Trade imbalance
 Environmental destruction

 Increasing of the unemployment rate

 Loss of culture
 Leads to more imports than export

Challenges of globalization
 Worker exploitation, many companies in developing countries expose local workers to high degree of
exploitation. These companies make exploitative demands like long working conditions yet some labour
organizations can hardly enforce labour regulations.
 Job loss,

 Loss of culture
 Neocolonialism

 Legal compliance for employers, employers need to employ people within the legal policies of the
countries where they are based and yet these different countries have their own laws covering things
like working hours, leaves, termination right etc.
 Cultural and language barriers. The world has a variety of cultures and languages which limit
association.
 Differences in technological development. Developed countries have more advanced technology than
the developing countries.

Solutions to challenges of globalization

 Empower people with skills needed to unlock jobs.
 Lower the costs of trade regulations. Countries should not put regulations
 Make societies more resilient in order for them to handle current problems.

 Promoting technological transfer in the world. Countries should embraces modern technology
 Partner with d reliable and experienced companies
 Find suppliers and partners across the world at various locations. Don’t put your eggs in one basket.

Roles of NGOs and CBOs (community based organization) in promoting globalization.

 They work across national boundaries and beyond local and national initiatives.
 They create trans-national networks and coalitions to influence intentional decision makers.

 They shape national and international policies

 They are closer to the grassroots, most often seen as the preferred channel for overseas development
aid and most efficient agent of guaranteeing the success of sustainable development.
 They assist the people to be part of social change and foster a feeling of belongingness and sense of
responsibility among the marginalized segments of the society.
 They have become a counter-weight (put pressure) to state power especially in the promotion and
protection of human rights and community development.
 They provide services to society through welfare works for community development using global
funds.
 They provide assistance in case of natural disasters using funds that normally lobby for globally.
 They have been instrumental in pushing for sustainable development at international level.
 They provide resources in form of finances to support innovation, demonstration and pilot schemes
which are a key to development.

 They carry out research, monitoring and evaluation of government projects as well as the
effectiveness of the utilization and accountability for donors.
 They have been at the fore front campaigning for elimination of slavery in the world.
 They have been active in intergovernmental negotiations in regulation of hazardous waste as well as
ban on land mines and other dangerous weapons.

How can globalization be achieved outside trade and politics

Foreign aid.
Foreign aid refers the assistance voluntarily transferred by one country to another.

It can also refer to assistance given out by religious organizations, non-government organizations (NGOs)
and Foundations.
This aid can be in form of gifts, grants, or loans but it can also be in form of food, supplies and services
such as humanitarian aid and military assistance. Developing countries like Uganda have received
foreign aid from developed nations for example in times of natural disasters, times of conflict or during
economic crisis.
Donor countries may make agreements with the countries to which they provide assistance.
They may agree to issues loans to an allied nation that is experiencing economic difficulties with special
repayment provisions.
Official Development Assistance (ODA) is the most common form of foreign aid provided to support
development and to fight poverty. Aid is provided in form of bilateral grants that is to say from one
country to another or funding in form of loans and often it is channeled through non-government
organizations and foreign organizations.

Types of foreign aid

Bilateral aid. This is aid given directly by one country’s government to that of another country’s
government.
It occurs when money flows from a country with a developed economy to a country with a developing
economy.

Bilateral aid is directly by strategic, political, and humanitarian interests. This is meant to further foster
democracy, economic growth, peace and sustainability of long-term programs.
Multilateral [Link] aid is the support offered by several countries that share funds to foreign
organizations such as the United Nations (UN), the World Bank, and the International
Monetary Fund (IMF). The funds are used for development, relief, budget, financing or to relieve hunger
in developing nations.
Tied [Link] is the type of aid which comes with strings attached. A developed country can offer a
bilateral loan or grant to a developing nation but will be required by the government to invest the
money on goods and services produced in that country.
Project [Link] the assistance given to support a certain project, such a hospital, road, school etc. this
can be given by a country or by organization like United Nations, world bank etc. e.g. Entebbe express
highway was financed by Exim Bank of china. North bypass was partly financed by European Union
Security or military aid
This is the aid given to assist a country or its people in its defense effort or to assist a poor country
maintain control over its territory.
Agriculture and food security [Link] aid given to support a country or community meet their need for a
reliable source of quality food.

Reasons why countries offer foreign aid

 They offer foreign aid in order to improve their own security. In most cases, economic aid is used to
discourage friendly countries from coming under the control unfriendly governments or paying for the
right to set up or use military bases on foreign soil.
 Foreign aid also seeks to promote the exports of a country and spread its literature, culture or religion.
 Countries often provide aid to relieve the distress caused by man made or natural disasters like
drought, illness, and conflict with an aim of creating influence over the receipt of aid.
 It has helped to close the foreign exchange gap by promoting increased inflow of foreign exchange.

 If properly used by the recipient country, foreign aid can lead to increased production and output
hence economic growth and increased GDP.

 Foreign aid can also be used to fight and reduce poverty in the world’s poorest nations of East Africa.
 It also leads to infrastructural development such as schools, hospitals, roads, bridges among others.

 It aids or promotes technological transfers from the advanced to the less advanced nations of East
Africa thus enabling the latter to use the technology for their own benefit.
 It creates strong relationships and corporation with all parties and countries in the developed world
which enhances development.

Benefits/positive effects/advantages of foreign aid to Uganda.

 Promotes long term economic growth and development.

 Fills up foreign exchange gaps in the domestic economy
 It creates a stronger relationship for all parties involved.

 It can reduce the impact of poverty

 It provides economic opportunities for the receipt

 It encourages national independence.

 It promotes technological transfer from developed countries.
 It leads to production of quality goods and services
 it leads to infrastructural development
 disasters and other emergencies can also be handled in through humanitarian aids
 It promotes development in the education sector.
 It leads to agricultural development.
 There can be development in the health sector.

Negative effects/disadvantages/Challenges of foreign aid to Uganda.

 Part of the money will not end up where it should be.
 Foreign aid is often done with a hidden agenda i.e. strings attached to it.
 High risks of corruption
 Foreign aid doesn’t offer a guaranteed benefit.
 It creates dependencies when not correctly managed.

 May not be enough to solve structural problems.

 Economic/political pressure to return the favor.

 It promotes neo colonialism.
 It is a source of conflicts.

 It increases dependency syndrome

Uganda and the international trade.

By independence, Uganda’s economy was growing and stable in terms of human resource, industries,
and capital accumulation compared to her neighbors. However, it experienced challenges from 1970s,
after Idi Amin had expelled the Indians causing the instabilities then.
The economy of Uganda began to turn around in the 1990s after years of diverstating political
instabilities, social and economic collapse.

With the help of World Bank, the government-initiated reforms aimed at improving its trade policies
with a primary focus on restoring its export sector that had collapsed and increase
Uganda’s participation in international trade to improve her imports and exports.
The economic reforms laid a foundation for sustained economic growth and expansions seen to date.
Uganda’s economy was liberalized and opened to foreign investors.
Uganda being a landlocked country, it depends on imports that mostly come through the port of
Mombasa in Kenya. Most of Uganda’s imports are from India and China.
Her exports are more to the local economic region of the East African Community (EAC) and the
Common Market for East and Southern Africa (COMESA).

Reasons for Uganda’s dependency on imports from their exported raw materials.
 Manufacturing costs are higher than imports
 Cheaper goods or materials
 Higher quality products from the outside world
 More variety of products to choose from
 Faster access to new items with the new advanced technology
 Better chance of negotiating discounts, exclusives and other benefits
 Inadequate skilled man power in Uganda

Positive impacts/Advantages/merits/importance of globalization

 Ability to tap into wider talent pool leading to better efficiency and increased production. For instance,
companies can hire workers from all over the world
 Cultural diversity and workforce from multiple cultural backgrounds and ideas can be brought together
to work for the good of the people

 New and larger markets and increased opportunities to specialize are created as a result of
globalization
 Higher standards of living like health and welfare are achieved.

 Free trade can reduce trade barriers like tariffs hence better balance of trade
 Competition among companies can drive prices downwards and this can lead better quality of goods
produced and better living standards
 Globalization provides poor countries with capital and technology with which to develop
 It creates conditions in which democracy and respect for human rights may flourish

 Cultural infusion with many countries learning about other peoples' cultures may arise

 Societies have become more tolerant to each other as a result of globalization

 Labor can move from one country to another to market their skills

 Technological advancement

 Employment opportunities are created when multilateral companies invest in developing countries

 Many countries have been able to agree on free trade agreements and sign treaties to that effect for
instance NAFTA (North American Free Trade Agreement)
 It allows resources to be pooled together, for instance the joint construction of the space station
 It reduces the prospects for tyranny and oppression especially in the young poor nations since they are
always constant check

 Globalization can help developing countries progress faster through elimination of tariffs
etc.
 It can reduce currency manipulation problems. If the world could have only one currency, this currency
manipulation would completely disappear
 It attracts foreign capital as well as foreign updated technology leading to improved quality of
production
 It has become easier for people to move from one country to another to acquire education and better
skills

 Globalization ensures global peace through global intervention where necessary.

 It leads to improved health because it allows doctors to rely on information across the globe.

 Allows some countries to have access to cheap raw materials

 It promotes global and international connectivity. With the use of the internet and other technology
the world has become a global village
 Globalization leads to environmental conservation and protect
 it leads to balanced development of world economies
 Increase in industrial development especially the young countries of East Africa due to free flow of
technology
 Bring in foreign currency through tourism, better international relations etc.
 Increased awareness among consumers about the challenges from climate change
 Improved governance and better labor protection as a result of competitive pressures of globalization

Negative impacts/Disadvantages/demerits of globalization

 There is social injustice as multilateral companies exploit the people, implement slave labor wages and
poor working conditions to ensure profit optimization
 Strong demand for food and energy has led to steep inflation. Agflation (food price inflation) has
affected many poor countries globally
 Globalization increases vulnerability to external economic shock. Financial crisis in the USA can affect
us as well
 Irreversible damage to ecosystems, land degradation, deforestation loss of bio-diversity are all
disadvantages of globalization
 Globalization is a source of trade imbalances especially among the poor countries of the world
 Foreign multinationals may influence political decisions in some parts of the world
 Intellectual property and designs can easily get stolen or replicated especially when products are made
elsewhere in another country
 Internal communication challenges accrue especially when people do not work in the same room
 Rising inequalities in wealth and income around the world. It has made the rich countries richer while
the non-rich have become poorer.

 Workers in developed countries may face salary cuts as the threats by employers to export jobs loom
 Multilateral corporations exploit tax havens to avoid paying taxes
 Deadly diseases like HIV/AIDS are being spread by sick travelers who cross from one country to the
other.
 Globalization leads to loss of cultural identities as a result of cultural imperialism
 It has negative impact on the environment. For instance the Greenhouse gas emissions
 Creates superiority of bigger nations over smaller ones.
 It leads to neo-colonialism
 Leads to more imports than exports resulting in growing trade deficit and balance of payment issues

 Small scale industries are wiped out as a result of the introduction multilateral companies
 Low growth of agriculture sector
 Rise in rural - urban migration

 Human rights violation

Activity of integration
1. The world has been referred to as a global village, partly due to easy flow of information and ideas. All
this is attributed to the discovery of information communication technologies (ICT) that have eased
trade and business making the world as a global market. However, this has imposed negative
consequences in Uganda as it has left the country’s moral values hanging.

a). Discus the ways in which ICT has promoted globalization in East Africa.
b). as a historian and political education student, discuss how a developing country like Uganda can do
to fit the globalized world without affecting her moral values.
2. Globalization has addressed old problems of people traveling long distances in search of or delivering
information, trading in goods and services. It has created new solutions of virtual space served with
global tools that has changed the pace at which business is done. However, in the globalization process
culture of many nations have been eroded creating a generation of people with intolerable morals.

Instructions.

In an essay
a) Identify the effects of globalization on different cultures in Uganda.

b) Explain how the effects on cultural values is affecting the youth today.
c) As a history and political student discuss how our cultures can be redefined to fit the globalization
world.

END