Friday, March 28, 2008

GlobalisationICT and Nepal

Globalisation is the most talked and debated issue in the contemporary world. It is a concept that escapes precise definition. In most cases, it is described rather than defined. However, it does not mean the same thing for all. For some, globalisation is a process of opening up economies so that trade between countries could take place freely. For them increasing globalisation has helped the expansion of opportunities for nations and benefited workers in rich and poor countries alike. Brings positive benefits for consumers, helping to increase choice, drive down prices, improve services and create new jobs and opportunities. Globalisation can therefore be seen as a positive force for change that has the potential to raise living standards and drive economies forward.

However, this is not readily acceptable for all. Many think globalisation as the concerted strategy of the industrial world, particularly of the Multinational Corporations, to safeguard their interest and spur a new form of colonisation. After opening of our market, our country will become a supermarket of foreign goods, which are cheaper, killing our local industries, increasing many more jobless. For them, globalisation means increasing poverty and deteriorating living standard of the workers, widening disparity between the rich and the poor within the country and also among the countries, and internationalisation of capital to the detriment of labour market. Even for the moderates, globalisation is a process of restructuring the world economy to find ways for business to maximise profits.

The IMF, the World Bank and the WTO and more generally, the high income countries are held responsible for influencing and largely determining the course of the globalisation process. They are also seen as the driving forces behind the policy reforms that the developing countries had to implement as part of their structural adjustment programs under the supervision of the IMF, the World Bank and the WTO. It is obvious that those countries and organisations will only foster their own interests. Globalization has become an unstoppable phenomenon affecting all aspects of our lives. Some Governments, political parties and trade unions often view this development as at best challenging and at worst sinister. Business and their representative organisations, on the other hand, promote the benefits of open trade across political boundaries and the integration of markets to create global opportunities.

Globalization is a process of increasing economic and non-economic linkages across the world. In the broadest sense Globalization implies integration of economies and societies across the globe. It is equated with the massive, irresistible cross-border flow and integration in the movement of goods, technology, labour and capital, resulting mainly from breakthroughs in transportation and communication. In a wider perspective, Globalisation, covers, various activities such as cultural globalisation, political globalisation, ecological globalisation, economic globalization and so on. But Here I am only discussing about economic globalisation. Economic globalisation implies increasing global inter-linkages of the markets in goods, services, capital and financing. Such a process has speeded up in the recent decade. The contributory factors for rapid economic globalisation are liberalisation, deregulation, privatisation, and declining costs of transport and communication.

The micro-electronics revolution has irrevocably changed the essence of human contact to earth. Distances are shrinking and information is spreading faster than ever before. The internet and World Wide Web have helped this process. Perhaps the most important catalyst for globalization is the spread of information and communications technology (ICT). Through the magic of ICT, it is now possible to instantly access useful information through the Internet and the latest computer technology.

While talking about globalisation, we must understand that our national economy has not even internally integrated. Market institutions and forces are yet to emerge in a competitive way. Nearly half of the population lives in absolute poverty and illiteracy. More than 80 per cent of the population earns livelihood from agriculture, which, however, constitutes only 40 per cent of the country's national income. Lack of proper planning process, commitment, accountability, and integrity of the government, and in lack of people's participation in development activities. The developing countries, particularly the least developed countries (LDCs) like Nepal, have not been able to substantially benefit from international trade due to both external as well as internal constraints. The developing countries have not been able to increase their share in international trade in spite of the preferential market access opportunities provided by the developed countries. It has been realised that market access for the developing countries is commercially meaningless if they cannot increase their competitiveness in the sectors in which they have preferential treatment. In the developing countries, lack of efficient production facilities, adequate infrastructure, weak management capacities, low level of technology and lack of technological capacity and inefficient transportation and communication, limits their potential to specialise in crucial productive sectors and to reap the benefit of preferential trading facilities.

For an economy like ours to integrate into the world trading system on terms and conditions favourable to our development needs, we need to build our capacity to negotiate at the multilateral level. This will happen only if we are able to increase our ability to understand the multilateral trading regime espoused by the WTO and formulate our national policies to benefit from it.

We also need to strengthen our capacity to benefit from international trade by increasing our competitiveness through investment in infrastructure, development of human resources, strengthening of institutional capacity, enhancement of technological capability, and supporting local enterprises, including linkages between large and small enterprises. By joining the WTO, Nepal can now fully enjoy the rights that all members have under the WTO agreements, such as non-discrimination by other WTO members and the ability to use the WTO's dispute settlement procedure. This membership will provide tremendous international market opportunities to Nepal. However, taking advantage of the new opportunity will also be quite challenging. Nepal has few industries and hence very little to export. Garments and carpets account for most of the country's total exports. Despite being an agricultural economy, it does not have enough surplus produce. Threats to domestic industries from cheap imports also loom.

ICT allows trade to become simpler and more streamlined, thus increasing the value and speed of transactions. Companies are not limited to physical locations or their own organizational boundaries for providing products and services. Networked information systems are allowing companies to coordinate their geographically distributed capabilities and even coordinate with other organization as virtual corporation. One major advantage of promoting electronic commerce in Nepal is that it can provide relatively cheap access to global markets even for small and medium-sized enterprises in remote areas. Small and medium Enterprises (SMEs) have been playing a significant role in the economic development of Nepal. The major exportable items like woolen carpets, Pashmina products and handicraft goods produced by SMEs have been major sources of earning foreign currency. Potential benefits of e-commerce for the developing countries like Nepal are immense. Any company can enter global markets where size and location have become rather irrelevant. Success in e-commerce will have an immediate impact not only on productivity and profits, but also generate new jobs employment and livelihood.

After accession of WTO, We have tremendous opportunities for exporting our products in the international market. But to substantially benefit from international trade, we must need to strengthen our capacity by increasing our competitiveness through investment in infrastructure, development of human resources, strengthening of institutional capacity, enhancement of technological capability, and supporting local enterprises, including linkages between large and small enterprises. We have been experiencing the fact that the more technologically capable countries continue to dominate their less capable counterparts, effectively monopolizing opportunities for economic growth through their insurmountable advantage in ICT. Given these diverse possibilities occasioned by globalization, it is of extreme necessity for Nepal to re-examine the trends in ICT development worldwide and devise ways by which its advantages can be maximized. This includes the need to extend the breadth and reach of ICT to peoples and sectors that stand to benefit the most, while curtailing its illicit and destructive uses.


Tika R. Kandel

by kandeltika at gmail dot com



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