Importance of Globalisation (1)

RESTRICTED

CB/12/JD

Feb 15 Accra

IMPLICATIONS OF GLOBALISATION FOR STATE AND NON STATE-ACTORS

INTRODUCTION

1. We are in a world of flows, a world of increasing fluidity where everything seems to be

melting away, including boundaries. Judge Rosalyn Higgins rightly puts it that, “Globalization

represents the reality that we live in a time when the walls of sovereignty are no protection

against the movements of capital, labor, information and ideas—nor can they provide effective

protection against harm and damage.”1 This declaration brings out the implications of

globalization. It is the creation of a world without borders. Globalization has been described as

the increasing and intensified flows between countries of goods, services, capital, ideas,

information and people, which produce cross-border integration of a number of economic,

social and cultural activities.2 It is a complex concept regarded as moving to a borderless world

in which global companies are the primary actors.

2. Actors are persons or entities who play a particular kind of role within a specific framework.

In the global sphere, there are two main actors, which are state and non-state actors. A state is an

organized community living under one government.3 Ghana, Togo and Liberia are all states in

Africa. Pearlman and Cunningham define a non-state actor (NSA) as an organized political

actor not directly connected to the state but pursuing aims that affect vital state interests.4 They

include The Amnesty International, The World Trade Organisation (WTO) and the Al-Qaeda.

1 Roslyn Higgins, International Law in a Changing International System, 58 Cambridge L.J.78, 82 (1999) as quoted by Julian Ku and John Yoo, Globalization and Sovereignty, 31 Berkeley J. Int'l Law. 210 (2013) http://scholarship.law.berkeley.edu/bjil/vol31/iss1/6 accessed on 11/02/15.2 Bertucci, Guido and Adriana Alberti. "Globalization and the Role of the State: Challenges and Perspectives." Reinventing Government for the Twenty-First century: State Capacity in a Globalizing Society (2003): 17-32.3 "State". Concise Oxford English Dictionary (9th Ed.). Oxford University Press. 1995. 4 Pearlman, Wendy and Kathleen Gallagher Cunningham, "Non state Actors, Fragmentation, and Conflict Processes." Journal of Conflict Resolution, 56, no. 1 (2012): 3-15.

1

RESTRICTED

RESTRICTED

Non-state actors wield economic, political or social power, and they could influence states at a

national and sometimes international levels. They wield this influence even though they do not

belong to that state and are not allied in any way to it.

3. Growing forms of economic, political and cultural interchange forms the core of

globalisation. A continual increase in information and communication technologies fuel these

forms of interchange. States are becoming interdependent on one another such that distant events

are beginning to shape local happenings and vice versa. National economies are also being

integrated into one single global market economy largely controlled by non-state actors. For

example, Chinese economic reform began to open China to globalization in the 1980s. These

issues have raised the argument that globalisation has reduced the sphere and authority of the

state while it has expanded the influence and role of non-state actors in the international

environment. Globalisation has affected the roles and influence of both state and non-state actors

because of the increase in cross-border flows brought about by the advances in transport,

information and communication technology. The purpose of this paper is to discuss how state

and non-state actors have been influenced in their roles in the international environment and the

extent of this influence. The discussion would be limited to the economic and political

dimensions of globalisation, even though, there are others like cultural and technological.

4. The paper will look at the process of globalisation and the dimensions of globalisation. It will

also look at the supranationalism and the sovereignty of states and discuss the effects of

globalisation on state and non-state actors.

AIM

5. The aim of this paper is to discuss the impact of globalization on state and non-state actors

with a view to making recommendations.

THE PROCESS OF GLOBALISATION

2

RESTRICTED

RESTRICTED

6. The flow of goods, services, ideas, information and people across borders, aided by

advances in transport, information and communication technology started the process of

globalisation.

7. In The Beginning. In the beginning was man and man had a need. Globalisation

began with man's need for a better life. Nayan Chanda, 5 a scholar in globalisation studies, argues

that “globalization stems, among other things, from a basic human urge to seek a better and more

fulfilling life.” This leads him to trace the initial globalization of the human species to the late

Ice Age when a group of our ancestors walked out of Africa in search of better life, food and

security. After many years of wandering along ocean coasts, they finally settled on all the

continents. Since then, global flow of people, goods, services and much more has continued on a

rising trend. Globalisation could, therefore, be described as an ancient process that has expressed

itself in waves over the centuries culminating in this latest wave. It is not new to man, neither is

it an event. It is a process and not an end point. As long as man occupies the earth and continues

to have needs, globalisation will continue. The current era should therefore take advantage of all

that this process has to offer to make life better.

8. Advances in Technology. Laptop computers, mobile devices like phones and tablets,

as well as surveillance devices are some of the trends in this era of globalisation that make life

better. Developments in railways, shipping and air transport have facilitated travel as well as the

transportation of goods across borders, reducing the cost of transportation in certain cases. The

Internet has assumed a pivotal function in facilitating globalization through the creation of the

World Wide Web that connects billions of individuals, civil society and governments. The result

of all these technological innovations is the integration of local, national and regional societies,

economies and cultures across the globe. Obviously, the process of globalisation depends on

advances in technology. There is no end to technological development. Development in

technology should, therefore, be encouraged, in schools and training institutions for the benefit

of this and subsequent generations.5 Nayan Chanda, Bound Together: How Traders, Preachers, Adventurers and Warriors Shaped Globalisation. (New Delhi: Penguin, 2007), xii.

3

RESTRICTED

RESTRICTED

DIMENSIONS OF GLOBALISATION

9. The global use of technology presents several perspectives. Two major areas, however,

would be considered, which are the political, and the economic aspects of globalisation.10.

Economic Globalisation. Economic Globalisation is the integration of economies all

over the world. Improvement in technology has reduced the cost and uncertainties of exchange

and reduced the capital required to enter foreign markets. Financial transactions across borders

are in the form of electronic funds transfer (EFT) which are almost instantaneous and costless.

They include wire transfers and online bill payment services. These and many others have

facilitated the merging of economies into a global economy. The effect of this integration is that

no national economy could insulate itself from the adverse fallouts from the world’s financial

market. The credit crunch of 2008 was initiated in USA yet affected many countries worldwide.

Economic globalization therefore puts undue pressure on member states as a result of unstable

market forces. In addition, it creates dependency on non-state actors like the World Trade

Organisation (WTO). There is the need for international bodies to create enough policy space for

diversity in national institutions so that states can position themselves better to benefit from

economic globalization.

11. Political Globalisation. Political globalization refers to the "intensification and

expansion of political interrelations across the globe.”6 Characterized by a proliferation of non-

state actors and the institutionalization of international political structures, global politics leads to

a decline in the power of the state to direct and influence their economies and to determine their

political structures. The UN controls global politics. At the regional levels, actors like the

African Union also exists. The impact of these organizations is to create a process of institution-

building, where the organizations could determine and dictate what happens in the governance of

member states. This might be necessary for states in some situations, especially under autocratic

governance where individual rights could be infringed on. However, the UN should recognize

6 Manfred B Steger, Globalisation: A Very Short Introduction. (Oxford University Press, 2013) 64.

4

RESTRICTED

RESTRICTED

the legitimate differences in culture, varying needs and preferences and different levels of

development across nation states in handling global politics.

NON-STATE ACTORS AND THE SOVEREIGNTY OF STATES

12. One of the most significant developments in globalisation is the rise of international

organisations. The current international legal system which is largely state-centered is considered

to be based on the Peace Treaties of Westphalia in 1648. This treaty established sovereign states

as the main actors in international law and relations. It recognised the equality of states as a

principle of modern international law. The concept also contained the principle of non-

intervention in the internal affairs of other states. It accepted sovereignty as an essential element

of state power signifying the supremacy of the state in its internal and external relations.7 Today,

international law essentially relies on the consent of states and the concepts of state sovereignty,

and sovereign equality remain the cornerstones of the international legal system.

13. Supranational organisations are often seen as a specific category of international

organisations, as opposed to ‘intergovernmental’ organisations. The main characteristic of

supranational organisations is ‘the direct statutory effects of their laws on the national laws of

their members.’8 The European Union (EU) is currently the only supranational organization.

Along with globalization came the proliferation of international organisations. One of the main

reasons behind states’ need to create international organisations in a globalized world is the

growing interdependence of states and the need to manage common problems.9 The UN was

created in 1945, to address political issues. In the same vein, the creation of the International

Monetary Fund (IMF), the World Bank Group the World Trade Organisation (WTO) resulted in

important new participants. These participants have potentially far-reaching powers in areas

traditionally reserved to state action only. Since then, many regional economic organisations

7 Ninčić, The Problem of Sovereignty in the Charter and in the Practice of the United Nations (1970), 5.8 Kirsten Schmalenbach, ‘International Organisations or Institutions, General Aspects’, in R. Wolfrum (ed.), Max Planck Encyclopedia of Public International Law (Oxford: Oxford University Press), online edition, para. 15, retrieved from www.mpil.com, accessed on 17 March 2015. 9 Jan Klabbers, ‘Two Concepts of International Organisation’, International Organisations Law Review, 2 (2005), p. 278.

5

RESTRICTED

RESTRICTED

were also created aimed at integration. Such are the European Economic Community (EEC), the

European Union (EU), the African Union and many of the regional development banks.10

14. Neil McCormick, a journalist, argues that, it is not as if international organisations and

their powers were imposed on states. States voluntarily consent to create and participate in

international organisations.11 Therefore, McCormick and some others are of the view that the

actions of international organizations are legitimate because states conferred their powers on

them. However, the fact remains that in delegating power, sovereign power becomes limited and

no longer absolute. The EU can be considered in this case that without further restrictions on the

sovereignty of member states, state sovereignty is already compromised. The EU has since its

creation created its own legal system where member states have voluntarily limited their

sovereign rights in certain fields. States are thus bound to apply the legal decisions of the

European Court of Justice as an integral part of their legal system. This limitation means that

member states must use their sovereign rights to ensure that incompatible prevalent legislation

does not exist.

IMPLICATIONS OF GLOBALISATION FOR STATE AND NON STATE ACTORS

15. Globalisation creates a world of paradox. Among these factors, this discussion focuses

on financial markets, international laws and global issues.

16. Financial Market For many scholars, the proliferation of information technology

marked the beginning of the process of financial globalisation.12 Information technologies have

given way to the use of electronic money within the financial market. Electronic money is a

challenge to states’ control over financial markets because it lacks the potential for regulation

10 Ibid11 Neil McCormick, ‘Beyond the Sovereign State’, Modern L. Rev., 56 (1993), pp. 1 et s. ; Neil McCormick, ‘Sovereignty, Democracy and Subsidiarity’, in R. Bellamy et al. (eds.) Democracy and Constitutional Culture in the Union, of Europe (London: Lothian Foundation Press, 1995), p. 95 and Paul B. Stephan, ‘Accountability and International Lawmaking: Rules, Rents and Legitimacy’, Nw. J. Int’l L. & Bus. 17 (1996-1997), p. 681. 12 McMahon, P. (2004) ‘Money, Markets and Microelectronics: Building the Infrastructure for the Global Finance Sector’, Prometheus, 22(1): 71-82.

6

RESTRICTED

RESTRICTED

that paper money has. Cyberspace has completely redefined the geography of the international

financial markets as well as its regulation. Financial transactions are increasingly taking place in

‘offshore locations’ (OFCs). Among the most important of these OFCs is the Isle of Man,

located in the Irish sea, which serves as a tax haven for European, and especially British,

financial firms. The ability to avoid the historical geo-physical constraints of the market, has

challenged the stability of domestic border controls and market regulations. Thus, in order for

the state to continue to have control over its domestic financial market, it must establish new

ways of regulating transactions that occur via the internet and thus reach into offshore locations.

17. International Laws. Apart from states losing control over their own markets,

globalisation has resulted in the sovereignty of states being eroded. Since the establishment of

the UN, sovereignty has been subject to international laws and sovereignty as supreme authority

and independence has been questioned. A global world requires a need for co-operation of states

in order for them to achieve the advancement of community goals. States can no longer act

completely independent of each other as they are affected by activities outside their boundaries.

Co-operation and interdependence between states necessitate the existence of an international

community of states guarded by international laws. The UN charter, as already discussed,

confirms the supreme nature of international law, especially in regard to human rights and

relations to other states. Although the majority of scholars of international law are of the opinion

that it is founded on the will of states, they contend that state sovereignty is submitted to some

restraint.13 Gobalisation thus reduces the sphere and influence of the state because states are

subjected to unfavourable international laws which subjugate their authority to non-state actors.

For states to realize the full benefits of international laws, they should exercise their sovereign

rights in ensuring that policies and measures taken at the global level correspond to the needs of

their state.

18. Global Menace. One other area where state control relative to non-state actors is

diminishing is in the control of global menace. The world of globalisation permits the

unrestricted global flow of ideas, products, information and many more across borders. Along

13 Kooijman, The Doctrine of the Legal Equality of States (1964) 139-140.

7

RESTRICTED

RESTRICTED

with such flows are illegal immigrants, international criminals, drugs, money laundering, sex-

trafficking, and much more which cannot be resolved by individual states acting alone. Such

global issues like terrorism create a situation in which taking the national interest alone into

account represents an inadequate and unsafe policy for states. A threat to any country is seen as a

threat to the security of all states in a global world. States would be required to pool their efforts

and to establish cooperation with non-state actors for solution to such problems. However, these

situations challenge the sovereign roles of states. Global problems are hard to tackle because

they require the cooperation of a greater number of actors. They are complex because they entail

both state and non-state actors, which creates coordination problems. Effective action requires

complex coordination among states, Non-Governmental Organisations, International

Organisations, Multinational Corporations and other non-state actors.

CONCLUSION

19. Globalization has affected the roles and extent of influence of both the State and non-

state actors. This is because of the increase in cross-border flows brought about by the advances

in transport, information and communication technology.

20. It all started with man's quest for a better life in the late Ice Age period, leading them to

settle across the globe. Globalisation is not new to man. It is a process. The current era should

therefore take advantage of all that the process has to offer to make life better. (7)

21. There is no end to technological advances. Development in technology should, therefore,

be encouraged, in schools and training institutions for the benefit of this and subsequent

generations. (8)

22. Economic globalization subjects member states to external pressure as a result of unstable

market forces. In addition, it creates dependency on non-state actors like the World Trade

Organisation (WTO). International bodies need to create enough policy space for diversity in

8

RESTRICTED

RESTRICTED

national institutions so that states could position themselves better to benefit from economic

globalization, irrespective of their status. (10)

23. UN could determine and dictate what happens in the governance of member states.

Although necessary in some situations, the UN should recognize that states have differences in

culture, varying needs and preferences and different levels of development. (11)

24. States exercise sovereign rights by delegating power to non-state actors. Sovereign power

becomes limited in the process. States could protect their sovereignty by ensuring that

incompatible prevalent legislation does not exist. (13,14)

25. Electronic financial transactions are increasingly taking place in ‘offshore locations’

(OFCs), a challenge to the stability of domestic border controls and market regulations. The

state should establish new ways of regulating transactions that occur via the internet in order for

it to maintain control over its domestic financial market and reach into offshore locations. (16)

26. International laws take supremacy over national laws. These laws submit state

sovereignty to some restraints. States should exercise their sovereign rights in ensuring that

policies and measures taken at the global level correspond to the needs of their state. (17)

27. Global problems are hard to tackle because they require the cooperation of a greater

number of actors. They are complex because they entail both state and non-state actors, which

creates coordination problems. Effective action requires complex coordination among states,

Non Governmental Organisations, International Organisations, Multinational Corporations and

other non-state actors. (18)

28. Even though it can be shown that globalisation has reduced the scope of state authority, it

is still within the sovereign power of a state to decide not to be part of the integrated global life.

The central challenge however is to ensure that globalization becomes a positive force for the

entire world.

9

RESTRICTED

RESTRICTED

RECOMMENDATIONS

29. The following are recommended:

a. The current era should, therefore, take advantage of all that the process has to offer to

make life better. (20)

b. Development in technology should, therefore, be encouraged, in schools and training

institutions for the benefit of this and subsequent generations. (21)

c. International bodies need to create enough policy space for diversity in national

institutions so that states could position themselves better to benefit from economic

globalization, irrespective of their status. (22)

d. The UN should recognize that states have differences in culture, varying needs and

preferences and different levels of development in their dealings with states. (23)

e. States could protect their sovereignty by ensuring that incompatible prevalent legislation

does not exist. (24)

f. State should establish new ways of regulating transactions that occur via the internet in

order for it to maintain control over its domestic financial market and reach into offshore

locations. (25)

g. States should exercise their sovereign rights in ensuring that policies and measures taken

at the global level correspond to the needs of their states. (26)

h. A Complex coordination among states, Non-Governmental Organisations, International

Organisations, Multinational Corporations and other non-state actors is required for effective

action against global menace. (27)

10

RESTRICTED

RESTRICTED

REFERENCE

Richard Haass, "Sovereignty and Globalisation." CFR.org. Council on Foreign Relations, 17

Feb. 2006. Web. 11 Feb. 2015.

Kooijman, The Doctrine of the Legal Equality of States (1964) 139-140.

11

RESTRICTED

RESTRICTED

Roslyn Higgins, International Law in a Changing International System, 58 Cambridge, L.J.78, 82

(1999) as quoted by Julian Ku and John Yoo, Globalization and Sovereignty, 31 Berkeley J. Int'l

Law. 210 (2013) http://scholarship.law.berkeley.edu/bjil/vol31/iss1/6 accessed on 11/02/15.

Wendy Pearlman, and Kathleen Gallagher Cunningham, "Non state Actors, Fragmentation, and

Conflict Processes." Journal of Conflict Resolution, 56, no. 1 (2012): 3-15.

Fassbender “Sovereignty and constitutionalism in international law” in Walker (ed), Sovereignty

in Transition (2003) 117.

Cassese, International Law in a Divided World (1986), 129.

Perrez, Cooperative Sovereignty from Independence to Interdependence in the Structure of

International Environmental Law (2000), 22.

Manfred B Steger, Globalisation: A Very Short Introduction. (Oxford University Press, 2013)

64.

Cornelius F. Murphy, “The Grotian vision of world order,” American Journal of International

Law (1982): 497

Ninčić, The Problem of Sovereignty in the Charter and in the Practice of the United Nations

(1970), 5.

Nayan Chanda, Bound Together: How Traders, Preachers, Adventurers and Warriors Shaped

Globalisation. (New Delhi: Penguin, 2007), xii

Ninčić, The Problem of Sovereignty in the Charter and in the Practice of the United Nations

(1970), 5.

12

RESTRICTED

RESTRICTED

Kirsten Schmalenbach, ‘International Organisations or Institutions, General Aspects’, in R.

Wolfrum (ed.), Max Planck Encyclopedia of Public International Law (Oxford: Oxford

University Press), online edition, para. 15, retrieved from www.mpil.com, accessed on 17 March

2015.

Jan Klabbers, ‘Two Concepts of International Organisation’, International Organisations Law

Review, 2 (2005), p. 278.

OBAAPA

Capt

Student

13

RESTRICTED