Globalisation and the threats it poses in the twenty-first century

Abstract

This article examines and assesses globalisation and its role in the context of the emerging global threats in the twenty-first century. It also provides policy suggestions and leads to a deeper understanding of the emerging opportunities and their related threats. It focuses in particular on the economic instability in the period of economic hardship, income inequality between and within nations, and the benefits and risks of Internet use. The author suggests that we should benefit from globalisation's positives even during the times of uncertainty caused by the impact of emerging threats, yet be aware of the threats and take courage and individual responsibility to tackle them. Globalisation is a product of the people and an informed and pragmatic approach towards the threats is crucial. If prevention and self-responsibility prevail, people might start looking to the future more positively, with broader hope and enthusiasm, through a shared lens of cooperation to improve living standards globally.

Introduction

‘Globalisation is everything and its opposite. It can be incredibly empowering and incredibly coercive’, states Thomas Friedman (2000, 406), who believes that globalisation is perhaps the biggest threat to itself if its tendencies and traits become oppressive. On the other hand, Giddens (1991, 64) defines it as ‘the intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa.’ Both definitions are valid and the term globalisation casually connotes interconnectivity, technological progress, interdependency, innovation, and the international exchange of goods, services and information. It has acquired an emotive force. Proponents of globalisation and the global governance of society consider the individual role of the nation-state to be outdated. They believe it should be increasingly replaced by international cooperation to ensure progress and security. Others view it with fear and criticism, considering globalisation to be a cause and driver of growing inequalities between people, nations and regions.

If a threat is considered something we might fear and towards which we react defensively to counter danger, then a challenge could be defined as a situation in which instead of fear, we exhibit courage. Some threats should be considered challenges that we can face without fear and thereby think of the opportunities they bring for positive change. If we want to prevent self-destruction, we need to recognise the threats, assess their impact and take responsibility for dealing with them.

Globalisation seems inevitable and irreversible, but it is a man-made product. Therefore, it is up to each of us to take responsibility for both the positive and negative outcomes of it that we can influence while being part of a globalisation process that is not progressing evenly. For instance, if a European citizen knows how to prevent or find protection from cyberattacks on a personal computer, that user will be able to use the Internet safely while also protecting other Internet users connected to the same network when abroad. Personal engagement and multilateral cooperation are not only good, they are necessary if we do not want international relations to fall back behind the achievements that have occurred since the end of the Cold War.

There are various serious threats from globalisation including energy insecurity, military conflicts and environmental destruction. This article will examine three specific issues representing threats to security at the beginning of the twenty-first century which directly and globally influence the daily lives of individuals: economic instability, growing income inequality and cyber-insecurity. It will assess recent developments in each of these areas and provide analysis as well as policy solutions to tackle these issues better in the future.

Economic instability: using our potential, while avoiding risks, to capitalise on opportunities

The speed, capability and even willingness of countries to integrate into the global economy vary and subsequently can determine the level of economic growth. Economic models for the globalised open economy build on aggregate supply and demand, that is, the total volume of goods and services supplied and in demand in the economy at a given overall price level and in a given time period. If this volume increases through increased exports and higher levels of investment, including foreign direct investment, then this ensures economic growth. On the other hand, inward-oriented policies lead to economic stagnation and decline, as was the case in the 1970s and 1980s in Africa and Latin America. Outward-oriented policies, leading to greater integration with the global economy, spur the progress that we are experiencing today. However, due to the global effects of the current crisis caused by increased interconnectedness, renewed nationalism has entered some national theatres, rejecting globalisation and rediscovering certain tendencies for stronger state sovereignty. This is the case, for instance, in Russia, Turkey and some EU states which are experiencing economic hardship, even though they are still profiting from globalisation through trade and other policy cooperation. For instance, in France, the EU's second largest economy and one of the world's largest exporters, the far-right National Front received its strongest-ever support in the March 2014 municipal elections. These nationalist tendencies may mirror people's fear that the global approach may have difficulty coping with growing local problems such as financial insecurity and high unemployment rates.

Financial insecurity

Crises in the 1990s in emerging markets and the current financial crisis have made it evident that threats and opportunities go hand in hand. Although production processes are more widely spread across various countries than a century ago, under the current system the circulation of global capital is relatively unstable. Living in a largely globalised world where money is still nationally based leads to instability, as capital flows are, in large part, directed by different monetary policies and interest rates, leading to unstable flows and recurrent crises. ¹ In addition, rising economic powers such as the BRIC countries (Brazil, Russia, India and China) represent a potential risk of upset to the geopolitical status quo. The threat from these countries could come from national politics or a powerful national political group pushing its country in a more nationalist, perhaps even military, direction, not defined by international considerations. In order to prevent this, a gradual and peaceful transition in the BRIC countries is necessary to ensure cooperative relations.

1

Author's interview with Marius Gustavson, 29 March 2014.

In addition, private financial actors hold increasing power in the world. Their power can be seen both as an opportunity and as a threat to our democracies. Globalisation creates incentives for governments to support more competitive markets and pursue sound economic policies for the improvement of living standards through economic growth. Globalisation can encourage the private sector to undertake a proactive role in contributing to economic growth through innovation and the establishment of new start-ups, which contribute through higher production and thus more tax paid to state budgets. However, state decision-makers need to remain independent of potential interference from private sector representatives and avoid pushing their interests into the government decision-making process at the expense of others.

Increasing youth unemployment rates

Governments today need to do more than prevent the influence of other bodies’ interests with respect to their voters. They ‘need to do more to control their deficits and boost economic growth in the medium term’ (The Economist 2010, 11). There are various ways to ensure economic growth through increased production and trade, but also through adjusted labour policies to which young active workers can contribute more than they do currently. Many university graduates have experience studying and living abroad and have learned foreign techniques and languages. Thus, with their acquired knowledge and energy they represent a potential to be used for growth and stronger cooperation. However, the current unemployment rates among young people (15–24 years) demonstrate both a threat to and an opportunity for efficient labour policies which are tightly linked to economic growth. Since 2007, the year preceding the current financial crisis, global youth unemployment rates have grown from 11.5 % to 12.6 % in 2013 (ILO 2013). On 4 April 2014, trade unions organised an anti-austerity demonstration to draw attention to youth unemployment in the EU. In the Middle East, as the young population has grown, unemployment rates have increased and the region now has the highest youth unemployment rate in the world. Globally, the figures for youth unemployment are rising but the ante- and post-crisis numbers are not that different from each other. Perhaps this is thanks to the globalisation of access to foreign labour markets. Nevertheless, more can be done to prevent an upward trend in youth unemployment (ILO 2013).

Labour market and economic prosperity

In its report on the US, the OECD (2014) proposes combining education and job training measures that extend opportunities and trying to make public services more efficient in order to trigger economic prosperity. With a targeted labour market approach, countries can utilise the youth potential in domestic markets more systematically to ensure growth and economic stability. Also, students could have their study programmes linked to various job opportunities in order to acquire practical experience in their field, preferably even before they graduate. Countries face competition over capturing the potential of their youth, with crucial stakes at play. If, after graduation, there is consistently insufficient employment demand and an inability to integrate the potential of young minds into the domestic economy, there might be an even stronger trend than there is today for young professionals to leave their ageing countries, which will not be able to counteract the loss of this human capital. Cooperation on the training and strategies needed to reduce global youth unemployment through targeted and shared national policy initiatives could be beneficial for all those involved to help prevent the growing threat of economic instability.

Growing inequality with unequal growth

Cooperation and global competition allow economies to focus on the fields they are best in and thus trade products using their competitive advantage depending on the quality of the business environment. On the one hand, in globalised economies practices shared between nations which assimilate the techniques of others might lead to less distinction and it being more difficult to compete on the basis of each economy's unique markets. On the other hand, Japan is still known for its quality electronics; India for growing tea, cotton and sugar cane; and Russia for its rich natural resources of oil and gas. Many more countries could be named. In the EU, common policies tend to move countries economically closer, including in terms of their production, but they still maintain their competitive advantages. For instance, Slovakia, a Central European country of 5.5 million inhabitants, which became an EU member state in 2004, could be considered representative of the EU's smaller states, along with the Baltic states, Bulgaria and Malta, which are currently the EU's GDP growth leaders since the crisis began (Balcerowicz et al. 2013, 29). Since 2007, Slovakia has become the world's largest producer of cars per capita and they represent a large portion of its exports. According to the International Monetary Fund's statistics (2013), in 2007 Slovakia's GDP reached 10.5 % growth, the highest since its transformation into a market-driven economy. The country has maintained positive GDP growth since then, even during the global recession, although the overall level of GDP growth has decreased. Globalisation processes can help to economise financial or scarce resources, including during periods of economic hardship. Nevertheless, larger and more interconnected markets do not automatically ensure fair and equal benefits and efficiency for all those involved in the trade and thus can lead to greater inequality. Less developed countries usually embrace more capitalist policies to improve their economic situation, yet, since they lack resources or expertise, they need support from richer countries to courageously approach fierce international competition.

The gap between the rich and the poor

The rapid globalisation of the economy and fast technological progress can be considered to be major underlying causes of the growing inequality. The gap between those who have access and are good at working with new machines and those who do not is growing. These factors are also dividing people into two groups which are receiving unequal benefits from the opportunities that globalisation brings. For instance, the US is considered to be the most unequal country in the rich world, where only the richest 1 % of the population benefits from the growth gains of 95 %. The overall income share of that 1 % is close to the highest level in a century (The Economist 2013). According to recent polls carried out in the US, 65 % of adults there believe that during the last 10 years the gap between the rich and others has increased (Pew Research Center 2014). Rising inequality between the rich and the rest can be considered as one of the major global threats of the twenty-first century, where the already poor are becoming poorer. The UNICEF report ‘Global Inequality: Beyond the Bottom Billion’ (Cummins and Ortiz 2011) claims that there is evidence of progress, but also that it is too slow and that more than 70 % of total income in the world is still enjoyed by the richest 20 % of the population. The UN millennium development goal to halve extreme poverty by 2015 has already been reached (UN 2013). Nevertheless, the figures and public perception of progress is different within countries. This demonstrates that globalisation can contribute to reducing inequalities between countries but that positive changes to inequality within states take time to adjust to new global figures; a regional approach to global inequality could play an important role in how people feel progress is being made in their daily lives.

Income inequality

Income inequality challenges many countries, including the members of the OECD. In general, less mobility and reduced equality of opportunity are considered to be the results of this inequality, broadening salary gaps reinforced by the economic crisis. However, there is also a decreasing trend in income inequality in developing countries including Brazil and smaller nations like Malaysia (World Bank 2011). In these countries strong economic growth has met with a willingness to reduce social disparities caused by the growth in income inequality due to the difference in the growth rates of rural and urban areas’ incomes and trade. The governments of these countries decided to finance equitable policies through taxation and investments. Between 1990 and 2007/8 (the beginning of the current economic crisis), the generalised inequality index (GINI), which evaluates the level of inequality, fell by five points in Brazil and by four points in Malaysia, meaning that income equality increased in these places over the period (Cummins and Ortiz 2011, 50 and 56). Yet, the trend went in another direction in developed economies, including the US, where the index increased by 2.5 points, and China, where it rose by approximately 12 points during the same period (Cummins and Ortiz 2011, 60 and 51). In the strong European economy of Germany it increased by 3.4 points during that period (Cummins and Ortiz 2011, 53), but has since fallen by almost 2 points (Portugal Economy PE Probe 2014). Other EU countries which have suffered a lot due to the crisis, such as Greece and Italy, have not really seen any changes in their income inequality statuses, and nor had the EU27 between the beginning of the crisis and 2012 (Portugal Economy PE Probe 2014). Therefore, these data demonstrate that, even during a crisis when the economic situation worsens, economies can grow or stagnate, but income inequality does not necessarily worsen due to the process having roots in globalising markets.

Globalisation and technological change have played a role in income distribution, although not in the same way in every country. The variations exist due to the economic situations in the different countries and the differences in policies and institutions. Rising inequality due to diverse increasing income growth rates could be prevented if the minimum income was higher, but only to the point that it does not reduce employment. Education policies that ensure that fewer financially demanding conditions have to be met to access quality education, including universities, would lead to a reduction in inequality, as well as the accumulation of human capital which in the long run could also boost GDP per capita. This could be ensured by providing wider options for accredited online education for those who cannot afford to attend courses on a campus but are willing to spend their time learning from home to acquire the necessary knowledge. Certain government tax policy reforms are often mentioned too, but something that everyone can contribute to is fighting any kind of discrimination which leads to an increase in inequality. Such inequalities can be reduced by taking individual responsibility for making our globalised lives more balanced and decent in various areas, starting in our homes, through each individual's proactive approach.

The Internet: living in the cyberworld

We belong to the era of the Internet, which enables us to exchange written, audio and video information instantly with someone on the other side of the world. However, we do not know where the information is stored, by whom or for what purpose. We think we share our messages in private but once they are expressed online they are no longer only ours. Our privacy and our security are threatened if that private information, shared in a private conversation, is abused to harm the sender by releasing it to a third party. Nevertheless, we should capitalise as much as possible from globalisation's positives without fear of the emerging threats that come with the opportunities of the Internet. It is in the interest of national governments to protect citizens from potential cyberattacks on their systems which are connected to public Internet sources. The globalisation processes of tighter cooperation and widened Internet access also need to lead to harmonised international efforts. It is the role of intelligence agencies to supervise the use of the Internet and also to ensure secure investigation and the handling of sensitive information, and to detect potential cyberthreats. In addition, private sector companies and individual Internet users need to be well informed and encouraged to learn new ways of use, the potential methods of abuse and how to protect systems in order to prevent cybercrime.

Growing Internet use contributing to economic growth

Regardless of whether one looks at the emerging digital presence as a developing threat or an opportunity, it is growing with every mouse click, shared video or Skype call. The ways to use the Internet have increased rapidly since the 1980s. Individual Internet users in the EU reached 73 % in 2012, which is just two percentage points below the Digital Agenda for Europe's target of 75 % of the population by next year (Seybert 2012, 1). Out of the 2.5 billion users worldwide, there are currently over 400 million Internet users in Europe. People are increasingly opting to use the Internet and its benefits.

The information technology sector contributes significantly to economic growth, both on a global and a local scale and therefore offers many economic opportunities. By the end of 2011, 21 % of the GDP growth in economies using the Internet in large numbers was attributed to the Internet (Manyika and Roxburgh 2011, 1). On a more local scale a new Cyber Command system has been created in the US during the Obama administration. The establishment of the air-force branch of this new Cyber Command has contributed considerably to the city budget of San Antonio, which is one of the US's largest cities and plays a pivotal role in the country's cybersecurity.

The Internet as a potential threat

On the other hand, the Internet can be viewed as a developing threat as well. According to CSIdentity (CSID 2014), a global provider of enterprise-level identity protection, the scale of consumer cybercrime totals 556 million victims every year, which basically means around 8 % of the world's population, more than the population of the EU today, and around 22 % of the world's Internet users. The three countries with the highest number of cybercrime victims are Russia, China and South Africa. The reasons for such high levels of cybercrime can vary from an ineffective and uncoordinated government response to law enforcement not viewing cybercrime as a priority or hackers infiltrating systems without being detected for a long time. But many are affected by the broad possibilities of Internet use. The infamous ‘Snowden affair’ has exposed the world to government secrets regarding how technology is used to spy on other governments as well as its own people. Edward Snowden, an American computer specialist and former US Central Intelligence Agency consultant, disclosed thousands of documents revealing the existence of US global surveillance programmes. With surveillance techniques ranging from infiltration of phone and Internet communications through to various kinds of cyberattacks, it is easy to understand how network infrastructure is seriously and repeatedly compromised. In addition, in Africa, several governments are starting to acquire new cheap spyware from Chinese and European companies for use in spying on their populations (Clayton 2014). According to the report by Human Rights Watch (2014), powerful spyware is proliferating and is ‘virtually unregulated at the global level’ with insufficient national controls. For instance, in Ethiopia, the largest economy by GDP in East and Central Africa, and a one-party state where Internet usage is still in its infancy (1.5 % of the population compared to 40 % access in neighbouring Kenya), Chinese cyber- and phone surveillance technologies have been deployed to undertake unlawful surveillance of free speech and suppress political dissent. In addition, China is developing its own Internet technology which enhances state control over the otherwise globalised domain of the Internet.

Although the Internet allows for easy access to information and services, the global sharing of information, and easy e-contact with people around the world, it also leads to personal disconnection. The rapidly multitasking, emotionless cyberpartner, in the form of a computer, has become the replacement for a good friend. People use computers daily. This anonymity makes it easy to criticise others without being easily identifiable and to pursue cyberattacks without being easily traceable or punished. Information shared by Internet users can be abused by cybercriminals. Statistics demonstrate that a high percentage of identity-theft cases involve the misuse of personal information for an illicit purpose. Companies like CSIdentity protect people from this kind of theft and provide a clear overview of related data.

Nevertheless, while in the 1980s it only affected several hundred people, in 2009, 10 million people were victims of identity theft, and since then this number has increased by approximately 8 % on a yearly basis (CSID 2014). According to CSID (2014), ‘the identity theft rate for children was 35 times the rate for adults in the same population’, noting that credit reports fail to detect most child identity theft and that this is not only a growing threat but also a growing trend. People need to be trained and informed about potential cyberthreats at an early age in order to be able to safely take advantage of the benefits provided by the Internet.

The Internet provides many beneficial services to worldwide populations. However, national cyber-related policies need to be revised and international cooperation on cybersecurity has to be strengthened to ensure higher respect of citizens’ privacy while protecting them from a serious global threat–-cyberterrorism. Possible protections should be realised in schools and workplaces to reduce the number of victims. One Internet user can be a door for cybercriminals to attack the whole system and networks used by millions. Targeted education and training is sorely needed. Internet use should be part of the school curriculum from the primary stage. New employees should receive security training including a voluntary short-term cyber-education course that could be financially supported by the company. This would lead to both increasing awareness and knowledge, as well as securing the safe use of systems.

Conclusion

The threats and opportunities of globalisation in the twenty-first century are numerous. The emerging threats of cyber-insecurity, income inequality and economic instability can be kept under control if more common strategies and policies are implemented, taking into consideration the individual responsibility to opt for a proactive learning approach and cooperation to tackle these threats. However, growth has been unequal, and the large gap in living standards between high-income and low-income countries is a matter for concern. But this should not lead to the conclusion that globalisation has fuelled the income inequality or that nothing can be done to improve the situation. More interdependence could help to deal with these issues in institutionally organised settings and should also create prosperity. As the article has examined and demonstrated, globalisation is a man-made product and economic instability can be improved through more stable circulation of global capital, better targeted labour policies and the support of entrepreneurship. Income inequalities and distribution can be tackled by equitable policies for education and taxes, and a proactive, individually responsible approach. In addition, everybody should have the opportunity to learn about cyber-related risks and opportunities through training in the use of safe systems, while being aware of potential intrusions into their privacy and the privacy of others. Both e-connection and personal disconnection are only one click away. Nevertheless, how the economic crisis, industrial advances and growing use of the Internet affect our living standards in the coming decades is yet to be seen, as is what happens to our personal relationships with the diminution of the human touch and growing use of touch pads.

History cannot be changed. It can be assessed. The present has been decided. The future is in our hands. As Winston Churchill said, ‘But now I leave the past, and I leave the present. It is to the future that we must turn our gaze’ (Churchill 2004, 501). We need to look to our common future with courage to tackle the global emerging threats together.