GLOBALISATION AND
CHALLENGES TO STATE
SOVEREIGNTY
There is a link between globalisation and State sovereignty. Globalisation refers to a process of removing government imposed restrictions on movements between countries in order to create an “open”, “borderless”, world economy. Globalisation, thus, has a powerful economic, political and social dimension. National sovereignty and national borders have limitations in the globalised economy. The management guru Peter Drucker observed that in a globalised economy, national boundaries have largely become irrelevant. Sovereignty of a nation in a globalised economy can be protected by the following ground realities.
1. Predominant industrial society.
2. Near equal society. 65 66
3. Democratic political institutions.
4. International economic bargaining powers.
5. Presence of civil societies. (NGO’s)
6. Knowledge based society.
7. Advanced information technology.
8. Appropriate distributive mechanism for the distribution of the benefits gained through globalised economy.
9. Adequate Social Security measures for workers. 10. Limited role for bureaucracy and to extend welfare functions of the State. In the absence of the above said features, the introduction of globalisation in a nation has been considered by many critics as surrendering the national sovereignty to MNC’s. In India, the globalised economy has been built on a socialistic foundation. In the context of poverty, illiteracy and inequality, the introduction of a liberalised economy will lead to mass protest and labour unrest. The sovereignty of the nation has given way to the concepts of supranational and extra-territorial regimes like IMF and WB. Further, these changes are being legitimised through international treaties and national policies. The role of the State as protector and guarantor of human rights has also undergone significant change. State‘s authority in this regard has been partially transferred to the universal codes regarding human rights. Several supranational institutions have appeared which have assumed responsibility for the protection of human rights and thus greatly undermined national sovereignty and citizenship. Immigration by the highly developed countries has resulted in creation of contradictory legal regimes. It has been observed that often the corporate sector, backed by national governments of developed countries, has supported the removal of restrictions on cross border flows of people, to protect and promote its financial and staffing interests. Despite this the domestic regimes have tried to uphold the state's long established sovereign right to regulate the entry of all aliens to its territory. The State sovereignty has been greatly undermined with the domestic courts increasingly invoking human rights covenants in defence of individual rights. As a result, the foundations of state sovereignty and nationality are being redefined. In the course of time, the meaning of citizenship may be diluted and the distinction between citizen and alien may be blurred. One scholar has observed, “the sovereignty of nations becomes invalidated, and their development determined more by the compulsions of the market place and less by their own national needs and priorities. National social contracts are abrogated with impunity; and international contracts are negotiated and enforced through a variety of instruments for covert and overt action”. From our analysis of the impact of globalisation on national sovereignty, it is understood that the benefits of a globalised economy have positive signs of development for developed nations than the developing and underdeveloped nations. When the developing and under developed nations introduce economic liberalisation and privatisation it may seriously undermine national sovereignty.
The general impact of globalisation on national sovereignty of developing nations are listed as follows:
1. Multinationals can impact communities in very diverse places. First, they look to establish or contract operations (production, service and sales) in countries and regions where they can exploit cheaper labour and resources.
2. It can also mean large-scale unemployment in those 67 68 communities where those industries were previously located.
3. Multinationals seek out new or under-exploited markets.
4. Multinational companies can also have significant influence with regard to policy formation in many national governments and in transnational bodies such as the European Union and the World Bank (key actors within the globalisation process). They have also profited from privatisation and the opening up of services.
5. Another outcome of globalisation has been a huge increase in salaries of senior managers, accountants, lawyers and public-relations personnel working for MNCs or the local competitors.
6. A major causality of this process has been a decline in the power of national governments to direct and influence their economies (especially with regard to macroeconomic management).
7. Developments in the life sciences, and in digital technology and the like, have opened up vast, new possibilities for production and exchange. Innovations like the internet have made it possible to access information and resources across the world -and to coordinate activities in real time.
8. Knowledge has become perhaps the most important factor determining the standard of living -more than land, than tools, than labour. Today’s most technologically advanced economies are truly knowledge-based.
9. Large multinational corporations still have considerable economic and cultural powers. Examples: Coca-Cola, NIKE, Mac Donald, and LEVIS
10. Indian industrialists who have so far failed to invest in research and development and are losing the battle for market share are also becoming amenable to globalisation in the fond hope of partnering with an MNC that will enable them to stabilise or expand their sinking business ventures.
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