5.3 Challenges from Globalization

In the previous topics we learned about globalization and its impact in the course countries. In topic 5.3 - Challenges from Globalization we will analyze the conflicts that globalization bring to the sovereignty of countries.

It is important to understand the degree of sovereignty in each course country because it has great implications about the power dynamics within a nation. A government that lacks sovereignty can be easily affected by the activity of other nations, and that can generate a lack of control over its domestic policies as well. A nation must also advocate for their sovereign right to rule itself in spaces, such as the United Nations. 🇺🇳

One example of a sovereignty conflict is the Russian-Ukraine war. For years, under his rule, Vladmir Putin did not respect Ukraine's sovereignty, by attempting to interfere and take over its territory. The conquering of Crimea in 2014 by the Russian government threatened Ukraine's sovereignty by annexing a territory that was previously governed by Ukraine and without legitimate consent by the Crimean population.

There are several aspects of globalization that have jeopardized the sovereignty of nations across the world. Here are common challenged brought forward by the globalization process:

Foreign Direct Investment consists of investment to a country by individuals or companies from another country, with the intention of pursuing personal interests in the company receiving the investment. As well as FDI, MNCs serve to mark an International presence. Since there is a clash of interests and regulations in the host country, these strategies can highly affect their economic and political ideas and principles. In other words, FDI and MNCs often disrupt the economic ideology of a nation.

Example: Due to challenges in attracting foreign investment, the Nigerian government has adopted policies to improve its business environment. This illustrates how nations - usually the less developed ones - try to adapt to the expectations of other nations to gain economic benefit.

By opening up to Foreign Investment, governments are actively interacting economically and politically with countries of different regimes and cultures. This can be seen as an imposition of ideology by the population, leading to domestic backlash,

Example: In Iran 🇮🇷, the government often limits FDI coming from Western nations, and their main investors are China and India. This is because it would be seen as controversial by the Iranian government, and its population, to receive investment from the Western world.

Rapid Economic Development, such as high industrial activity, can have negative consequences for the environment and alienate citizens.

Example: In countries that have engaged in more liberalization, such as China 🇨🇳, the amount of pollution has risen substantially. Furthermore, with the imposition of a neoliberalism perspective, the Chinese government also alienates the population and prevents them from seeing the negative impact to focus on only one thing: production.

As countries interact with each other more in a more globalized world, it is easier to apply pressures on nations, through actions such as sanctions and the reversal of treaties. These mechanisms are used to orient nations to the "correct" path, as established by the International community.

Example: Russia 🇷🇺 has been the target of many economic sanctions, especially from western countries, since its invasion to Ukraine in 2022.

The government cares deeply about the perceptions of its sovereignty, as it is important to mantain its legitimacy from its own population and the International community. In order to preserve its sovereignty nations engage in domestic reforms that will help them adapt to international demands. On the other hand, governments are also trying to control the domestic debate about its economic policies to deflect negative commentary and focus on the improvement of economic conditions.

In the next guide, we will discuss more in depth these economic policies! ➡️