Globalization in the Middle East Essay
Globalization is a phenomenon that has involved many nations in the process and even the nations of the world opposing globalization are influenced by this process. It is the flow of ideas, culture, customs, tradition, way of living, education from one part of the world to the other. It has impacted positively and negatively the very nations of the world. Many underdeveloped countries have been exploited in the process and only the West has gained. We will look upon this statement in this paper and see how globalization has affected community, culture, and economy of the Middle East region.
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Globalization, Middle East, culture, community, economy.
Globalization is not an event or an occurrence; it is a trend or a set of interlinked events. The first phase of globalization started in 1854 when the world was coming together but not in a peaceful manner. The main forces such as the internet, fast transports and increase in the ability of investors and nations to invest in other countries shaped the process of globalization in the 1990s. Some authors of great books refer to globalization as a trend of interdependence among the states of the world. According to them, globalization has been framed as a result of economic, technological and cultural interdependence among the nations of the world. The West and European Countries have been the major players in the game of globalizations. Their powers and influence on the Middle East and the South East Asian countries has been so immense that they have been able to transfuse their culture, educational programs and their way of living into the lives of the countries mentioned. The rate of globalization is now accelerating at a faster pace than ever before. GATT and WTO, now known as World Bank and IMF, took birth as a need of international collaboration for economy of the world. The researchers of globalization are yet unclear if the phenomenon of globalization has any positive effects on the third world countries. This is because only the first world countries in the world seen to prosper in the modern times while the issues and problems of under-developed nations continue to rise. In this paper however the focus is on the Globalization in the Middle East and its effects on the culture and economy. Initially the definition of globalization and its general effects will be discussed and then after developing a general understanding, specific discussion of Middle East will be undertaken.
Globalization can be defined as a process which is a multi-dimensional, multi-directional and uneven process of economic, political, cultural and technological interdependence. This interdependence is among the countries of the world which has made this world a ‘Global Village’. Globalization is directly related to the growth of the countries. The developed countries are highly dependent upon each other as they trade in food items, services, manufactured items and other goods with money. This has forced all the countries participating in the globalization to follow one economic system that is Capitalism. The more effective period of globalization was from 1945 to 1973 when the world was united in a sense. Capitalists were emerging in this period and concerns for environment aroused in the countries. A joint organization of oil-producing countries was formed named Organization of Petroleum Exporting Countries (OPEC). OPEC, an intergovernmental organization, which was established in 1976, is a cartel of 13 oil producing countries. OPEC took oil production and oil price under its control. Major member countries in OPEC are from the Middle East.
This collaboration of 13 countries brought these countries closer to each other as they had similar interest-export of oil. Through this cartel and meetings of member countries throughout the year, OPEC ensures that the countries contact and support other members. The member countries communicate with each other and decide the prices of oil. Recently 153rd meeting of OPEC ended in Vienna, Austria; these numerous meetings give us an idea of how close the member countries have been in making the decisions. This also implies that these countries are interdependent upon each other for decision making and they share a common interest.
The third phase of globalization took place from 1973 to 1991. In this period, Soviet Union disintegrated and Capitalism was embraced by the majority of the countries including the countries which emerged through the disintegration of USSR. The fourth stage of globalization is from 1991 to date. In this stage, the ideological conflict ended as all the countries embrace capitalism. Communism was abandoned; only China is the country which follows communism. Many changes in the international market took place in this era of globalization.
Creation of the European Union (EU) is another major step in the process of globalization. This step has allowed the regional states in Europe to come closer and support each other. These countries have to pay no taxes for trade among the EU. It has become a lot easier for the states to trade with each other as they have common currency now which is Euro. Making the payment and receiving payments has become very easy because of the common currency. Decisions made by one country in EU have a weighty impact on other member countries and these countries are heavily dependent upon each other. This has caused these countries to come very close to each other as the people need no visas to travel from one country to another. This increase in interaction among the member countries has caused a rapid phenomenon of globalization in the region.
SCENARIO OF THE WORLD UNDER GLOBALIZATION
There is an increase in the interaction among the states of the world. Increase in tourism, exchange of students and professors, free flow of human capital are some of the contributors to the rise in globalization level. In today’s world, dollar (US$) has become a common currency for international payments we can say that it has become a medium of exchange. The biggest revelation for the critics of globalization is the fact that one decision made in the US, affects most of the countries.
The recent global crisis which originated in the US has its effects in all the countries of the world. The stock exchanges in the EU countries have been at five year low level as a result of the crisis in USA. China’s growth has stagnated and its GDP has started to fall because it was a major trading partner of US and EU countries.
The countries which can compete with other countries at providing goods and services at lower cost, of the same quality are the countries which flourish from globalization. The countries which are able to provide superior grounds for investment with secure law and order condition, availability of resources and stable political situation are the countries which prosper from Foreign Direct Investments (FDI).
GLOBALIZATION AND MIDDLE EAST
The Middle Eastern countries have been active in the process of globalization as other developing countries. Their contribution to the process has been immense although these countries are limited in certain areas. The Arab world is diverse socially, economically, politically and historically but the people are interlinked in many ways.
The biggest piece of proof of globalization in the Middle East is the import of drinking water from other countries. Most of the Arab countries are rich in oil and gas but drinking water is almost absent of the Arabian Peninsula. Availability of drinking water in each home of the Middle East country is the proof of the fact that globalization has been taking place in this region also. Human resource outsourcing is also one of the most observed trends in the Middle East. Experienced and well-educated men have been employed in Middle East from all over the world mainly in the field of civil engineering, electrical engineering, drivers and computer science. Most of these men are from countries where they are not paid well enough in their country so they seek jobs in the Middle East countries. There is a free flow of people to other countries which has also accounted for the acceleration in the process of globalization.
Force that have led to globalization in Middle East
Internet has been the major force that has led to the globalization process. Internet has become a medium of communication; a person sitting in one continent can communicate with other person sitting in another continent in real time using internet. Geographical territories are no boundaries in today’s world for communication. Internet has allowed sharing of information with other countries and transfer of data from one computer to another. One of the advantages of internet is that it is cheap and accessible to everyone. In only some years it became a ‘need’ of every person from ‘invention’. Internet is defined as network of networks of the world and these networks are interconnected through a complex web. This complex web is used to access different networks of different companies and different websites in different countries.
Outsourcing is another force that has contributed to globalization process. During the early 1990s many companies in the Middle East started seeking for professionals in different fields who are good at their work. These professionals needed to be well educated in different fields such as health care, automotive jobs, IT, engineering etc. As a result many people from other countries who were well educated and were attracted by the salaries and benefits were outsourced in to Middle East. The labor markets in the Middle East mainly in UAE and Qatar are still vibrant. Therefore many foreigners moved into these companies and the language being spoken by majority became English. This was because there were people from various races and countries with different languages. So they could not speak and understand the local Arabic language. This is one of the chief impacts of globalization in the Middle East that there has been a shift from their language to another.
Free flow of capital and people from one country to another has become very easy now. All the nations want all restrictions removed and want free flow of capital. The investors in the world are now free to move their investment from one part of the world to another in a time frame of few minutes. This has made the world a place where investors can invest in any part of the world as they wish. People sitting in one part of the world can make purchases from a shop in another country on telephone or internet. This has increased competition for all the firms operating in the global context because they are now not competing with only the firms in one country but in the whole world.
Another force which has led to the process of globalization in Middle East is that the people living in this region have become more informed than they were before. In the past people were heavily dependent upon books and written journals for information and their main source for retrieving information was library. Now the people are able to find information about many things from many sources such as the internet, television, radio and online libraries. This has both good and bad consequences, because when a research is done and is made public, it can be used by anyone and also be duplicated. The person or the company which devoted its resources and time on the research loses and the one who copies the research gains. This has made the protection of intellectual property and ideas a difficult task. The other good side of people getting more informed is that when they are more informed and have more knowledge, they make better decisions which will be better for the economy of the nation.
EFFECTS OF GLOBALIZATION
It is still under debate whether the effects of globalization are in favor of the nations or not. Globalization is helping the developing countries to raise their standard of living. Globalization allows the businesses to compete on a global scale, making them more competitive and opening more opportunities for growth. Globalization is in support of free trade, helps erase poverty and favors prosperity for the nations which go global. In this section we are going to look at the effects of globalization and analyze whether the stated advantages are really present or is it just the perception of people created by the developed nations.
Effect on the community
Multination Corporations (MNCs) are growing in the countries as the trend of globalization is picking pace. These MNCs are huge in size and they are powerful enough to influence the government. Such corporations which operate in many countries account for over 33 per cent of the world output and 66 percent of the world trade. These MNCs are the biggest gainers from the process of globalization and are having an impact upon communities in very diverse manner.
As these MNCs have established their businesses in most of the countries of the world, they have also placed their franchises and branches in the Middle East. These multinational corporations first established their facilities around the Middle East countries. They produced and operated on Middle East lands to provide sales and services in the region as they were getting cheap labor resources. The main resource in Middle East is availability of oil, for that reason petroleum products are very cheap which are essential in day to day operations of these multinationals. The wages paid to the workers might are minimal, they are not provided with good working conditions to work in and their rights are ignored as they are forced to work for 18 to 20 hours in a day. Manufacturing companies like Nike and Levis Strauss are paying as little as 36 cents per hour to the workers in the Middle East. While in US, workers doing the same job might expect US$ 10 per hour.
These MNCs are also blamed for producing and advertising for the products which are not favorable for the community. Activities of tobacco companies in Middle East are soaring as they are targeting young people for increasing their sales. Use of tobacco is injurious to health and causes heart diseases but the companies producing them have so much power over the Middle East countries that they are not stopped from their activities which harm the community. They get involved in heavy advertising of harmful products and use promotion strategies that force the young generation to buy these products. McDonalds and Burger King have opened up franchise stores in Middle East countries and the children are indulging themselves in their food products at an increasing rate. These food products are very high at calories and huge burgers may give calories up to 1600 kilocalories to the consumer. These products are having negative effects on the health of children and they get fat and lethargic eating these products.
Most of the effects of globalization are on the young generation and it may be advantageous as well as undesirable for them. The young generation has got more access to the databases and warehouses of information than ever before. Therefore excess information may lead the young generation to take wrong steps in their lives. They may fall prey to cybersex on the internet by mature people who exploit these young children. Spread of AIDS and STDs in young generation is yet another issue facilitated by global transportation. Young people might also fall prey to internet fraud and terrorism. The desirable effects include more knowledge, developing of skills and becoming more aware of the world.
Global warming is one of the consequences of globalization that the communities have to bear. Another outcome is activity of one nation, group or organization or even one person causes other communities to bear the consequences too. For example, the nuclear accident in Chernobyl caused turmoil in other countries such as Germany, Russia and US where ever the food supplies of Chernobyl were exported. This was caused by globalization as these countries imported vegetable items from Chernobyl. Another example is the outbreak of swine flu in the US but the whole world has been affected. More than 100 people have died of swine flu. Because of globalization, this flu was spread in other countries also and people died in other countries also.
While these MNCs pose a threat to the health of the people, the community in which the MNC is working might also get benefits. Additional wealth flows into that community where the MNC is working and creates employment in the area where the facility is located. Other benefits are that the MNCs start to work for the society, opening up schools and health care centers where they are located. They do social work for marketing their own company but as an outcome the society also gets benefits. Many of the unskilled workers also get trained when they work for the MNCs.
Effects on culture
In Middle East there are more than 120 local channels on television but more international channels are viewed by the viewers. The media in Middle East has been revolutionized as more and more people are drifting towards the television to view international channels. Use of television and internet has influenced the local culture and Western culture has been adopted by many younger generation people.
At one time in history cultural diversity added flavor in the world, now it has ended. It looks like the communities in the world will embrace single culture. The culture of jeans and shirts has entered the Middle East and even the girls have started wearing them. A lot of English words have entered into the language of most of the Middle East countries to the extent that some countries have embraced English as official language and they have forgone Arabic. The youngsters in these countries have started to listen to Western songs and their own songs are influenced by Western music. The younger generation has started to celebrate Valentine’s Day on 14th of February which is a pure Western festival.
The Middle East region continues to face demographic shifts and social transformations which have mixed impact on women. In USA, women had to start working because there was a shortage of men after World War II. The same culture has been now adopted by the women in Middle East. Following the Western trends, the entrepreneurial skills amongst the women have been developed especially in Jordan, Egypt and Bahrain. Many women have started working as there has been increased in work opportunity for women created by the MNCs that continue to establish in the region. As globalization has been embraced by the Middle East countries, the inequality between men and women has decreased in the region and men have started accepting working women. Although the women in these countries have lower literacy levels and are paid less than men, but they are still stepping outside their houses and seeking jobs. Therefore there has been a cultural shift in the societies of Middle East that the women are allowed to work and start up their own businesses.
Western ideas, institutions and customs have been widespread in Middle East now. Thus many say that globalization is largely equivalent to Westernization. Asia, Europe, Africa and other parts of the world are more open to Westernization than Middle East because they already have considerable Western components. Globalization in Middle East was also referred to as modernization because the traditional society was being changed into a modern one. The existing Arab societies in the Middle East have been blended with new and foreign ideas to raise living standards and stabilize the existing order of education, health care, law and order, and security.
People living in the Middle East have adopted the technology that the West is using. Telecommunication in Middle East is on the peak with almost everyone owning a mobile phone. Mobile phone has become a need for communication in today’s world and Middle Eastern countries have not been left behind in the fast-changing technology if cell phones. Mobile phones are used by people in Middle East for calling locally and making international calls also. International calls have been made so cheap that the international calling rates are in competition with the local call rates. Mobile phones are also used by the people in this region for instant messaging, as personal digital assistants (PDAs) and for Global Positioning System (GPS). There has also been a trend in the youngsters of using iPods for collecting listening songs. Voice over Internet Protocol (VoIP) is also being used to communicate with relatives living in other countries and for business conferences.
The children have lost their interest in sports as the culture of video games and computer games has been adopted from the West. This is an example of “Quiet Crisis” that is taking place in the globalized nations as mentioned by Thomas Friedman in his book. Children are losing their interests in science and mathematics which will cause the nation to lack innovation and technology as a result of shortage of scientists and engineers.
Effects on economy
With the forming of OPEC, it was obvious that the Middle Eastern countries were the majority in the world which is supplying oil to other countries. These countries’ output has a very significant part in the global supply chain as oil products are used in every part of the industries whether it is education industry or electricity production. The Middle East region benefited immensely from the wealth created by the sharp rise in the prices of oil in the international market in 1970s. There was an explosion of investment and growth in oil exploration companies in this region. This increased capital flows, trade and worker remittances to other countries which helped other countries also to grow.
Import in the region from other countries started going up rapidly as the standard of living was increasing. People were demanding more luxury goods and consumables from other countries because they had money to buy these items. Some of the cheaper goods were also bought from other countries such as reconditioned cars from Japan and as a result, their own growth was falling down. As a result of these activities, there was unemployment within these countries though some countries witnessed rapid growth such as Egypt, Jordan and Qatar. Although the Middle East is in the process of rapid globalization since 1970s but it could not generate high growth rates and did not reap full benefits from globalization and integration of the world economy.
The gap between the income levels of the rich and poor is increasing in the Middle East within the countries as well as in comparison with other countries. Some people are living luxurious lives and have a lot of choices of food, cars, women, hotels, houses and have security. While the others are unemployed, starving and do not have a place to stay. These states have lost their sovereignty to the countries who are importing oil from these countries. These countries, USA, Germany, England, Russia to name a few, are controlling the policies formation and economy of most of these Middle East countries.
The governments of these states have become more dependent on the multinational corporations operating in these countries and the major importers of their oil. The multinational corporations operating in these countries own most if the financial assets in the region and are doing business to explore oil and produce crude oil in the region. Therefore they are more powerful than the governments in the region as they control the financial assets in the region and have huge investments in numerous projects around the Middle East. The countries in the region are vulnerable to these MNCs and the other Western nations which control the policy formation. The bases of power of these MNCs are the investments and businesses as they have free will to disinvest in the country and shift their businesses to other countries. With globalization, the MNCs have built their power to have a free flow of capital from one country to another where ever they think the conditions are more favorable. This has made the countries’ governments less powerful and less sovereign than the MNCs.
ROLE IN THE FLAT WORLD
The role of Middle East in the flat world should be to provide oil to the countries which need it but these countries in the region should maintain firm policy against the overwhelming power of the MNCs and the importing countries. The Middle East should not allow these companies and countries to dominate them and the terms should be limited to trade and investment. Undesirable and too much control over the resources of the country should not be allowed.
Middle Eastern countries should take full advantage of globalization in their region and should welcome Foreign Direct Investment (FDI). The investments should be welcomed from all the countries who are interested. This will not only create employment in the region but also boost the GDP of the countries. Crude oil is the raw material that is used in most of the industries in each and every country in the world. This plus point should be made a multiplication point and these countries should focus on becoming a part of the global supply chain. According to Friedman, two countries which invest in a business together are less likely to go to war with each other as they are a part of the same global supply chain. Their fortunes are invested in the same project so how can they go to war when they know that the outcome of war will be the failure of that business venture. Therefore these Middle Eastern countries should concentrate on being part of the global supply chains and partner with other countries.
COMPETING ON INTERNATIONAL LEVEL
External influence on traditions, culture and national authenticity should be opposed by the Middle East but the ideas and technology should be allowed to penetrate in to the region. There are a list of globalization ideas and products that the community in Middle East is not ready to accept. This rejection of ideas and changes should be at a lower level so as to get influenced by the positive innovations, technologies, researches and education methodologies that can have a positive effect on the future generations. Islamic community in this region builds a religious and cultural wall against numerous aspects of globalization. Those aspects should be forgone and other aspects of globalization such as transferring of technology and education should be embraced. This will allow the region to compete on an international level.
Almost every part of the world has not resisted to globalization to the extent equaling Middle East. The ideas, customs and institutions of globalization have been rejected due to their Western influence. Oil rich lands of the region have motivated them to become a part if the global supply chain and partner with many other countries. Although the people in the Middle East have opposed globalization but the area is surely globalized. With the culture of jeans and Coca-cola being rapidly adopted by the youngster we can say with proof that the region is entertaining globalization.
- Thomas, Friedman. (2005) The World is Flat, Farrar, Straus and Giroux, United States.
- Metcalfe, B. (2008) Journal of Business Ethics, Women, Management and Globalization in the Middle East, 83, 1, 85-