THE GLOBALISATION PROCESS AND ITS IMPLICATIONS TOR TANZAIA
Address by Ambassador Ami Mpungwe to the CEO-ROUNDTABLE, KILIMANJARO HYATT REGENCY HOTEL, DAR ES SALAAM, 9th OCTOBER 2012.
INTRODUCTION
May I begin by stating the obvious and say: the World has changed! The end of Cold war and significant developments in Science and Technology, over the last few years, particularly those brought about by the convergence of Information and Communication Technologies (ICT), have already transformed the world that we knew, not too long ago, beyond recognition.
They have re-defined almost everything that distinguishes and separates the human from the rest of the animal kingdom. This change and transformation process is engulfing the entire world and is already impacting heavily on systems of political and social organization, governance and wealth creation across the world. And this change and transformation process is happening at an alarming speed. As a result, even the nature CHANGE itself has also CHANGED!
Any attempt, therefore, that seeks to understand the fundamentals of this change process and its implication to the nations of the world, including Tanzania, should, in essence, begin by developing an objective and in-depth understanding of the nature and character of this change process and the New World that is fast evolving.
In that regard, Thomas Kuhn, the famous historian who has done a lot of work on the concept of paradigm and paradigm shifts, has this to say, "You don't see something until you have the right metaphor to let you perceive it'
THE DRIVERS AND DYNAMICS OF THE ON-GOING GLOBAL CHANGE
The journey towards the “right metaphor”, at the very beginning, would reveal that at the core of this paradigm shifting process, there are five key drivers that characterize the on-going global changes, namely:
1) HUMANISATION: OPTIMISING HUMAN FREEDOM AND CAPACITY
It is characterized by a profound commitment to the universal values of Democracy; Fundamental Principles and Practices of Human Rights and Rule of Law, and; Best Practices of Good Governance, in terms of transparency, effectiveness, responsiveness and accountability. Issues related to Gender equality and citizen empowerment also form integral part of this process.
Obviously, the logical consequence of this process comes out in terms extending the frontiers of human freedom and liberty, to their fullest extent and in a very indivisible manner, across the world. In the process, it is also meant to optimize the human potential and capacity to act in both, facing the difficult challenges and exploiting the vast opportunities that are brought about by the Globalisation process.
2) GLOBALISA TION
Globalization works to coordinate and integrate, production, distribution and exchange process across the world, with the view to taking full advantage of the existing or potential economies of scale and scope, in a manner that lowers production costs, increases efficiency and productivity and gain global competitiveness either for individual businesses or in inter-state or inter-regional trade and economic relations, as world economies become increasingly networked together, at the global scale. In the process, political, social, legal issues etc that are associated with such production, distribution and exchange processes, are equally networked and integrated at the global scale, hence the intensification of the phenomenon of globalization.
As a consequence of this process and in spite of the on-going global financial melt-down and economic down-turn, we are currently noticing a major upswing in the phenomenon of Mergers and Acquisitions at both, domestic and cross-border levels, largely by large corporate entities of the North. For instance, in 2007, before the onset of the Global Economic and Financial Crisis in 2008, Mergers and Acquisitions in the global gas and electricity sectors alone rose by 52 per cent to an all time high of almost US $ 300bn, driven by big European deals. At the same time, the total value of deals in 2006 was US $ 298.8bn, compared with US $ 196bn in 2005. Similar tendencies are noticed in all other sectors across the world, on daily basis! Associated with this process, there is also an enhanced tendency for consolidation of fragmented industries at both domestic and cross-border levels, throughout the world today, all pointing towards the globalizing character of the evolving New World Order.
3) LIBERALIZATION
At the same time, the Liberalization process, as we are all very much aware, works to open up domestic, regional and global markets, albeit some hitches here and there; encourage free movement of goods, services and other factors of production, throughout the world. The obvious effect of this process comes in the form of transforming national boundaries into markets and putting trade issues quite high in the global agenda, second to war issues! The formation of sub-regional and regional economic blocs has already become prominent feature of this process, as nation- states implement different growth strategies that are meant to expand economies of scale, enhance productivity and leverage global competitiveness. Tendencies to cling on false-nationalisms of the past viz-a-viz regional economic collaboration increasingly continue to receive serious challenges!
4) DIGITALIZATION
As I had indicated earlier on, significant developments in Science and Technology over the last three decades or so, through the convergence of Information and Communication Technologies, is indeed, transforming the world into a global village that it is to- day.
It has already rendered the differences in Time, Space and Distance, completely meaningless and irrelevant in today’s world of business or politics! The Digitalisation process continue to significantly transform the manner in which, individuals, organizations and even nations, live, interact, communicate, learn, work, compete and even play. But perhaps, most significantly, it has already eliminated a lot of traditional' jobs and traditional ways of doing things, as my own experience in the diplomatic service indicates. While Digitalization comes with a lot of its own challenges, it has also opened up, new and vast opportunities for creating worth and reorganizing various aspects of human endeavour, particularly as it is characterized and underpinned by growing efficiencies in Information Technologies and plunging costs of telecommunications!
ENVIRONMENTALISATION
This process, as we are all very much aware, focuses on renewed and intensified concern and care for the environment, in the quest for sustainable development and the very survival of the human race!
CHARACTERISTICS OF THE NEW WORLD OF GLOBALISATION.
The dynamic interplay between and among these global drivers, has created a global environment of political and social organization, wealth creation and service delivery that is characterized by extreme instabilities; profound discontinuities; wide-spread uncertainties; growing unpredictabilities, as well as the most intensive competition for markets and resources ever witnessed in recent human history!
Much as there are serious efforts to regulate, control and codify various aspects of this global process, nobody as yet, seems to be in control of the intensified globalization process! On the other hand, this process is so all-encompassing that there is nowhere to hide!
Many of the old philosophies and power structures are collapsing and new ones are taking shape. The notion of Power has equally transformed and no longer comes from above but increasingly it emanates from below, in so many different ways!
The dynamic interplay between and among the various drivers of the Globalization process has triggered a profound transformation in doctrine, concepts, structures, systems and styles of governance in both public and private sector organizations.
In the business world, for instance, there have been significant shifts in corporate governance and management philosophies, from Adam Smith's division of labour to the minutest task; Taylor's Scientific Management, Total Quality management of the 1980s, to the current considerations for Learning Organization, Six SIGMA and, particularly, the IT driven Business Processes Re-engineering (BPR) and Enterprise resources Planning (using such software programmes as SAP, Oracle, People Soft, etc).
As a result, in the business environment, customers and consumers, wherever they are in the world today, are much better informed of their wants and needs, for goods or services and at a specifically defined quality and price. Similarly, in politics citizens and voters, wherever they are in the world today, are much more aware of their political, constitutional, legal and human rights, than at any other point in human history. This is reflected in the new trends and approaches to politics and political organizations, taking into full account, all aspect of demographic and technological changes!
The notion of civilized State is now increasingly being defined, terms of the existence of sustainable peace and stability as well as the level of Humanization that a given State has attained, i.e. strict adherence to Universal Values of Democracy, Human rights, Rule of, Law and Good Governance. This has become such a fundamental political requirement that it has even attracted some strong economic conditionality for modern business. Investments and modern technologies would shun or move away from any political environment that either, does not subscribe to or fails to apply or live by these fundamental and universal values. Similarly, the notion of power and influence is progressively, less determined by military or political might!
Increasingly, the notions of power and influence are assuming a socio-economic character, largely through higher levels of humanization, economic growth, productivity and competitiveness that a nation attains, at the global market place.
As a result, issues of Global economic competitiveness have substantially assumed the centre-stage in both public and business governance. In that regard, most governments throughout the world, have significantly reviewed and re-defined their roles as well as sizes, consistent with the political and economic challenges of Humanization, Globalization, Liberalization and Digitalization.
There have been significant reforms and restructuring of government structures, with a lot of the traditional responsibilities either moving out of government domain or being out-sourced to the private sector. The ultimate objective is to enable governments, through best practices of Good governance, to contribute significantly to the creation of the most conducive environment, in which both the economies and businesses would grow and thrive.
On the other hand, the private sector is increasingly being entrusted with the role and responsibility of being, the most effective engine for economic transformation and growth, in almost every country of the world, including the former Communist State.
The central focus for many nations and business organizations to-day is to attain higher productivity and global competitiveness, through the most efficient use of human, physical and natural resources. Success of failure by nations and business organizations would very much be influenced by their ability to deal the challenges as well as the capacity to exploit the vast opportunities that are located within the dynamic interplay between and among the five drivers of Globalization.
IMPLICATIONS TO THE THIRD WORLD
Defining the on-going global changes and the emerging characteristics of the New Order in this manner, therefore, poses significant challenges to the Third World countries, particularly, the African continent, which has variously been described to be the “world's biggest development challenge”.
As Third World countries, concurrently endevour to resolve the legacy problems of their colonial past; find answers and solutions to the prevailing political and economic difficulties and, at the same time, face the enormous challenges that are located within the evolving New Global Order of globalisation, as they work to define and determine their development path into the future.
WHAT IS TO BE DONE?
This leads us to the final part of my presentation that seeks to suggest what needs to be done by countries like Tanzania, in response to the difficult challenges and some kind of opportunities that are brought about by the on-going Globalization process.
In that regard, the first thing that countries like Tanzania need to do in response to the globalization process, is to develop an in-depth understanding of the character and dynamics of such global changes and developments. Tanzania is a constituent part of this global system and we cannot hide from its developments. I say this because, to a large extent, we Tanzanians have developed a tendency of being disinterested players or observers of the ever changing global environment. While in the past, we used to be the guiding light and source of inspiration to the rest of Africa and indeed, the Third world in general, we have now taken the back seat! On the other extreme, there are some among us who even believe the world revolves around Tanzania, on issues of change and development! Here one needs to draw a lot of inspiration from countries like India, China, Malaysia and other Far Eastern Nations in the manner that they have been able to understand and respond to the difficult challenges of globalization as well as exploit the vast opportunities that are also brought about by the Globalization process. The issue of visionary and effective leadership, therefore, becomes extremely relevant in this regard!
The second point, therefore, relates to our own capacity to develop appropriate and effective policies and strategies that are consistent with own internal demands as well as global realities. Effective execution and follow through by both public and private sector structures and system becomes critical to eventual success. Systems of Governance therefore need a thorough review consistent with the huge development challenges that we face at the moment.
In that regard, we constantly need to keep our aerials and radar on as we monitor major global events that heavily impact on our development challenges at home! We therefore, need to be ever flexible and adaptive to change!
Thirdly, in both public and private sector governance systems, we need to develop and nature the culture and spirit of constant innovation, that is consistent with the demands and realities of the global changes.
Fourthly, to the extent that we depend on FDI and indeed, we cannot seriously develop without such in-puts, we need to develop an investment and business environment that truly sets us apart from our immediate competitors, not necessarily in terms of generosity of our incentive but largely in the easiness of doing business.
We therefore, need to brand Tanzania in a manner that offers world-class value proposition and experience!
Finally, we need as a nation, in our various governance structures and systems, to attract, develop and retain talented Young People. The quality of our education system therefore, holds the ultimate key in the extent to which we can make appropriate and effective responses to the domestic and external developments brought about by Globalization process.