Globalization and Nation States

Global Young Elites Summit on “Technology, Policy, Management (TPM)”

Globalization and Nation States

Juan Uriburu Quintana

International Master in China Studies

National ChengChi University

We are living in an increasingly globalized world. How many times have we heard this expression? The answer is probably going to be ‘too many.’

Since the 1980’s, when the term ‘globalization’ became a very popular word, it has been used by and large by those willing to make reference to the opportunities, benefits and advantages globalization offers, and on the other hand, by those willing to show open hostility, distrust or just caution towards it. This wide usage of the term is due, in part, to the information technology revolution that accompanies this phenomenon. Phenomenon that, as a matter of fact, has so far generated more heat than light.

A few years ago, in 2000, the International Monetary Fund issued a brief under the title “Globalization: Threat or Opportunity?.”(1) Such a title reflects the two main streams of opinion regarding globalization and the reactions it provokes. It is not only because of the carefully chosen words included on the title that would like to makereference to this brief, but also because of the character of the institution it was issued by.

Certainly, globalization can be mainly considered in economic terms, as a process of economic integration. But it has important effects in many other areas, particularly, and, among others, the political and cultural ones.

Therefore, the role of governments, societies, economies, political parties, institutions, ideologies, policies, reforms and of other remaining sectors will be necessarily involved in the discussion whenever globalization is being discussed.

The main purpose of this paper is to analyze the current role that nation-states have in the globalized world, taking specially into consideration the fact that, as the world becomes increasingly globalized, predictions regarding the crisis, failure or even demise of the nation-sate keep arising.

In my view, and for the reasons I will explain in this paper, nation-states not only still survive, but they also do it in a good way. They adapt in order to endure. And they do so in the same way they have been doing it for more than four centuries, since the modern system of states was formally established in 1648, when the Treaty of Westphalia was signed.

Nowadays, nation-states would-certainly-not and could-certainly-not remain immune to the fundamental changes that are taking place in the global economy.

We have to remember that it was only a few decades ago when Anthony Giddens defined the nation-state as a ‘bordered power container.’(2) Does the nation-state remains sovereign and such a power-holder? The answer is that it does not longer remains such container, at least in the sense that expression used to have a few years ago.

Of course, nation-states have lost manouver capacity. They have become less autonomous, and, in a way, less sovereign. But there is a remarkable difference between saying that nation-states have changed and are now weaker than before, and saying that they have failed, they have been agonyzing, or even that they have died.

Necessarily, the role of the government of nation-states will also be analyzed, since even though Thomas Jefferson once said that ‘The government is best which governs the least’ (3), Gregory Chow has astutely observed that ‘in the process of an economic integration promoted by government, the government has to play an important role, even if Jefferson’s statement is still valid when a set of economic institutions is well established.’ And, he adds, ’if one is to understand the important roles of the government and nongovernment sectors and their interaction in shaping the transformation of an economy, it is necessary to understand the historical, cultural and institutional factors that affect the actions of government officials and the people.’(4)

Since the early years of the 20th century to these days, world politics and economies have gone through particularly great changes.

It could not really had been any different, if we take into consideration that, from a historical perspective and in less that a hundred years from now, the world has witnessed the collapse of Imperial China, the funding of the Republic of China, a World War, two Russian revolutions, a Civil War in Spain, a second World War, a Communist revolution in China, the post-war collapse of the French and British colonial empires, a Cold War between soviet-style communism and capitalist liberal democracy, the collapse of the Berlin Wall, the decomposition of the Soviet Union, and, among many other major events, the end of the communist Utopia.

Even the ‘end of history’(5) has been announced, but it would perhaps be more accurate just to say that ‘the bitter ideological confrontation sparked by this century’s collision of ‘isms” has ended.’, in the words of Kenichi Ohmae. (6)

Ohmae’s opinion regarding the nation-state is that it has come to an end, and that ‘more of the core values supporting a world based on discrete, independent nation-states –liberal democracy as practiced in the West, for instance, and even the very notion of political sovereignty itself- have shown themselves in serious need of redefinition or, perhaps, replacement.’(7)

According to this, ipf not redefined, nation-states should be replaced. But, what would replace them? Ohame argues that there are a number of more focused geographical units, that he calls ‘region states’(8), and he adds that ‘what defines them is not the location of their political borders, but the fact that they are the right size and scale to be true, natural business units in today’s global economy.’

One would be certaintly tempted to say that, instead of coming from a policital science’ view, international relations’ angle or public international law’ perspective, Ohmae’s statement reflects his background as a business strategist and an economics consultant, but, fortunatelly and as a matter of fact, it is not necessary to adopt any of the above mentioned postures to reject these arguments, since completely opposed opinions are also to be found expressed by authors specialized in such a field.

Peter Drucker, for instance, has said that ‘although the best and the brightest have been predicting the nation-state demise for 200 years, despite all its shortcomings, the nation-state has shown amazing resilience. While Czechoslovakia and Yugoslavia have been casualties of a changing order, Turkey, a nation that never before existed as such, has become a functioning nation-state. India, rarely united except under a foreign conqueror, is holding together as a nation-state. And every country that emerged from the 19th century colonial empires has established itself as a nation-state, as have all the countries emerging from the breakup of the Eurasian empire forged by the czars and tied together even more tightly by the czar’s communist successors. So far, at least, there is no other institution capable of political integration and effective membership in the world’s political community’.(9)

Analizing its current role, Drucker adds “In all probability, therefore, the nation-sate will be a greatly changed nation-state, especially in domestic fiscal and monetary policies, foreign economic policies, control of international business and, perhaps, in its conduct of war’.(10)

As regards the controversial issue of sovereignty, and as, I would say, a political scientist’s answer to Ohmae’s position, Michael Burgess argues that ‘today is much more appropiate to refer to the “autonomy” of the modern state- its capacity to determine itself- than is to speak of what is now an outmoded sovereignty.’(11)

Burgess distinguishes two aspects of the modern state, and says ‘the modern state is a historical phenomenon, but it is also a distinct political institution, developed by society. Through its evolution, the state came to be seen as the “public” power, while society was equated with “private” activities. The modern territorial state was considered the sole legitimate source of publi order and political authority, and it was “sovereign” in the sense that admitted no rival in competing authority within its own territorially demarcated boundaries.’ (12)

In juridical terms, sovereignty is one of the more important issues of Public International Law. One of the finest expositors of this branch of Law is Ian Brownlie, who affirms that ‘the sovereignty and equality of states represent the basic constitutional doctrine of the law of the nations, which governs a community consisting primarily of states having a uniform legal personality. As states are equal and have legal personality, sovereignty is in a major aspect to other states (and to organizations of states) defined by law.’ (13)

‘Sovereignty’, he adds, ‘is a term that can be used as a synonym for the word ‘Independence’,(14) and it is perhaps about time to underline that a state can only be considered such if the legal criteria of Satehood is accomplished.

The Montevideo Convention on Rights and Duties of States, Article I, provides:

“The State as a person of international law should posses the following qualifications:

a)a permanent population;

b)a defined territory;

c)government; and

d)capacity to enter relations with other states.’ (15)

For the moment, let us continue with this line of analysis. Brownlie explains this ennumeration and says that by ‘population’ we have to understand a ‘stable community’, by ‘defined territory’ ‘the physical basis of the state’, by ‘government’ ‘politicalorganization of the community’ and for the ‘capacity to enter relations with other states’ the concept represented is ‘independence’.(16)

‘Independence’, Brownlie argues, ‘has been stressed by many jurists as the decisive criterion of Statehood’. ‘Independent states may enter into forms of cooperation by consent and on an equal basis. The basis for the cooperation may be the constitution of an international organization, such as the United Nations or the World Health Organization.’(17)

International Organizations are a key-concept in this subject. Since the end of the 19th century, the world has been looking for means to canalize cooperation and integration among nations. Multilateral treaties replaced the old bilateral model, and international conferences were held in order to promote a deeper integration in the world using such organizations as instruments to accomplish that goal. But cooperative structures can also be created by treaty or custom. As Brownlie puts it, ‘one such structure, the confederation, has in practice either disintegrated or been transformed into a federation.’(18)

Burgess adds that ‘federation emerges as a political order wich seeks to accommodate the greatest possible number of communities and societies, primary and intermediate, without destroying them. Is is a living, pluralist and organic order which builds itself from the ground upwards, constructing its ties of authority and decision making according to the principle of subsidiarity.’(19)

Two words need to be said about this principle. Subsidiarity is one of the basis of the Catholic Social Theory, and it can be explained by saying that social basic functions can be carried out at primary or lower levels of associational life with performance criteria determining which functions should be managed at a higher level.

The principle of subsidiarity is being analyzed in this paper because the papal encyclicals Rerum Novarum (1891) and Quadragessimo Anno (1931) incorporated a set of assumptions and principles about man, the state and society that was integrated into the later Christian Democratic conception of European Union, an institution that will be analyzed ut infra because of the high degree of integration this organization has achieved.

Since we are analyzing how do nation-states adapt in order to endure in this drastically changed and globalized world, it would be appropiate to say once again that nation-states tend to form new international organizations, or to become members of already-existing multilateral institutions, they are nota lone in this kind of efforts.

In the last decades, or even the last few years, organizations from the civil society have emerged as new global actors. And there would be no need to make any special mention of them, except for their special characteristics, that have seriously threatened the power of the nation-state. Organizations such as Al Qaeda, in Afghanistan, the Revolutionary Armed Forces of Colombia, ETA in the north of Spain, the IRA in Ireland, Tamil Tigers in Sri Lanka, Sendero Luminoso in Peru and Hizbolla in Lebanon no need to be introduced to anybody, since most of the people will easily recognize them for publicly known reasons.

Going back to the nation-state integration phenomenon, it has been analyzed by Burgess when he said that ‘Integration today is an attempt by the modern state to accomodate and adjust to the unprecedenterd changes in the global political economy.’(20)

Among these relatively new transnational actors, and just to mention some of them as well as their main features, we will find the United Nations (UN), that was established in 1945 to deal with international peace and security, economic, social and sustainable development, as well as to develop body of human rights and international law consisting of treaties, conventions and standards. The number of its member states reached192 in 2006.

Another major global organization is the International Monetary Fund (IMF), established in 1945, being its goal to promote international monetary cooperation, exchange stability, and orderly exchange arrangements, to foster economic growth and high levels of employment, as well as to provide temporary financial assistance to countries. The IMF is currently composed of 184 member states.

The IMF and the World Bank (WB) were originated in the Bretton Woods Conference, in 1944. The WB has the same amount of member states than the IMF, and its goal is to provide interest-free credits, grants, low-interest loans to developing countries. It has been structured in two institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The former is focused on middle income and credit-whorty poor countries, and the later focuses on the poorest countries in the world.

During the first years of the 1990 decade, a series of neo-liberal macroeconomic instructions, called the ‘Washington Consensus’, was promoted by these two last organizations, the WB and the IMF, as well as by the Treasury Department of the United States of America, in order to promote growth in countries having economic crisis. Since the 1999-2001 economic crisis in Argentina, a country that followed such prescriptions, the ‘Washington Consensus’ has been widely critized. The question if Argentina followed these instructions correctly or not is not going to be analysed in this paper.

The World Trade Organization was established in 1995, and it is the only global international organization dealing with the rules of trade between nations. In 2005 it had149 member states. The WTO was ment to be the successor of the General Agreement on Tariffs and Trade (GATT, established in 1947.

As regards the Word Health Organization (WHO) it can be said that it was established in 1948, whith the objective of reach the attainment by all people of the highest possible level of health. There are 193 states that are member of the WHO.

One of the oldest organizations of this kind is the International Organization for Migration (IOM). It was established in 1951 and is currently the leading inter-governmental organization that promotes humane and orderly migration working jointly with governmental, intergovernmental and non-governmental partners. It is compound of 118 member states.

The European Union (EU) was established in1993 and it is based in a large number ot pre-existing treaties. Among the most important ones, we can mention the Treaties of Rome of 1957 that established the Economic European Community (EEC), the Treaty on European Union of 1993 did so with the ‘Europe of the 12’, which, a few years later, became the ‘Europe of the 15’ with the Treaty of Amsterdam. In 2004, 10 new members were admitted to the EU, that currently has 25 member states.

Because of its importance regarding concepts such as ‘integration’, ‘federalism’ and ‘subsidiarity’, the EU will be analized ut infra.

In 1994, the North America Free Trade Agreement (NAFTA)was established, an dit has 3 member states. Another regional institution is the Association of South East Asian Nations (ASEAN), that was established in 1967, and has10 member states to the present.

In Latin America, the Common Market of the South (Mercosur) was established in 1991, and has currently 5 member states, with a similar number of states having associated state status. The Andean Community (CAN) was established in 1969 and it has been recently reduced to 4 member states, since one of the former members has decided to joined the Mercosur. Both Mercosur and CAN member states formed, in 2004, the South American Community.

The Organization of the Petroleum Exporting Countries (OPEC) was established in 1960 as a permament and interngovernmental organization designed to coordinate and unify petroleum policies to help stabilise the oil markets, assure producer countries a fare return for their investments and garantee an economic, efficient and regular petroleum supply to consumer countries. The OPEC has 11 member states. During the oil crisis of 1973, the OPEC and the Organization of Arab Petroleum Exporting Countries (OAPEC) became major actors in the global scene.