DEVELOPMENT

5.1.
Globalisation and Estonia
Erik Terk, Marju Lauristin
5.1.1
Globalisation as a context of development
Globalisation is a process of pivotal importance, which
increasingly affects the conditions for development in the
majority of countries. This term is used to characterise
the intensification of connections and dependencies
between economies and of the communication between
various countries’ residents, which started in the 1980s
and has been explosively increasing ever since.
There have also been earlier periods of intense international
relations and therefore, many authors prefer to
call the process, which started in the 1980s’ economiccentred
globalisation, rather than simply globalisation,
stressing that, currently, it is the economic intertwining
that serves as the engine for the integration of the
other spheres of life. The globalisation of economy has
occurred, at least initially, at a much faster pace than the
integration between lifestyles and cultures, the development
of supranational governance structures, etc., but it is
also pulling these processes along. Globalisation is interpreted
as the highest stage of internationalisation, which
is accompanied by qualitative changes in practically all
spheres of life. This is not just a number of various simultaneous
developments, such as cross-border interpersonal
communication, international relations between companies,
the increased importance of international financial
markets, etc., but rather a complex integral process, which
involves societies, companies and people in various countries.
Globalisation is both geographic and functional integration,
whereas the latter aspect is even more important
than the former (Dicken, 1998; Terk, 2012). Globalisation
is closely related to other significant processes in today’s
world – namely deregulation, both internationally and
domestically.
The beginning of the globalisation phase in the
world has been associated with the reduction of customs
tariffs between states, which made the unhindered movement
of goods possible, as well as with the collapse of
the Soviet Union and the socialist bloc that it controlled:
It allowed a large number of countries, whose participation
in the integrated global economy had previously
been limited, to become involved in it. These factors are
significant, but do not reveal the fundamental content
of the process. Researchers almost unanimously agree
that there are three engines for the current globalisation,
which reciprocally amplify each other. Firstly, the accelerated
movement of capital across state borders (mostly
the movement of financial capital, since foreign direct
investments, i.e. the investment of money in companies’
buildings and equipment are significantly more selective
and conservative). Secondly, the revolutionary development
of information and communications technology.
Thirdly, the intensification and cheapening of international
airline connections, which promotes frequent
travel between different countries. For the countries that
are plugged into it, globalisation can provide an opportunity
for accelerated economic growth, as well as various
developmental impetuses, starting with the transfer of
know-how, and ending with intercultural enrichment. At
the same time, globalisation in its present form is being
justifiably criticized because the entire complexity of
globality is being dominated by economic and business
processes. This makes both the globalisation process and
its results quite contradictory (Beck, 2002). Thereby, the
pattern of the social relations formed over long periods,
guarantees secured by workers, existing welfare systems,
and uniqueness of national cultures, etc. may suffer. As
the latest international economic crisis demonstrated, an
additional danger is the possible setbacks that can result
from the volatility of the international markets. The critics
of globalisation find that the process as a whole (if
we ignore a few exceptions, primarily China) increases,
rather than reduces, the development gaps between the
countries of the world. The optimists, on the other hand,
find that the plusses of globalisation greatly outweigh the
minuses, even for the less-developed countries, while the
“humanising” of globalisation would only require some
agreements and limitations (e.g. ecological ones), maybe
with a slower, more gradual opening of economies and
societies in some cases (Bhagwati, 2004). The opinions
of the more critically-minded authors vary broadly, from
demands to halt globalisation, to calls for making its
ideology more social, initiating common efforts by the
states to gain greater control over international capital,
and strengthening supranational institutions and international
legislation, which should help to reduce the
negative consequences of globalisation, etc. At the state
level, a significant dilemma is the relationship between
protective mechanisms, and the creation of the preconditions
necessary for success in a globalised economy.
Some authors assert that globalisation is just a new
way of reproducing the previous relationship based on
the domination of the centre over the periphery, i.e. the
continued ruling position of the so-called “triad” (the
U.S., the European Union and Japan) (Amoroso, 1998).
However, reality bears witness to the fact that more
complicated dependency relations are developing. Of the
geo-economic shifts during the last ten to fifteen years,
the most important one has been the rise of the East-
Asian countries, especially China. The bilateral relationship
between the U.S. and China is so pivotal that the
future progress of the world’s economy depends on it. In
this context, Russia, as one of the former principal power
centres, along with Eastern Europe, has been demoted to
a lower plane.
194
Estonian Human Development Report 2012/2013