DEVELOPMENT

More documents

Recommendations

Info

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
When Estonia regained its independence in 1991, it was faced with a world that was already globalising. Regardless of the fact that the reestablishment of independence took place under slogans calling for the restoration of the nation-state, there was no alternative to the opening up of the economy, and to going along with globalisation – an isolationist policy would have led Estonia into a dead end. International openness paved the way for many more contacts, for information and capital to flow in from the developed countries (assuming the ability to ensure the elementary functioning of the business environment), and also access to markets (assuming the capability of reaching these markets, which, regarding the end consumer, can be quite difficult). An important role in the shaping of the social affairs of re-independent Estonia was played by United Nations organisations: the WHO, along with the World Bank, helped to reorganise the healthcare system; the ILO helped with labour policies and the UNDP with the creating of the foundations for family and integration policies. In the period right after the restoration of independence, an important role was also played by the International Monetary Fund, which put Estonia’s finances and the public sector on track. George Soros’s international Open Society Foundation established the basis for the development of civil society. These global organisations earned good reputations in Estonia, unlike in many other developing countries and post-Communist states, especially Russia; and cooperating with them comprised an efficient globalisation school for the officials, various professional specialists and civil society activists, who had had little international experience. A few years later, this all proved to be very helpful when relations with the European Union started to develop. There has been little research and generalisation related to the impact of globalisation on Estonia, since it is difficult to differentiate the effect of globalisation from the impact of Estonia’s accession to the European Union. The EU accession can be addressed as one of the subsidiary processes of globalisation – as noted by Dehesa, nation-states must give way to regional integration, and, to a certain extent, subordinate their own activities to transnational institutions (Dehesa, 2006). However, the EU accession cannot be considered to be ordinary globalisation. The support from the European Union expedited the convergence of living standards with those in the wealthier countries, while this support was dependent on the accelerated adoption of the EU institutional framework. This also means that economic integration is accompanied by a political dimension related to national sovereignty. The significance of this aspect will probably increase in the future – issues related to the continued intensification of integration, and a movement toward the “federalist” model of the European Union will become more topical. Discussing globalisation predominantly within the context of internal EU integration, as has been done to date, ignores many important aspects of globalisation, such as the opportunities of the Asian market; coping with the competitive pressure caused by Asian goods; participation in the international cooperation and security organisations, which transcend Europe; participation in educational cooperation and labour exchange with countries outside the EU. Technological development, the functioning of global information networks and the internationalisation of culture are far from European-centred phenomena. 5.1.2 How globalised is Estonia? Various indicators are used internationally to measure globalisation and openness. These are relatively multifaceted and complicated to measure phenomena; therefore indicators reflecting individual aspects of openness, rather than overall globalisation of a country have been more popular so far. Used most frequently are yardsticks of economic openness based on the share of foreign trade in GDP, assessments based on foreign investment statistics, and various indicators related to the intensity of foreign relations and international interpersonal contacts. Yet there have been some attempts to compile synthetic indices that measure the overall level of globalisation. The best-known indicator of a country’s economic openness is to divide foreign trade volume (exports plus imports) by that of GDP (hereinafter, the EO indicator). In small states with open economies the total of the exports and imports often exceeds GDP, and therefore, the ratio may be more than 100%. Based on this indicator Estonia usually ranks in the top ten. However, when interpreting this fact, one should understand that there are huge differences between large and small states in regard to this indicator. The top ten countries in the world according to the EO indicator are primarily small states, for instance, the city-state of Singapore, Luxembourg and island states like the Seychelles and the Maldives, while the U.S. with its large domestic market is at the bottom of the ranking. In the majority of the successful small- and medium-sized states, including the reference states in this report, the foreign trade-to-GDP ratio is between 80% and 150%. Of the states within our sphere of interest, the ones with a high EO indicator include Singapore, Taiwan, Estonia (with a ratio of over 120%), as well as Slovakia and Ireland. The EO indicators of the Czech Republic and Hungary are also relatively high, although lower than the aforementioned states. The economies of New Zealand and Uruguay are, according to this yardstick, significantly less open. A large foreign trade-to-GDP ratio may offer great opportunities for growth and development, but also contains a major risk component. In international economic crises, countries with high EO indicators usually suffer large declines. In countries with large domestic markets, where most companies have partners that are located in the same country, the impact is less drastic. In order to avoid serious consequences, the states with high levels of economic openness, like Estonia, should have geographically diverse lists of partner countries (even during international economic crises, there are regions of the world where economic growth continues), or be able to establish strong financial buffers for the times when their export markets decline. Another indicator for comparing the economic globalisation levels of various states is foreign direct investment (hereinafter, FDI) stock as a percentage of GDP. This ratio fluctuates less than the EO indicator based on Estonian Human Development Report 2012/2013 195
Page 1:
ESTONIAN HUMAN DEVELOPMENT REPORT 2
Page 4 and 5:
Table of Contents 1 Human Capital /
Page 6 and 7:
Dear Reader Since the moment when E
Page 9 and 10:
1Human Capital Estonian Human Devel
Page 11 and 12:
the HDI’s content has also been h
Page 13 and 14:
Figure 1.1.1 The human development
Page 15 and 16:
Figure 1.1.7 The income sub-index:
Page 17 and 18:
The results of the Princeton Projec
Page 19 and 20:
the hypothetical generation. The to
Page 21 and 22:
Figure 1.2.3 Life expectancy. Eston
Page 23 and 24:
Table 1.2.2 also presents the most
Page 25 and 26:
The new trends that are appearing i
Page 27 and 28:
Figure 1.2.8 Components of populati
Page 29 and 30:
New features were introduced into E
Page 31 and 32:
Initiation of Voluntary Birth Contr
Page 33 and 34:
Table 1.3.1 Best-known educational
Page 35 and 36:
(OECD 2012b). Therefore a certain r
Page 37 and 38:
The reciprocal dependence of the pr
Page 39 and 40:
Figure 1.3.8 Percentage of students
Page 41 and 42:
Table 1.3.4 The quality of educatio
Page 43 and 44:
1.4 Health Raul-Allan Kiivet Change
Page 45 and 46:
Table 1.4.1 Usage of prescription m
Page 47 and 48:
allude to the fact that approximate
Page 49 and 50:
promote healthy lifestyles among th
Page 51 and 52:
Figure 1.5.1 The World Values Surve
Page 53 and 54:
Table 1.5.2 Estonia’s participati
Page 55 and 56:
Figure 1.5.3 The percentage of the
Page 57 and 58:
Figure 1.5.5 Percentage of the Esto
Page 59 and 60:
The fact that Estonia’s position
Page 61 and 62:
Summary Mati Heidmets The global vi
Page 63 and 64:
2People and Society Estonian Human
Page 65 and 66:
Table 2.1.1 Structure of the Bertel
Page 67 and 68:
tioning market economies (15 states
Page 69 and 70:
2.2 Freedom and democracy Martin M
Page 71 and 72:
Table 2.2.1 Democracy indicators Po
Page 73 and 74:
Figure 2.2.2 The distribution of th
Page 75 and 76:
would be something that none of the
Page 77 and 78:
political participation are general
Page 79 and 80:
strongest, while a very small perce
Page 81 and 82:
is concerned, Estonia is one of the
Page 83 and 84:
Figure 2.4.2 Average circulation of
Page 85 and 86:
2.5 Corruption Jüri Saar In accord
Page 87 and 88:
Lithuania, 61%; and in Russia, 69%.
Page 89 and 90:
2.6.2 Intentional homicides in Esto
Page 91 and 92:
crime. And thirdly, there was a wis
Page 93 and 94:
References 1. Ahven, A. & Tabur, L.
Page 95 and 96:
states included in the EU Kids Onli
Page 97 and 98:
2.8 Public assessments of the state
Page 99 and 100:
Figure 2.8.4 Changes releated to tr
Page 101 and 102:
of the state’s development are en
Page 103 and 104:
Table 2.9.1 The positions of Estoni
Page 105 and 106:
3. IEP (2011). Structures of Peace.
Page 107 and 108:
3Welfare and the Quality of Life Es
Page 109 and 110:
choices made, not what people say t
Page 111 and 112:
Figure 3.1.5 Public social spending
Page 113 and 114:
tion agreed upon the social contrac
Page 115 and 116:
References 1. Aidukaite, J. (2006).
Page 117 and 118:
hand, to the “inequality of acces
Page 119 and 120:
and explanations of the extent of i
Page 121 and 122:
5- much more than I deserve. Some d
Page 123 and 124:
people in Estonia consider the inco
Page 125 and 126:
Table 3.3.1 Experienced Well-Being
Page 127 and 128:
at about 70%. In Latvia and Lithuan
Page 129 and 130:
sign. It seems that the usual view
Page 131 and 132:
3.4 Quality of life Anu Toots 3.4.1
Page 133 and 134:
a uniform composite indicator has n
Page 135 and 136:
3.4.6 The components of life qualit
Page 137 and 138:
Figure 3.4.4c Perceived quality of
Page 139 and 140:
Figure 3.4.5 Changes in the depriva
Page 141 and 142:
3.5 Environment dimension of well-b
Page 143 and 144:
Figure 3.5.1.b Estonia’s position
Page 145 and 146: 3.5.4 Energy intensity The energy i
Page 147 and 148: productivity, which is defined as t
Page 149 and 150: perceive themselves as worse off th
Page 151 and 152: 4The Economy Estonian Human Develop
Page 153 and 154: vide a valuable connection for maki
Page 155 and 156: Figure 4.1.3 Components of economic
Page 157 and 158: ule of law, the sub-indicators for
Page 159 and 160: References 1. Acemoglu, D.; Robinso
Page 161 and 162: Development Report employs generali
Page 163 and 164: and pasture land, and this was capi
Page 165 and 166: Basing the total and net savings re
Page 167 and 168: 4.3 Labour market Reelika Leetmaa,
Page 169 and 170: The problems include the very limit
Page 171 and 172: • Expenditures for active labour
Page 173 and 174: who lose their jobs. These ensure i
Page 175 and 176: 4.4 Productivity and the economic s
Page 177 and 178: labour costs at the company level r
Page 179 and 180: Table 4.4.4 Comparison of the produ
Page 181 and 182: Figure 4.4.1 Annual average increas
Page 183 and 184: 4.5 Innovation Erik Terk, Katrin M
Page 185 and 186: Table 4.5.2 Comparison of innovatio
Page 187 and 188: Table 4.5.4 Comparison of the indic
Page 189 and 190: in order to make the R&D potential
Page 191 and 192: It is characteristic of the South K
Page 193 and 194: mechanisms for increasing their sta
Page 195: Globalisation and Policy Patterns 5
Page 199 and 200: 5.2 The impacts of globalisation an
Page 201 and 202: Table 5.2.2 Support of the differen
Page 203 and 204: 5.3 Development policies Erik Terk,
Page 205 and 206: • C -the “Estonia-centred” su
Page 207 and 208: Figure 5.4.1 Support for the possib
Page 209: Summary Erik Terk Estonia is part o
Page 212 and 213: ehavioural patterns. Therefore, it
Page 214 and 215: EDR 2012/2013 authors Clemens Buche
Page 216 and 217: EDR 2012/2013 authors Alari Purju i
Page 218: Editor-in-Chief: Mati Heidmets Prod
show all

DEVELOPMENT

Create successful ePaper yourself

Delete template?

Save as template?