Globalization and its Impact on Catholic Higher Education

First of a series

(This series is a reprint with permission from a recent book edited by Msgr. Jose R. Rojas entitled Light to All)

by Leonardo Z. Legaspi, OP, DD

Nations of Economic Globalization

Globalization has become a sort of fashionable buzz-word. It is quite often said but seldom with the same meaning. It is in fact one of those far-reaching concepts which are used by different people to explain facts which are of a completely different nature. Even when qualified as “economic”, globalization can still be associated with a variety of phenomena.

The first notion of economic globalization is that of an ever-growing expansion of transborder financial flows and their impact upon the monetary and exchange policies of national economies. The effects of the financial dimension of globalization are somewhat disputed. If the mobility of capital that flows across borders can be seen as an efficient way to allocate resources world-wide and to channel them to developing countries, their volatility and their possible use for speculative attacks against currencies are thought to pose new threats to the economic stability of countries. In other words, the virtually free movement of huge capital flows creates both opportunities and risks.

Another notion is the globalization of production and the ensuing expansion of world trade flows. The domestic contents of most goods have diminished, and intermediate production stages now take place in different countries. Final products—specifically technology intensive ones—can hardly be considered to be full made in a given country. This is the result of the interplay of several new trends, including reduction in the costs of the mobility of production factors and the economies of scale required by increasingly sophisticated production processes.

International trade of intermediate goods is conducted primarily among industrial units of the same company. Corporations frequently structure their activities to fit marketing and production strategies designed to enhance their global or regional competitive position. Countries are selected for investment by those companies on the basis of the overall advantages they present. This has led to increased competition for foreign investment among countries, particularly developing ones. As opposed to the sixties and even the seventies, when controls and restrictions were deemed necessary to discipline the operations by transnationals in their markets, developing countries have been reformulating their trade and economic policies, in part to offer an attractive domestic environment for foreign investment, which is needed to complement their generally insufficient rate of domestic savings.

Another dimension of economic globalization is thus a growing uniformity in the institutional and regulatory framework in all countries. For the globalization of production to take place, rules in different countries need to be made similar, so that no artificial advantage prevails in any of them. Examples of these rules are the introduction of the World Trade Organization (WTO) of international standards for intellectual property rights and trade related aspects of investment measures. Matters that were once considered to fall primarily within the domestic jurisdiction of each State are now subject to multilateral disciplines. Naturally, there are limits to such uniformity due to national differences. The interplay of global trends toward uniformity and national identities is a complex one.

Finally, economic globalization is linked to a revolution in production patterns leading to a significant shift in the comparative advantages of nations. The competitive position of a country relative to others is determined more and more by the quality of its human resources, by knowledge, by science and technology applied to production methods. Abundant labor and raw materials are less and less a comparative advantage, to the extent that they represent a diminishing share of the value added in virtually all products. This irreversible trend makes it unlikely for countries in the South to succeed solely on relatively cheap labor and on natural resources.

The Consequences of Economic Globalization

Hand in hand with economic globalization goes a change in the role of the State.

Globalization means that external variables have an increased bearing on the domestic agenda, narrowing the scope for national choices. Requirements for external competitiveness have led to greater homogeneity of the institutional and regulatory frameworks of States and these requirements have left less room for widely-differentiated national strategies with regard to labor and macro-economic policy. Fiscal balance, for instance, has become a new dogma. The Maastricht Treaty of the European Union, which sets limits within the budget deficit of its members, has to be maintained.

Both international public opinion and market behavios have also come to play a role in redefining the range of possible actions by States. Information flows freely and rapidly. If, for example, the news is disclosed that any particular country is having difficulties controlling its budget deficit or is going to hike its interests rates, world financial markets make decisions based on that information, which will have an impact on the country concerned. Countries, their leaders and the policies they are pursuing are under the close scrutiny of the world public opinion. Any misdeed or step judged by these immaterial entities to be in the wrong direction may exact penalties. Conversely, developments or decisions construed to be positive are rewarded. International public opinion and, above all, markets tend to be conservative, to follow certain orthodoxy in economic matters. They establish a pattern of economic conduct which admits little variation in a world of immense variety of national realities. The complex process of adjustment must not ignore such diversity. This complex process requires a change of attitude and a determination to fight against vested interests in the public sector. But there is no alternative.

Some Public Implications of Economic Globalization

One may have the impression that the globalization process responds only to market forces. From the perspective of both the allocation of financial resources and decisions concerning productive investments, the market is really a decisive factor. But we should avoid the mistake of drawing, from this fact, misleading conclusions.

The first such misleading conclusions would be to consider globalization as the result of market forces alone. This is not true. The framework within which the market operates is politically defined. The power game among nations is not absent. Neither is the possibility of economic cooperation among States. Foreign trade negotiations are still conducted through dialogue among States, in particular those concerning the definition of the rules in which competition occurs. Economic clout is a key factor in these negotiations, as well as in the settlement of bilateral trade disputes. In some cases, economic powers invoke their influence to circumvent the very multilateral disciplines they themselves have proposed. Subsidies in agriculture clearly illustrate this trend. The recent movements towards the creation of schemes of regional integration, which are characteristics of the nineties, are also initiatives with which governments have tried to influence the direction of economic globalization.

The second dangerous conclusion would be to transform the market into a form of ideology, according to which everything that falls into line with market forces is good, positive and brings development, whereas every political decision meant to regular competition forces is viewed as negative.

It is precisely the recognition that there are limits to the market that enables us, developing countries, to act politically in defense of our national interests. But the forms of such action, of regulating the globalization process, vary among different developing countries. Whether or not we want it, economic globalization is a new international order. We must accept this with a sense of realism lest our actions be devoid of any effective impact. This does not imply political inertia, but a whole new perspective of how to act on the international stage.

From Miracle to Stricken Economies

The issue of globalization is crucial in this part of the world. In East Asia and Southeast Asia, the one-time miracle economies are struggling today to stop the destruction, which swept through their societies in a matter of months the impressive growth they accomplished through many years of hard work. Policymakers and economists from Japan to India are pointing to globalization as a threat to national well-being, pointing to open borders as formidable doors beyond their control to stem the free flow of finance, business, trade, ideas and cultural values from the North to the South, from the capitalist societies to the poor economies, from the industrialized and stable countries to the agriculture-based and unstable economies.

Before the crisis, many Asian governments welcomed the forces of globalization, as market liberalization and broader integration of Asian economies to the global market spurred rapid growth across Asia. Rising living standards made people, especially the local elite and upper middle class families, willing to tolerate governments which were authoritarian, which were hiding behind public relations slogans such as performance-based legitimacy, guided democracy, constitutional authoritarianism, or activist government, in countries such as South Korea, Indonesia and China, where growing prosperity and political repression went hand in hand. The feeling was that behind the Asian embrace of globalization, economics could be separated from politics. It was a western notion, which imposed cultural norms in their Asian clients. That assumption, needs to say, was and has always been in doubt. Politics always goes with business, government, military, church and diplomacy in Asia. Failure to observe this truth now have resulted in millions thrown out from work in Thailand, Indonesia, South Korea, Russia; and even Japan and Hong Kong have suffered from the Asian financial crisis. Governments have been forced to provide more resources to compensate the victims of global economics and financial forces.

It has become clear that embracing globalization demands political, social, cultural costs. Transparency, accountability and the rule of law are necessary for global economy—that is, the guidance of globalists from the West. Given Asia’s background, these globalists are suspects and less welcomed, despite the rush to embrace them by Asia’s elite sectors. Some Asian leaders therefore have denounced globalization as a new form of western imperialism. Malaysian Prime Minister Mahatir bin Mohammed has accused the West of using financial markets to bring Asia to its knee. Similar sentiments have been voiced by officials and intellectuals of China, Indonesia, India and Japan. Even Singapore’s Lee Kuan Yew has been shaking his head in pointing out that Asia is suffering such devastation without being responsible for the financial crisis directly.

However, no Asian country appear likely to reverse course and reject globalization. For Asians, the North Korean and Burmese models are viable alternatives to the global economy. Governments of South Korea, Thailand, Singapore and the Philippines have welcomed the opportunity for reform. But if the current signs of recovery in Asia fail to live up to expectations, a lasting backlash could develop against the West. It could further harm Asian interests and downgrade American influence in the South.

The West must recognize the legitimacy of Asian concern over eroding values and social cohesion. Internal fragmentation is an authentic threat in the multi-ethnic state that characterizes much of Asia. In turn, Asia could recognize that Western countries have also been buffeted by globalization and that managing its challenges will be a central item on the policy agenda of Washington, London, Paris and Bonn long into the 21st century.

This Asian experience of globalization defines the challenge of globalization in this part of the world: to make the transition from recognizing the existence of global problems to devising concrete instruments and establishing effective mobilization for change among Asian countries.

It is in this context that I see the challenge to Asian universities and to Catholic universities. They are the highest formalized institutions of learning, research, instruction, extension services and social critique. They have teams of professors, instructors and research schooled in different disciplines and branches of knowledge. In Asia, during this critical period in its history, the universities can contribute to make the transition successful. Unfortunately, taking the forefront in this issue are the research think tanks, government and international foundations—not universities, not Catholic universities, particularly our Catholic universities—still steep in the traditional arts and sciences, are unable to move into new areas of intellectual challenge and to engage in public debate and scrutiny.

So far removed are the universities and academics that they themselves are not called in to help sharpen the globalization issues or to identify alternative approaches or propose solutions beneficial to the welfare of the poor and salaried middle class. The elite, who comprise these discussants are not concerned about whether their rhetoric will boomerang back to their face and plunge them down to the problems with which the poor have to grapple with. They are above the negative impacts of these interventions and are equipped with resources to move above and beyond these problems. Why this palpable absence in the public discourse on globalization? There are several reasons or causes. Let us go over them briefly.

Universities have failed to shift their focus of attention and energy from the traditional actors of the institution itself, its faculty and experts, and its own primary concerns, to the more significant actors today of students, employers and society in general. By being so inward-looking, universities have missed out in addressing the concerns of their most important stakeholders—the students and society.
Universities have not become sufficiently aware of the rise of the alternative institutions which provide learning, skills, knowledge, and non-formal education and training programs for a wide range of clientele—training institutions by private business, research centers of government agencies, development agencies of multinational corporations, foundations, etc. These alternative agencies tend to become more cost-effective, market-oriented, flexible and responsive to changing forces in the external environment.
These alternative learning and education/training institutions have incorporated the latest communications media, information technology, and skilled resource persons in their delivery systems, making the age-old lecture room, blackboard and chalk, and lecture methodologies appear so old, decrepit, ineffective, and out-of-date.
They are also one with the contemporary and future world, attuned to the prevailing questions and probities which touch on the future of mankind and this endangered planet.

To be able to truly and effectively assist our counties make the transition the universities in Asia must seriously look into the following:

Instruction and programs of studies. These are new curricula or modern interventions based on market demand studies which can incorporate current events into a wide variety of programs such as liberal arts, economics, history, social science, political science, etc. Too often, the curricula contents were designated a decade ago, which hardly any updating; more with no reference to the issues which deeply intrude into people’s lives. The failure of universities to move their studies from traditional topics to contemporary issues is a common occurrence further leaving the universities behind other alternative institutions emerging to respond to these new phenomena.
Open debates and topics. In the hundreds of seminars, workshops, and conferences conducted by universities every year, involving in-house faculty and professors or invited resource persons from industry, science, government, the community, international scholars, there is a consistent lack of focus on in-depth movements and developments which are the burning topics occupying the biggest, most powerful, and often hidden or covert institutions of the world.
Research investigations. There is a wide dearth of lack of concern or investigations into these topics by the different research institutes or bodies of universities that they virtually get buried in the forgotten inventory of should be universities researches.
Extension services. In their extracurricular activities, universities fail to bring into their ambit of operations the type and kind of community services which would expose the general public to the complex and impactful programs and policies of the world’s most powerful institutions and agencies.

Particular Implications for Catholic Institutions of Higher Learning

The issues of globalization impose on our institutions of higher learning additional challenges. Globalization is a historical dynamics that embraces not only the realm of economics but also that of science, history, culture, and religion. It calls for a greater integration and conformity on the part of individual and groups as necessary for survival in human society. Although some thinkers suggest that it can remedy the world’s development problems, its future is frightening in view of its inherent contradictions that are ethically unsound and economically inappropriate in the struggle for just, sustainable, and participatory societies.

Therefore our Catholic Universities should bring into the public debate on globalization our Social Teachings, the Catholic ethics vis-à-vis globalization.