assignment of neoliberalism neoliberalism, Assignments of Social Work

Download assignment of neoliberalism neoliberalism and more Assignments Social Work in PDF only on Docsity! NEOLIBERALIS M NEOLIBERALISM : OUTLINE DEFINITION OF NEOLIBERALISM HISTORY OF NEOLIBERALISM CRITICAL ANALYSIS NEOLIBERALISM IN THE PHILIPPINE CONTEXT WHAT IS GLOBALIZATION? GLOBALIZATI ON a process of interaction and integration among people, companies, and governments of different nations. WHAT IS GLOBALIZATION? GLOBALIZATI ON driven by international trade and investment and aided by information technology, which effects on every aspect of human life. WHAT IS GLOBALIZATION? ECONOMY A defining feature of globalization, therefore, is an international industrial and financial business structure. WHAT IS NEOLIBERALISM? NEOLIBERAL THEORY A largely unregulated capitalist system not only embodies the ideal of free individual choice but also achieves optimum economic performance with respect to efficiency, economic growth, technical progress, and distributional justice. “The state is assigned a very limited economic role: defining property rights, enforcing contracts, and WHAT IS NEOLIBERALISM? It is essentially about making trade between nations easier. It is about freer movement of goods, resources and enterprises to maximize profits and efficiency. WHAT IS NEOLIBERALISM?  Cardinal feature of neoliberal thinking: the assumption that individual freedoms are guaranteed by freedom of the market and of trade. The freedoms it embodies reflect the interests of private property.  Thus requires the removal of various controls deemed as barriers to free trade, such as: tariffs, regulations, certain standards, laws, legislation and regulatory measures, and restriction on capital flows and investment. Germany America Japan WHY THE NEOLIBERAL TURN? Case 2: After the two world wars, the US emerged dominant in the global economy.  1950s: One third of world exports came from the U.S.  Theory: To ensure its dominance, the US restructured the world economy through neo-liberal policies such as deregulation and liberalization.  Deregulation: put simply, deregulation means limiting government control over market forces.  Liberalization: The trade liberalization program invariably consists of the elimination of import quotas and the reduction and unification of tariffs.  Aim: To create new markets for its surplus products and excess capital. INSTITUTIONS ESTABLISHED THE UNHOLY TRINITY  INTERNATIONAL MONETARYFUND (IMF)  WORLD BANK (WB)  WORLD TRADE ORGANIZATION (WTO) INSTITUTIONS ESTABLISHED BRETTON WOODS INSTITUTIONS  INTERNATIONAL MONETARY FUND (IMF) WORLD BANK (WB) What are they? INSTITUTIONS ESTABLISHED HOW WERE THEY FORMED? 1944: Bretton Woods Conference: The International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), also known as the Bretton Woods Institutions (BWIs), were formed in Bretton Woods, New Hampshire in 1944 on the eve of the end of World War II. The conference intended to "formulate definite proposals for an International Monetary Fund, and possibly a Bank for Reconstruction and Development." They were precursors to the United Nations and other multilateral institutions formed after World War II and reflected the new spirit of cooperation between nations, especially in economic matters. Wyn 25, a eo £- THE MOUNT WASHINGTON HOTEL, BRETTON WOODS, NEW HAMPSHIRE Meyer ESTABLISHED INSTITUTIONS 1947: GENERAL AGREEMEN T ON TARIFF AND TRADE (GATT) ESTABLISHED INSTITUTIONS WHAT IS IT? It is a multilateral agreement among countries that provides a framework for the conduct of international trade. It contains disciplines on matters related to import and export of goods. Through this, countries committed to reduce tariffs on certain imported products. ESTABLISHED INSTITUTIONS HOW WAS IT FORMED?  The US drafted a charter for a proposed International Organization (ITO), but it was heavily amended in the UN—evoking opposition from the US. Eventually, because of such heavy opposition from the US, the ITO was “dead”. Negotiations on trade liberalization, however, continued.  Trade rules and tariff concessions were negotiated during the 1947 Geneva conference and signed in November that year. ESTABLISHED INSTITUTIONS WHAT IS IT? The WTO is a freestanding organization with legal personality and with self-executing enforcement, meaning that it contains binding dispute mechanisms to enforce trade rules. It was established to supervise and liberalize world trade. It is the successor to the GATT. ESTABLISHED INSTITUTIONS HOW WAS IT FORMED?  1980s: There were calls for a stronger multilateral organization to monitor trade and resolve trade disputes.  The WTO began operations on January 1, 1995. Following the completion of the Uruguay round (1986- 1984) of multilateral trade organizations. ESTABLISHED INSTITUTIONS WHAT IS ITS FUNCTION? To set and enforce rules for international trade. To provide a forum for negotiating and monitoring further trade liberalization. To resolve trade disputes. To help developing countries benefit fully from the global trading system. CRITICAL ANALYSIS GATT: AN AGREEMENT TO REDUCE TARIFFS  Meant to promote “free trade” principles like liberalization, equal market access, reciprocity, non-discrimination and transparency on a global scale.  The commitment to reduce tariffs is inherently imbalanced. Generally, tariffs serve 3 functions: they protect local industries from foreign products, provide an additional source of revenue for the government and allocate foreign exchange among different competing imports..  Moreover, powerful countries like the US would simply circumvent the GATT and intervene directly whenever its economic interests were being threatened. CRITICAL ANALYSIS WORLD TRADE ORGANIZATION  Created to continue the fundamental principle of the GATT that exported goods should generally be free to enter into the importing country.  The objectives of free trade—objectives the WTO forwards, such as opening agriculture, industry and services as well as liberalizing investments—serve the interest of developed countries thus are inherently unbalanced.  It is an organization that prides itself on its democratic processes and decisions made by consensus.  But even Former director-general Michael Moore acknowledges the inequalities present in the organization, saying, “Some members are more equal to others when it comes to influence.”  There is much behind-the-scenes maneuvering to the detriment of the interests of developing countries.  Ex: the WTO‟s infamous “Green Room” meetings  Ex: The WTO‟s dispute settlements processes CRITICAL ANALYSIS WORLD TRADE ORGANIZATION  Transnational corporations (TNCs) play a huge role in the WTO—which solidifies the bias of the organization towards larger rather than smaller companies.  Right from the start, TNCs stood to gain from the liberalization measures of the WTO.  TNCs have access to the highest decision-makers and staff of the WTO.  Powerful countries, again, find various ways to circumvent the rules while developing countries follow them and suffer the consequences.  For instance, many developing countries have made huge reductions in their tariffs and bound them. India‟s trade-weighted average tariff has been reduced from 71.4% to 32.4% while the tariff in developed countries has only been reduced from 6.3% to 3.8%. CRITICAL ANALYSIS DISPARITY BETWEEN THE THEORY OF NEOLIBERALISM AND THE PRAGMATICS OF NEOLIBERALISM  Principles of neoclassical economics vs political commitment to individual freedom  Distrust of state power vs the need for an authority to defend rights of private property, individual liberties and entrepreneurial freedom. CRITICAL ANALYSIS RESTORATION OF POWER  Gerard Dumenil and Dominique Levy have concluded that neoliberalization was, from the very beginning, a project to achieve the restoration of class power.  1970‟s capital accumulation crisis: There were clear political and economic threats to elites and ruling classes everywhere. They had to move decisively to protect themselves from political and economic annihilation.  After the implementation of neoliberal policies in the late 1970‟s, extraordinary surges in income inequalities and wealth occurred in the US, Britain, Russia, China and Mexico. CRITICAL ANALYSIS POVERTY, OVERPRODUCTION AND LOCAL DISINTEGRATION  This economic restructuring has made the divide between different social and ethnic groups even deeper. Moreover, it has increased the potential capacity of the economic system and expanded levels of production without reducing poverty significantly.  Micro-Efficiency = Macro-Insufficiency:  Global oversupply of commodities: a result of the unlimited capacity to produce and the limited capacity to consume.  In developing countries, entire branches of industry producing for the internal market are driven into bankruptcy on the orders of the WB and IMF CRITICAL ANALYSIS DIARMING THE NEW ORDER  “The New World Order is based on the „false consensus‟ of Washington and Wall Street, which ordains the „free market system‟ as the only possible choice on the fated road to a „global prosperity‟.”  In order to disarm this world order, we must democratize the economic system and its management and ownership structures. We must redistribute income and wealth, restore the rights of direct producers and rebuild the Welfare State. PHILIPPINE CONTEXT 1946 Bell Trade Act 1954 Laurel-Langley Agreement  Provisions of this act tied the Philippine economy to the economy of the United States.  Despite the nominal independence of the Philippines at that time, these established free trade with the U.S., so neocolonial patterns were sustained. PHILIPPINE CONTEXT THE MARCOS DICTATORSHIP  Authorized a series of investment incentives laws which maintained the neocolonial preferential treatment for foreign investors and allowed the neocolonial trade patterns to continue  In general, foreign investors benefitted. PHILIPPINE CONEXT AGRICULTURE Background Information  1/3 of the land area of the Philippines is fertile and can be used for agriculture  The Philippine economy is predominantly agrarian  Agriculture, fishery, and forestry contributed to almost 20% to the GDP[Gross Domestic Product] PHILIPPINE CONTEXT INDUSTRY Background Information: In 2004, 33% of the Philippines‟ GDP came from the industry sector How Trade Liberalization under the WTO has affected it  The government‟s policy of attracting foreign investments increased foreign dominance in Philippine industries.  Footwear, apparel, rubber, textile, glass, tires, paper, wood, cement, and steel manufacturers in the country all suffered from imports and low tariffs.  Many local companies were forced to downsize/close because of the foreign competition.  Many workers were laid off or force to go on rotation  45.1% of workers in January to March 2004 were displaced because of reorganization, downsizing, and change in management (merger). 8 establishments reduced their number of workers or closed down every day, and 196 workers were displaced daily.  In July 2004, approximately 2,688 Filipinos left the country everyday. PHILIPPINE CONTEXT SERVICES Background Information: Roughly 44% of the Philippines‟ GDP is from the Service Sector How Trade Liberalization under the WTO has affected it  The Philippines has committed under the GATS to bind all restrictions on market access and has applied national treatment on foreign investors and suppliers in financial services  The Privatization and Commercialization of social services is a burden to average Filipinos.  Rates for vital utilities increase, making them less accessible.  Many families could not pay for healthcare in Public Hospitals.  Education became so costly because of the privatization of state colleges and universities.  Local service providers are marginalized because of the liberalization under GATS.  Capital has become concentrated on foreigners, through TNC‟s. REFERENCES GROUP 2 SOTTO SORIANO TENSUAN TABORA Sources:  IBON Data Bank and Research Center. 2005. WTO: The Supreme Instrument of Neoliberal Globalization. Manila: IBON Foundation.  David Harvey. 2005. A Brief History of Neoliberalism, Oxford: Oxford University Press  Michel Chussodovsky. 2003. The Globalization of Poverty. Ibon Books, pp. 1-64.  Shah, A. (2010). A Primer on Neoliberalism. Retrieved February 13, 2011 from: http://www.globalissues.org/article/39/a-primer-on-neoliberalism  Kotz, D.M. (2000). Globalization and Liberalization. Retrieved February 13, 2011 from: http://people.umass.edu/dmkotz/Glob_and_NL_02.pdf  Globalization101.com (nd). What is Globalization? Retrieved February 13, 2011 from: http://www.globalization101.org/What_is_Globalization.html  Shah, A. (2010). Poverty Facts and Stats. Retrived February 13, 2011 from: http://www.globalissues.org/article/26/poverty-facts-and-stats