Globalisation: A Double-Edged Sword
Otho H. Hadi *)
Introduction
It is well understood that the tendency of globalisation cannot be blocked and it is indeed
inevitable. The global transformation process, which underway today has been basically generated by two
major influences, namely the advancement of technology and commerce or trade. Both are interrelated
and supporting one to the other. The increase of trade activities is not only magnetising the transfer of
technology, but also eventually bringing the reinforcement of technology itself. Like wise, the
advancement of technology expedites the flow of good and services. Interaction between the
advancement of technology and commerce has strong influence over the economic structural adjustment
in many countries, both in developed and developing countries. Overall process yield world economic
more and more become integrated.
The wave of change happened so swiftly, and the process of it bears challenges that must be
answered by Indonesian. These challenges can be treated as opportunities that must be exploited, but also
can be seen as constraints that must be overcome. Hence, the process of change can be useful and should
be harmless for Indonesia in the future.
One of the opportunities is the boost of market. In this situation, production and commerce can
be paced in line with our competitiveness. An example is the fast growing of Asia-Pacific region. In 1990s
annual growth in this region was approximately 4 percent. If we exclude Japan, the annual growth of this
region is more than 7 percent. This figure is actually higher than world rate of growth, i.e. 3 percent in
total average or even higher than level of growth of industrial countries which is only 2.5 percent per
annum. Certainly, the vastly growth allowed the increase of trade transaction volume. The augmentation
of export in Asia region was twice higher than any place in the world. The core problem now is whether
or not we could exploit the opportunity.
What is globalisation?
Recently, globalisation has become the topic of many discussion and forums, both from the
perspective of social culture, social politics, and economy. The impact of globalisation had been very often
discussed and reviewed after Seattle meeting in 1994 regarding APEC (Asia Pacific Economic
Cooperation) where Indonesia has signed an agreement (understanding) along with other 20 country
leaders to establish a cooperation forum. Besides, the economic crisis undergone in 1997 opened a
relevant question whether Indonesia will be quite fragile to the globalisation of economy.
Discussing globalisation, we have to define first what the globalisation is:
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*)
Globalisation is world amalgamation swayed by access of technology, information, and mass
communication with its impacts in the field of economy, politic, social, and culture (Limas Sutanto,
2001)
Globalisation is a neo-colonialism of economy and culture (Y.B. Mangunwijaya, 1998).
Globalisation is a form of US Hegemony (Sugiono, 1999)
There are also some other points of views on globalisation:
a. A dreadful attack of foreign to local companies in domestic market.
b. A positive challenge for local /national company to enter international market.
c. A challenge to conquer market segmentation (Alberto Daniel Hanani, 2000).
Otho H. Hadi, MA adalah Staf pada Direktorat Politik, Komunikasi dan Informasi, Bappenas-red
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Since the definition is varied, there is a need to narrow the focus of this paper, and I would think
that deeper and more comprehensive thoughts are needed to apprehend the meaning of globalisation.
As we are all aware, globalisation is a post-cold war phenomenon that cannot be avoided. The
ruin of Berlin’s wall is not only a symbol of the collapse of a cold war physical building that had been
separating people, but also values of civilization. The cold war that was monumented by the bulky walls,
ruined at the same time the opening of partitions dissociating nations, so that we now live in the world
without boundary. 1
No one can stay away from this kind of
situation. In the past, in the cold war, enemies we
fight against are those who are living outside the
wall. Now, since the wall was ruined already, our
enemies are actually resided in our environment,
and even among us. The instance is the war
against terrorism that we are now combating.
Yet, appearance of Osama bin Laden as figure
daunted, can be seen as globalisation
phenomenon. Why? It is Guerrilla News
Networks because that globalisation, according to
Thomas L Friedman, has bear superpower,
supermarket and super-empowered individual.
If there is an “angry” super-powered
Source: Guerrilla News Networks
individual, he or she can put across his or her
insanity in the world podium. It is the values embraced by super-empowered individual. Consequently,
terrorism will be a significant phenomenon of globalisation for they can pour their own insanity anywhere
in this world. In such a situation, it is realized that the dominant value will be value of the era.
Globalisation, according to Thomas L. Friedman, contains two dimensions, i.e. ideological dimension, that
is capitalism, and economic dimension, that is free market. In addition, it also contains a dimension of
technology, i.e. information technology (IT) that has been unifying the world. Consequently, as Friedman
states, we should be dressed in “a new dress” or suitable software in order to be able to bound into
globalisation. The new dress replaces the old one during the cold war, for instance, outfit ala Mao, Nehru,
or costume dressed by Russian.
To be compatible to the new dress, every country should have applied the principles as follow:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Prioritising private sector as the main generator of economic growth,
Maintaining inflation rate at a very low level and stabilizing price of goods and services,
Trimming down the role of bureaucracy,
Upholding balance and surplus budget,
Removing or reducing any import tariff,
Vanishing any restriction of foreign investment,
Removing all kind of monopolies and quota
Increasing export and privatising industry of goods and services,
Opening industry and stock market for directly foreign investor ownership,
Growing of competition, fighting against corruption in bureaucracy environment,
Opening the banking system and telecommunications for ownership of private sector,
Giving opportunity to all citizens to choose pension system based on competition, including
those offered by overseas company.
If we have fully complied in accordance with those principles, we are then suitable to the golden
straight jacket. As a consequence, this will transpire the so-called democratisation of technology, fiscal and
monetary, and democratisation of gaining information. What will happen then? Furthermore, when a
1
Thomas L Friedman, Lexus and the Olive Tree, New York : McGraw Hill, 2000
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country has complied in accordance with those principles, the country will have spacious chances or
options in their economy. Unfortunately, there are very little options in politics. As stated by Friedman,
the political preference is only “pepsi” or “cola”.
In the presidential election in some countries, South Korea for instance, there is no difference
between the contestants in terms of political vision. However, if the country is not ready yet but strongly
tries to apply the principles of globalisation, as a result the rich-poor discrepancy will be broader. This is
the concern of Friedman as a senior journalist, that with globalisation there will be a wider gap between
the rich and the poor inter-country or even within the country.
Friedman gives an example, owing to the globalisation, i.e. the basket ball superstar Michael
Jordan. He earned 40 million US dollar per year. Why so high? One reason is because that the MJ T-shirts
were bought by teenagers from all over the world, from Jakarta to Moscow. What
does it really mean? If teenagers in Indonesia buy the MJ T-shirt and since a piece
of his income is given away to pay tax, it is then obvious that Indonesian teenagers
also pay tax for US government indirectly. It also prevails in other businesses,
McDonald for instance. Then, globalisation will eventually widen the gap between
the rich and the poor country. Similarly, within a country, those who have no
adequate capacity to compete will be left far behind. Despite a person like MJ who
earns about 40 million dollar per year, there are many homeless people as well in
the United States. They do not have permanent shelter, sleep restlessly under shop
porchs, chipped by food stamp program from the government.
Cruising the globalisation
Facing the world existent changes, we are likely imposed to swim voyaging the deep blue ocean.
If we do not wear suitable swimsuit (the golden straitjacket), it is likely that we will be guzzled and drifted
by vast wave. In that case, then, we need a sufficient preparation or say it a well-prepared strategy to enter
the era of globalisation. We have to fully figure out that globalisation is inevitable phenomenon. As stated
by Joseph E. Stiglitz, Nobel Prize winner in economics in the year 2001 and as the advisor of [ex]
President Clinton, and also as [ex] Chief Economist of the World Bank, the most important thing is how
the globalisation is dealt with. 2
Part of the problems, according to Stiglitz, was instigated by or rests upon the IMF, World Bank,
and WTO constituting rule of the games of globalisation. Regrettably, the rule of the games is more likely
favourable for developed countries, and more specifically for the interest of faction in internal politics and
administration of developed countries, rather to the interest of developing countries.
Friedman’s advice on understanding globalisation is reflected on his book “Lexus and The Olive
Tree”. Lexus represents a Japanese luxurious car, and olive tree is a tree grown in Jerusalem. If Lexus is a
symbol of developed countries, olive tree corresponds to developing countries; he recommends that olive
tree should have an extremely sturdy root in order to be able to compete with lexus. Otherwise, olive tree
cannot be able to face globalisation.
Having said so, Indonesia and other developing countries should aware of these two advices: how
to deal with globalisation and how to reinforce nationhood (“akar kebangsaan”) – to increase potential of
nation to handle globalisation. Hence, it is wise to observe what have been done by other countries or
even by multinational corporation in reinforcing its competition capacity.
Western European countries, as we are all aware, established “The European Union.” They have
already had their own European currency namely Euro and almost all European countries have become
members. What is the impact? Such a cooperation brings about the increase of their capability to deal with
other countries, including the United States, particularly in developing aircraft industry such as Airbus – a
2
Joseph E Stiglitz in his book Globalization and its Discontent.
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joint venture among some European countries such as Germany, France, Spain, The Netherlands, etc.
Today, they can even compete with the United States Boeing.
Some of the immense enterprises accomplish merger or joint operation to achieve efficiency and
expand their market, so as to increase their competitiveness, for example Chrysler and Mercedes Benz, or
between KLM and Northwest. Taking into account those examples, in dealing with globalisation, not only
do we have to fortify our nationhood, but also call for cooperation with other countries. This is the
strategic value of ASEAN as regional cooperation forum which eventually will strengthen the bargaining
position of its members.
Strategies on how to strengthen nationhood, how to increase capacity to face globalisation, and
how to reinforce Indonesia as a Unitary State are of great consequence. In contrast, decentralisation or
regional autonomy that set off likelihood for Indonesia to become more fragmented will drive down the
capacity of Indonesia’s bargaining position. Subsequently, we have to be able to excavate our own
domestic potential in order to strengthen Indonesia’s nationhood. The increase of human resource quality,
domestic resource and fund mobilisation such as applying national social security program, the use of local
content, and nation solidarity enhancement, are indeed significant steps in the era of globalisation.
Without strengthening our nationhood and sturdy regional cooperation, it is likely difficult for Indonesia
to compete in this globalisation era.
Challenge of Globalisation for Indonesia
a. Challenge in Economic Area
Entering the 21st century, Indonesia is determined to resemble the stance of countries whose
economy are more enhanced. It is useless, nevertheless, if we do not move from now on to carry out
concrete actions to attain distribution of prosperity. The real challenge in front of us now is that of free
trade, the agenda for Asia-Pacific region in the year 2020 as agreed in the conference of APEC in Bogor.
Many people perceive sceptically to the idea of liberalization. In their point of view, it is more
beneficial for developed countries vis avis developing countries. They perceive that for countries with
inadequate quality of their human resources, social, politics, and economic institutions, liberalization will
lead to more extensive dependency toward developed countries in terms of economy as well as culture.
On the other hand, there has been evidence that countries complying to free economy path have grown
faster than those conform to other path. Various studies show that world trading will increase in line with
the prevailing free trade regime. The increase of trade activities will intensify level of production, expand
labour force and ultimately increase income per capita and prosperity.
International trade is perceived as an effective evolvement drive and it is proven by the
acceleration of industrialisation and economic growth in newly industrialising countries, which base their
strategy on export. Nowadays, the predicament is not whether we agree or disagree, join up or leave. No
country in this world can decide not to join, meaning that they will be excluded from the stream of world
trade as well as economic cooperation. International relation, including trade, takes up the principle of
reprocity. If we intend to enter international market, we should open our domestic market to other sides.
Consequently, the disparity between domestic and international market will become smaller and indistinct.
The issue right now is not debating the principles, but how to take advantage and to reduce its
negative impacts. The answer is there: increase competitiveness as a part of strengthening our bargaining
position. The increase of competitiveness should be derived from the increase of efficiency and
productivity. Protection can still be used to support competitiveness in domestic market. However, it
should be gradually released, the sooner the better, since the protection will surely lead to inefficiency.
Competitiveness enhancement to lead swiftness of commerce in global market relates to various
factors, i.e. among others quality improvement of human resources and apprehension of technology and
institutional strengthening. As argued by Lester C. Thurow (1994), now we are heading to the world that
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are dynamic, and characterised by brainpower industries and synthesized comparative advantage. In
consequence, in implementing programmes of nation building, those two aspects should be put as high
priority. Prominent human resource is that of progressive, open minded, productive and professional.
With this quality, we develop science and technology since its role is not only reflected by equipment we
owned, but creative and innovative ability of human resources. In addition, economic policies both macro
and sectoral, monetary and fiscal, should be dense and in harmony to support the effort of human
resource quality enhancement. The problems that we have to overcome are to improve prosperity,
particularly over the grassroots economy as a consequence of liberalization of economy.
Quantitatively, the picture of people-oriented economics can be studied from data BPS indicating that
in the year 1999 as much 97,4% or 32 million from domestic entrepreneurship produced the output less
than Rp50 million in average per year. Mostly that is 68,9% among other is in agriculture area. They are
the group that have to be paid attention to. Despitefully we also have to pay attention to that 14%
Indonesia people or about 26 million people live below poverty line.
Our problem, in fact, in facing this globalisation tendency is how to guarantee that economic
benefit from liberalisation will reach widely the people in such a manner so that we really head for the
manifestation of UUD 1945. We may not forget that the objective of state-run is to realize the social
justice for all citizen. It is that prosperity of people to be prioritised, not individual. Thereby big challenge
of globalisation (liberalization) is how to prevent the widening of discrepancy. We have to be cautious to
accept the view that growth yielded by international trading which more and more wide because free of
resistance automatically will improve the distribution of income. Expert like Michael Todaro (1977) shows
clearly that matter. His research conclude that: “There was no evidence if any automatic “trickle down” of
the benefits of economic growth to the very poor. On the contrary, the growth process experienced by
(the) LDCS has typically led to a “trickle up” in favour of the small middle class and especially the very
rich.”
Free competition is rather unfair for the situation of people-oriented economic is still waste away,
it is not factious, and hence inequitable. Without directional effort, economic growth and improvement of
prosperity will only be bypassing the majority of people, and enjoyed by only a few. The answer is truly
side-taking that is realized in strategic stages to improve the deprivation and strengthen the economic
competitiveness of the people-oriented economics.
b. Challenge in Political Area and Security
The ebb in international politics and relation bear the political tendency and security in various
areas. Global environment is faced by a world of full of distortion and loaded by unpredictability.
International political constellation progressively departs from optimism of Post Cold War that is
predominated by economic issues, democracy, human rights and environment. The issues reflect very
significant impacts and becoming apparent, i.e. terrorism and mass proliferation of weapon.
In line with strategic development undergone, Indonesia is dealt with a dynamic international
environment, marked by the happening of various international relation friction like bi-polarism to multipolarism and then appearance of tendency of unipolarism, the appearance of non-state actor and global
issue like human rights, democracy, environment, good governance, and terrorism. Responding those
issues, a favourable external environment is needed, i.e. stable, peaceful environment and prosperity
representing the part of constitution commendation. To translate it in a perspective of geo-politic, hence,
a significant effort taken is to formulate a political policy and international relation based upon a more
constructive, realistic, and moderate to create the balance and harmonious of inter-state relation.
For Indonesia which is now developing institution of democracy ("transition to democracy"),
presumably become clear of what factors or actors that can be the barrier. In a situation weakened by IMF
and international creditor, Indonesia is in this time at the most a hunt farm of all global capitalists that
ready to attack properties asset in it, inclusive of national asset. All executive, legislative, and judicativepolitical elites came across vast difficulty to be able to detain the obsession and deception of all capitalist
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to uphold the democracy. Whilst democracy institution is still weak, that way they think, why don’t we
take opportunity to dredge up the advantage? And, it is happened, the dirty conspiracy between those who
own power and capital, with the effect that the embryo of democracy will be passed on before it grows. If
the established democratic country find difficulties to barricade the global capitalist deception and entwist,
it is most likely for countries that are learning toward democratisation.
This newly international configuration basically alters the context whereas government play a part.
Government structure and system of policymaking should be adjusted when the government will function
effectively in a global policy environment. And it has various potentials to strengthen the governmental
policy and effectiveness.
Globalisation is peeping out the wide care that sovereignty of a nation is gnawed. The
government nowadays has to admit and work in an environment whereas most solving of problem should
be formulated by paying attention to global world. We have experienced, fiscal and monetary policy can
no longer be taken on the basis of domestic consideration. About USD 1,5 trillion are commercialised
every day in world finance market. This is more than 10 times the money required to support the volume
of world commerce now. This means 90 percent of that activity can be seen as an incarnation of activity
of efficiency seeking in market or currency speculation. This amount is far above the intervention ability
of the central bank, especially because of lack of coordination. We also experience of how our finance
policy is basically determined by International Monetary Fund with its Letter of Intent and World Bank,
and also donor countries.
Competition for international investment means the traditional national policy, like education and
practice, taxation, social protection, economic settlement, or labour (code/law), are becoming global
policy concern. Even, public management policy is watched because the policy can influence the efficiency
and effectiveness of their policy. As a result, policy should be made consistently or competitive with the
tendency of our especial trade partner.
The answer to globalisation or strive to look for the solution to global policy dilemma also affects
for sovereignty. Taking part in international organization or taking a side on international agreement also
limit the policy preferences for government. This new environment even obliges us to alter the domestic
or international practices. The example is our international relation policy such as “bebas aktif”. Then the
question is whether this policy that prevailed since 1948 is still relevant. It is whether the congeniality of
“bebas” for our international relation policy can still be maintained as its original spirit to confront the
change of international configuration that has been intensified by globalisation.
The question is whether the government has no what we call effective control. It is obvious,
interdependency indeed narrow the degree of independency of national policy. It is also true, unilateral
action is more difficult to be used in making the policy or fulfilling the requirement of world society
whose independency has already been so excessive. The government can no longer fulfill a lot of
important policy target. In facing environmental deterioration, international crimes, narcotic commerce, a
nation-state concerns can only be realized through international cooperation. This is the entry point
toward the advancement of nation sustainability, such as cooperating in compiling policy strategy, or
cooperates in formulating rule of the game for development and the use of international information band
or global financial system. However, opportunity opened by globalisation can only be utilized optimally if
the government accommodates the structure or governmental management so as to function effectively in
the new world. The government should inquire the globalisation impacts on the development process of
national and international policy, and also inter-relation among actors constituting policy in it. This is
aimed to protect and strengthen the principles of democracy that are required for the governance of
national and global.
In the security area, in general, globalisation is seen as a positive factor since the increase of
investment flow, commerce, technology, communication and information will give the advantage of a
stable international environment. However, securities advantages from globalisation are limited by many
contradict pressures. First, a nation-state still represents the vitally strategic actor. Second, globalisation
tendency is followed by the emergence of regionalism, especially in the area of security, where the end of
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Cold War had removed the attention from global strength balance to a series of system of regional
strategy, including Asia Pacific region. Third, integrative tendency from globalisation can be so fragile to
intervening security environment. In other words, two sides of globalisation which is contradicted one to
the other is often described as a contradictory process between variety and uniformity, unity and
dissociation, integration and fragmentation, or centralisation and decentralisation.3
Globalisation impact in the area of security and defence are among others: First, progressively the
opening of national economics in consequence of global economics integration can bear the challenge to
sovereignty, including Indonesia. Second, unsymmetrical interdependency between developed countries
and developing countries bear the developing nations are more depending upon market, investment, and
technology of developed countries. These matters cause the nations round into fragile over the pressure of
developed countries which in the end can generate the social crisis, economic, politics and security. Third,
globalisation also soars the crisis in consequence of foreign penetration that oversteps state boundary,
such as capital flow, ideas, and population mobility, and also peep out non-state actors. It is obviously
depicted by the increasing of threat of non-military and trans-national predicament, trans-national crimes
in the form of environmental deterioration problems, illegal immigrant, piratical, illegal fishing, gun and,
people smuggling, commerce of children and woman, narcotic commerce, and terrorism.4
Terrorism itself is seen as a phenomenon of global nightmare creation
using international transaction and network, regional and national. Terrorism
represents one form of violence by using a very organized network so that
become unpredictable and intangible threat to a state and also individual.
Incident of terrorist attack in the United States on 11 September 2001 with the
violence scale and methodologies commemorate that threat forms are rather
asymmetrical and represent the real challenge for national security and defence.
In Indonesia, also faces terorism such as bombing tragedy, murder and crime,
although sporadic in nature. Bali bombing which killed more than 180 people
and injured more than 300 people, and other such happenings, have opened the
eyes of some world leaders that terrorism is not a mere figment. Even, it is
revealed that a number of radical movement which grow in some ASEAN countries as in the Philippine,
Singapore, Malaysia, and even possible in Indonesia is closely related to international terrorism network.
In consequence, it is not a taboo for Indonesia to initiate closed cooperation and coordination within
national environment and also in ASEAN, as well as international to overcome the terrorism predicament.
Terrorist attacks raging in this last decade have also opened the opportunity for cooperation of interintelligence bodies and inter-responsible units for handling terrorism and international crime, i.e.
intelligence bodies, police, military, immigration and custom offices, department of health etc. both
nationally and internationally.
c. Challenge in Cultural and Social Area
Globalisation shows a big change in world society. What shown is not a trivial thing. It is not
solely the problem of adding modern equipment, such as video, fashion, television, computer, etc. in way
of living. We live in a world experiencing a remarkable transformation whose impacts are almost knock
over every aspect of life. Whether you like it or not, we are pushed to come into the global constellation
which is not fully comprehended by anyone, but its impact can surely be felt.
The phenomenon is not merely an economic terminology. Globalisation also contains political,
technological, cultural and religious dimensions. It is erroneous assuming globalisation only relates to main
system, such as worldwide economy constellation. Globalisation does not what is out there, truly apart,
3
4
See White Book of Indonesia Defence Policy 2002, Department of Defence, forthcoming, and Australian Commonwealth of, Australia’s'
Defence Policy. Defence 2000: Our Future Defence Force, Canbera: Defence Publishing Service, 2000.
Ikrar Nusa Bakti, The Significance of Asia Pacific Geopolitics for Indonesia in coming future", a seminar paper, "Constellation of Asics
Pacific Geopolitics: Challenge And Opportunity For Indonesia", conducted by the Directorate for Political Affairs and Communication and
Information, Bappenas in collaboration with FISIP Unpad, UNSFIR, and Department of Foreign Affair, Bandung 16 January 2003.
Halaman 7
and far from everyday life. It also represents the phenomenon " here", which directly influences the
system of our life and belief.
The advancement and sophistication of media technology enable us to witness the forms of life
and different belief system. A society also views the other one in a variety of life style, different religious
orientation, ethnic groups, different languages, etc. Even, globalisation, as expressed by Anthony Giddens,
also represents the long distance effect (time-space distanciation). Meaning, what is going on one place,
can also happen in the other hemisphere. For example, bomb terror in Bali concurrently influences the life
of people in the other parts of the world. Basically, global society life now should deal with plurality of
culture that is influencing each other, what we have never conceived before.
This will indeed generate excessive
conflict, upholding and endless. As stated by
Samuel Huntington, borderline in the world of
cold war era does not come from politics or
ideology, but culture. In his controversy book,
“The Clash of Civilization” (1993), Huntington
has a notion that the bond of modern society is
likely determined by their religion heritage,
language, history, and tradition or what we called
as civilization.
As civilization convenes with one
Source: BBC Online
another, through globalisation, if there is no
communications channel, hostility germs become lumpy and ready to burst. For most people living in
Europe and North America, globalisation is irewed unpleasantly, like westernisation or Americanisation in
other parts of the world.
Conflicts occurred in the modern world, even within one civilization. According to Kenichi
Ohmae, in the same civilization, society often battle among its components. For example, conflict in
Northern Ireland between Protestants and Roman Catholics.5
Conclusion
Globalisation can be seen as a double-edged
sword. In one side it has borne an integration process,
interdependency, and homogenisation, but at the same
time, on the other hand, it bears also a process of
disintegration, dependency and heterogenisation in almost
every field of life, economic, social, cultural, politics,
security, etc. usher and in state
5
Kenichi Ohmae, The End of Nation State, NY: Macgraw Hill, 1995
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paper, "Constellation of Asics Pacific Geopolitics: Challenge And Opportunity For Indonesia",
conducted by the Directorate for Political Affairs and Communication and Information,
Bappenas in collaboration with FISIP Unpad, UNSFIR, and Department of Foreign Affair,
Bandung 16 January 2003.
Department of Defence, White Book of Indonesia Defence Policy 2002, , forthcoming, and Australian
Commonwealth of, Australia’s' Defence Policy. Defence 2000: Our Future Defence Force,
Canberra: Defence Publishing Service, 2000
Friedman, Thomas L, Lexus and the Olive Tree, New York : McGraw Hill, 2000
Huntington, Samuel, 'The Clash of Civilization" , Cambridge. Polity Press, 1993.
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Stiglitz, Joseph E in his book Globalisation and its Discontent
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