Globalisation – Debate Environmental Tales

Even though formal colonial bonds were cut in the 20^th century, many of the basic economic structures have survived in current globalisation, where investors of the wealthy countries seek the cheapest locations of production and raw material supply and gather the profits leaving often environmental and social problems as price of their economic contribution to local distant societies.

In the 1980’s the policies of US president Ronald Reagan and British Prime minister Margaret Thatcher favoured “free trade”. Simplified it means reducing regulation and role of states – letting the “invisible hand of the markets” to decide where to produce, what to pay and how to clean industrial emissions. Before that most industrial countries had national brands manufacturing various consumer goods in multiple SME’s (small and medium sized enterprises) and people were living all around country. Countryside had been quieting down a bit previous past couple of decades, but small towns were lively.

Urbanisation

Since 1980’s “the invisible hands” have been guiding labour to various corners of the Globe with low wages. Various bilateral free trade agreements paved the way to moving production to far-away countries – leaving empty factories around quieting towns in the west – while newly industrialising countries were building new production sites to serve in the same purpose – with lower economic, but higher ecologic costs.

Image: Map of the world urbanization rate, 2018.
Accrediting the author: By Nicxjo – Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=93920149

Population has been piling up to cities around the World, as small-scale agriculture has been replaced with monoculture supplying to large central purchasing organisations, that compete on international markets. As also small-scale local manufacturing units have lost the cost reduction race, the proportion of trading and service has risen in national economics. In plain English instead of farmers and factory workers there are more salespeople, car mechanics and plumbers to serve the needs of the growing central cities.

Due to economies of scale, many of those factories that have survived, have been bought by larger companies of the same or similar trade. This network of subsidiaries allows many benefits – and also concentration of wealth. As the investors – and logics of capitalism – demand continuous growth, when the owner has been aggressively acquiring new possessions for few decades – and has been bought by each time larger investment funds – in the end there begins to be shortage of companies to be bought.

Privatisation

As a part of the free-trade the two international organisations founded 1944 in the Bretton Woods Conference in the USA – the IMF aka International Monetary Fund and the World Bank have encouraged many countries of the Global South to guide their national economies to produce raw material to the global markets – instead of directly feeding their people. This has guaranteed economic supply to international corporations, but made poor countries dependable on their monoculture sourcing function of coffee, cocoa, cotton, pineapple, etc. and various ores and fossil fuels.

Due to shocks in global trading many developing countries ended up badly in debt to World Bank and other international funders. As the debts were in dollars, changes in currency rates and high domestic inflation have made situations catastrophic in many cases. The solution provided by the funders has often been the privatisation of remaining state-owned companies.

The touch of “the invisible hand” has often ended up selling national infrastructure monopolies in despicable prices to the international investment funds and large – often western – corporations. In many cases some people in power have benefited through bribes and economic benefits and the citizens have suffered an even died in numbers due to lacking or poor healthcare, sanitation and water.

Consider:

Globalisation has provided army of economical goods mass-produced and distributed with mainly fossil fuels across the Globe. Large multinational corporations have risen and opt their production and sourcing, where costs – and often environmental and social standards are low.

Those multinationals have become so powerful, that they have been able to considerably slow down the development of regulation aiming to slow down the climate change and the sixth extinction.

Tasks:

1. DEREGULATION AND ENVIRONMENT.

Nigeria is second largest African producer of petroleum and gas. This means lot of international fossil energy giants have operated on Nigerian soil for decades. As majority of the oil fields are small, there is a widespread network of oil pipes across the Niger river delta.

Read about the environmental issues created by the over half a century of oil extraction in Nigeria.

Nigerian state oil company reported of many problems already 1983. Can you think of reasons, why still, over forty years after that many issues remain same or have worsened?
1989 the Exxon Valdez oil spill in Alaska got wide media coverage. The tanker released over ten million US gallons – equalling to 238 095 barrels to arctic waters. It is estimated, that since 1958 there has been 9 to 13 million barrels of oil draining to ground in Nigeria.
- That is from 37 to over 60 times more oil contaminating nature, than from Exxon Valdez. It is a lot of lost oil and damaged life and water.
- Why this has been possible?
Learning of the reasons for the oil spill, can you think of three proposals how to motivate the oil companies, locals, the international community and the Nigerian government to work better together to help preventing the oil spills?
List some of the damages the spills have caused for the nature.
Nigeria has burned immense amounts of natural gas. Why they just burn it and do not sell it or for example make electricity of it to national use?
Why is this bad for the climate?
Shell is a Dutch company, that has avoided flaring gas in western oil-fields. Why do you think its Nigerian subsidiary was in court because of gas flaring in 2005 in Nigeria?
- This can be called “double standards”. What does that mean?

2. DEREGULATION AND HUMAN RIGHTS.

As oil has generated most of Nigerian export earnings for six decades, state military has been aggressive in protecting the economic interests of the international oil companies – and even killed Nigerians that have defended their rights to clean environment or demanded some compensation of the oil taken from their territories.

Read about the human rights issues connected with fossil industry in Nigeria.

Why have Nigerian soldiers killed people protesting against international oil companies?
Are the dollars from oil distributed evenly to citizens of Nigeria?
Text reveals an estimation of 300 – 400 billion dollars of Nigerian oil money having vanished to corruption since 1960. Minimum of $300 000 000 000.
- Imagine the impact, if even 1/3 of that would have been spent on maintaining the pipelines, building hundreds of medical centres, thousands of village schools and keeping the sweet water resources safe, etc. So given back to citizens.
- Lot of violence and misery could have been avoided.
One buzz-term in international business is ESG. It aims to raise concerns for the environment, social issues and good governance. After reading the chapter, do you think good ESG values have realised in Nigerian oil trade?

3. URBANISATION.

As you can see from the graph below, most people lived in countryside until the early 20^th century. Even though there are now about dozen countries in the World, in which over 80 % of the population live in urban areas, it was quite recently, when we reached the point, when more than half of us live in cities and towns.

Image: Rate of urbanisation – past 500 years. By Our World In Data – https://ourworldindata.org/grapher/urbanization-last-500-years, CC BY 3.0, https://commons.wikimedia.org/w/index.php?curid=86956576

So, over 99 % of human existence vast majority of us have lived in rural areas, where we are daily exposed to surrounding nature. Again, over 99 % of that time we have managed to maintain the global temperature and vitality of ecosystems in healthy levels.

Our surroundings tend to stimulate our desires and goals. In modern urban grounds our senses are bombarded with commercials, store fronts, fashions, vehicles, etc. Constant flow of temptations inviting many of us to consume. Yet, increasing proportion of us is understanding stimulus of that kind has caused the global warming.

Old proverb says: “Out of sight, out of mind.”

Observing the urbanisation curve above, it seems to have been true past decades. The more of us have been urbanised – living without daily nature connection – the faster we have wiped away the rest of the ecosystem.

There are young people moving to rural areas, re-connecting with the nature. Housing is also considerably cheaper and it is easier to have more space than in cities.

What would it take for more of us to downshift?

Returning to smaller communities, where it is safe to move as people know and care of each other.

In other words, returning to human sized society, that again live directly from the Earth and nurtures it instead of polluting and consuming it.

4. PRIVATISATION.

Under the rule of the “Iron Lady” numerous privatisations were set afoot in UK starting from the 1980s. Many previously public services like electricity, gas, water, phone, etc. were privatised.

Around the World the one of the main reasons given to privatising state owned companies has been, that free markets are more efficient than rigid public services, so they can provide better service in lower cost.

Read recent BBC article about consequences of privatising water in the United Kingdom.

Has the service improved after the privatisation?
Are the private water companies planning to lower their prices?
Have the investors made profit?
Have they grown their profits with methods that public service would not have allowed?
Have the profits remained in the UK – where the water services are offered?
Does privatising water in the UK sound like a success story?
Do you think privatising would serve the customers better or worse in Nigeria, than in UK?
Can you think, why privatisation has been pushed to Global South by the IMF / World Bank?

Links – read more about effects of globalisation:

Oil production in Nigeria – impacts to nature:

https://en.wikipedia.org/wiki/Petroleum_industry_in_Nigeria#Environmental_impact

Oil production in Nigeria – human rights:

https://en.wikipedia.org/wiki/Petroleum_industry_in_Nigeria#Human_rights_impact

BBC about Water investors having withdrawn billions of pounds:

https://www.bbc.com/news/articles/cw4478wnjdpo

Take action:

Oilwatch: https://www.oilwatch.org/oilwatch-worldwide/

Fight fossil fuels: https://fightfossilfuels.net/

Downshift: https://en.wikipedia.org/wiki/Downshifting_(lifestyle)

Regenerative agriculture: https://en.wikipedia.org/wiki/Regenerative_agriculture