Diane Coyle: Globalisation by the people, for the people

The mobile-powered spread of telephony and the movement of people across borders are linked

One fashion from the fading year that seems certain to carry over into 2004 is multinational-bashing. In certain circles, it's a badge of right-thinking to condemn corporate globalisation, a no-brainer like hating George Bush and loving Noam Chomsky.

The bad news for these intellectual fashionistas is that globalisation will forge ahead more rapidly than ever in 2004. But not because big, bad corporations have made a New Year resolution to outsource jobs and pillage the environment even more. Rather, globalisation is taking place under the radar, on a small scale, in the choices being made by hundreds of millions of individuals around the world. People are doing it for themselves.

Take one example, the 180 million or so people from poor and middle-income countries who are working abroad. The global economic slowdown of the past two years also slowed the flow of international migrants. Migration depends on the economy doing well because then more people can afford the cost of travel and setting up elsewhere. However, the numbers of overseas workers has scarcely fallen and will pick up again with the recovery.

Most of these workers send money home to their families. It's hard to track the amounts as they are usually small and often pass through informal channels rather than banks. The World Bank estimates the amount at more than $80bn in 2001. The Inter-American Dialogue centre for policy analysis puts the figure at up to $150bn a year.

To put these estimates in context, even the lower one dwarves the combined amount of official aid from governments and private aid from charities to poorer countries. The higher figure is comparable to the amount multinational companies spend each year on direct investment overseas (it was just over $200bn in 2002).

So in the case of the Philippines, for example (one of the biggest recipients of remittances from its workers abroad), the money sent back by nannies, nurses, construction workers and others is about $7bn a year. This is approximately seven times the amount of inward direct investment and 14 times the country's receipts of official aid. Overseas Pakistanis each year send home two to three times more than foreign companies invest in the economy. The economic impact of remittances is even larger in the case of small countries such as Haiti or Nicaragua.

Of course, the movement of so many people from middle-income countries to work overseas is not a straightforward, good news story.

Their conditions of employment can be grim - certainly by the standards of their host countries - and nobody would be complacent about hundreds of millions of people deciding they had to leave their families and friends out of financial necessity. Equally, though, this massive phenomenon of movement and small-scale financial flows does not fit neatly into the tale of globalisation as an imposition by powerful corporations and the US government on the powerless people of the world.

The same picture of people using the opportunities offered by the global economy emerges in evidence on the extraordinary spread and increasing use of mobile telephones. According to statistics from the International Telecommunications Union, there are more mobile subscribers (1.14 billion) than fixed line subscribers (1.1 billion) in the world, and around 100 countries in which mobile has overtaken traditional telephony.

The pace at which this new technology has spread is unprecedented. For many poor countries, especially large, rural ones, the cost of investing in a universal fixed-line telephone network has always been prohibitive. State ownership of the system through inefficient and corrupt monopolies has been another common obstacle. Mobiles have leapfrogged these hurdles.

The School of Information Management and Systems at the University of California, Berkeley has estimated that 98 per cent of the information generated globally in 2002 - flowing through electronic channels such as TV, telephone, radio and the internet - was accounted for by telephone calls. And in this category, the share of voice mobile calls and text messages is climbing rapidly - growing by 35 per cent between 2001 and 2002 to reach about 13 per cent of the total sum.

Although the internet has dominated the discussion and study of new technologies, mobile telephony is the innovation that seems to be spreading like wildfire around the globe. Certainly, visitors to the big cities in developing countries can't have failed to notice the phenomenon. Even rural areas in some countries now have their first ever telecommunications links to the outside world. While the network and services are still provided by corporations, of course, phone calls consist of the direct, person-to-person exchange of information, in contrast to the packaged, broadcast content of TV and radio, or even much of the world wide web.

These phenomena - the mobile-powered spread of telephony and the movement of people across borders - are linked. Both prefigure the next wave of globalisation. Thus MPs for constituencies with large numbers of immigrants now find the people seeking help at their surgeries can be contacted by mobile. Information about job prospects and housing, all kinds of news, and advice about dealing with the authorities, can easily be passed back to others at home.

Farmers in developing countries are able to get direct news of prices for their produce in urban markets or even the commodities markets of New York and Chicago. The great hope for the internet - wider access to information - is in fact being realised by a combination of people and telephones, a more fluid and informal information network than one involving expensive computers, high literacy skills and packaged content.

It is a far cry from the caricature of globalisation as the manipulative creation of multinationals. This isn't to say that big and powerful corporations are not, well, big and powerful. Equally, thoughtful campaigners appreciate the nuances of the complicated processes we describe as globalisation. They have moved on from being pure "antis" to campaign on the details of trade and intellectual property rules, for example. But even the most nuanced groups still take advantage of the general - and rising - distrust of big companies for the purposes of publicity and campaigning.

Fair enough, you might think. After all, 2003 started with the first big lawsuits arising from US corporate scandals, such as WorldCom and Tyco, and ended with the uncovering of the massive Parmalat fraud in Italy. So there's no shortage of inexcusable behaviour by large companies to make people mistrust the corporate world.

While many corporations are highly responsible and even idealistic about their role in economic development, others are indeed cynically focused on short-term profits. But to concentrate on what companies are doing is to misunderstand the emerging nature of globalisation. Even the most powerful corporations - or governments - are not in control.

This phenomenon might turn out to be an even more disruptive process than the changes we have already seen during the past couple of decades, but this time it's globalisation by the people, for the people.

Diane@enlightenmenteconomics.com

Diane Coyle is author of 'Sex, Drugs and Economics' and 'Paradoxes of Prosperity'

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