Globalization is a key feature of the modern competitive world. It is a phenomenon that has been present since the age of ancient civilization. Globalization creates both positive and negative consequences in relation to different spheres of society.
South Africa is one country that has undergone a transformation due to the impacts of globalization. It has affected all sectors of the economy, which has made this country to be among Africa's leaders in terms of technology and economic development. This country has also undergone a major transformation in the issue of apartheid, and this was eliminated through efforts by the trade unions.This paper aims at analyzing the trade unions in South Africa with regards to globalization.
It also gives the benefits and weaknesses of globalization and how they can be mitigated. The paper also gives a conclusion and recommendation on the issues discussed. Introduction. Many countries have benefited from the benefits of globalization. Other countries have not made significant steps toward the use of these benefits, and this is one factor that separates successful nations from failed states. Globalization is a process in which regional or local environments are transformed into global environments.
It makes the use of technological, economic, political and socio-cultural forces. In the economic aspect, globalization involves creation of an international economy through integrating national economies. This is done through foreign investment, trade, migration, technological advancement and capital flows. Technological advancement is achieved through research and development, after which the technology is disseminated to various societies across the world.
Foreign investment involves investment across country borders and this is facilitated by a favorable investment environment.Migration involves removal of national boundaries and making it easier for people to travel to any part of the world. Globalization is a process that moves through different centuries and it goes as far back as the Parthian and Roman empires. In such cases, farming, technology, trade and knowledge was exchanged by different societies.
However it gained prominence during 19th Century as this is seen as the period where globalization grew at the highest levels. Effects of globalization. The effects of globalization can be sub-divided into three categories; economic, political and cultural. Economic effects.Globalization has led to the formation of a global market where capital and goods are exchanged freely. In South Africa, it has led to development of global financial markets, such as speculative and foreign exchange markets, and has provided borrowers with means of acquiring external financing.
In terms of production, it has helped to increase the amounts of goods and services that are produced in different parts of the world. Globalization has also increased the competitiveness of businesses, due to removal of trade barriers, which has led to competition between local and foreign goods.As will be discussed later, this is one potential weakness of globalization. Globalization is illustrated by events happening in a part of the world and affecting another part of the world. For instance, the US is currently facing a mortgage crisis, and this is being felt by countries throughput the world. This is evidence of globalization.
A negative economic impact of globalization is the increase in pollution and damage to the environment. Globalization has facilitated the growth of industries, many of which emit fumes and waste, that pollutes the environment.Political effects. Globalization has led to formation of world bodies that help regulate the political issues in the world. Such bodies include the UN, IMF, World Bank and these regulate different political and economic issues.
Globalization makes countries pass treaties and laws that govern global issues as opposed to individual countries. For instance, the International Court of Justice governs global issue that involve abuse of human rights. It deals with countries and focuses on global cases that are guided by international courts as opposed to individual countries.Globalization leads to a global link between political events in different countries, such that an event in one country may affect other countries in different parts of the globe. Cultural effects. In terms of culture, globalization has provoked the desire to improve standards of living, adopt new practices and technology, and enjoy foreign ideas and products.
People have access to the culture of most parts of the world, and this has helped people to be tolerant to and embrace the culture of others.Examples of features that portray the cultural effects include international tourism and travel, pop culture and world wide fads such as sudoku, MySpace, Face book, and other interactive networks. Trade unions in South Africa. There are three major trade union federations and these will be discussed below; COSATU This is the largest trade union federation in South Africa and has 21 trade union affiliates, which control approximately two million workers.
This federation was formed out of the need to streamline the activities of unions. After inception, the federation had 33 unions which had less than five hundred thousand members.The federation grew in numbers and played a key role in resisting apartheid. This was achieved through organizing of strikes across towns and factories throughout South Africa.
COSATU is also an alliance between South African Communist Party and ANC. Its role in this alliance is not very clear since it opposes ANC's policies, in spite of the fact that they are in a common alliance. Some members support the alliance since they see it as a way that they can benefit from the government, but others are against it since they see independence from the government as a core need for them to attain their objectives.ANC This is the governing body of South Africa and is supported by COSATU and SACP.
Initially it was known as South Africa Native National Congress and it was founded to fight for the rights of black South Africans. Sol Plaatje and John Dube were among the founders of the party. In 1923, it changed its name to ANC and acquired a military wing. the ANC has ruled the country since independence in 1994.
It has alliances with SACP, in terms of holding elections, government positions and making of policies. SAPC. This is a South African party founded in 1921, to fight for the rights of workers.It gained prominence in 1922 after organizing an unsuccessful strike by mine workers. The strike was aimed at protesting towards the unfavorable treatment of black workers, who were to be relegated to lower management levels.
SAPC was however contradictory, since it supported the white miners' color bar, yet it was striking against racialism. According to Chidester, Dexter and James (2003), its slogan also advocated for the rights of the white people yet it failed to mention the blacks, who are the majority in the nation. The strike flopped mainly due to the failure of black workers to strike.The lack of success of the strike forced this party to change its strategy, and adopted an approach that focused on fighting for the rights of the native people. The native people of South Africa are the black people, and this was the beginning of change that would see it grow at high rates.
The party now has an approach that gives people of all orientations equal rights. View of South Africa trade unions on globalization. COSATU, SACP and ANC are against the globalization process, since it insists that the process represents the wishes of the West, and that it has negative impacts on workers.This is one situation where members of the alliance are criticizing themselves, since they are part of the government.
COSATU is also accusing ANC of being manipulated by the IMF and World Bank, under the guise of globalization. The labor unions in South Africa, have played a major role in the eradication of apartheid in the country. According to Munck (2004), the major achievement can be said to be the transformation of the South African workplaces to give everyone equality regardless of background or race. These unions have made employers appreciate the role that they play and the benefits of negotiating.
In the past, the trade unions were for white people, and black people were not allowed to join them. The trade unions have changed all this and there are millions of black South Africans who have joined them. However, it is the general opinion of these trade unions that globalization has negative effects on workers. There are several reasons that are given for this, and they will be comprehensively discussed below.
One of the reasons given by the trade unions include that in the modern competitive world, countries compete against each other so that they might attract investments.According to Alatas ; Cameron (2003), countries have learned the value of foreign investment and subsequently create the necessary environment for attracting local and foreign investors. The countries create a favorable environment through lowering costs of corporations, lowering taxes, creating laws that favor investments, lowering taxes among other measures. When costs for investments are lowered in South Africa, this effect is shouldered by taxes that workers pay.
The net result is increase in taxes paid by workers, which decreases their disposable income thereby lowering their standards of living.Another argument is that in their efforts to decrease the costs of investors affects the bargaining position of labor unions and workers. According to Nilufer (2000), this is due to the reason that the government is unwilling to increase the wage rate, since this will compromise its objective of lowering the cost of investment. Globalization has also been seen to have negative impacts, due to rendering the workers redundant. This is because modernization comes with new technology. This technology is able to do activities faster, at lower costs and more effectively than ordinary human beings.
The employers realize this and subsequently replace employees with machines. Some lay offs are so massive that they lead to conflict between labor unions and employers. The unions claim that workers are being fired indiscriminately and without reasonable compensation, while the employers say that they are increasing efficiency so that they can maximize their profits, which is the essence of doing business. However, ANC does not view globalization as lowering the living standards of workers is an illusion, and that on the contrary, it improves their standards of living for the majority. There are four reasons that are given for this argument.
The first is that employers are not very much influenced by cost, when hiring workers but are influenced by the value or productivity of the employees. According to Bordo, Eichengreen and Irwin (1999), productive employees in this respect are those who possess good education and modern technical skills. They further argue that foreign investors, unlike what the critics think, are not attracted to foreign countries just because the operational costs are low. There are numerous other factors that influence investment decisions by firms. Such factors include the state of infrastructure, the political environment and other factors.The third reason is that the perception that investors curtail freedom of labor movements.
This is seen to be true, some of the times, but not in majority of the cases. The argument is that the investors improve relations with labor movements so that both parties may meet their objectives and goals. The fourth argument is that critics are of the opinion that since globalization increases the wealth around, this benefits the rich and not the poor. They say that this is a wrong perception since globalization helps to create a fixed amount of wealth that trickles down to the poor.Critical analysis.
South African labor market. There are certain features that are present in the South African labor market, that are common in developing countries. Most developing countries have two main sectors, that is the traditional and modern sectors. South Africa also has an informal and a formal sector. The formal sector in South Africa uses technology and capital intensive means of production. Workers in this sector are generally better paid, have more skills and have access to insurance and pension systems.
This sector operates under legal structures and can be regulated.According to Hart (2003), the informal sector uses labor intensive forms of production and workers have generally low skills and are poorly paid. This sector operates under conditions and an environment that makes it difficult to be regulated. Industries such as manufacturing, petty commerce and agriculture fall under this section.
Such workers do not have adequate job protection and benefits that are shared by those in formal professions. However, it is important to not that the two sectors cannot exist independently, and that they have relationships that exist between them.These characteristics are useful when analyzing the impacts that globalization has in South Africa. Trade policy reforms.
One consequence of globalization in South Africa has been trade liberalization. Trade liberalization in South Africa has been assumed to have positive effects on the labor force. One benefit that liberalization is expected to bring is reduction of inequality and poverty levels. This stems from the positive effects that liberalization brings to the economy. The benefits are expected to increase returns by producers, and it is assumed that they will pass on the benefits to employees.
Increase in their incomes is then expected to raise their social status. Capital market reforms. Another impact of globalization to South Africa, according to Baldwin (2005), is the increase in foreign investment. In fact, one of the major aims of globalization is to increase the levels of foreign investments through removing or reducing barriers to trade. It is therefore important to analyze this in relation to the welfare of workers.
Increase in foreign investment in South Africa usually creates employment and increases capital flow.This has positive effects on the wage rate which improves the welfare of workers. However, there is concern in South Africa that the benefits of foreign investment only benefit few people, which locks out opportunities for workers. There is also concern that most forms of direct investment are usually acquisitions and mergers as opposed to new investments.
This has negative effects to workers since it locks out employment opportunities. It also puts them at a risk of dismissal, as the new management in cases of acquisitions, may decide to replace the existing staff.
