Globalization as a leading trend in global development and its consequences at the end of the 20th and the beginning of the 21st centuries

Minakova Irina ORCID: 0000-0001-6838-7940 Doctor of Economics Dean; Faculty of Public Administration and International Relations; Federal State Budgetary Educational Institution of Higher Education 'Southwestern State University' 3A Officer Street, Kursk, Kursk region, 305029, Russia irene19752000@mail.ru

Rastorguev Anton Lecturer; Department of International Relations and Public Administration; Federal State Budgetary Educational Institution of Higher Education 'Southwestern State University' 50 let Oktyabrya str., zd 94, Kursk, Kursk region, 305040, Russia guimo-swsu@yandex.ru

Introduction

The concept of globalization has become widely used to denote the economic integration that characterizes the global economy in the last decades of the twentieth century, starting in the 1980s (La globalization à l'aube d'un nouveau cycle. URL: https://theconversation.com/la-globalisation-a-laube-dun-nouveau-cycle-223126 (accessed: 09/26/2024); Avec la mondialisation, les sanctions économiques sont devenues plus courantes que les interventions militaires. URL: https://theconversation.com/avec-la-mondialisation-les-sanctions-economiques-sont-devenues-plus-courantes-que-les-interventions-militaires-181207 (date of access: 09/26/2024)).

In the scientific literature, "globalization" is most often defined as a multidimensional process affecting various aspects of society and individuals. This is reflected in the intensification of the exchange flows of tangible and intangible goods. The widespread use of the term "globalization" is usually associated with the work of T. Levitt, who, in an article published in the Harvard Business Review in 1983, stated the emergence of global firms ^[1]. In 1991, S. Sassen introduced the concept of global cities into scientific circulation, which included New York, London and Tokyo ^{[2, p. 85]}.

As globalization processes have intensified, numerous papers have appeared on their future prospects and implications for the global economy. In particular, the French political scientist Badie B. in 1998 suggested the gradual leveling and disappearance of nation-states ^{[3, p. 7]}. Another French scientist O. Dollafu expressed a similar point of view ^[4].

However, in recent years, there has been a slowdown in the globalization processes in the world and certain deglobalization trends have emerged in relations between States. Such contradictory dynamics of globalization processes give rise to numerous scientific discussions regarding their pace, results for the global economy and the economies of individual countries and regions, and prospects for their development in the future.

The purpose of this work is a systematic theoretical study of globalization processes and their consequences for the global economy.

Research materials and methods

The theoretical basis of the presented research is fundamental analytical works devoted to the analysis of globalization processes in the world economy ^[5-7]. The research of contradictions arising in the process of globalization was carried out by Baer J., Brenner R., Crotty J. ^[8-10]. Individual consequences of the creation of a global socio-economic space are analyzed in the works of Giraud P.-N., Bedua S.F., Manzi R. ^[11-13]. The relationship between globalization processes and the level of poverty in the world is revealed by Lamy G., Bourguignon F. ^[14-15]. The prospects for the development of globalization are defined in the works of Strange S., Gilles R., Wagner I., Gilson B. ^[16-18].

The reliability of the conclusions and generalizations is confirmed by the authors' reference to the information resources of the World Bank, the international information platform Statista, and international analytical centers. The study is based on a systematic approach to the study of multilevel and hierarchical socio-economic systems. In the process of developing the research issues, the authors used dynamic, structural, comparative analysis, critical conceptual analysis, and institutional analysis.

Hyperglobalization and stabilization of globalization dynamics

The problem of globalization is one of the most pressing issues discussed by political scientists, economists, sociologists, and philosophers today. Globalization is an objective process of growing interconnection between peoples, countries, and civilizations; intensification of interstate exchanges of material and spiritual values, formation of global culture and ethics; homogenization and universalization; transformation of nation–states and transnationalization, leading to the strengthening of the role of supranational structures in solving not only global but also national problems.

Research shows that the process of globalization is quite ancient. You can highlight some of the major events that stood at its source ^[11]: 500 BC: the creation of the silk road that connected East Asia with Europe through the middle East; 332 BC: conquest by Alexander the great of Egypt, which facilitated trade between Europe and Asia; 117-138 years: the reign of the Roman Emperor Hadrian, who carried out the policy of the development of trade and cultural exchange throughout the Roman Empire; 618-907: the reign of the Tang dynasty in China, to ensure the active development of trade with Central Asia and India; G. 711: the Islamic conquest of Spain, opened new trade routes between Europe and the Muslim world; 1258: the capture of Baghdad by the Mongols, suspended trade on the silk road, but at the same time contributing to the development of new trade routes between Europe and Asia; 1492: discovery of America by Christopher Columbus, marked the beginning of European colonization of the Americas and speed up trade; 1602: creation of the Dutch East India company, marked the beginning of European expansion in Asia and became one of the first multinational corporations; the years 1839-1842: the opium war in China, which resulted in the defeat of China and the opening of its ports to the Western powers; 1869: the completion of the Suez canal, which facilitated trade between Europe and Asia; 1944: the creation of the Bretton woods monetary system based on the use of the US dollar as a reserve currency; 1947: the advent of GATT negotiations as the basis for the reduction of trade barriers; 1985: the signing of the Schengen agreement, assuming free trade between Belgium, the Netherlands, Luxembourg, France, Germany, 1995: Creation of the WTO.

Although globalization is sometimes interpreted as an exclusively financial and economic phenomenon, it covers a much broader area than just the cross-country movement of goods, services and capital. Globalization is a complex phenomenon integrating: economic globalization: the development of world trade and transnational corporations; financial globalization: the emergence of global finance and international financial exchanges; cultural globalization: the interpenetration of cultures in all their diversity and the emergence of a globalized supraculture; political globalization: the increasing influence of international organizations ^[11]. Historically, economic globalization has been the initial stage of globalization processes. Since the 1960s and especially since the 1970s, the openness of the global economy and the development of free trade policies have accelerated globalization. The active globalization processes were evidenced by the outstripping annual growth of global exports (10%) compared with the dynamics of global GDP (6%) in the period from 1990 to 2008 (Croissance annuelle du produit intérieur brut (PIB) mondial de 1980 à 2023, avec des prévisions jusqu'en 2029. URL: https://fr.statista.com/statistiques/571245/croissance-du-produit-interieur-brut-mondial-pib-en-2020/(date of request: 12/20/2024)). The global volume of foreign direct investment, estimated at $560 billion in 1980, exceeded $1,850 billion in 1990 (Statistiques sur les investissements directs étrangers. URL: https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Archive:Foreign_direct_investment_statistics/fr&oldid=218999 (accessed: 12/20/2024)). Thus, investments have tripled in about ten years, indicating the internationalization of capital. Technology transfer, migration of human capital, and cross-border information flows have been added to the cross-country movement of direct investment, goods, and services. As a result, the interconnections between national economies have become large-scale and comprehensive.

The creation of the WTO in 1995 intensified globalization processes: since 1995, the physical volume and value of world trade have increased by an average of 4% and 6%, respectively ^[12].

However, since 2008, economic globalization has entered a new phase, which is characterized by stagnation of international economic flows, primarily global trade and long-term investments. In early 2009, the annual volume of exports decreased by 30% in China and Germany, and by 45% in Singapore and Japan. Trade in manufacturing products fell from 15.6% of global GDP in 2011 to 14.5% in 2021 ^[13]. The slowdown in economic globalization was largely the result of the 2008 crisis, exacerbated by the Covid-19 pandemic. According to official data, for one quarter of Covid-19, losses in global trade in goods and services amounted to 320 billion dollars, which is comparable to losses that could be caused by a global increase in customs duties by 0.7% (L'épidémie Covid-19 coûte 320 Mds USD aux échanges internationaux par trimestre de perturbations. URL: https://www.allianz-trade.fr/actualites/impact-coronavirus-commerce-mondial.html. (date of request: 06.10.2024)).

The pandemic has significantly limited migration processes in the world. From March 11, 2020 to February 22, 2021, about 105,000 restrictions on movement were introduced in the world.

At the same time, the process of economic globalization has slowed down due to the crisis of the multilateral system of regulation of international trade, manifested in the absence of a common agreement within the framework of the Doha Round of negotiations. There has been a significant complication of the negotiation process between the countries, due to two factors. Firstly, the number of participants in international negotiations has increased, which makes it much more difficult to reach consensus: if 23 countries participated in the first round of GATT negotiations, held in 1947, then 64 countries participated in the negotiations within the framework of the Doha Round. Secondly, the issues discussed in multilateral forums are becoming more complex than in previous decades. If, before the creation of the WTO, tariff reduction was the central issue in the rounds of negotiations, then since the 1990s negotiations have been underway to reduce technical barriers to trade, liberalize the cross-country movement of intellectual property, reduce subsidies to national producers, etc.

Ideological foundations of globalization processes

The theoretical basis for the formation of the global market is a priori liberalism and the concept of the Washington Consensus based on it.

In 1817, D. Ricardo introduced the principle of comparative advantages and relative (comparative) price into scientific circulation. According to his theory, free trade benefits all countries that specialize in producing products with the lowest relative price compared to their partners. It is only a relative price comparison that matters, and therefore a country does not necessarily have to have an absolute advantage in one or more types of production in order to benefit from participating in an international trade exchange. It was the theory of comparative advantages that was used by the IMF and the World Bank in the 1990s as a theoretical foundation for justifying the feasibility of liberalizing foreign trade. According to the dogma that trade increases global wealth anyway, the poverty that sometimes accompanies an open economy is interpreted as a temporary phenomenon caused by changes in the terms of trade. Thus, D. Ricardo's theory proved the unequivocal superiority of liberal economic policy.

The central provisions of economic liberalization are: liberalizing interest rates; liberalizing foreign trade; removing barriers to foreign direct investment; privatizing state-owned enterprises; and deregulating markets. The very term "Washington Consensus" is a set of principles of macroeconomic policy, which at the end of the 20th century were recommended by the leadership of the IMF and the World Bank to states experiencing financial and economic crises. Some countries have benefited significantly from the development of globalization processes in the world. Globalization is accompanied by certain short-term benefits for consumers: access to a wide range of goods and services produced worldwide; concentration of a country's resources on the production of products where the country has a resource or technological advantage; opportunities for active labor migration. At the same time, there is increased competition for domestic producers, which will lead to the ruin of a significant part of them. Especially when it comes to competition from multinational corporations that displace local producers in developing countries. The latter is accompanied by a significant increase in unemployment and inequality.

Preliminary results of globalization

Globalization presupposes the creation of a single world space. G. Hegel (1830) and F. Fukuyama (1992) believed that reason and liberalism would make conflicts between nations impossible, and the diversity of peoples would become part of a universal system ^[6]. The 28th President, W. Wilson, attempted to institutionalize the idea of universal peace through the creation of an intergovernmental organization, the League of Nations, whose main tasks were to ensure global collective security and the diplomatic settlement of international conflicts. Later in 1946, the League of Nations would be transformed into the United Nations. F. Fukuyama, in his book The End of History or the Last Man, published in 1992, noting the collapse of the Eastern Bloc, argued that a market economy spread throughout the world would lead to the creation of a single space. Let's analyze the consequences of globalization processes.

1. Globalization has not ensured the establishment of a more egalitarian world.

Despite the fact that globalization presupposes high cross-country mobility of labor, capital, and technology, which should have led to an equalization of the levels of socio-economic development of countries and regions, in practice this has not happened. Up to the present time, the traditional opposition of the planetary "North" – rich industrialized countries and the planetary "South" – poor countries has been preserved.

In 1958, D. Bhagwati showed the possibility of "depleted" growth in large countries whose exports can influence world prices (such as China, India or Brazil) ^[14]. According to his approach, an increase in exports of goods in the production of which the country has a comparative advantage leads to a decrease in world prices for them. Under certain conditions (in particular, with low price elasticity of demand, since in this case the price of a product is determined by supply), an increase in production leads to a deterioration in the terms of trade, resulting in a reduction in export earnings. If this loss of income is not offset by increased sales, the country becomes poorer while producing more.

If we judge development by the ability of less developed countries to approach the level of developed ones, which should be accompanied by a reduction in global poverty, then the results achieved here can be described as very mixed. While some Asian countries, primarily China, have approached the level of developed countries due to high rates of economic development, the gap between a number of countries in sub-Saharan Africa has increased even more ^[15]. According to the World Bank, by 2050, almost 90% of the world's total population living in extreme poverty will be concentrated here (Pauvreté. URL: https://www.banquemondiale.org/fr/topic/poverty/overview (date of access: 09.10.2024)). Of the thirty poorest countries in the world, twenty-five are located on the African continent. The vast majority of them specialize in the export of mineral raw materials or agricultural products, while industrial goods with minimal primary processing account for less than 5% of their total exports (Ibid).

Thus, as a result of the globalization processes, the gap between developed and developing countries has widened further, which indicates an increased global differentiation in terms of socio-economic development.

2. Globalization has not provided economic growth.

The theorists of globalization argued that the spread of the market economy as the most efficient economic system would inevitably ensure global economic growth. In the 2000s, several indicators were proposed to characterize the level of globalization. The most widespread of these is the Index of Globalization (KOFGI). This is a comprehensive index that measures the globalization of economic, social, and political processes in each country on a scale from 1 (lowest) to 100 (most globalized). In total, the index includes 43 different variables (The KOF Globalisation Index is A Multidimensional Approach to Globalisation. URL: https://www.degruyter.com/document/doi/10.1515/jbnst-2019-0045/html (date of access: 09/12/2024)).

Table 1

The index of globalization of selected countries of the world, 2023 (Ibid.)

A comparison of the index of globalization of countries and the level of their economic development (GDP) (Table 1) allows us to conclude that a country's involvement in globalization processes is not necessarily accompanied by an increase in its level of socio-economic development (this is evidenced by the neighboring positions in the KOF Globalization Index of countries such as the United States (25th place), Croatia (26th position) and Lithuania (24th position); China (79th), Mongolia (80th) and Colombia (81st); India (87th) and Guatemala (91st) (table 1) (KOF Globalisation Index – KOF Swiss Economic Institute ETH Zurich. URL: //https://kof.ethz.ch/en/forecasts-and-indicators/indicators/kof-globalisation-index.html (date of access: 09/12/2024)).

Market reforms in Russia in the 90s were implemented in full accordance with the concept of the Washington Consensus and led to devastating socio-economic consequences. J. Stiglitz, winner of the Nobel Prize in Economics in 2001, former chief economist of the World Bank, described the results of the Washington Consensus policy as follows: "In all the countries that implemented it, development was slow, and where there was growth, its benefits were unevenly distributed." J. Stiglitz emphasizes that the crisis in the Russian economy in the 90s was largely a consequence of the implementation of the provisions of the Washington Consensus: "Russia was once one of the world's two superpowers, and now its GDP is about 40% of Germany's GDP and barely exceeds 50% of France's GDP. In terms of per capita income, Russia now ranks 73rd in the world (in terms of purchasing power parity), significantly behind the former Soviet satellite countries in Central and Eastern Europe" ^[19]. Thus, for Russia, the implementation of the liberal doctrine within the framework of globalization policy has led to a profound crisis, confirming the thesis that globalization is not a universal tool capable of ensuring economic prosperity.

On the contrary, the most dynamic development was noted in Asian countries with fairly active government regulation that implemented import substitution policies: the "Brazilian miracle" in Latin America, the "Ivorian miracle" in Africa, and Asian "dragons" (South Korea, Taiwan, Hong Kong, Singapore).

3. Globalization has not provided a reduction in conflict in the world.

The global state presupposed the rapprochement of countries and the gradual leveling of borders between them. According to S. Strange, the state diplomacy of the past should have been replaced by the diplomacy of firms, relations between which would be less confrontational than relations between states ^[16]. However, international statistics show that neither the period of hyperglobalization (1990-2008) nor stabilization (2008-2011) were accompanied by a reduction in conflict in the world (Table 2).

Table 2

The largest armed conflicts of the era of globalization

Compiled by the authors

There is an official position of the Russian Ministry of Foreign Affairs that the bombing of Yugoslavia, which was conducted against a sovereign state in violation of the UN Charter, international law and Security Council resolutions related to the settlement of the Kosovo crisis, was a major destabilizing factor for international relations, weakened the status of international organizations, primarily the United Nations ("An absolute violation of international law": how the bombing of Yugoslavia by NATO aircraft changed the world. URL: https://news.rambler.ru/army/41920417/?utm_content=news_media&utm_medium=read_more&utm_source=copylink (date of request: 17.12.2024)). As part of Operation Allied Force, NATO used 1,300 cruise missiles, 37,000 cluster munitions, as well as bombs with enriched uranium. As a result of these bombings, 2,500 people were killed, more than 12,000 people were injured, 25,000 houses were destroyed, 470 kilometers of roads and 595 kilometers of railway tracks, hospitals, schools, kindergartens, and civilian infrastructure were damaged (Il y a 25 ans, l'otan bombardait la Yougoslavie de Slobodan Milosevic. URL: https://www.rts.ch/info/monde/2024/article/il-y-a-25-ans-l-otan-bombardait-la-yougoslavie-de-slobodan-milosevic-28448105.html (date of request: 02.11.2024)). The bombing of Yugoslavia set a precedent that led to a series of armed conflicts: if in 1989 there were 86 of them in the world, then in 1998 - 118, and in 2000 – 127 (Évolution annuelle du nombre de conflits armés dans le monde, selon le type de conflit, de 1989 à 2022. URL: https://fr.statista.com/statistiques/1459845/conflits-armes-monde-guerre-violence / (date of access: 02.11.2024)).

During the thirty years following the bombing of Yugoslavia, until the withdrawal of American troops from Afghanistan in August 2021, Western countries, most often as part of coalitions under American command, took part in more than a hundred external military interventions, the longest of which was Operation Desert Storm, which began on January 17, 1991. According to official data, more bombs were dropped on Iraq and Kuwait than on Germany in 1944. The death toll among civilians and military is estimated at about 150,000 people (L'ère stratégique de la guerre du Golfe. URL: https://legrandcontinent.eu/fr/2023/08/15/lere-strategique-de-la-guerre-du-golfe / (date of access: 02.11.2024)).

In addition to open armed interventions, numerous "color revolutions" were initiated in the countries of Central and Eastern Europe, Central Asia, the Middle East and North Africa: the "Rose Revolution" in Georgia in 2003, the "Orange Revolution" in Ukraine in 2004, the "Poppy Revolution" in Kyrgyzstan in 2005, a series of revolutions in the Middle East and North Africa in 2010-2013, called the "Arab Spring", etc. ("Color Revolutions" in the context of democratic transit: materials of the Expert-analytical project. URL: https://nmn.media/articles/431 (date of access: 03/20/2025)).

4. Globalization has not been accompanied by the demilitarization of the world community.

Official statistics show that globalization has not led to a reduction in conflict in relations between countries and, consequently, to a reduction in military spending (Figure 1) (Dépenses militaires mondiales 2001-2023. URL: https://fr.statista.com/statistiques/565182/depenses-militaires-tendance-mondiale-2001 / (date of access: 03.11.2024)).

Figure 1. Dynamics of military expenditures in the period from 2001 to 2023, in billions of dollars (Ibid.)

5. Globalization has not ensured the harmonious and equitable development of the world

In the early 1990s, as a result of the collapse of the USSR, the United States of America became the only global superpower, which opened up the possibility for them to "promote" democracy and American values around the world, especially in developing countries (the Gulf War in 1990-1991, the invasion of Afghanistan in 2001, Haiti in 2004, Iraq in 2002-2003, etc.) ^[18].

At the same time, it was the United States that became the only country that opposed the negotiations on the Convention on the Prohibition of Biological Weapons, the purpose of which was to establish international control over the activities of biological laboratories in various countries of the world. Since the 1980s. The United States of America has refused to ratify or unilaterally withdrawn from many international treaties and organizations, such as the United Nations Convention on the Law of the Sea, the World Conference against Racism and the Kyoto Protocol.

The costs of globalization have led to a weakening of the globalization processes in the world, called "deglobalization". After 2008, there has been a serious slowdown in the dynamics of global trade and foreign direct investment ^[17]. Thus, trade in manufacturing products decreased from 15.6% of global GDP in 2011 to 14.5% in 2021 ^[18].

In 2017, Donald Trump expressed his intention to renegotiate the North American Free Trade Agreement (NAFTA) with Canada and Mexico and increase customs duties on Chinese and European imports by 45%. D. Trump began to realize these intentions during his second presidential term. So, on March 4, 2025, tariffs of 25% on imports from Mexico and Canada came into force, as well as additional tariffs of 10% for most US trading partners. For most Chinese goods imported into the United States, the tariff was 145%. In response, China imposed 125 percent customs duties on American products (Chine contre États-Unis: le poids économique des deux puissances mondiales. URL: https://www.france24.com/fr/asie-pacifique/20250428-guerre-commerciale-pekin-estime-du-bon-côté-histoire-trump (date of access: 04/29/2025)). March 12, 2025 The United States of America has imposed customs duties of 25% on steel imported from Europe, China and Canada (Guerre commerciale: chronologie des actions tarifaires de Trump depuis son retour au pouvoir et prochaines étapes. URL: https://legrandcontinent.eu/fr/2025/03/04/guerre-commerciale-chronologie-des-actions-tarifaires-de-trump-depuis-son-retour-au-pouvoir-et-prochaines-etapes / (date of access: 03/20/2025)).

This indicates a resurgence of protectionist policies in the United States, a country that traditionally positions itself as a state with a liberal economy. All over the world, countries are increasingly opting for trade restrictions (Figure 2) (The Global Sanctions Data Base. URL: https://ideas.repec.org/p/ris/drxlwp/2021_010.html (date of access: 11/18/2024)).

Figure 2. Dynamics of restrictive measures in foreign trade (Ibid.)

Deglobalization is manifested in the active use of sanctions by countries in international relations. Thus, over 1,275 sanctions were imposed on the Russian Federation, including exclusion from the international financial system (Ibid). These measures are an example of the so–called "geo-economics" - the use of economic instruments to influence the political goals of another country.

Deglobalization is accompanied by the multipolarity of the world and its regionalization. In 2022, China initiated the Comprehensive Regional Economic Partnership Agreement, which unites 15 countries that account for a third of global GDP and represents the largest free trade agreement in the world.

Another significant global agent is BRICS. This association of the four largest developing countries: Brazil, Russia, India and China, established in 2006, expanded in 2011 due to the accession of South Africa. In 2024, after the accession of Saudi Arabia, Egypt, the United Arab Emirates, Ethiopia and Iran, the association was named BRICS+. This association accounts for 46% of the world's population, a third of the land surface and 37% of global GDP (while the G7 accounts for only 10% of the world's population and 45% of GDP). BRICS+ is the most important participant in the hydrocarbons and metals market (43.1% of oil production and 44% of oil reserves; 35.5% of gas production and 53% of its global reserves). Together, the country produces 42% of the world's wheat, 52% of rice and 46% of the world's soybeans (BRICS+: vers un monde plus multipolaire? URL: https://www.iris-france.org/wp-content/uploads/2023/12/Note-AFD-BRICS-D%C3%A9cembre-2023.pdf (date of access: 11/21/2024)).

Conclusion

Globalization is transforming trade, finance, employment, technology, communications, people's lifestyles, culture, and management models. In this paper, the authors of the article investigated the impact of globalization on economic growth, poverty, income distribution, processes of militarization and conflict.

The authors conclude that despite the existing beliefs that globalization should lead to higher growth rates and ensure an increase in living standards, this has not happened in practice. While individual countries such as China and India, which were considered poor before the 1980s, have been able to benefit from globalization, the economic situation in other countries has hardly changed or even worsened. This primarily concerns the poorest countries of the African continent. The costs of globalization can take many forms. The weakening of national Governments and the global spread of free markets have contributed to the marginalization of individual countries and regions, which is accompanied by an increase in unemployment, poverty, and inequality. Globalization has led to an increase in global conflict and related military spending. All this indicates that modern markets need government regulation, which is why deglobalization processes are intensifying in the world, accompanied by an increase in tariff and non-tariff trade restrictions and the imposition of sanctions; regionalization is developing dynamically, which represents a fragmentation of the global economic space.

Thanks

The publication was prepared as part of the state assignment for 2025 No. 075-03-2025-526 "Conceptual approaches to the formation of mechanisms for national economic sovereignty of the Russian Federation in the context of unprecedented global challenges."