Globalizations Corroding Edifice

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A Socialist Project e-bulletin ... No. 1922 ... October 31, 2019

Globalization’s Corroding Edifice

Dara Leyden and Benjamin Selwyn

The World Bank’s World Development Report (WDR), published every year since 1978, plays a similar role to that of the state of the union address in the US, in which the president hopes to keep the faith of the Congress and public. Its task is to persuade state leaders, policy-makers and academics, directors of industry and media commentators of the ever-expanding benefits of American-led globalization. Economic growth, liberalization of trade and openness to foreign capital are part and parcel of its project of integrating the world of production, trade and finance.

WDR 2020, "Trading for Development in the Age of Global Value Chains" (GVCs) published this month, is no exception. It boldly proclaims that GVCs "boost incomes, create better jobs and reduce poverty." These positive effects it cites are achieved through two interrelated processes. Firstly, industrial production has become globally dispersed rapidly since the 1990s. Secondly, this dispersal generates novel possibilities for firms in developing countries to integrate themselves into increasingly high-tech international production.

In... a world of GVCs, developing countries no longer need to establish entire industries. Through linking up with so-called lead firms, which are usually trans-national corporations (TNCs), they can access best-practice techniques and latest technologies, and match them with their competitive ‘factors of production’ of cheap labour and natural resources.

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