Dr Van Niekerk had begun by explaining the Downgrade of Moody’s and what impacts it had on South Africa. The down grade in Moody’s leads to an increase in debt for South Africa, where a tension in the economy can increase, what can cause problems for the economy? Globalizations must help people, it can’t be just for a profit therefore it is needed to govern globalization, to benefit from interdependence and to mitigate risk. Till now the global financial crisis has affected America and Europa, although now with the downgrade of Moody’s South-Africa had come in an economic challenge for the first time.
The world economy has internationalized as far as its basic dynamics are concerned in that it is presently dominated by perceived largely and uncontrollable market forces. Strategies of national economic management have become less pronounced because of the growing emphasis on the global context of economic actions. The multilateral institutions like the international Monetary fund (IMF), the World Bank and the World Trade Organization (WTO) are beginning to become more influential in the international environment (Varma, 2002:1)
It is therefore necessary to decide whether we are on the right track with globalization or not, because the globalization have both a positive and negative effect. The other question that has been asked is, is it possible to govern globalization and how to govern and guide globalization?
The meaning of economic globalization is the process by which markets and production in different countries are becoming increasingly interdependent on account of the dynamics of trade in goods and services and the flows of capital and technology. Both globalization and global economic governance have made them core issues in global affairs, although they affect groups, countries and people in different ways (Held & McGrew, 2000:30). The defining issue of our time is that globalization must be investigated (Legrain, 2004: 4,113). Although the most globalist see globalization and regionalization as a complementary rather than an opposing processes. There is also a particular significance to issues that are related to global economic governance between globalization and internationalization.
Another problem is that our government is not necessarily in line with the requirements created by globalisation. This does create tension for the government but in turn forces them to change.
In Johan Fourie latest blog post he explains what governments need to do to support markets. Governments need to invest in things that are needed for markets to grow, including education, human capital and innovation. He claims that when looking at the industrial policy, governments needs to intervene more actively and more specifically.
It have become very clear that our governments these days are not in line with the requirements that have been created by globalization. In Johan Fourie’s latest post he had explained what the government will need to support the markets. Therefore Johan Fourie have also stated that growth mostly depends on investment in tangible and intangible capital, in education and training, and on innovation and market failures can raise the growth rate. By Investing in infrastructure and education will allow firms in these industries to become more productive by adopting more efficient technologies and hiring more efficient workers?
Globalizations reflect global competitiveness between great market blocs and intensified collaboration and competition in the emergence of new regional blocs that are not only economic, but also social and politically nature (Muller et al., 2001:2004).
The importance of systematic economic interdependence as different factors. International economy can enclose a very small measure of systemic economic interdependence, and a globalized economy is more than a full systematic interdependence. Therefore both the global economy and the overarching process of globalization have to be governed. Global governance can be defined as a process of political coordination among governments and inter-governmental and transnational agencies. Global governance is also based on the acceptance of divided sovereignties, the strengthening of the global rule of law, and the recognition of universally valid values and principles (Messner & Nuscheler, 1996:31).
The first issue there have been discussed in the seminar is whether globalization should be understood as internationalization or regionalization. Globalist is in general more proponents of a radical form of globalization, where the others where more in favor of internationalization and regionalization.
The Second issue we had discussed where the question, are the modern day globalization unprecedented or not? The globalist usually believes that what is happening right now is inevitable and historically unprecedented and that globalization is now more genuinely global than ever before. The other people argue that globalization is at any rate, much more exaggerated and they highlight continuities between the past and present.
The third issue that has been discussed is, does globalization promotes global inequality? And what will the implications for governance be? There are also the issues of inequality, because inequality has serious implications for global stability and word order.
In the above Debate we have state the fact that there is a strong connection, especially in the present era, between globalization and global economic governance. The first two issues have mostly focused on the globalization; both had important implications for global economic governance. Therefore it is essential to clarify the conceptual meaning and interpretation of globalization and global economic governance. Globalization also refers to the integration of national markets in a global economy. But the alternative is that the global economic governance refers exclusively to rules and the guidelines that are used by institutions for managing the global economy.