Globalization and Its Counter-forces in Southeast Asia

7. Economic Nationalism and the Limits of Globalization

134 134 Helen E.S. Nesadurai 7 ECONOMIC NATIONALISM AND THE LIMITS OF GLOBALIZATION Helen E.S. Nesadurai INTRODUCTION: ECONOMIC NATIONALISM AND ECONOMIC GLOBALIZATION Events since the closing years of the 1990s seem to indicate a turn to what is popularly termed economic nationalism, an approach that is said to privilege individual state interests and the adoption of interventionist or illiberal economic policies, particularly trade protection, to fulfil the state’s declared developmental goals. Economic nationalists who endorse such protectionist and self-serving policies, it is claimed, have little regard for the interests or well-being of other states and communities that may be harmed by these policies. Economic nationalism has been blamed for the failure of the World Trade Organization (WTO) to initiate a new round of global liberalization at the 1999 Seattle Ministerial Meeting as both industrial and developing countries sought to safeguard their respective national interests and were unwilling to compromise for the good of the multilateral trading system as a whole. Global trade talks have been in limbo since then, with no agreement reached either in 2003 at the Cancun Ministerial or at the 2005 Hong Kong Ministerial. Latin America is currently posing deep concern, especially to economic and financial circles due to the “wave of nationalizations” in countries like Venezuela, Bolivia and Ecuador.1 Resistance by developed country governments, in France for instance, to foreign purchases of domestic/ national firms even when national security considerations are minimal is 134 07 G&CForces Ch 7 1/28/08, 12:27 PM 134 135 The Limits of Globalization 135 another disturbing trend emerging in the world economy that is attributed to the rise of economic nationalism.2 Post-millennium actions of the United States have also caused some concern for the world political economy, with the seemingly nationalist George W. Bush administration introducing tariff protection on imports of steel and clothing and imposing anti-dumping duties on Vietnamese catfish imports in order to protect U.S. industry and jobs. The debate over the outsourcing of high-skilled knowledge-based jobs from the United States, which featured as a central election issue during the 2004 Bush-Kerry presidential campaign, was also informed by a degree of nationalist concern about the long-term strength of the U.S. economy if the latter continued to experience a hollowing out of high-technology activities.3 These developments raise a crucial question in the context of globalization: do these trends indicate a worldwide turn towards economic nationalism, and if so, does this shift in economic ideology and policy practice portend growing limits to globalization of the world economy? As Shulman notes, most scholars take it as a matter of faith that nationalist sentiments must be weakened if global integration is to make headway.4 Yet, economic policies of the sort described thus far, often characterized as economic nationalist policies, are not novel and have been all too common in the post-1945 world political economy. Their adoption did not appear to hinder the growth of global economic integration since the end of World War II seen in the expansion of trade and investment links worldwide.This alone suggests that the relationship between economic nationalism and economic globalization may not be as contradictory as critics of protectionism and adherents to economic liberalism would propose. It is clear that we need to sharpen our analytical understanding of both economic nationalism and globalization to better understand the relationship between these two phenomena. Following this introduction, the section below reviews the literature on economic nationalism, focusing on recent calls in the literature to reconceptualize the term to emphasize its nationalist content rather than to simply associate it with interventionist or illiberal policies by definition. Although reformulating the concept of economic nationalism does not adequately help us distinguish economic nationalist policies from policies that may stem from more particular interests but are simply framed in terms of benefiting the national community and economy, the exercise, nevertheless, offers us added purchase on the link between globalization and economic nationalism. The analysis is supplemented further in this chapter with a more comprehensive understanding of globalization that captures its multi-faceted nature. Here, the chapter offers a three-pronged conception of globalization, which also reveals the historical continuities 07 G&CForces Ch 7 1/28/08, 12:27 PM 135 136 136 Helen E.S. Nesadurai and discontinuities associated with it. While globalization at its most basic represents a process...