The Politics and Culture of Globalisation: India and Australia by Hans Löfgren & Prakash Sarangi

Author:Hans Löfgren & Prakash Sarangi [Löfgren, Hans & Sarangi, Prakash]
Language: eng
Format: epub
ISBN: 9781138553064
Google: IosLtAEACAAJ
Goodreads: 39230372
Publisher: Routledge
Published: 2017-08-03T00:00:00+00:00

CONCLUSION

The comparative cost disadvantages of high process-regulation standards have resulted in the shifting of certain segments of the dirty goods industries to third world countries. Data point to a monopolisation of product patents by foreign owners, rather than Indian owners, which suggests that disadvantage experienced by third world firms relates to structural inequalities. Higher product standards make it more difficult for third world producers producing their own patented products to compete in international markets. This process has secured innovative-firm status for the multinationals of rich countries. Third world firms are forced to resort to adaptive-firm strategy. They are reduced to experimenting with generic drugs and are compelled to resort to cost-cutting in the process of manufacturing to achieve relative price advantage. Multinationals have also taken advantage of the structural position of third world firms to gain further market domination. Multinationals have converted third world manufacturers into their subcontractors, thus achieving further cost reduction and further consolidation of their market domination. Although the number of third world manufacturers is growing, they have driven themselves towards permanent dependence in the production chain. The growth of third world industries is happening, therefore, as a consequence of the cost-shifting strategies adopted by competing multinationals from rich countries. This would seem to be an attempt to reduce market uncertainties and to use third world manufacturers to gain competitive advantage in global markets in terms of relative pricing. Stringent process regulations in countries like the United States have therefore provided disincentives to site the production of dirty goods inside the United States, which in turn creates incentives for first world corporations to search for cheap manufacturing locations. In place of the shrinking dirty goods segment, these corporations have also diversified their products (Chandler 2005), guarding against adverse outcomes for employment opportunities in the rich countries.

In the international market, on the other hand, through outsourcing, greater flexibility is generated to grapple with commodity segments within the dirty goods sector that involve high market uncertainties and high process costs. Dumping helps multinationals to resolve the problem of high fixed costs and simultaneously to gain price advantage against each other to consolidate market domination. Thus, the dumping of the hazardous wastes industries in poorer countries comes as a package along with the dumping of an industrial model and the dumping of a path of economic development that hamper the long-term growth prospects of these economies. The lack of any international environment regulatory body akin to an international trade regulatory body like the WTO is no mere coincidence. That third world capital and its ruling elite do not press for international environmental regulations, and instead compete amongst themselves for the middleman role of sub-contractors, is revealing. The highly iniquitous social and economic order prevents third world victims from building any substantive pressure from below to challenge global cost-shifting. There is a lack of clarity in distinguishing the nominal and real value of resources embedded in the very framework of development pursuits. This may drive resources into the hands of those offering higher monetary value, but may not, therefore, lead to expansion of the real economy.

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