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Archive for the ‘Globalisation’ Category

Thanks to the increasing globalisation in the chemical industry today as well as the heightened competition and ebb and flow of supply and demand, your company just might not be able to keep up with some of the processes and manufacturing anymore. Whether you are dealing with polymers, fine chemicals, resins or dispersants, choosing a company amongst the many chemical manufacturers that can handle this for you is paramount.

Boosting Business by Outsourcing

Reducing costs is the name of the game no matter what the business is. Of course, the only way to compete is to ensure you have the latest technologies and safety processes for your business. However, what if your company simply does not have the budget for it? Before long, your company would not be able to compete in the marketplace. Unfortunately, the chemical manufacturers with the best innovations win.

When you can no longer effectively compete by manufacturing your own chemical-based products or develop your own products or process developments, it is time to outsource and reduce your bottom line. This is actually a smart move because you no longer have to invest in new strategies and technologies to compete. Rather, you just have to choose a chemical manufacturing company to outsource to that invests in innovative processes, research and development and safety measures. Let them bear the burden of being competitive with other chemical companies.

By outsourcing to a chemical contract manufacturer, you can concentrate on the portion of your business that is the most competitive in the marketplace. The hard part is finding the right chemical manufacturers to work with that would best suit your needs.

Choosing the Right Company

One of the best things about choosing a chemical company in the UK is the fact that the government gives tax incentives to companies so they can focus on research and development. This means the company you choose will likely have more streamlined, quality processes over companies in other countries. Cleaner technology and higher efficiency ratings should also be expected.

Choose a company that is versatile and adaptable in various technologies such as polymers, fine chemicals, dyes and pre-polymers. While you may only need to focus on one aspect of their technology at a time, you would know they have the ability to take care of any chemical planning, processing and manufacturing needs should they evolve in your business.

Reputation in the industry for safety, good customer service and innovations is important too. You want a company with a long, varied history in the chemical manufacturing business. This history should illustrate a clear progression of innovation as technologies have improved and changed. In addition, the chemical company you choose should also have a long list of satisfied customers as well.

While the chemical business is huge in the UK, generating billions of dollars each year, you should focus on your particular piece of the pie. Choose a company from the many chemical manufacturers that align with your goals, provide excellent customer service and can easily adapt to your needs for overall success.

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The argument for increased intercultural understanding has never been greater

The level of globalisation seen in the last 20 years is not going to go away. Companies need to operate worldwide businesses, and they will continue to do so. Because so many multinational companies receive substantial revenues outside their home country, they cannot withdraw their current management, operations and resources without huge consequences. Substantial planning and structural changes are necessary before such decisions can be made.

In the short term, some companies might retrench and repatriate their people early. But with the current economic downturn, there may be no job opportunities back home! Other companies may choose to move their people out of ‘risky’ areas and relocate them to perceptibly ‘safer havens’.

Twenty years ago employees were expatriated primarily to export their knowledge and skills to other countries. In today’s environment, fewer expatriates are needed because companies have built up capabilities in production, marketing, technology, and management, to serve a global network which no longer has a specific home location.

As a result, the number of expatriates represents the core number of employees needed to support globalisation on a worldwide basis. Terrorist threats will not change the need for the development, exchange, and placement of key personnel globally.

The argument for increased intercultural understanding has never been greater. Working successfully in/or managing multicultural teams is a growing focus, along with long-distance management and effective communication strategies.

It is generally accepted that in Europe there is more respect for the time it takes to achieve the desired outcomes of business management programmes. In addition, there is a desire for a more thorough, in-depth exploration of issues and strategies.

A fragile, unhappy, fearful expat family may simply be pushed over the edge by all that they have witnessed. Catching these families early is a challenge to avoid the difficult consequences of an early repatriation.

Family issues will become more important as companies face increasing difficulty in filling overseas assignments with fewer willing to go. Now more than ever, family support will become paramount and forward-thinking companies will recognise this and provide the necessary emotional and factual preparation.

Mobility will not stop. People have to feel secure and their companies need to provide that protection, emotionally and physically. Without it, there can be no global workforce.

Original article at www.intercultural-training.co.uk

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Globalisation and the changing role of the Private Investigator

Globalisation has created a dynamic and challenging business environment for everyone.  Key contributors to this development in the History of Mankind have been, although not exclusively:

1. The Internet  – Developments in communications

2. Greater openness and trade agreement between competing Nations

3.Better accessibility to, and cheaper international travel options

Oil prices have soared from a very flat period toward the end of the 1990’s, to record Highs this year, partly driven by supply demands, and certainly by speculators. Inflation in commodity

prices, have also contributed to the major world economies now experiencing inflationary pressures to a greater extent than ever before.

The recent credit crunch has restricted access to credit for consumers and businesses alike heralds the end of an era of credit based capital growth, or at least for many years to come.

The role of the Private Investigator has also changed to reflect this brave new world.  Since the 1970’s, there has been an accepted place for gumshoes in the dark halls of corporate financing, buyouts and mergers, and obviously in respect to corporate recovery.  Since the early 1990’s and the emergence of George Bush Senior’s New World Order, the day to day business of running a business has become complicated in terms of law, and the risks involved.

Many a modern private investigator has shifted emphasis from day to day operations involving more domestic and local investigative assignments to international investigations. 

These multi-domiciled investigations can be complex and expensive to complete, and accordingly, the skill sets of the investigator have evolved and developed to embrace the new arena.  For example, many established detective agencies recruit multilingual staff, from a multitude of disciplines, such as the legal

profession, Information Technology specialists and former embassy staff in order to meet the demands of the client who has a requirement for international investigations.

The new mantle a private investigator adopts is that of a risk consultant; someone who sees beyond the corporate veil to identify and assist clients in mitigating against all kinds of risks, from those involving international trade laws, to arbitration, litigation and asset recovery, not

to mention the burgeoning activity of international fraudsters.

A global economy that is under pressure represents a fertile environment within which the ruthless criminal and opportunist fraudster will operate.  Businesses and individuals will be tempted to take greater risks to seek more elusive profits, and it is these false opportunities that the criminal will tend to create whilst intending to permanently deprive their victim of their assets.

In this New World Order, the role of the Private Investigator has become more important than at any time since the days of Pinkerton.

Broadsheet newspaper publication: http://www.dailynews.lk/2009/09/25/fea01.asp

Globalisation and hit men

push finance aristocracy trans-Atlantic

By Wendell W Solomons

Summary: Anglo-American finance institutions find themselves forced to cough up larger and still larger pay rewards for their hit men. Britain’s Chancellor of the Exchequer explains tactfully, “Our aim should not be to prevent rewards where they are deserved, for long-term success or hard work.”

Today’s rules of unregulated markets allow executives to go out and become financial raiders in their own right — in competition with their previous financial home. This headache shakes the firms at a time when France and Germany at EU summits ask for a ceiling on the incomes of executives of financial institutions.

Yet, there’s more. Besides the EU, globalisation now causes the G-20 to take up the risk to world trade posed by financial freebooting. China, India, Russia and Japan (which states that it can no longer play the role of “Yes-man”) belong in the G-20 which represents two-thirds of humanity.

A diplomat who served Australia for more than a quarter century brings up the year-2005 published work, “Confessions of an Economic Hit Man” by John Perkins.

This stimulates thought.

(a) Have the hit men been part of the plan to make us walk the economic gangplank today? (b) In the alternative, do events in the market suggest that the world’s traditional finance aristocracy walk the razor’s edge to avoid losing control of its financial raiders whose ranks have expanded into thousands? These thousands have been saturated too by the media catch-phrase of the last three decades — “Free to Choose.”

The US Federal Reserve has been placed on the horns of a dilemma because financial institutions like J P Morgan pay increasingly large salaries and bonuses to keep their financial raiders at home instead of their zipping out to carve for themselves a part of the cake like the infamous Bernard Madoff who took a $ 60 billon wedge of savings, including those of his friends. In this next quote, we see a careful US Federal Reserve chief trying to keep financial firms from being restrained in their endeavours:

“Forcing large, troubled financial firms to shrink is not a useful solution to the dangers created by ‘too big to fail’ institutions, Minneapolis Federal Reserve President Gary Stern said in an essay released on Tuesday.’

“If we exclusively embrace a reform that misleadingly promises victory over TBTF by constraining the size of large financial firms, we may squander the time and resources needed to address the problem at its roots,” Stern said. (Reuters, Apr. 21, 2009)

Australian diplomat Reg Little recollects how John Perkins had described life as part of an elite group trained to “utilise international financial organisations to foment conditions that make other nations subservient to the corporatocracy running our biggest corporations, our government, and our banks.”

The Australian diplomat adds —

“Perkins’ second book on financial strategies, ‘The Secret History of the American Empire,’ invites readers to revisit and reconsider events like the 1997 Asian Financial Crisis and ponder on it as the product of a team of economic hit men. It also raises daunting questions about the longer-term viability of major global institutions like the World Bank and IMF.”

Those then are the dimensions of the hit men’s world and scope of their know-how. We have a salient example next of the men who want to have their cake and eat it.

Zombie Hit Men

Lawrence Summers, a nephew of economics text-book writer Paul Samuelson, was placed on a team to conduct economic reforms in the Baltic republic of Lithuania. Within a year of his team’s effort, the economy of the republic turned pale. Suicide rates rose to the highest in Europe. Lawrence Summers played out more than the familiar role of loan salesman for Wall Street banks. He ambled on as a master zombie, groomed by what US journalists in 1976 had called “Voodoo Economics”.This behavioural nudging was a legacy from Great Communicator President Ronald Reagan who promoted Milton Friedman to Presidential Economics Adviser, the position he had hankered for after the slaying in 1962 of President John F Kennedy. Friedman had been translating for two decades for the psyche of hit men such as Lawrence Summers, the social philosophy of Ayn Rand.

Rand, Ayn (1905-1982) was named Alice Rosenbaum in St. Petersburg by her non-observant Jewish family. A fan of early movies, she had chosen to study social pedagogy in Bolshevik Petrograd. From there she carried her stock-in-trade across oceans to the USA. Her movie scripts to adjust behaviour flopped and she took to typing stories instead. A wealthy sponsor was found through the grapevine to finance the printing of her work and force-feed its promotion on university campus.

In the USA of the 1950s and 1960s Rand received promotion as a cult figure for college students. By 1965, courses on her books were offered in as many as eighty American cities. Wearing a $ sign as a brooch in her dress, the chain-smoker taught that selfishness is a virtue, that altruism is a vice, that the unfettered capitalist, Mr. Top Hat of her writings that began in the 1930’s, was the best possible persona for the world.

Lest we miss her purpose, Martin Seymour-Smith, a critic, explains:

“Unfortunately her crypto-totalitarian and ultra-simplistic ideas have had some influence on the conservatively bred young, since they allow people to be ruthless without a bad conscience. Her ‘philosophy’ is capitalistic-Superman (as in the figure in the comics).’

He continues,

“The ‘great’ men are those who use others, in the name of ‘reason,’ with an enlightened ruthlessness.” As icing on the cake, he adds, “The Fountainhead” — like her other books — is offensively ill written (‘pedestrian, pockmarked with short, clipped staccato sentences’).”

Many defined her social philosophy as one proposing a dog-eat-dog outlook. Gore Vidal described her outlook as “nearly perfect in its immorality.”

Ayn Rand and Milton Friedman brought forth men like Lawrence Summers as zombie functionaries. Pushed out of Harvard by teachers but himself ‘Too Big to Let Loose,’ the same Summers has been promoted by the financial aristocracy to the position of head of the National Economic Council at the White House of President Barrack Obama. Hopefully, Summers will now face the music and dance — promoting discipline on the turf as Godfather of financial raiders.

Alerts

Financial icon George Soros with an intellectual coterie of his own, anticipated that the hit men would shift the anchor of the aristocracy. He moved in with an article called “The Capitalist Threat” a decade ago —

“Unsure of what they stand for, people increasingly rely on money as the criterion of value. What is more expensive is considered better… People deserve respect and admiration because they are rich. What used to be a medium of exchange has usurped the place of fundamental values, reversing the relationship postulated by economic theory. What used to be professions have turned into businesses. The cult of success has replaced a belief in principles. Society has lost its anchor.” (‘Atlantic Monthly’, Volume 279, No. 2, February 1997.)

Two centuries ago a forecast on lost moorings had been penned: “This is the abolition of the capitalist mode of production within the capitalist mode of production itself… It establishes a monopoly in certain spheres and thereby requires state interference. It reproduces a new financial aristocracy, a new variety of parasites in the shape of promoters, speculators and simply nominal directors; a whole system of swindling and cheating by means of corporation promotion, stock issuance, and stock speculation.”(Marx’s manuscript edited and published by F. Engels in ‘Capital’, Volume III, Chapter 27.)

Contemporary US commentator Laura Knight Jadczyk follows on —

“And so it is: such a state of affairs cannot last long… and, as Lobaczewski says, the outcome is inevitable. Sooner or later, the reality this psychopathic elite think they create is going to turn around and bite them. In fact, it is already beginning to. And that is due to another psychopathic trait: the inability to remember the past or conceive of the future and the consequences of their actions.’

“Goaded by their character, psychopaths thirst for global power even though it ultimately condemns them to death along with millions — or billions — of others. Psychopaths do not have the capacity to understand the catastrophes that they repeatedly bring on themselves and the world. Just as germs are not aware that they will be burned alive or buried deep in the ground along with the human body whose death they are causing, so the psychopath does not understand that the only reality he is creating is the reality of his own ultimate destruction. (http://laura-knight-jadczyk.blogspot.com).

Old Clan versus New Legions

How did the number of financial raiders reach cataclysmic size? In part, Rand and Friedman had chanced to imperil the financial aristocracy by promoting the conversion of an old system. Here is a case study to reflect what the old system was.

A man named Jacob Schiff emigrated from Germany and settled in the US in 1865. After ten years in the market, he was settled for marriage with the daughter of Solomon Loeb, the head of Kuhn, Loeb & Co.

Sample Essay

Words 1,396

Globalisation is considered to be the amalgamation of countries, markets and skills in such a way that both individuals and corporations reach other people in a more profound and faster way than ever before. It has also led to a transformation of trade, finance and socio-cultural foundations countries worldwide so that today they more interdependent and closer to each other than ever before. And where products are more homogenised and standardised on a global scale (Levitt, 1984). The article, “Blond and Blue-eyed? Globalizing Beauty” by Geoffrey Jones, (2008) traces the growth of beauty or cosmetics industry from its humble beginning to a truly globalised industry, with different sectors catering to different needs of consumers around the world. Jones (2008) details evolution of beauty industry and discusses the drivers and obstacles of international expansion and also the strategy adopted by different organisations to expand internationally.

Jones (2008) in his article details several drivers which led to beauty industry’s evolution from a minor industry to a global sector. Following are the drivers mentioned in the article:

Emergence of United States as world’s largest homogenised market
Positive relationship between standard of living and use of toiletries
Positive impact of Increase in disposable income and market growth
Global appeal of American cinema and International travel effect of American Culture Value
Economies of scale and high margins for “prestige products” and first mover’s advantage

Similarly he has pointed out several major obstacles to globalisation:

Difference in consumer preferences and difference consumption patterns
Problems with marketing and distribution; restrictions on advertisements
Difference in human physiology of different locations
Difference in governmental  regulations in different countries

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In his recent book, Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization, former CIBC World Markets chief economist Jeff Rubin suggests that while the world isn’t running out of oil, it is running out of cheap oil.

Rubin predicts an era of triple-digit oil prices that will fundamentally change the way we do business. The economic repercussions of expensive oil, he says, will be the end of and the eventual reversal of the trend towards globalisation.

The days of shipping raw materials halfway across the world to be processed by cheap labour will be over. Flying food from where it is in season to where it is not will be a thing of the past. Locally sourced products will move from being a trendy buzzword to an economic necessity.

We asked our oil analyst Riccardo Fabiani to take a close look at Rubin’s theory and offer some expert commentary.

“Jeff Rubin has some very good points, particularly as he highlights the role of cheap labour and energy in boosting global trade and fostering globalisation.

Unfortunately, his overall theory is based on the premise that oil prices are likely to hit triple digits in the years to come, which, in our view, is unlikely.

Rubin anticipates a new era of oil prices around US0-300 per barrel, which, I agree, would have a devastating impact on world trade and thus on globalisation in the near future.

However, while our team here at D&B Country Risk Services do expect oil prices to increase above US per barrel over the next two years, we don’t see prices getting anywhere close to US0. Simply put, Mr Rubin’s premise does not take into account a series of factors which could exert downward pressure.

First of all, as oil prices are going up again, oil exploration is also resuming and is opening up potential new sources of petroleum. Iraq, for example, has ambitious plans to increase production capacity to 10 to 12-million barrels per day by 2017, up from the current 2.5-million barrels per day, making it, along with Saudi Arabia, the most important producer in the world.

Secondly, high oil prices have already encouraged many states and companies to switch their consumption to petroleum substitutes. This is raising the demand for coal, natural gas and renewable energy sources. For example, the recent commercial exploitation of previously untapped “shale gas” reserves has substantially raised supply and suppressed prices in the natural gas market and is likely to boost the use of natural gas-fuelled cars and power plants, among others.

Finally, we cannot discount the positive impact of technological progress on energy efficiency in the medium and long term.

Taken overall, all these factors are likely to exert downward pressure on oil prices. Without skyrocketing oil prices, Mr Rubin’s scenario of high oil prices causing the world economy to become less globalised is unlikely to occur.”

GLOBALISATION OF BUSINESS

Meaning and Dimensions

            Globalisation in its true sense is a way of corporate life necessitated, facilitated and nourished by the transnationalisation of the World economy and developed by corporate strategies. Globalisation is an attitude of mind – it is a mind-set which views the entire world as a single market so that the corporate strategy is based on the dynamics of the global business environment. International marketing or international investment does not amount to globalisation unless it is the result of such a global orientation.

            Globalisation encompasses the following:

Doing, or planning to expand, business globally. Giving up the distinction between the domestic market and foreign market and developing a global outlook of the business. Locating the production and other physical facilities on a consideration of the global
business dynamics, irrespective of national considerations. Basing product development and production planning on the global market considerations. Global sourcing of factors of production, i.e., raw materials, components, machinery/
technology, Finance etc., are obtained from the best source   anywhere in the world. Global orientation of organisational structure and management culture.

            Companies which have adopted a global outlook stop “thinking of themselves as national marketers who venture abroad and start thinking of themselves as global marketers. The top management and staff are involved in the planning of world-wide manufacturing facilities, marketing policies, financial flows and logistical systems. The global operating units report directly to the chief executive or executive committee, not to the head of an international division. Executives are trained in worldwide operations, not just domestic or international. Management is recruited from many countries, components and supplies are purchased where they can be obtained at the least cost, and investments are made where the anticipated returns are the greatest.”

            A truly global corporation views the entire world as a single market – it does not differentiate between domestic market and foreign markets. In other words, there is nothing like a home market and foreign market – there is only one market, the global market.

                        Multinationals develop integrated international production logistics and marketing system-The production sharing between various units in different countries. For example, about two thirds of Toyota’s total business is- outside Japan. More than half of its vehicles sold overseas is manufactured overseas and the remaining exported from Japan. Toyota has established integrated manufacturing systems in all three of its main markets- North America, Europe and Asia. Plants in China, Indonesia, Malaysia, Philippines, Taiwan and Thailand turned out nearly a third of the company’s overseas production. These manufacturing units are inter-linked by flows of components / parts, production planning etc. To cite a different example, Mazda’s sports car, MX-5 Miata, was designed in California, had its prototype created in England, was assembled in Michigan and Mexico, using advanced electronic components invented in New Jersey and fabricated in Japan, financed from Tokyo and New York, and marketed globally.

C.Pavithira

M.Phil Scholar

Department of Commerce

Periyar University, Salem-11

Marx predicted globalisation of world capital over a century and a half ago. He pointed out that capital had an inherent tendency to expand, to seek areas of higher profit. Once it exhausts opportunities in one particular ‘market,’ it moves on to encompass other markets. Today the dominant view holds that globalisation, or spread of global capital and capitalism to far corners of the world, is inevitable. The process tends to link up the nation-states’ economies into an integrated world economy. But it is a multidimensional phenomenon. It impinges not only on the world economy but also on the environment, public health and culture, indeed almost every facet of life.

However, the economic integration of the world is not accompanied by matching political integration. The process of creation of supranational bodies able to enforce agreed system of rules and laws on all states is, in comparison, slow. The international system remains an anarchic one, composed of nominally sovereign states. The leading advanced capitalist countries seek free movement of capital and goods. The movement of labour continues to be hampered by a plethora of rules, regulations and laws.

The form of capitalism that the advanced, capitalist world, led by its corporate sector, is trying to impose on the rest of the world—in essence, the neoliberal mantra of liberalisation, deregulation and privatisation—is not conducive to the economic development of developing countries such as Pakistan, which are yet to establish a sound infrastructure and industrial base. Besides, it is certain to lead to tensions and conflict in inter-state relations and/or periodic global economic crises. A financial crisis hit the advanced capitalist world in 2008, sooner than expected.

The global crisis notwithstanding, Pakistan’s economic problems are worsening by the day, due to reliance on the neoliberal paradigm, further confounded by its ruling elite’s aimless policies, corruption, lavish lifestyle, resistance to positive change, and lopsided priorities.

Capitalism’s survival and growth depends, in any case, on the patronage and protection of governments. Judicious regulation of the activities of big market players by governments is essential for the system to work, as is clear from the failure of the ‘deregulation’ experiment of the past few decades. Unbridled ‘deregulation’ in accordance with neoliberal thinking, particularly in banking and finance, were bound to lead to problems. That moment arrived in a big way in 2008 when financial systems in the advanced capitalist world faced a meltdown. Capitalism is in its worst crisis since the Great Depression of 1929. The economies of the advanced capitalist world are in particular distress! Economies of those developing countries dependent on exports to those countries are also affected badly. The IMF forecast contraction of the developed world’s economies, and a reduction in the growth rate elsewhere.[1] The creed of market economy, which metamorphosed into greed economy, has received a big jolt. The huge inter-state and intra-state inequality that it promoted is pushing an increasing number of people across the globe below the poverty line. However, an organised effort is being made by governments in the advanced capitalist world to save capitalism. Nevertheless, a contradiction exists in the claims of the proponents of the market, who decry government intervention whilst the going is good, but call upon the government to save the market when things go awry, as they are bound to, from time to time.

Apart from this, the neoliberal paradigm has made the whole edifice topsy-turvy. It emphasises trade and finance, rather than production and manufacturing industry. This amounts to putting the cart before the horse. Trade follows production of goods, and finance has an important role in industry, but auxiliary, not primary. The rigmarole of financial instruments, hedging and risk management devices, not to speak of speculation and non-productive re-shuffling of financial investments that has taken centre-stage during the last few decades of the ascendancy of neoliberalism, has done more harm than good.

Besides, the developing states’ economies have been severely harmed by premature liberalisation and deregulation, mindless privatisation of state entities and strategic assets. The ‘integration’ of their economies with the world economy has been a mixed blessing, good for some countries, devastating for others. The industry of many developing countries—Pakistan, for example—has got stunted as a result of unthinking patronisation of neoliberal policies. Many economists in the developing countries have merely been parroting the neoliberal mantra, and the presumed blessings of ‘globalisation’ under the neoliberal paradigm—without understanding, and in some cases denying outright, its highly detrimental effects. Many of them have allowed their economies to become suppliers of raw materials, low value-added manufactures and low-skill jobs or merely markets for more developed countries. What they really need is to upgrade the skills of their people, establish industry, initially to substitute imports and at a later stage to export higher value-added products. Foreign Direct Investment is a good thing if it serves the needs of their economies, and worse than useless if it promotes the exploitation of their resources without adequate compensation or transfer of technology. What they need is to upgrade the knowledge and skill of their workforce, and open up avenues to utilise that knowledge and skill. The knowledge and skill gap with the developed world must be bridged in the quickest possible time. In this lies their only chance of meaningful survival, which means survival with dignity. Instead, most of them are turning their economies, partly under pressure, partly on the urging of the IFIs and the developed world, into consumption-oriented economies, markets for the industrialised world’s surplus production.

Many things that otherwise would have been perceived merely as claims, have been upheld by events around the world. Here is a crisis of global proportions, in essence a systemic crisis of world capitalism, hastened and aggravated by the misdeeds of greedy ‘investors,’ speculators and middlemen of the financial system, especially in the industrialised world, where the financial systems are the least regulated. In the US, the Congress passed a 0 bailout plan in late 2008 to save the system from collapse.

After the disintegration of the Soviet Union, and especially since the terrorist attacks in America in September 2001, the sole superpower has tried to sustain its hegemony through military adventurism. It launched an open-ended ‘war on terror’ and invaded Afghanistan and Iraq. Hundreds of thousands of people have fallen victim to this gigantic folly, to which there is no end in sight. Finally it has contributed to the financial meltdown that we witness today. While the Western governments and media focus on ‘extremists’ and ‘terrorists,’ they do not tell their people that they were promoted by western governments and their surrogates in the Islamic world, during the jihad against the former Soviet Union in Afghanistan. After 9/11, a wrong strategy has only served to keep them in business longer than might otherwise have been the case. They are now fighting against their own creators rather than doing there bidding!

Unfortunately, Pakistani leaders, past and present, cannot escape the blame for helping unbottle the genii—an action that led to the current unenviable situation for Pakistan. Since 1979, almost all Pakistani regimes have gone along with Washington’s strategic aims in the region, with the consequences that we witness today. The ‘war on terror’ has had highly detrimental consequences for its people! It has become an albatross hung around the nation’s neck. The financial costs of this war in FY 2008-2009 were Rs. 678 billion, up from 484 billion the previous year! The much-touted ‘financial assistance’ received from Washington and its allies is not even a fraction of the financial costs of this war. The political and human costs are in addition.

To return to our main subject, the world system theories give a good insight into understanding the contemporary world. Immanuel Wallerstein’s world systems theory analyses the world holistically. It considers ‘historical ‘systems’ in place of what is called ‘society’ in traditional social science. Systems are classified on the basis of economic production relations. Today’s system is the capitalist world economy, in which capitalist production relations prevail. In the past there have been other systems, which he names localised ‘mini systems’ of pre-agricultural period and later ‘world empires’ based on the ‘redistributive tributary’ mode of production. In today’s ‘world economy’ both state and non-state actors have a role in determining the course of events. The proper field of discourse that considers all these issues is political economy.

Some political economists divide the approaches to the study of international political economy into three different categories: Realist, Liberal and Marxist. According to Frieden and Lake, these three approaches differ in that they regard, respectively, nation-states, the individual, and classes (in society), as the units of analysis. The proponents of the liberal approach claim that economic relations, both at the international and domestic levels, are essentially harmonious, while the Marxist and the Realist approaches consider them to be conflictual. In the Marxist view, based on dialectic materialism, economics determines politics. Economics divorced from politics has no meaning. In the realist view, politics and power relations determine economics. The liberals regard