Competition Law and Competition Policy in Middle East: its significance in international perspective


 


            Globalisation of both the economy and the society has confronted the world over the past decade (Kim & Weaver 2000, 121). Among the important contributors to world confederacy and the global economy are the advances in computerization, telecommunications, and other forms of information technology. A shift of focus and interest from the local market to the international setting has demanded innovation not just in corporate leadership as new information, forms of communication, and technology. These are being offered to be utilized in encouraging and reinforcing interaction among individuals and the operating enterprise. Since globalisation represents the shift of the main venue of capital accumulation from the national to the supranational or global level (Teeple 2000, 4) and due to the adverse effects of such phenomenon, international businesses plan to venture into new horizons catering to the needs of the new markets and countries. However, before achieving specified goals, there are several matters to be considered and are imperative for in-depth scrutiny and probing. The potential expansion of a business enterprise into a new location requires sufficient amount of information that are affecting to such process. Thus, the introduction of the new division of international labor calls for evaluation and reorganization of the business operations as well as a reassessment of the governing economic policies of a country.


            According to Proctor (2000), competition is important since it affects the success of a business venture. Proctor added that competition is more than just producing and distributing products and services that matches the needs of the consumers. Competition is about the company’s capability of positioning itself in the market so that they will stand out among the rest in the perception of the consumers. Through an effective and efficient competitive advantage strategy, the organization will be able to reach its prescribed objectives and continuously operate in the chosen field of industry and at the same time earning more profit and expanding its operations. However, this description suits the business or marketing perspective.


            This paper argues that some organizations in the Middle East should require international competition policy in order to coincide with the trends of globalisation. Globalisation serves as the main predecessor.


 


 


 


If globalisation would be voted in terms of popularity among the most controversial and popular topics in all perspectives (i.e. economics, sociological, political, cultural, etc.), it may have been garnered the top spot. From providing an accurate description of the term alone, it gives off opportunity for debate and argumentation among social scientists and scholars. Globalisation is currently the most popular tag or catchphrase that depicts the promises as well as threats that face the 21st century civilization (Giddens 1999; Gilpin 2000; Held and McGrew 2000; Nye and Donahue 2000). The constant exchange of arguments among advocates as well as critics of globalisation makes it more interesting, thus providing an extensive body of knowledge that is used as reference to qualify its extent of effects. The term “globalisation” has acquired considerable controversial force in reference to the existing exchange of disagreements between pro- and anti-globalisation. For the supporters of globalisation, it is a process that is globally beneficial as key to future world economic development and it is also unavoidable and permanent. On the contrary, critics regard it with resentment or even fear because of the potential drawbacks that it may bring such as increased cases of global divergence within and between nations, threats of labor force especially in employment and living standards, and incongruous prevention of social progress. Globalisation can be evaluated along different dimensions yet its economic aspect has been the most popular area of exploration (Hackmann 2005, pp. 211). With the presented arguments from pro- and anti-globalisation, another contentious issue on globalisation emerges as it is argued as myth.


            Hirst and Thompson’s (1996; 2000) view that globalisation, as conceived by more extreme globalizers, is largely a myth. This essay discusses the underlying arguments that illustrate globalisation as myth. By further looking on additional literatures, the mythological assumption of globalisation is clearly illuminated. To begin with, various definitions of globalisation is provided and followed by its beneficial as well as harmful repercussions. Then, the proving of globalisation as myth follows by emphasizing into specific area or subject, which is economics as bounded its negative side. Further, personal reflections on globalisation are included as product of analysis and understanding of the topic at hand.


 


Globalisation: think global, act local


            Basing on the most popular definitions provided in various area of specialization (i.e. social, economical, cultural, political, etc.), globalisation is relatively and differently defined. However, there are few things that serve as common denominators to such varied descriptions. The qualifying terms such as cooperation, integration, interconnection, convergence, or anything that depicts homogeneous mechanisms validates globalisation in terms of process, effects, areas and degree of influence, and others. It also includes the idea of technology, information, and communication. De Soysa (2003) described globalisation “as economic, political, and social integration of states and societies, both horizontally and vertically, in tighter webs of interdependence” (pp. 7). Further, it is “a process and not a qualitatively different end state, where politics and the state have become superfluous and the market has taken over”. Erling (2001) flatly used the term “McDonaldization” of the world as a synonym for globalisation. More often than not, providing definition to globalisation necessitates the area in which it is being referred to. On this case, it is purely economic globalisation. De Soysa’s definition is directed toward economic cooperation involving specific areas of society and the market itself. Economists see globalisation in terms of extremely integrated large-scale markets and increasing interdependence between previously independent domestic or regional economies (Kim and Weaver 2003). The myth of globalisation on the definitions provided is supported by the views of Hirst (1997), Hirst and Thompson (1996; 2000), Rugman (2001), and Cellary (2007).


 


Globalisation and its Fruits: reaping the profits of a lone global community


Sen (2002) observes that globalisation plays a great contribution in the worldwide improvements “through travel, trade, migration, spread of cultural influences, and dissemination of knowledge and understanding (including that of science and technology)”. This observation supports the wide-ranging coverage of globalisation and its effects. In terms of economics point of view, the merits of globalisation in the economic dimension are evident particularly in terms of capital flow, influx of technology, job creation, trade and fiscal benefits, the significant role of the private sector, competition, poverty alleviation, and sustainable growth (Steger 2003). One of the benefits of globalisation of economies is the continuing global trend headed for freer flow of trade and investment across international borders, thus resulting to integration of the international economy (Teeple 2000; Gilpin 2000; Held and McGrew 2000; Nye and Donahue 2000). Because it expands economic freedom and spurs competition, globalisation raises the productivity and living standards of people in countries that open themselves to the global marketplace. This is the commonly perceived notion on globalisation when connected with economics. In special cases like for less developed countries, the benefits of globalisation is apparently observable to providing access to foreign capital, global export markets, and advanced technology while breaking the monopoly of inefficient and protected domestic producers. There is faster growth that promotes a culture of poverty reduction, democratization, and higher labor and environmental standards (De Soysa 2003).


Globalisation has produced enormous benefits for very large numbers of people. Frequently, a mistake critic blames poverty and income inequality on globalisation but it is argued that majority of cases are more attributed to the consequences of domestic conditions in individual countries. In my own opinion, globalisation is a good thing in the sense that it offers international cooperation of all countries adhering to international policies. For instance, multinational corporations offer jobs to developing nations in order to prosper and speed up its growing economy and at the same time contributing to the increase of economy of the world. The presence of free trade leads to a more efficient allocation of resources, with all countries involved in the trade benefiting. In general, they claim that this leads to lower prices, more employment and higher output.


 


Globalisation and its Threats: facing the impending danger


            When seen on the perspective of building a uniform global society, globalisation is a myth (Cellary 2007, pp. 291). This is supported by the fact that humanity is so much diverse to shape a uniform society. There are too many differences in important factors, such as history, tradition, culture, religion, etc. thus, resulting to a complicated idea of uniformity. Agreeing on this argument, I personally believe that forces of globalisation ironically deviate to the idea of integration and homogenization. Indeed, Cellary present a potent discussion on how can culture homogenized considering the fact that it is relative and diverse in origin.


According to Hirst and Thompson (1996), it is widely asserted that people practically live in a period wherein the greater part of social life is determined by global processes, in which national cultures, national economies and national borders are dissolving. This is connected to the argument of Cellary as related to difficulty or even the impossibility of cultural integration based on global community perspective. Globalisation is the main factor of losing the national identity of a nation and cultural identity of a mother culture. Culturally, the integration of a foreign culture to another native culture changes its original resulting to the formation of something new or revised version of both cultures. The tendency is that people lost the identity of their race and acculturate themselves to the new way of life in which globalisation introduced to them. This is very unmistakable because of the role of communication and its supporting mechanisms (e.g. technology) and the effects of media to people. Thus, globalisation is a myth as it cannot sustain the idea of national as well as cultural identity instead strongly influences national and cultural indifferences.


Hirst and Thompson (1996) argue that globalisation is not unprecedented in world history and foreign investment and trade are concentrated in the so-called triad – Western Europe, North America, and Japan. These authors argue that the economy is becoming more international but not more global. Globalisation is a myth because the process is long overdue as it exists before. Globalisation implies two distinct phenomena (Held et al 1991). First, it suggests that political, economic and social activity is becoming worldwide in scope. Secondly, it suggests that there has been an intensification of levels of interaction and interconnectedness among the states and societies. Among these relations are those created by the progressive emergence of a global economy, the expansion of transnational links which generate new forms of collective decision-making, the development of intergovernmental and quasi-supranational institutions, etc. (Giddens 1999, pp. 71). Although eminent recognition on economic development in terms of globalisation is powerful, Hirst (1997) strongly argues that the entire process “outlawed distinctive national strategies of macroeconomic management and social welfare” (pp. 409). The expression of globalisation may obliterate the political will to search for practical means to uphold economic and societal output, employment and social equity in the advanced industrial countries, to the detriment of their long-run economic performance (Hirst 1997, pp. 410). The process of globalisation has outgrown the governance structures of the international system of states and undermined the authority of the nation-state.


To supplement the myth of globalisation on this aspect, Rugman (2001) argues that “the vast majority of manufacturing and service activity is organized regionally, not globally”. International business enterprises are the engines of global business operations as they think regionally and act locally. There is a little degree of integration among the identified triad of Hirst and Thompson (1996). Commenting on Rugman’s arguments, Ferkiss (2001) stated that Rugman’s statistics clearly indicate that most manufacturing activity is within regions, and service activities likewise “are essentially local and regional”. Thus, Rugman essentially negated the claim of economic globalisation as internationalization of economies.


            Further, Guillen (2001) stated that perhaps the most controversial aspect of the convergence debate has to do with the impact of globalisation on inequality across and within countries. With empirical support, it can be said that development levels across countries appear not to be converging as opposite to the perceived results of globalisation. The myth of globalisation is related to the inability of international community to be subjected by common economic policies and applicable mechanisms. Since globalisation has become a key factor to measure the nation’s economic stability, many of its critics have pointed out some of the costs of globalisation in many different aspects. One of the considered costs of globalisation is that economic globalisation creates many opportunities to improve the material well being of poor people, but may be politically unsustainable (Hirst 1997). It issues a challenge to the government capacity ever since (Du 2004). On my personal point of view, globalisation on this aspect is not a spontaneous process. It is rather a suppressive strategy that deliberately pursued by world’s superpowers directed to a tiny group of people as subject for the struggle and selfish quest for world domination. For Hirst (1997), the strong version of the globalisation thesis contends that national economies have simply been subsumed into world markets and that the power of such market forces either negates or renders unnecessary any possibility of effective public governance, whether by nation-states, international agreements or supranational institutions.


 


 


References


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