The Maritime Economist Magazine Spring 2015 | Page 31

voice of professionals

Contrary to the development theories that conceived
development as ‘national development’, present
notions underlying neo-liberal economic development
being pushed through globalisation, re-conceives
development as global competitiveness within the
global market place (Onder, 1998). Significantly, the
race to the bottom hypothesis argues that states in their
competition to attract mobile capital must converge
to the lowest common denominator. Globalisation
is always accompanied by liberal democracy, which
facilitates the establishment of a neo-liberal state and
policies that permit globalisation to flourish. Its main
driving forces are institutions of global capitalism, but
it also needs the firm hand of states to create enabling
environments for it to take root. A growing amount
of literature on social dimensions of globalisation
shows that many are wary of the so-called benefits of
globalisation (Jenkins, 2004; Servais, 2004; ILO, 2004).
Labour fortunes are undermined by an ideological
discourse that upholds profit as a sign of efficiency
that will generate the required levels of productivity
to sustain economic growth for national
development. To succumb to labour demands or
interests would render an economy inefficient and
directed towards failure, thus making out labour
‘standing in the way’ of national progress if it
insists that its interests should be considered. In
this way, while globalisation is about removing
state restrictions on capital, it seeks also to
control labour by making believe that social
protection and job securty are uneconomic and
inimical to economic growth (Jenkins, 2004).
Globalisation and Shipping

The maritime business is no exception to the
pervasive forces of globalisation. The ship owner in a

bid to reduce costs flags out the ship to nations that
allow cheap crew to be sourced globally through
third party management. Under these influences the
industry structure becomes fragmented giving rise to
‘split incentives’ of its many actors. This creates failures
and barriers in holistic and well-founded development
of the industry. Such a fragmented scenario perforce
induces regression to a compliance driven culture as
the means of governance for the globalised industry.
However, the fact that an international regulation is
enacted upon a natio n by nation basis who remain
keen to make their states an attractive choice as
regulators, the sovereign privilege creates an
unregulated environment where capital is free to act
as it pleases (Alderton and Winchester, 2002).
The mandated advancements of safety practices get
heavily weighed against economic logic of low costs
and returns for each partnering entity. Only accident
analysis largely remains the way forward as newer
regulations get enacted based on lessons learnt and
its avoidance. Such ‘low road globalisation’ practices
fuelled by the constant economic pressures severely
undermine the seafarers’ capability to negotiate
risks associated with the hazardous environment. In
conjunction with the competitiveness effect it
provides an ideal ground for downward
harmonization impacting all aspects of the business
operations that derive from the over-worked, fatigued
and isolated crew on board the ships (DeSombre,
2008). It needs to be noted that maritime transport
is a safety-critical industry. Hence concerns for human
safety and environmentally safe operations co-exist
with service quality. Shipping produces its service
with the ship as its core constituent unit that operates
geographically remotely and in a high risk
environment and the unknown – out of sight - seafarer
lies at the heart of it.

ME Mag

Critique on Globalisation

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