By Matija Šerić

Globalization has resulted in direct political influence that has led to a decline in the power of national governments, particularly in the areas of economic governance (macroeconomic management) and the internal structure of the state. There are strong indicators showing that the impact of globalization in the political sphere is most visible in government decisions, which are now conditioned by market principles and circumstances more than ever before.

The Importance of Multinational Corporations

In order for governments to truly govern their states, they must increasingly do so in a way that resists the pressures of transnational market forces. Small countries are often described as merely administrative territories owned by multinational corporations such as foreign banks, oil companies, T-Com, McDonald’s, Lidl, Apple, or Amazon. The power of these large corporations is indeed enormous. National governments genuinely struggle to resist the blackmail and lobbying of major private actors.

Global Governance

The growing number of general and specialized international institutions is a phenomenon that Craig Murphy called “global governance.” International organizations and associations that operate in specific areas include the United Nations, the European Union, the Organisation for Economic Co-operation and Development (OECD), the World Trade Organization (WTO), the World Health Organization (WHO), the Arab League, the Association of Southeast Asian Nations (ASEAN), and the Organization of American States (OAS).

The goal and efforts of these global and regional organizations are reduced to the ability to control what happens within their member states and to direct political, economic, and other processes. This represents a trend of political globalization. Small states that are not members of such organizations are often labeled as rogue or undesirable states, such as North Korea, Cuba, Venezuela, Iran, and Syria. The future will undoubtedly bring new efforts for nation-states to adapt to supranational associations, which—besides positive effects such as the protection of human rights, freedoms, and pluralism—may also produce negative consequences. Indeed, even in the field of human rights, supranational organizations may sometimes have adverse effects.

The Internationalization of Human Rights

There is a process of internationalization of human rights, limiting states in how they treat their own citizens and foreigners. Various international conventions and agreements regulate the relationship between the state and both its citizens and foreign nationals. Over time, increasing efforts are visible to establish unified rules concerning human rights, including refugees and migrants, such as the well-known Marrakech Agreement, which divided the world between states that accepted it and those that rejected it. Small states are, of course, under the greatest pressure to align with foreign agreements and conventions they may not wish to accept.

Economic Integration and Interconnection

Undoubtedly, economic globalization is a deep historical process that emerged as a result of cultural connections and progress in industry, transportation, technology, and science. The strong interconnection and integration of global economies through trade and financial flows bring both advantages and risks to small states. Changes and shifts in the economic policies of the United States, China, and Japan are felt throughout the world.

Differences in the Use of Capital

Although the internationalization of global markets, free trade, and the movement of capital more easily generate income and profits for small states by removing protectionist barriers, the problem lies in the fact that decision-making centers are located in large countries, where institutions such as the World Bank or the Asian Infrastructure Investment Bank are headquartered. For example, the international capital market creates significant disparities in development and purchasing power among members of the International Monetary Fund (IMF). Developed countries use capital from this market, while developing countries borrow from the IMF.

Cultural Globalization

Cultural globalization accompanies economic globalization, spreading beliefs, behavioral patterns, and ways of thinking. It can be divided into two cultural phenomena that are particularly influential on small states:

• The spread of individual values, often of Western origin
• The adoption of Western institutional practices: capitalism, democracy, Western bureaucratic organizations

It is often questionable how suitable and welcome these cultural phenomena are for small states that differ significantly from those where such practices originated. For example, Myanmar, Mongolia, Somalia, Serbia, or Bolivia—where such practices are promoted or imposed—differ drastically in cultural terms from the United States, the United Kingdom, and Germany. However, if these states wish to become part of certain integrations such as the European Union or NATO, they must adapt regardless of whether this implies a certain erosion of domestic customs, habits, and beliefs.

Thus, Tunisians, Filipinos, and Pashtuns may use iPhones, drink Sprite, eat burgers from McDonald’s, and watch MTV, but this will not make them Americans in any sense. It will merely introduce some Western commercial products into their lives, which will remain strongly shaped by the environment in which they live. The consumption of commercial products cannot significantly alter specific national ideals, values, beliefs, and identities.

How Can Small States Preserve Sovereignty in Globalization Processes?

Large and powerful Western states export their legal practices, economic behaviors, and civilizational values, which—despite positive effects—can also have very negative consequences. Nevertheless, despite fears, history teaches us that small nation-states and peoples will survive globalization and will not disappear. It remains to be seen whether, in the future, state powers will continue to be transferred to regional and/or broader international organizations, or whether new modalities will emerge that are acceptable to the majority of states.

Acceptable modalities would be those that protect independence and sovereignty while simultaneously enabling economic cooperation, business activity, and the flow of people and goods. The world we live in is a world of globalization, with all its advantages and shortcomings.