The Social Contract: Theories and Practice (3)

Vietnam Case study: reflections on a new role of the State facing globalisation

Note (1): Excerpt of my doctoral thesis “La Restructuration des Entreprises publiques au Vietnam. English translation by myself. The full bibliography is at the end of this page. Thank you.

…These remarks and criticisms on the report of the two poles bring our attention back to the crucial question on the new role of the State – especially that of developing countries like Vietnam – to manage the relation with the countries, which hold the economic and political power of the world. The concept of world-economy was invented by Braudel (54) and developed by Wallerstein (55) and Amin (56) who are part of the School of Dependency Theory. This theory maintains that the poverty, political instability and underdevelopment of the countries of the global South are the consequence of the historical processes put in place by the countries of the North, which engender the economic dependence of the countries of the South. It affirms that all countries are thus globalized and belong to a world-system of which the great powers of the OECD (in particular the United States) constitute the nucleus surrounded by the developing countries, which gravitate around to constitute it. the suburbs.

According to Wallerstein (55), the world system in which appears the dichotomy between capital and labor and the permanent accumulation of capital by the agents of competition is not limited to the borders of countries. This capitalist world system is far from homogeneous in cultural, political and economic terms. It is characterized by fundamental differences in development, accumulation of political power and capital. While the Core or Centrale has a high level of technological development and manufactures the complex products, the role of the periphery is to provide low-cost raw materials, agricultural products and labor for the development of the Core. The periphery countries is forced to sell its products at low prices, but they have to buy the kernel products at relatively high prices. The principle of a global market encourages the continuous commercialization of goods, including labor and services. Speaking on the negative effects of globalization, he pointed out that the liberalization of the national market presents a danger to the endogenous economy and to the political sovereignty of the country. Faced with purely commercial competition, labor and human relationships are stripped of their “intrinsic” value and transformed into commodities in a market, which is based solely on exchange value. Commercial exchanges are thus regulated by a world market whose laws escape and turned into commodities in a market that is based solely on exchange value. As a result, the sovereign State will find itself faced with this new challenge, which is to maintain its role as a managerial state in the face of global competition. It must redefine its national and international economic policy to guarantee its part of the “social contract” towards the nation, but also its social responsibility as an economic and political actor in the international arena.

The study of the interdependence between nations and the environmental consequences caused by economic development on a global scale makes it possible to identify and understand the challenges of globalization. Among the works that have been done on this subject, let us quote, in chronological order, the contributions of Sauvy (75), Perroux (74), Mahan (58), the Club de Rome (68), Seymour (63), Luttwak (59), Passet (53), Huntington (65), Lorot (60), Pascal (57), Brzensinski (64), Bruntland (67), De Rivero (61), Latouche (76), D’orfeuil (62), Stückelberger (73), Treillet (77), and Vercauteren (70) who have contributed to enriching the studies in political science.

Pascal’s introduction to geopolitics (57) provides an understanding of the political and economic challenges facing the modern state in the context of globalization, particularly the sharing of natural resources and peaceful cooperation while remaining economically competitive. Geopolitics emphasizes how the power of a state is linked to its central position. The concept of the pivot of history was studied and developed by MacKinder at the beginning of the 20th century. For Mahan (58), “the position of a State is fundamental to fostering a process of cooperation, which favors the conquest of markets. This process can be intensified if the state has control of the seas.”

Luttwak (59) and Lorot (60) introduce the concepts of geoeconomics and geopolitics, branches of geography. Luttwak (59) evokes a New World Order where the economic weapon would have replaced the military weapon as the main instrument of power in the service of States. Within the framework of policies aiming to protect the national interest, the States can act in liaison with the companies of their country to protect and develop their national economy, to control sensitive technologies, to conquer foreign markets and to define the sectors of economic activity. The “Enjeux Planete” collection by the Charles Léopold Mayer Foundation covers the theme of dependence and the role of NGOs through the development myth developed by de Rivero and the idea of non-governmental diplomacy developed by d’Orfeuil.

From these theories, one can understand the merits of the international classification of nation-states, according to the criteria of economic as well as political dominance of strong states over the rest of the world. These exercise a certain control over other countries in the region  and also submit to the rules of the game led by the great powers. One can also understand the motivation behind the race for world hegemony of the great powers through the tug-of-war between China and the United States. Both try to attract to their “economic and political camp” partner-countries that are useful for them in economic gain as well as in political power. For example, China, who seeks to rally the countries in the Indo-Pacific region and those of the continent of Latin America or Africa, by doing so, enters into competition with the United States who react with protectionist measures such as the tariff war, economic embargo, expulsion of  Chinese residents from their territory, etc. Likewise, the US imposes the diplomatic embargo on regions it considers its territory such as Tibet, Taiwan (and soon Vietnam). Interventions in public by the Dalai Lama (19), as a guest in the United States or Western countries have been dissuaded by Chinese representatives to host governments, under the pretext of a “violation of Chinese sovereignty”. In the eyes of the great powers, the rise of emerging economies is a threat to the equilibrium of the established World Order, which shares natural resources as an exclusive privilege of the “core” countries. The tariff war waged by the United States against its Chinese competitor is only a manifestation of American power in the will to keep the status quo of American hegemony.

Whether justified or not, this hegemony has caused a lot of damage economically and in terms of human losses to target countries and their allies. The example of the abandonment of South Vietnam  in 1972 to safeguard commercial interests with China is also a lesson in political history for the countries, which are dependent on international politics between the great powers according to Nguyen Tien Hung (1) and Seymour (63) who have raised their concerns on countries being manipulated politically by America’s Superpower.

Brzezinski (64) states that the role of the United States at the head of the “free world” sometimes justifies American policy vis-à-vis her European or Asian partners. The sanctions by force on countries considered as enemies by the United States (because they do not conform to the ideas of Western democracy) is also a demonstration of American superiority. TheIraq invasion or Iran embargo are concrete examples of this manifestation of power. On the other hand, the rationale for forcible imposition can take the form of civilizational differences as a potential risk to go to war, but in reality it may hide economic motivations behind these arguments. According to Huntington (65),  the division of the modern world is rooted in civilizational differences, regardless of political borders, because the identity of a nation is less and less defined by its belonging to a single nation but rather to a cultural identity. Thus, cultural or ideological arguments can also influence relations between states.

At the global level, the issue of preserving the natural environment and habitat for sustainable development is part of the United Nations Agenda. The idea of sustainable development is based on the principle that human societies must be careful not to compromise the ability of future generations to meet their own needs. In particular, ecological concerns have contributed to the theory of the world economy by considering that the inhabitants of the globe are part of a “whole” and have a collective responsibility for the fair and equitable use of the goods of humanity. The works of Bruntland (67), Diamond (52) and Gomdaogo (66) have largely contributed to supporting the policy of sustainable development. The Brundtland Report (67) summarizes the goals of the UN’s first World Commission on Environment and Development to address environmental problems resulting from the uncontrolled exploitation of planetary resources by businesses around the world. Based on the assumption that development rests on the three pillars, which are the economy, the social and the environment, we note that ecological crises are often linked to activities. The Nuclear Fallout from Rongelap in 1954, the Mercury Crisis in Minamata (1956), the Torrey Canyon Oil Spill (1957), the Seveso Disaster (1976),  the Bhopal Disaster (1984), the Chernobyl Nuclear Disaster (1986), the Exxon Valdez Oil Spill (1989), the Erika Disaster (1999), etc., are powerful reminders of the consequences of global warming.

It is becoming more and more obvious to make the link between economic activities and their consequences on the environment and on people’s health—to name a cancer cases and other degenerative diseases linked to malnutrition and harmful land treatments in agriculture, air pollution affecting the respiratory tract, urban overpopulation, desertification of agricultural land, loss of biodiversity are visible signs of the excessive and irresponsible use of natural resources. The two Meadows Reports, initiated by the Club of Rome (68) in 1972, then in 1974, developed the notion of “sustainable development” and the ecological footprint by recalling the common interests of humanity instead of ideological controversies. In the first report, environmental risks such as the acceleration of industrialization, the strong growth of the world population, the persistence of global malnutrition, the depletion of non-renewable natural resources and the degradation of the environment were identified as the object of study. In the second, a diversified and contextualized approach according to ten major regions predicts that in 2030 the world economic system could collapse if measures are not taken to reduce the use of planetary resources and limit environmental degradation. These reports were authenticated by the Smithsonian Institute, a scientific research institution that covers ecosystem modeling, planet observatory on the resilience of coastal areas and monitoring the habitats of certain species under the effect of change climate, among others.

Conclusion

All the above-mentioned literature allow us to have a systemic look at the link between development, the process of industrialization of the economy, the structuralist approach and the theory of dependence to come to the need for a”good governance ”, a theme treated by Généreux (69), Vercauteren (70), Palau (71), Glaymann (72), and Stückelberger (73) on questions linked to the new role of the State in the context of globalization. In particular, EHESS researchers have developed a critical panorama of currents of thought on the development and characteristics of the economy of the twentieth century based on the works of Perroux (74), Sauvy (75), Latouche (76) and Treillet (77).

For the historical and institutionalist approach in reaction to the classical school, we note the names of institutionalist authors such as List (78), Schumpeter (79), Weber (80) in the context of the “German Sonderweg, industrialization of Western countries”. The chapter on “The theory of productive forces and the theory of values” by List (78) is especially important because it addresses the characteristics of political economy, which have influenced research on the problems and strategies of privatization in countries in transition.^[1]

The literature on privatization highlights the work of experts by the IMF, the World Bank, the UN Development Agency UNDESA, the OECD organisation on the various aspects of privatization in countries in transition. In particular, the expert reports of the development agency UN DESA (81) during the period 1995-1999 on “Questions of privatization and regulation in developing and transition countries“, as well as “The evaluation of the framework of action for investment on the case of Vietnam”, carried out in 2009 including other economists works on the role of the State in the economy, the theoretical foundations of privatization policies in the developing countries, economic analysis in modern political economy such as Tullock, Frey, Crozet, Fields, Plane, Teulon and Fouad are gems for the sustainable development theory to preserve our planet. In this sense, abiding to international standards are worth the effort in allowing to better and safer life in peace and harmony.

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^[1] Anh Tho Andres, Doctoral Thesis. La Restructuration des entreprises publiques au Vietnam, Restructuring of Public Enterprises in Vietnam, Paris 2018. English Translation of Excerpts by Anh Tho Andres (2021).