Globalization and New International Public Works Agreements in Developing Countries

An Analytical Perspective

Mohamed A.M. Ismail

• Publisher: Routledge
• Year: 2016
• Print ISBN: 9781409427964
• eBook ISBN: 9781317127024
• Edition: 1
• Topic: Law
• Subtopic: International Law
• Index: Law

This book scrutinizes the new legal nature and stipulations of International Public Works Agreements and provides an in-depth analysis of new forms of infrastructure agreements which have been created in developing countries, such as PPPs. The volume also examines the direct impact of the new legal environment upon infrastructure transactions such as dispute resolutions and ADR mechanisms, in particular, arbitration. It provides an analytical perspective on international public works agreements in developing states in the light of ICC rules of arbitration and FIDIC forms of contracts. As globalization significantly influences le contrat administratif in civil law legal culture, this book examines the legal cultures of civil and common law from a comparative perspective. The author argues that harmonization and integration of the two cultures, in infrastructure agreements, are the way forward. The book will be a fundamental guide for researchers and academics working in this area as well as judges, lawyers and international arbitrators in both common law jurisdictions and civil law legal systems.

Chapter 1
Cultural and Legal Globalization: Social and Legal Phenomena

Cultural Globalization Phenomenon

Cultural globalization is a cultural socioeconomic phenomenon. The first element that was influenced by globalization was culture. Cultural interaction is the main outcome of the flow of ideas and values into developing countries. Culture represents a set of practices, values, beliefs and customs acquired by individuals as members of a distinctive society and resulting from interaction among people.¹

Culture has reacted to globalization in two contrasting ways:

1. Acceptance of a new global culture.

2. Rejection of a total loss of cultural identity as each distinctive group of people strengthens localization.²

In fact, globalization, according to many authors, has two faces. As is stated above, with respect to the economic dimension of globalization, Stiglitz³ refers to the understanding of globalization in some parts of the world:

The current process of globalization is generating unbalanced outcomes, both between and within countries. Wealth is being created, but too many countries and people are not sharing its benefits. They also have little or no voice in shaping the process. Seen through the eyes of the vast majority of women and men, globalization has not met their simple and legitimate aspiration for decent jobs and a better future for their children. … Even in the economically successful countries, some workers and communities have been adversely affected by globalization. Meanwhile, the revolution in global communications heightens awareness of these disparities. … [T]hese global imbalances are morally unacceptable and politically unsustainable.

It is true that “Those who are discontented with economic globalization generally do not object to the greater access to global markets or to the spread of global knowledge, which allows the developing world to take advantage of the discoveries and innovation made in developed countries.”⁴

It is argued that globalization is a debate with two different views, Universalism versus Territorialism, or Globalization versus Globaphobia. However, from the economic perspective of globalization, economists used to refer to “international economic integration” when discussing the growth of overseas transactions. Today, they refer to “globalization,” which has become the popular term. For example, in his article “The Globalization of Markets,” published in the Harvard Business Review, May—June 1983, Theodore Levitt stated that a powerful force drives the world toward a converging commonality; that force is technology, and the direct result emanating from that is a new commercial reality.⁵

Culture is a very complex entity that in the age of globalization is seen to be torn between two powerful forces: “a centrifugal force” and “a centripetal force.” The latter force works to facilitate cultural homogenization and the formation of a true global society that has dissolved all differences, while the “centrifugal force,” under the influence of national movements and the fear of loss of identity, mitigates the impact of globalization by preserving local identities.⁶

In modern and civilized systems it is common to find high degrees of differentiation.

As society expands and increases in complexity, the degree of social and cultural differentiation develops to the point that, even for members of the same society, the only commonality is their humanity.⁷

It has been argued that cultural globalization is a form of cultural imperialism, as it tends to associate cultural cosmopolitanism with Westernization or Americanization. Yet the process of cultural interaction and globalization does not mean, in its true sense, that the world should be dominated by a single logic or culture. The process is one that aims to achieve mutual respect and trust and to search for common interests, values and principles. It is not a one-way process, but rather, a two-way interaction.

The Clash of Civilizations: Is It Real or Is It Co-ordinated?

In his famous thesis, Samuel Huntington pointed out that the world is far from being dominated by a single logic. He added that the great divisions where humans are concerned are cultural, rather than ideological or economic. The clash of civilizations will dominate global politics.⁸

Huntington divides the world into eight civilizations that are in potential conflict. These include Western, Confucian, Japanese, Islamic, Hindu, Slavic Orthodox, Latin American and African. He predicts that conflict and clash will occur among these civilizations in general and between the West and the Islamic—Confucian axis in particular.

Huntington’s arguments are based on several reasons that are believed to have caused the clash:⁹

• Differences between civilizations are basic.

• Increases in cultural interaction raise the level of awareness of the differences among civilizations.

• Social change and economic modernization are weakening the status of the state as a provider of identity.

• Cultural characteristics and differences are less easily compromised and resolved than political and economic ones.

• Successful economic regionalism may reinforce civilization’s consciousness.¹⁰

Huntington concluded that:¹¹

The futures of both peace and civilization depend upon understanding and cooperation among the political, spiritual and intellectual leaders of the world’s major civilizations. In the clash of civilizations Europe and America will hang together or hang separately. In the greater clash, the global ‘real clash’, between civilization and barbarism the world’s great civilizations with their rich accomplishment in religion, art, literature, philosophy, science, technology, morality and compassion will also hang together or hang separately. In the emerging era, a clash of civilizations is the greatest threat to world peace and an international order based on civilization is the surest safeguard against world war.

Criticism of Huntington’s Thesis

Many scholars have criticized Huntington’s views. Criticism arises because it is known that culture is a sharp-edged entity that is nowadays rationalized.

There are differences in civilizations and cultures, but to what extent? Are there no commonalities? Huntington argues that these different civilizations have to learn to co-exist with each other.

In fact, there are many similarities among civilizations as a result of the increased interaction among cultures.¹² Nowadays, globalization plays a significant role in enhancing comprehension between varied and diversified civilizations. This transnational cultural phenomenon will create coordination rather than political conflict.

Also, similarities and commonalities are increasing, but these are narrowing the constant gap of existing differences. It should be noted that the reason behind the two world wars of the twentieth century was not a consequence of the clash of civilizations.¹³ At the outbreak of the First World War and again at the outbreak of the Second World War, globalization was not yet recognized. Today, the situation is totally different: globalization is currently enhancing the world atmosphere and is familiar to people from a diversity of civilizations.

Universalism Versus Territorialism (the Two Faces of Globalization)

The first modern protest against globalization took place in Seattle in December 1999; this was supposed to be the start of a new round of trade negotiations leading to further liberalization. Farmers in developing countries found that their jobs were threatened by the highly subsidized crops from the United States and Europe. Opposition to globalization came not only from developing states but also from developed countries. These protesters “did not accept the argument that, economically at least globalization would ultimately make everybody better off.”¹⁴

The International Labour Organization and the World Commission on the Social Dimensions of Globalization, which was established in 2001, surveyed 73 countries on all continents except South Asia. In the United States and the European Union, the unemployment rate increased between 1990 and 2002. The commission also found that 59 per cent of the world’s people were living in countries with growing inequality, and only 5 per cent lived in countries with declining inequality. In brief, globalization may have helped some countries to increase their gross domestic product (GDP; the total sum of the goods and services produced, usually in one year), but it did not help most of the people in these countries.¹⁵ It is worth mentioning that there are many forms of a market economy. The American model differs from the Japanese model and from the European social model. It is argued in developed countries that globalization has been used to advance the “Anglo-American liberal model.” Moreover, wages in the United States have been stagnant for more than a quarter of a century, and incomes are as high as they can be partly because Americans work far longer than their European counterparts. In the developing world, there is strong resentment that globalization has been used to advance a version of market economics reflecting corporate interests that are to be found in huge parts of the developed world.¹⁶

It is doubtless that development progresses from levels of subsistence agriculture toward light manufacturing and urbanization and then to high-tech services. More than half the world not only has a foothold on the development ladder but it is actually climbing it. This ascension is evident in rising personal incomes and the acquisition of goods such as cell phones, television sets and scooters. Progress can also be monitored through rising life expectancy, falling infant mortality rates, rising educational attainment and increasing access to water.¹⁷

It is of fundamental importance to realize why a vast gap exists between rich and poor today. It is appropriate to return to the very recent period of human history when this divide emerged. The past two centuries constitute a unique era in economic history, a period referred to as growth by Jeffrey Sachs, an eminent modern economist.¹⁸ In conclusion, all regions such as Western Europe, Eastern Europe, the former USSR, the United States and Canada, Latin America, Japan, Asia and Africa, were poor in 1820. However, economic progress has been universal, and today’s rich regions have experienced by far the greatest economic progress.¹⁹

There are three goals of development strategy that are shared globally. First, it is recommended that development strategy be developed and adopted on a global scale, and that sustainable technologies allow us to combine a high level of prosperity with lower environmental impacts. Second, stabilization of global populations is appropriate, particularly populations in the poorest countries, in order to combine economic prosperity with environmental sustainability. Third, it is the duty of the developed world to help the poorest countries to escape from the poverty trap. These three goals – environmental sustainability, population stabilization and ending extreme poverty – are the essence of the promises of the new millennium.²⁰

It is true that the latter goals are not only the essence of the new millennium but also the essence of globalization. Protesters of globalization should note that mutual cooperation between developed countries and developing states may directly lead to a global consensus of understanding among various civilizations to mitigate cultural controversies and poverty. In light of the new technology that substantially changed life in recent decades and improved ordinary citizens’ lifestyles in both developed and developing countries, a fundamental factor of a globalized and harmonized world emerges.

Legal Globalization Phenomenon

Law is a social science that performs an important role as an essential mechanism fulfilling the requirements of all human societies. On the one hand, law reflects and represents the mirror image of a society, determines its common interests and reflects its cultural traditions.²¹ On the other hand, globalization has had its influence on various human societies, breaching cultural barriers through the flow of commodities, capital, people and intangibles such as culture and values from one country to another.

Information technology developments during the last two decades have ...

Table of contents

• Cover Page
• Dedication
• Title Page
• Copyright Page
• Contents
• List of Figures and Table
• About the Author
• Foreword
• Preface
• Acknowledgments
• List of Abbreviations
• 1 Cultural and Legal Globalization: Social and Legal Phenomena
• 2 Definition of International Public Works Agreements
• 3 Legal Nature of International Public Works Agreements
• 4 PPPs in Developing Countries
• 5 Globalization and Enhancements to State Procurement Legislations in Terms of Contract Price (Egyptian Case Study)
• 6 Performance of the Contract and Parties’ Obligations
• 7 Penalties in International Public Works Agreements
• 8 Penalty for Delay: Penalty Clauses and Liquidated Damages in Accordance with Arab Legislation and Court Decisions (An Analytical Perspective)
• 9 Obstruction Encountering Performance
• 10 Alternative Dispute Resolution (ADR)
• 11 Application of Alternative Dispute Resolution (ADR)
• 12 Definition of Arbitration in International Public Works Agreements
• 13 Characteristics of International Public Works Disputes and Arbitrators
• 14 Multiparty Arbitration in International Public Works Agreements
• 15 Mechanisms of Disputes Settlement in International Public Works Agreements
• Annex 1
• Annex 2
• Annex 3
• References
• Index