Economic change in a global city? By SEBASTIAN. r.h. Keys

Assignment Question: Identify one process/actor of economic globalisation and some of the ways in which it positively and negatively imposes change in a global city.

When assessing the process of economic globalisation on a global city it is important to identify and understand key actors involved. Foreign direct investment (FDI) is one of the main processes that pose as a major force of change in a global city. Hwy-Chang Moon argues that FDI is used by Multinational corporations (MNC) as a way of diversifying and growing in order to ‘exploit their monopolistic assets in foreign locations’. (Moon, 2016) This exploitation of MNC through FDI poses a range of positive and negative changes to the many of the stakeholder in a global city.

The backdrop of the tall tower over the older building displays the inevitable growth of global cities economic activities over time.

Cities are in furious competition with each other all around the world to attract FDI from MNC as they understand that growth is symbiotically attached to their economic activities. (Synott, 2009) In Sydney $6 Billion dollars was invested in the Barangaroo district from governments and other foreign investors. Their projections claimed that this overall investment will create up to 24,000 permanent jobs, generate approximately $2 billion per year to the NSW economy and provide more than 11 hectares for public leisure. (Barangaroo, 2013) Large FDI like this in Sydney are just one ways in which cities can increase their ‘international competitiveness’ and overall quality of life (Moon,2016)

The result of the strategically placed business district has allowed for a plethora of employment opportunities for people all around the city.

Whilst a range of stakeholders benefit from FDI, some scholars argue that it has a polarising effect by further increase the inequality of a city. (Rossi, Dupont, 2016) And while governments, invest in projects to attract outside investors, they 'sometimes ignore the needs of local residents.’ (Synott, 2009) Negatively imposed change due to FDI in the case of Barangaroo district can be seen through the forced displacement of the local residents.

Passionate protest against the displacement of the Millers point public housing residents. Mary Perkins, executive officer at Shelter NSW says that by ‘Pushing’ all the local residents out it will further exasperate regional problems (Needham, 2015)

Contradictory however, Rossi and Dupont (2016) would argue that the freeing up of prime assets for FDI is key in the overall 'poverty alleviation' of a city. The Minister for Social Housing, Brad Hazzard called the sail of terraces a “Gold Mine” for the government who are looking to spend more funds on the ’60,000’ people waiting on the public housing list. (Saulwick, 2016)

All though MNC’s have tried to address their Cooperate Social Responsibilities (CSP) through the regeneration of the bush land, they have failed to address the needs of the displaced residents and designing effective social programs for their rehabilitation. (Jenkins, 2005:540)
Here stands Seven Stones that were originally on the site. They are one of the few symbolic reminders of the displaced people before the FDI of the British colonialist in 1814

On a local level in Barangaroo FDI will result in the end of residential communities, but on a global level will be a major influencing factor for the district becoming a huge hub for international business, with a large net benefit to the whole city.

References

  • Barangaroo .2013. delivery authority. NSWGov <http://www.barangaroo.com/discover-barangaroo/overview.aspx>
  • Jenkins, R. (2005). Globalization, Corporate Social Responsibility and Poverty. International Affairs,81(3). pp 525–540
  • Moon, H.W. 2016 , Foreign Direct Investment ‘A Global Perspective’. Seoul National University, South Korea.
  • Needham.K. 2015. ‘Millers Point descendant Patricia faces the hardest choice’. News. Sydney Morning Herald. 15th November 2015.<http://www.smh.com.au/nsw/millers-point-descendant-patricia-faces-the-hardest-choice-20151114-gkz2vh.html>
  • Rossi.J & Dupont, G .2016. Analyzing the Relationship between Corporate Social Responsibility and Foreign Direct Investment. 'Foreign Direct Investment 'as a Tool for Poverty Alleviation'. chapter 9.
  • Saulwick, J. 2016. 'At Birrong, the former homeless show the other side of the Millers Point sales. Sydney Morning Herald, 24th September 2016<http://www.smh.com.au/nsw/at-birrong-the-former-homeless-show-the-other-side-of-the-millers-point-sales-20160924-grnk3h.html>
  • Synott, J P. 2009. Global and international studies: 'an introduction / John Synott.' second edition. English book, Illustrated edition. Cengage Learning

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