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GLOBALISATION
«Аrguing against globalization is like arguing against the laws of gravity» (the famous quotation of Kofi Annan (Ghanaian diplomat).
The main idea of these words is that globalisation is inevitable. That’s why the one thing we can do about it is to adjust to this process and to learn to benefit from it. Globalization is much like fire. Fire itself is neither good nor bad. Used properly, it can cook food, form iron, heat our homes. Used carelessly, fire can destroy lives, towns and forests in an instant. Globalization can be incredibly empowering and incredibly coercive. It has dangers and an ugly dark side. But it can also bring tremendous opportunities and benefits.
On the economic side of things, globalization is responsible for a greater choice of products that will guarantee consumer satisfaction. Moreover, it poses mutual economic benefits on both sides of the countries in trade. (For example, a multinational corporation makes a direct foreign investment for building factories in a developing country. As a result, a corporation receives cheap labor which generates greater profit and in turn, a country benefits from more jobs and financial capital entering it).
Socially, there is the spread of technology, knowledge and culture. The Internet allows people to stay in touch with international news and insurpassable amount of information regarding all sort of things. The proliferation of information generally increases people's social, political and economic awareness.
And politically, globalization is responsible for spreading different political ideals so that people are able to make informed opinions in the political arena.
Critics argue the dark side of globalization stems from multinational corporation's violation of human rights in the developing countries. Moreover, it widens the gap between rich and poor nations. Political globalization, like continental governance, may be disastrous.
On the orther side, economic globalization is a good thing: free trade allows goods to be produced from the most efficient nations and brings down the cost to all consumers. Globalization also strengthens international relations.
The reality is, the question whether globalization is good or bad is not black and white. But the process of connecting various economies, spreading technology, ideas and culture has done more good than harm.
| Benefits of globalisation | Problems of globalisation | |
| 1. | Economies of countries that engage well with the international economy have consistently grown much faster than those countries that try to protect themselves. Well managed open economies have grown at rates that are on average 2 ½ percentage points higher than the rate of growth in economies closed to the forces of globalisation | There are social and economic costs toglobalisation. Trade liberalisation rewards competitive industries and penalises uncompetitive ones, and it requires participating countries to undertake economic restructuring and reform. While this will bring benefits in the long term, there are dislocation costs to grapple with in the immediate term, and the social costs for those affected are high. |
| 2. | Countries which have had faster economic growth have then been able to improve living standards and reduce poverty. India has cut its poverty rate in half in the past two decades. China has reduced the number of rural poor from 250 million in 1978 to 34 million in 1999. Cheaper imports also make a wider range of products accessible to more people and, through competition, can help promote efficiency and productivity. | Some countries have been unable to take advantage of globalisation and their standards of living are dropping further behind the richest countries. The gap in incomes between the 20% of the richest and the poorest countries has grown from 30 to 1 in 1960 to 82 to 1 in 1995. |
| 3. | Improved wealth through the economic gains of globlisation has led to improved access to health care and clean water which has increased life expectancy. More than 85 percent of the world's population can expect to live for at least sixty years (that's twice as long as the average life expectancy 100 years ago!) | Increased trade and travel have facilitated the spread of human, animal and plant diseases, like HIV/AIDS, SARS and bird flu, across borders. The AIDS crisis has reduced life expectancy in some parts of Africa to less than 33 years and delays in addressing the problems, caused by economic pressures, have exacerbated the situation. Globalisation has also enabled the introduction of cigarettes and tobacco to developing countries, with major adverse health and financial costs associated with that. |
| 4. | Increased global income and reduced investment barriers have led to an increase in foreign direct investment which has accelerated growth in many countries. In 1975, total foreign direct investment amounted to US$23 billion while in 2003 it totalled US$575 billion. | The increasing interdependence of countries in a globalised world makes them more vulnerable to economic problems like the Asian financial crisis of the late 1990's. |
| 5. | Improved environmental awareness and accountability has contributed to positive environmental outcomes by encouraging the use of more efficient, less-polluting technologies and facilitating economies' imports of renewable substitutes for use in place of scarce domestic natural resources. | The environment has been harmed as agricultural, forest, mining and fishing industries exploit inadequate environmental codes and corrupt behaviour in developing countries. Agricultural seed companies are destroying the biodiversity of the planet, and depriving subsistence farmers of their livelihood. |
| 6. | Increasing interdependence and global institutions like WTO and World Bank, that manage the settlement of government-to-government disputes, have enabled international political and economic tensions to be resolved on a "rules based" approach, rather than which country has the greatest economic or political power. Importantly it has bolstered peace as countries are unlikely to enter conflict with trading partners and poverty reduction helps reduce the breeding ground for terrorism. | The major economic powers have a major influence in the institutions of globalisation, like the WTO, and this can work against the interests of the developing world. The level of agricultural protection by rich countries has also been estimated to be around five times what they provide in aid to poor countries |
| 7. | Improved technology has dramatically reduced costs and prices changing the way the world communicates, learns, does business and treats illnesses. Between 1990 and 1999, adult illiteracy rates in developing countries fell from 35 per cent to 29 per cent. | Trade liberalisation and technological improvements change the economy of a country, destroying traditional agricultural communities and allowing cheap imports of manufactured goods. This can lead to unemployment if not carefully managed, as work in the traditional sectors of the economy becomes scarce and people may not have the appropriate skills for the jobs which may be created. |
| 8. | Modern communications and the global spread of information have contributed to the toppling of undemocratic regimes and a growth in liberal democracies around the world. | Modern communications have spread an awareness of the differences between countries, and increased the demand for migration to richer countries. Richer countries have tightened the barriers against migrant workers, xenophobic fears have increased and people smugglers have exploited vulnerable people. |
| 9. | The voluntary adoption by global companies of workplace standards for their internationalised production facilities in developing countries has made an important contribution to respect for international labour standards. Wages paid by multinationals in middle- and low-income countries are on average 1.8 to 2.0 times the average wages in those countries. | Globalised competition can force a 'race to the bottom' in wage rates and labour standards. It can also foster a 'brain drain' of skilled workers, where highly educated and qualified professionals, such as doctors, engineers and IT specialists, migrate to developed countries to benefit from the higher wages and greater career and lifestyle prospects. This creates severe skilled labour shortages in developing countries. |
| 10. | International migration has led to greater recognition of diversity and respect for cultural identities which is improving democracy and access to human rights. | Indigenous and national culture and languages can be eroded by the modern globalised culture. |
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