Globalization: the Good, Bad and the Ugly
As we know from the simple principle of microeconomics that” people face trade off”. We are better off when we trade off. People have to give up something which they have to get something which they do not have. What globalization has done to the human kind is beyond imagination. We have the access to resources which one could not even think of before globalization. There are five factors of production, land, labor, capital and organization. These are the resources which are leveraged to optimize the production of goods and services.
After globalization market has become free and every country has access to each others’ resources. There are two things which work, one the country is benefitting because of export and the country is able to generate goods, services and employment by exploiting other country’s resources. So both of them are complementing each other and participating in mutual development. If you look at the tag on your shirt, chances are you would see that it was made in a country other than the one resides.
What's more, before it reached your wardrobe, this shirt could have very well been made with Chinese cotton sewed by Thai hands, shipped across the Pacific on a French freighter crewed by Spaniards to a Los Angeles harbor. This international exchange is just one example of globalization, a process that has everything to do with geography. As more money is poured in to developing countries, there is a greater chance for the people in those countries to economically succeed and increase their standard of living.
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Global competition encourages creativity and innovation and keeps prices for commodities and services in check. Developing countries are able to reap the benefits of current technology without undergoing many of the growing pains associated with development of these technologies. Governments are able to better work together towards common goals now that there is an advantage in cooperation, an improved ability to interact and coordinate, and a global awareness of issues. There is a greater access to foreign culture in the form of movies, music, food, clothing, and more.
In nut shell we can say that the world has more choices. After the industrial revolution, the availability of "capital" or investible resources became the most dominant source of comparative advantage. Globalization is a country’s participation in international capital flows, particularly Foreign Direct Investment (FDI). As we know, annual flow of FDI across the globe is more than $ 1 trillion. Same is true of Foreign Institutional Investment (FII). Availability of capital and productivity are still crucial in determining a country’s growth rate.
However, there has been a dramatic change in the global mobility of capital, and national boundaries are no longer important determinants of sources and uses of capital. A dramatic illustration of this is the fact that the most developed country in the world, which enjoyed unprecedented growth during the 1990s, is actually a capital-importing country, i. e. the United States. Similarly, the fastest growing developing country, i. e. China, is one of the largest recipients of capital from outside. Economic integration is a powerful force for raising the incomes of poor countries. Also we suggest globalisation of Adidas
In the past 20 years several large developing countries have opened up to trade and investment, and they are growing well — faster than the rich countries. There is no tendency for income inequality to increase in countries that open up. The higher growth that accompanies globalization in developing countries generally benefits poor people. Since there is a large literature linking income of the poor to health status, we can be reasonably confident that globalization has indirect positive effects on nutrition, infant mortality and other health issues related to income.
Globalization is good not just for the rich, but especially for the poor. The booming economies of India and China have lifted 200 million people out of abject poverty in the 1990s as globalization took off (International Monetary Fund). Tens of millions more have catapulted themselves far ahead into the middle class (Certainly more than $2 trillion of foreign aid that the U. S. and Europe have poured into Africa and Asia over the past half-century. In the next eight years almost 1 billion people across Asia will take a great leap forward into a new middle class).
In China middle-class incomes are set to rise threefold, to $5,000, predicts Dominic Barton, a Shanghai managing partner for McKinsey ; Co. Vietnam’s economy grew 6% a year, the number of people living in poverty (42 million) fell 7% annually; in Uganda, when GDP growth passed 3%, the number fell 6% per year, says the World Bank. China unleashed its economy in 1978, seeding capitalism first among farmers newly freed to sell the fruits of their fields instead of handing the produce over to Communist Party collectives.
Other reforms let the Chinese create 22 million new businesses that now employ 135 million people who otherwise would have remained peasants like the generations before them. Foreign direct investment has helped drive China's gross domestic product to a more than tenfold increase since 1978. Since the reforms started, $600 billion has flooded into the country, $70 billion of it in the past year. Foreigners built hundreds of thousands of new factories as the Chinese government built the coal mines, power grid, airports and highways to supply them. Per-person income in China has climbed from $16 a year in 1978 to $2,000 now.
When we see the India after it opened up its economy foreign companies have invested $48 billion in India since 1991-$7. 5 billion of that just in the last fiscal year--the same amount dumped into China every six weeks. By the mid-1990s the economy boomed and created millions of jobs. People waited five years to buy a scooter and cars and they were only for the rich. "Since we've liberated the economy, lots of companies have started coming into India and as a result these things have become like commodity. We share a planet and with modern transport and communication we share it more easily.
The enterprise, curiosity and enthusiasm of human beings will always ensure that opportunities are sought in every corner of the globe. So our challenge is not to prevent globalisation but to manage it in such a way as to maximise the benefits for all. The Bad: Globalization is not a concept without explicit scope for internal policies protecting respective industries or the implication of diminution of enforced restrictions on exchanges. While crossing borders and integrating a complex system of trade and production seems very attractive, one cannot ignore the 'flattening' effect of the practice.
Globalized trade and dedicated outsourcing of resources are bound to result in a conflict between various distinctive political forces. The ideology will of course continue to have an increasing impact on organization of business practices, but not without trade and exchange relations being affected. Globalization creates a broader platform for a range of foreign products and the movement of goods between and within boundaries. This coupled with the scope of increased access to external financing is challenging the financial crunch that is also responsible for the recent period of recession.
Market interconnectedness has paved the way for inter-dependency and in turn, an economic collapse. Globalization is channelized via international institutions that are designed to supervise processes that are related to education, migration, world cultures and heritage and business. This has in turn facilitated advances in technology and reduced the cost of trade negotiations. Free trade is not one that can or will be easily incorporated within developing or under-developed market based economies.
International agreements result in reduction of tariffs, transportation costs, capital control and subsidies. The restrictions thus imposed on intellectual property and supranational recognition charge cultural globalization, to add strength to the already powerful and make the struggle even more uphill for those battling market forces. Use of communication technology to further the interests of homogenization leads to harboured traditional diversity amidst an outward claim of 'retained individuality within international integration'.
The signs are all around and clear to see. The flip side of the coin highlights trade disputes, conflicts in bilateral and multilateral agreements on trade and education and barricades that hamper movement. The growing concern towards the implications of global terrorism is not without base. Global conflicts are inter-woven with the attempts at globalization. The strategy also has a very negative impact on cultures around the world. The influx that is the outcome makes it impossible for a society to check the disregard of what is uniquely theirs.
Acceptance of imported goods and services do affect national income. Internal and external migration and investment opportunities tip the balance required for nations to enjoy the status of 'developed' or 'developing'. Globalization is supposed to fuel and guarantee social, political and economic unification. However, developed and established economies continue to exploit the 'sharing' business to empower their own strong and wealthy economies. Subsequently, in the political arena, the reallocation of power is surfacing in the form of industrial and technological rivalry.
On the social front, the world is now at a loss in the attempt to guard and flaunt diversity that is enriching. The random influx of ideology and lifestyles and unmonitored inter-cultural communication has resulted in the creation of a pseudo culture that is common across boundaries.
The Ugly: Economic Ugly:
Poorer countries are sometimes at disadvantage: While it is true that globalization encourages free trade among countries, there are also negative consequences because some countries try to save their national markets. Exploitation of foreign impoverished workers: The deterioration of protections for weaker nations by stronger industrialized powers has resulted in the exploitation of the people in those nations to become cheap labor.
The shift to outsourcing: The low cost of offshore workers have enticed corporations to move production to foreign countries. This is draining out resources at the short term.
Social Ugly
Cable television and foreign movies became widely available for the first time and have acted as a catalyst in bulldozing the cultural boundaries – this is also affecting the conservative value system, India used to boast of. Access to television grew from 10% of the urban population (1991) to 75% of the urban population (1999) thus stripping valuable productive time from Indian households. * Unmarried boys and girls are sharing same apartment and staying away from their parents.
Indian youths leaving education in mid-way and joining MNC's for call centers and BPOs. Easy money is enticing them to take many unnecessary risks (rash driving in new bikes ,alcoholism )
There has been an increase in the violence, particularly against women due to the televisions and foreign movies depicting violence and improper behavior. More availability of cheap and filthy material (CD's or DVD's of Hollywood movies, porn movies, foreign hyper channels like MTV, FTV) in the name of liberalization.
In India, land-line or basic phone was a prestige symbol few years back but now easy availability of mobile causing accidents.
Open society norms has contributed to dating, celebration of friendship days/valentine day, and resulted to rising number of call girls and make them more prone to STDs – thus hurting the Indian priced value system. People are less worried for government jobs as MNC's and private or public sector are offering more lucrative jobs. Huge salary hikes are creating bunch of non-loyal employees.
In place of old cinema halls, multiplex theatres are coming up, thus hurting the power segment movie goers.
There is deterioration in social values as evident from less respect for ladies, older people .Monthly pocket money of 10-17 years old has risen by 500% from Rs 300 in the year 1998 ,their buying which is mostly instinctual are sometimes harmful for the kids. Candies ,chocolates ,junks poses health hazards ) Conclusion We can see the world shrinking and globalization is a reality today. It has brought Western cultures to third world countries and this has created new aspirations in these countries which are a lot harder for them to obtain, this could be seen as the route of wars and conflict in third world countries; the desire, the need, the want of a better life that was not known before.
On the other hand globalization has brought in International Organizations such as the UN, the IMF the World Bank, which has brought a just international economic system where countries can trade easily, help each other out and promote peace. There have been many globalization cycles throughout the history. There have been three rapid economic growth and three rapid globalizations in the last two centuries. Globalization has losers and winners. The former consists of workers and capital owners that compete with the imported goods and services.
It also includes all the consumers of goods and services that are exported. The latter consists of workers and capital owners that produce exported goods and services. It also includes all the consumers of goods and services that are imported. The current globalization will end like all the previous ones. Thus globalization is neither good nor bad but while the arguments of those for and against it continue to be debated, it is clear that the world will continue to become a global community.
But while the debates continue it is important to accept whether good or bad what this era of globalization has achieved to date. Economic growth through economic integration has steadily continued to rise. Political, economic, and cultural interdependence has helped to halt the rise of so called superpowers. The establishment of international organisations regional or global has helped to create peace and stability albeit in the west. Globalization will continue and like all things there will always be winners and losers.
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Globalization: the Good, Bad and the Ugly. (2018, Apr 13). Retrieved from https://phdessay.com/globalization-the-good-bad-and-the-ugly/
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