The Effects of Globalization
Diversification Most individuals growing up in the country of The Bahamas have already in some part become infused with diversity from their elders. “Don’t put your eggs in one basket”, this is an old saying that we have all grown up with and have become accustomed to. We can look at diversity in this very simple manner. The more one spreads their resources out the more he/she increases their chance for reward. For the average investor this is “key” in optimizing their investment portfolio. The financial sector is made up of various markets; some of these markets weather storms much better than narrowly focused ones.
For example; if you place a portion of your funds in multiple companies such as BTC and Commonwealth Bank as opposed to just one single corporation such as Verizon cellular,
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Globalization Since the beginning of time “Man” has always made strides to improve his way of life. Take for example the discovery of fire and the wheel; these simple discoveries have contributed to creation of devices such as automobiles and the light bulb. By sharing their discoveries with other tribes our great ancestors improved hunting techniques and social behaviors. By integrating inventions, ideas and resources, societies have become more globalized through communication, political and religious beliefs.
When used in an economic context, it refers to the reduction and removal of barriers between national borders in order to facilitate the flow of goods, capital; service and labor, although considerable barriers remain to the flow of labor. Globalization is not a new phenomenon. It began towards the end of the nineteenth century, but it slowed down during the period from the start of the First World War until the third quarter of the twentieth century.
This slowdown can be attributed to the inward-looking policies pursued by a number of countries in order to protect their respective industries, however, the pace of globalization picked up rapidly during the fourth quarter of the twentieth century. (Feels like there should be an explanation here). Diversification and Globalization The Bahamas is well known worldwide for its beautiful beaches, friendly people and great Caribbean food. Advertisement outlets such as radio, video and internet have played a strong role in our country’s publicity.
With a strong influence of black-slave descendants, the Bahamas has become one of the wealthiest Black countries in the world. However with the world around us moving at cyber speed investors and consumers want goods and services at break-neck Nano speeds. For example internet consumers want data plans that are affordable and reliable. Therefore corporations such as BTC have to keep up with new technology, services and strategies. Let’s take for example the farmer on Ragged Island; he may want to compete with farmers in New Providence; through advances in technology he would be able to display his products via internet outlets.
Outlets such as websites, social- media, video phone and also smartphone services would help propel the farmer’s products on a more global level. Whether we want to or not, globalization is here, unlike free trade agreements and policies, globalization takes place every day and it starts with the average citizen. Governments have the power and authority to open markets to foreign investors; when this happens a free trade agreement is reached. However an individual or corporation can decide at any time to improve upon their own mechanics on a national or global level.
With tourism and finance serving as the two major industries within the Bahamas for multiple years we have not had to trade or forsake much to propel these products to a higher level. Moreover a vast difference between globalization and its cousin free trade is; globalization is technology driven and it is not affected directly by government decisions. Herein lies the want versus need parody. Because a person wants to compete on a more grand stage they then make the necessary improvements so that they can grandstand on a mainstream platform.
Whereas the need is forced upon them more for the good of the people versus one entity’s gain. Now that we have a bit more food for thought let us take a more in-depth look at some of the key factors and ways that diversity and globalization affects the Bahamas. Diversification of industries Tourism has been the staple of Bahamian income for a vast number of years. Every day we see more and more companies emerging within these Bahama lands. Probably the best known hospitality employer in the Bahamas is the Kerzner International Company.
What makes this company a successful giant is their diversification strategies. Kerzner International makes billions of dollars yearly on average. Although they do the same amount of customers every year they make their money in diverse ways. First let’s not look at this giant company as simply a hotel; this would be a great understatement in the least. In all honesty they are so much more. Not only do they offer vacationers rooms and numerous food outlets, they also have water parks a golf course, jewelry stores, spas and nightclubs.
Truth be told they have even more attractions…more than we have listed here at least. What we are seeing is a spread-out of capital and resources to minimize risk loss. As with everything there is a time and a place and all things work in seasons. Some nights at the restaurant can be really slow and the profit expected may not resemble a monthly forecast. Whereas nights at the disco, or days on the golf course can bring in excess profit allowing the loss that Kerzner experienced from the food and beverage area to be smoothed out by the recreational and activities department.
See how the game plan comes together now? Smaller restaurants like Twin Brothers can face greater dilemmas during a drop in tourist months. Bahamian operations like this had a harder time balancing books when they have a narrow income pipe (verify). With just the one avenue of income and that being food and beverage it is hard for a small local business to make ends meet. Not only are we blessed with beautiful beaches but we manage to maintain a healthy financial industry called banking. The last few years we have seen a rollercoaster ride transpiring within the banking arena.
However this industry remains prosperous enough to still be considered as our second main industry. Local banks like Commonwealth Bank have enjoyed great prosperity because of their relationship with the Bahamian people. It has become one of the hottest topics carried across the local grapevine that you can walk in and out today with a loan from Commonwealth Bank. Although the rates have been known to be seemingly high this has not deterred persons from partaking with the hassle free funds. The main focus of any bank is not to be a charity but instead a financial earner.
Banks make money by investors saving funds with them thus allowing them the opportunity to grant loans to other consumers. Money is the main “good” of any bank however banks do own other property such as cars and land. Banks not only make money on the funds that consumers borrow, they make money in other avenues such as credit and debit cards and also automated teller machines. On all goods and services provided by a bank there is a surcharge this is how they mainly make money in diverse ways. If you notice a pattern with larger companies you would see the trend of spreading capital out to increase revenue earning potential in other avenues.
Although the risk is still there at least for the most part the chance of more financial protection is there this way. Diversification of Education It is jawed about all over local talk shows both radio and television and also spread in the local papers; the national grade average in the Bahamas is a D-level. It may be a hard pill to swallow but maybe we need to rethink and diversify the educational blueprints within our country. Of course the basic math and English programs can never be dismembered, but maybe we need to add more curriculums to the educational mix.
Countries such as China and Japan have longer school days and study more courses than those of the average Bahamian citizen. Think about every Bahamian being able to speak at least three languages, or even doing more in depth science classes. What a pity,we have all the tools to make these things happen but yet they are not being utilized. Of course nothing is cheap, or comes by easy means; but think of the potential of adding more hours and courses to the seemingly flimsy Bahamian curriculum. Why then would we need to journey abroad for a prestigious tertiary education?
Shouldn’t we be able to produce world class doctors and scientist and not only politicians and lawyers, not to mention pastors. By diversifying the educational system we give ourselves a better opportunity at breaking into mainstream fields and moving past the reputation of a country of just sun, sand and sea. Diversification of Government One of the most powerful if not the ultimate power in any country is its government. Like most things we encounter in life there are good and bad sides to anything. Yet it would be hard to say if the diversification of government is a good or bad thing.
This would be a consideration left to an individual. However ways in which it would affect the Bahamas would be bill passing of laws, public benefits and issuance of jobs to local contractors. Although there are only certain ways in which we can look at diversification within a governmental structure the idea of not putting all of one’s eggs in a single basket would remain the main principle. Every government that comes into power promises that they will accomplish what no other party can or will do. A basic trend of all governmental parties seems to be to work extremely hard when first elected and then wither away into mediocrity.
Sadly some may accomplish good and seek to do even better; but by constantly changing governing parties you tend to get the best effort out of politicians. However; like stated earlier this can also have an adverse affect on the Bahamas by delaying projects that a previous government may have started to implement. How does diversification in the Bahamas tie together? We have come to understand that although methods of diversification may present some risks, they also give us a greater shot at accomplishing more goods.
Financially this provides us with better security and peace of mind with our hard earned money. For the most part we understand what diversification is; and now we see that it can affect the Bahamas’ educational system, tourist industries, banking industries and even our political arenas. It is imperative that we focus on creating more diverse systems for us to rely and fall back on if our current avenues begin to dissipate. By becoming more diverse as a country we give ourselves a better chance at longer financial prosperity but also a shot at propelling ourselves into a country of super power status.