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Advantages and disadvantages of Globalisation. Need for development.

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Introduction

3rd Problems and Solutions - Globalisation Problem 1. Globalisation and multinationals. First the positive image. Globalisation has two meanings, 1.a good meaning of increasing free trade and capital flows to the 3rd world so they grow and develop and 2. a less pleasant aspect of unfair Globalisation - all the bad aspects in reality where the west imposes high tariffs keeping ldcs out of its rich markets and farm subsidies wrecking 3rd world farmers and the 3rd world. Positive results of globalisation Globalisation is where the world's separate economies become integrated into one as trade grows, capital moves from MDCs to LDCs and labour migrates the opposite way. This comes from the removal of barriers to integration bringing a single world market. The WTO negotiations have brought many trade barriers down, cheaper transport, the internet and telecommunications and the rise of the NICS all are leading to rapid globalisation. We all gain from increased specialization and CA. The 3rd world gains jobs, exports and allocative efficiency as they concentrate on what they are best at producing. Western capital and technology sharply increases their productivity and living standards. Cheap labour "exploitation" leads to an income, and an end to absolute poverty and then higher wages. The open economies that welcomed foreign investment, that focused on exports and created market friendly environments gained the fastest growth - the NICS and now the emerging economies. The west gain cheaper imports, competition keeping inflation down and growth up as we reallocate resources to higher value industries. ...read more.

Middle

This is partly their fault through borrowing too much and too much waste of money, but in many cases is due to collapsing commodity prices and a sharp rise in oil prices and interest rates in the 1980s. Thus they have had to bring in excessive free market reforms as part of IMF SAPS. LDCs desperately need FDI and too often turn a blind eye to multinational damage to their environment or bad work conditions and child labour. They need the jobs and exports too badly. Each LDC competes with all the others. Their bargaining power is reduced by the over supply of tea, coffee, cotton, copper, palm oil and all other commodities. As they develop they concentrate in these C.A.s in their billions. They sell cheaply then to the West, and we get ever cheaper food, they get debt and stay in poverty. (C) The west imposes free market ideology even where it damages the 3rd world. You must argue that free trade, when not distorted by western subsidies, is good. That free trade with unprotected western markets allow export led growth and industrialization is the main way ldcs can lift themselves out of poverty, providing good governments create the right, roughly 10 conditions, for a market friendly environment. However the IMF too often imposes these free market conditions too quickly and insensitively to the individual needs of each country. The IMF and WTO are problems under globalisation, they need reform to help the 3rd world develop faster. ...read more.

Conclusion

They, and the Nics protected and helped their infant industries in order to force structural change. True globalisation brings more trade for 3rd world exporters, they freedom to need export more than they need aid. At Cancun the West remained intent on keeping the doors shut to extra 3rd world exports, but we press them to open up. We have then the wrong kind of globalisation. Economists want more globalisation but mainly by the west opening up to 3rd world exports and removing its trade distorting farm supports designed to help the fat livings of US cotton growers and EU farmers under CAP. The 2002 decision by Germany and France to preserve CAP subsidies until 2010 excludes millions of farmers in Poland etc who join under enlargement as well as 3rd world farmers who could easily undercut EU farmers. Globally we need stronger rules against the minority of bad exploitative multinationals. We need reforms of the IMF and WTO to give the 3rd world a stronger role. At Cancun in Sept 2003 the 3rd world stood up against present, unfair globalisation rules. Cancun collapsed because the west refused all the changes G21 demanded, but the west must change or be blocked out of vast fast growing markets China's 1300 million people. The 3rd world however needs multinationals and desperately needs more globalisation as free trade for exports to the west. We must not throw this baby out with the bath water. It would be a disaster for the whole world and especially the poor world if we all became simplistically protectionist under the banner of local products for local people. ...read more.

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This essay improves as it goes on. It needs a tighter structure with more clear signposting of what each section is about. It becomes too emotive and personal. The writer makes a number of very good points but they would be more effective if presented in a more neutral way.

Marked by teacher Dennis Salter 17/09/2013

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