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Discuss the extent to which globalisation has been beneficial to Africa, China, America or Britain.

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Introduction

Discuss the extent to which globalisation has been beneficial to Africa, China, America or Britain. Globalisation is when the world's separate economies become integrated into one as trade grows, capital is able to move from MDCs to LDCs and labour can migrate the opposite way. This comes from the removal of barriers to integration bringing us closer to a single world market. Many African and other 3rd world countries will benefit from job creation through increased trade (exports) and allocative efficiency meeting the demands of increasing consumers and markets, as they aim to concentrate investment in industries which they have comparative advantage. Comparative advantage where a country producing a good or service because it is better at producing that good/service and also producing it at a lower cost than another country. On the other hand globalisation is seen to have some drawbacks in some cases, because of western power, this is things such as Laws, regulations preventing free trade, high taxes poor countries cant afford. Weak 3rd world governments may also be forced to pay high tariffs on imports and be given limitative quotas on exports. ...read more.

Middle

African countries also have so much debt that they are unable to build a market friendly environment to gain structural change into secondary industries. MDCs should help these countried by providing them with aid and cancelling their debts, we should also have true free trade by reducing our barriers to poor countries, the globalisation will benefit poor countries as they will get export led growth. MDCs could also help LDCs to industrialise by allowing for foreign direct investment (FDI), this is beneficial as if western companies build factories in these countries it will provide jobs from abroad, it should also act as an injection into the economies circular flow from abroad. It should also cause a local multiplier effect which is the enlarged impact on national income of a small change in an injection or spending. However this also brings things such as exploitation of workers, the employer may pay their workers very little money, and make them work in very dangerous conditions. Foreign industries may cause small LDCs to become overly dependant on them, the foreign company may also begin to bribe local politicians in order to change local policies. ...read more.

Conclusion

These might follow the path of China just like other countries such as Brazil and Turkey have. It takes more than Globalisation to do this, as it requires MDCs like Britain and America to provide good aid and guidance to the LDCs. These African economy could also try for EOI, however this can only be achieved if the government approaches it in a good way. The economy could also try ISI (import switching industrialisation), this aims at producing imported goods in the domestic economy. However this produces many infant industries and will not be good for a small country as it will be too difficult to maintain these infant industries and enable them to compete against foreign industries. Overall globalisation can be beneficial if all the gains of free trade are allowed for. However it can be damaging if MDCs try to exploit LDCs and take their natural resources, leaving them with very little once they have developed. It also depends whether the government are organised and their aim is for good economic growth and setting the preconditions for this. Thus there are many requirements for globalisation to be beneficial to everyone. Africa will need to allow for some exploitation in the short run if it wants to gain exports and foreign currency in the long run. ?? ?? ?? ?? ...read more.

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This essay covers many of the main points and really gets into its stride towards the end when it examines why Asia has benefitted from globalisation but not Africa.

Marked by teacher David Salter 05/04/2012

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