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Evaluate the impact of globalisation on consumers, workers, producers and the Government in the UK.

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Introduction

Daisy Chui 13J Economics Unit 6- The UK Economy Evaluate the impact of globalisation on consumers, workers, producers and the Government in the UK. Globalisation refers to the world economy becoming increasingly integrated, becoming a single international market rather than many national markets. It has brought in diminishing national borders and the fusing of individual national markets. The fall of barriers as stimulated free movement of capital and paved the way for companies to set up different regional bases around the world.1 When discussing globalisation, many people simply immediately discriminate against the developed countries, claiming they exploit the developing countries and keeping all the gains for themselves. Critics say the West's gain has been at the expense of developing countries. The already meagre share of the global income of the poorest people in the world has dropped from 2.3% to 1.4% in the last decade. As always, it is much easier criticising than praising. What truly are the effects of globalisation in the context of the UK? For consumers, globalisation is largely a good thing. Vigorous trade has enabled consumers to have more choice, being able to buy many overseas products. ...read more.

Middle

This means workers are not protected. Globalisation has also added pressures on poorly skilled low paid workers. There has been ever increasing trend for work requiring high labour low skill inputs to go into the developing world where wages are a fraction of what even low paid workers earn in the UK. In contrast, the long-term trend for UK manufacturing and services in areas, which are internationally traded, are for UK to specialise in producing ever more sophisticated technological products. This requires high skilled labour, therefore an increase in demand for workers who are better educated, trained and therefore better paid, putting low paid workers out of work. The changing trends towards a more technology-based century with the Internet thriving means there is higher demand for IT workers. Due to this the UK government may have to increase their government spending in order to provide training programmes for the increasing unemployed. For UK producers, globalisation is good. They can now exploit cheaper resources for production and establish in places where labour is cheaper, such as in South East Asia. The expansion of the global market ultimately means a larger marketplace for producers, being able to sell to more consumers. ...read more.

Conclusion

This in turn affects consumers as they have less disposable income. Yet, since there is increasing free trade in the exchange of goods and services, visible and invisible exports have increased UK's capital in-flow. The government benefits from this. Yet what seems to happen now is that short-term capital flows move with alarming speed from one high return location to another. These sudden ruses either in or out of one market causes serious problems for the domestic banking system and the exchange rate, property prices and other asset values. The UK government must take care in trying to put pressure and control on this, by encouraging investors to stay and prevent such fast capital inflows and outflows from affecting the economy. Globalisation is inevitable and affects everyone. Supporters have said that it has promoted information exchange and led to a greater understanding of other cultures. But protests against WTO's conference in Seattle last year prove that there is still opposition. Yet, one must realise that even the developed countries, the so-called 'super-powers' also suffer from the effects of globalisation, as seen in this illustration of the UK. Yet if the right policies are implemented and the country has a stable and civilised government, then they will reap more benefits that losses. 1 http://news.bbc.co.uk/2/hi/special_report/1999/02/99/e-cyclopedia/711906.stm ...read more.

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