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"To what extent is a globalized world of economic benefit?"

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Introduction

Globalization "To what extent is a globalized world of economic benefit?" The countries of the world are rapidly becoming more interdependent in a process known as Globalization. This process means that much economic growth comes because of trade between nations; with each specializing in the products they are best at producing. Recent advances in the world of information and communication technology has meant that globalization is truly upon us - more than ever before. Globalization has many advantages and disadvantages. One of the major advantages of globalization is the promotion of economic efficiency in the production of goods and services. For example, it makes economic sense for countries that have a comparative advantage of ease of accessibility to raw materials, to manufacture goods requiring these raw materials and to export the final product. It would be inefficient for another country to import all the raw materials and then manufacture the final product to use. This quest for economic efficiency had led to the rise of huge multinational corporations like Nik´┐Ż. ...read more.

Middle

The major disadvantage of globalisation is the loss of jobs in the developed nations, resulting from "job exports" to developing countries. For example, many Dyson employees have lost their jobs due to the production of vacuum cleaners being relocated to Indonesia. Many employees in UK call centres have also lost jobs because UK companies are increasingly transferring their call centres to India. This leads to unemployment in the developed nations. Many employees also face pay-cut demands from their employers with a threat of exporting jobs if they do not comply. Many others are very anxious about their jobs, as companies are having to face intense competition. This results in companies being forced into becoming more efficient, meaning job exports to places of cheap labour or even job cuts. Many anti-globalization supporters argue that globalization is leading to the rich getting richer and the poor getting poorer. But this increase in the rich-poor divide is being caused, not by globalization, but by international trade barriers and protectionism in areas such as the EU. ...read more.

Conclusion

Most exports also use some imports. To take a simple example, a country might export packaged sugar, but import the packets. Lowering import barriers makes export industries even more efficient and competitive in world markets. Countries that lower trade barriers concentrate their national energies in industries they are good at, where they have an international advantage. Import barriers encourage countries to focus efforts in industries where they do not have any advantage. It leads to wasteful and lazy investment. There is evidence that developing countries that erect barriers to imports have slower growth in incomes than those that are open to trade. Globalization leads to improved efficiency, lower prices, more jobs and improving standards of living in developing economies. But globalization can only be of economic advantage to countries that embrace it with open arms, like China. Globalization can truly make the world a better place to live if trade barriers and protectionism are made a thing of the past and the concept of a global free market economy is adapted in its entirety. Bharat Mittal U6KW Page 1 of 3 ...read more.

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