Is Increased globalization a good thing?
Is Increased globalization a good thing?
More and more people are becoming aware of the 'shrinking' world. The golden arch of McDonalds and the infamous Coca Cola logo are inescapable in almost every country. We only have to go as far as the nearest supermarket in order to see the extent to which citizens of one country are dependent on imported goods from other parts of the world. The World Wide Web is the most graphic example. In order to assess whether increased globalisation is a good thing or not, this essay will firstly discuss the term 'globalisation'. Then it will analyse the advantages and disadvantages of globalisation in our contemporary world.
Over the course of the last few decades, the term 'globalization' has slowly crept into the words of politicians, economists, journalists, entertainers alike. It is a term especially controversial to define because it is a subject which undergoes constant dispute between academics about just what it means to speak of globalization. It is commonly associated with words such as capitalism, modernisation, liberalisation and is often used as a synonym for internationalisation and universalisation.
Perhaps a good starting point for the discussion is one where globalization is defined as 'the process of increasing interconnectedness between societies such that events in one part of the world more and more have effects on peoples and societies far away'1. In other words, a globalized world is one in which social, economic and political events become more and more interconnected and where such events have more impact upon each other.
Most people will agree that nowadays the world economy is more interdependent than ever. However, opinions clash when trying to come to a decision about whether or not it is a positive process or not. It is a subject which constantly draws fervent support and fervent opposition. Firstly, it is necessary to draw up some arguments in favour of globalization. After all, there must be a reason, or reasons, why it has become such a vital aspect of world development.
Through international trade, goods and services are readily available in all parts of the globe resulting in great number of international transactions. Necessities such as food and clothing are much cheaper today than they were 10 or 20 years ago. In large part, this is a direct consequence of liberalization and trade expansion. Such gains benefit literally billions of people. Also, now that air travel is no longer a blessing for the rich and prosperous, international travel has become more frequent. In less than twenty years, the number of passengers flying between Asia and North America had increased almost six-fold2. This positive trend owes to the phenomenon of globalization.
Nowadays, people around the world are connected to each other than ever before. Forms of communications have fundamentally revolutionalised the way people from one part of the world deal with the rest of the world. Electronic communications allow flows of information from one part of the world to another and the Internet and the World Wide Web have helped widen the periphery of social groups that one would normally have access to. Technologies have made it possible to make immediate contact with each other, irrespective of their location on earth and regardless of the state borders that might lie between them.
Another benefit of globalization is the creation of the 'global culture'. The world is becoming more homogeneous. Differences between people are diminishing, developing a cosmopolitan community. Such transformations are likely to lead to fewer disagreements amongst nations. Greater harmony will make war less likely. In fact, there are arguments that accelerated globalisation since the 1960s may have reduced the chances of major interstate war.
The most important contention put forward by advocates of globalization is that it is a progressive movement improving the lives of people. Engagement with the rest of the world facilitates growth. Growth, in turn, reduces poverty and promotes prosperity. A great example is the tremendous economic success enjoyed by national economies of the 'Tiger' economies of Singapore and South Korea, which have had some of the highest growth rates in the international economy. In fact, for South Asia, the average life expectancy at birth has more than doubled from only 30 years just before World War II to ...
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The most important contention put forward by advocates of globalization is that it is a progressive movement improving the lives of people. Engagement with the rest of the world facilitates growth. Growth, in turn, reduces poverty and promotes prosperity. A great example is the tremendous economic success enjoyed by national economies of the 'Tiger' economies of Singapore and South Korea, which have had some of the highest growth rates in the international economy. In fact, for South Asia, the average life expectancy at birth has more than doubled from only 30 years just before World War II to 63 years today. Yet they are still able to subscribe to their own 'Asian' values. This successfully refutes the argument that globalisation destroys national identities. China's experience was similar: with liberalisation came spectacular growth, and poverty declined from 28 to 9 per cent between 1978 and 19983. Life expectancy at birth has also increased very considerably around the world. Moreover, the gap in life expectancy between the old industrial and the developing countries has narrowed. Child mortality has declined and living conditions have improved considerably for most inhabitants of the developing world. To reiterate, poverty has diminished, thanks to globalisation.
Furthermore, globalisation has created millions of jobs and built roads, airports and factories in poorer countries. It delivers new capital and technology to developing countries. In the 1990s alone, foreign investors have poured $1 trillion into developing economies4. This trade and investment is raising living standards in some countries faster than many thought possible. For instance, living standards now double every ten years in China.
The Pew Global Attitude Survey5 indicated that citizens in the developing world have a more positive attitude towards globalisation than people generally believe. What's more, views of globalisation are distinctly more positive in low-income countries than in rich ones. Indeed, the fast-growing economies in the world in this era of globalisation are developing countries that are aggressively integrating with the world economy. In general, those countries that have increased their participation in trade and attracted foreign investment have accelerated growth and reduced poverty. Uganda and Vietnam are prime examples.
Many have the attitude that globalisation directly means Westernisation, or even Americanisation. However, if we consider the world at the beginning of the last millennium, this is clearly not the case. The high technology in the world of 1000 A.D. included the printing press, paper and the magnetic compass, all of which were used extensively in China and unknown elsewhere. Globalisation spread them across the world, including Europe. This shows that it can work both ways. A similar movement occurred in the Eastern influence on Western mathematics. Europe would have been a lot poorer, had it resisted the globalisation of mathematics, science and technology at that time. The same would apply to the developing countries of today. To reject the globalisation of science and technology would be foolish.
Advocates of globalisation also claim that greater integration does not lead to growing inequality within countries as some allege. There are certainly some countries in which inequality has risen, but that is not the worldwide trend. Most importantly, in the developing countries that are growing well as a result of integration and other reforms, rapid growth translates into rapid poverty reduction. Since 1980, the total number of extreme poor declined by 200 million6.
As it had been discussed in the previous paragraphs, globalization clearly can bring tremendous opportunities and benefits. However, opponents of globalisation accuse it of acting as a trap for nations. Critics charge globalisation for the industries that have shut down and the jobs that have been lost to global competition. Globalisation brings a flood of cheap imports into developed countries, thus reducing the relative wages of unskilled workers who are suddenly forced to compete with inexpensive labour in the developing world.
Moreover, the emergence of a 'risk culture' is a great worry. The major problems that face many countries today are global risks such as pollution. Globalisation also manifests itself in the contemporary spread of AIDS in Africa and Asia. These are problems that states cannot solely control by themselves. Globalisation also makes it easier for drug cartels and terrorists to operate. Terrorists use the tools of globalisation - the travel network, communications, global fundraising and money movement and lowering of barriers - to attack not only people and nations but also the global economy itself. One only has to look as far as the September 11 incident to see this.
One of the main worries that academics depict is that globalisation can make the state obsolete. The pace of economic transformation is so great that states are no longer closed units and they cannot control their own economies. That is to say, their power is declining. Globalisation of trade and investment has in some ways weakened the independence of national governments. That leads to questions about the sovereignty of individual nations to regulate their own affairs in what previously were thought to be purely domestic, purely internal matters.
The SARS outbreak also reveals the negative impacts globalisation can have. Whereas it took many months for the great flu epidemic to move around the world in 1918, nowadays the SARS virus can hitch an airplane ride and get anywhere in 24 hours. Furthermore, the 1997 Asian financial crisis was illustrates how extensive expansion caused by globalization can spill out of control. It was transmitted through a worldwide financial system that had become much more integrated than almost anyone had actually realized. That made it possible for the crisis to spread quickly and disastrously through Asia triggering a huge economic collapse in Russia and causing instability in the world's economy.
As globalisation creates a 'global culture' most urban cities now resemble one another. The world shares the so-called "Hollywood culture". Surely, diversity in the world makes the world a more interesting place to live. The subject of globalisation understandably provokes an identity crisis amongst individual citizens all over the world.
Another major problem of globalisation is that there is a lack of shift of finance and capital from the developed to the underdeveloped worlds. Direct investment is highly concentrated amongst the countries of the developed world. Trade, investment and financial flows are concentrated in and between three blocks - Europe, North America and Japan. This group of three blocks could in fact act almost cartel-like and regulate global economic markets and forces by themselves.
Increasingly, policies are being formulated for developing countries through global institutions such as the IMF, the World Bank and the WTO. Often, their policies favour the agenda of the richer countries that dominate them. Since the policies are usually set in a one-size-fits-all manner, they hinder the ability of the individual country to choose the particular set of policies that suits its own development needs.
Additionally, globalisation has not been experienced everywhere to the same extent. In fact, it is probably only applicable to a small percentage of humankind. For instance, only a small minority of the world's population can connect to the WWW and most people probably never even made a telephone phone call in their lives. Phenomenon such as electronic mail has been mainly concentrated in the so-called North of the world. It could even be argued that globalisation only applies to the developed world. It is very easy to overestimate the scope of globalisation. In the famous book "World On Fire" by Amy Chua, she notes that in several countries, there are market-dominant minorities- small ethnic groups which control the wealth and the economy. These include the Chinese in the Philippines, the Indians in east Africa, or whites in South Africa. Too often, free market reforms in these countries simply allow the market-dominant minorities to accumulate even more wealth, widening the poverty gap. Anti-globalisation movement claims that integration leads to growing inequality within countries, with no benefits going to the poor.
Some see it as the latest manifestation of Western imperialism and capitalism. The forces that are being globalised are conveniently those found in the Western world. Thus, globalisation creates losers, allowing the more efficient exploitation of less well-off nations, all in the name of openness. Contemporary capitalism, driven by Western countries in Europe and North America, has established rules of trade and business relations that do not serve the interests of the poorer people in the world.
Ecologically, globalisation has caused phenomena such as 'global warming', greenhouse effect', ozone depletion and a decline in Earth's biological diversity. Rises in carbon dioxide emissions caused mainly by industry is expected to rise ten per cent every twenty years. This owes largely to globalisation.
If it indeed does make lives better, how can one explain for the widespread poverty that still exist today? The per-capita income in the richest twenty countries is 37 times greater than that in the 20 poorest7. Accordingly, globalisation cannot, and does not, serve interests of all countries in the world.
To conclude, globalization refers to a process in which the world is in many respects becoming a single place. It has in one way or another encompassed every sphere of social life. It brings people together as well as promoting higher economic growth and lower cost goods and provides much wider opportunities and choices at the same time. The advocates say globalization brings the first real chance of prosperity to the impoverished corners of the world whilst the opponents say globalization is the cause of growing poverty and inequality on the planet.
However, globalization definitely is not a panacea. It does not hold the answer to universal equality, prosperity, peace and freedom as some had presumed. Poverty is still rampant in the contemporary globalizing world. Human-induced ecological degradation has never been worse. Numerous major armed conflicts were underway and globalization has not provided a formula for increased democracy either. Yet, it lowers costs, broadens choices, delivers more capital and opens more markets, giving the individual more power to control his or her destiny.
As the Asian economies demonstrate, globalization can build economies through trade and investment and spur development in even the world's poorest nations, but it can also bring economies down overnight. Namely, used properly it can be used to massively reduce poverty worldwide and to reduce global inequality.
In this light, it seems that globalization itself is neither good nor bad. However, used properly it can bring about many benefits; used hastily it can seriously damage an economy. It must be seen as something to mold, shape and manage.
The reality is that globalization is here to stay whether we like it or not. With 1.2 billion people still living below the poverty line, the foremost challenge is to encourage greater global cooperation in order to provide g collaboration and coalitions to handle the risks emerging from this connected world. There is a need to balance local forces with international forces. A country must carefully choose a combination of policies that best enables it to take the opportunity - while avoiding the pitfalls.
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