Globalization and Development

Globalization

Introduction

Historical aspects of globalization indicate that human beings have been making connections with each other across borders and later around the world socially, economically and politically (Gangopadhyay 147). Since the First World War, these links have become more pervasive than ever. These connections are driven by legal infrastructure, modern transportation and communication, as well as, the political will to establish cross-border connections in international trade, finance and relations. In researching about the driving forces behind economic cross-border interactions after the World War II, it is clear that the collapse of Communism, as well as, widespread of capitalistic ideologies led to growth of economic ties on the global scale. Colonial powers such as Britain, France and Spain created the foundation of economic globalization (Carbaugh 102). After the collapse of colonization, trade and international organizations that foster international relations and development emerged such as the International Monetary Fund (IMF), WTO (World Trade Organization) and the UN (United Nations) (DuBrin 158).

It is also quite evident that irrespective of the economic status of any state, basic needs and security for most people is not guaranteed. The fact that there can be no islands of prosperity calls for networking to foster development. Goldin and Reinert (158) point out  that development in one region significantly affect the economy, security and the welfare of other communities in distant places of the globe. The world financial crisis between witnessed between 2007 and 2009 proved this. This essay strives to discuss the main advantages and disadvantages of globalization in terms of development.

Understanding Globalization and Development

There have been debates and various approaches of defining globalization. However, the concept of globalization captures aspects of worldwide interconnectedness in all aspects of life. That is, economic, social, cultural and technological exchange across borders (Lane 201).  Goldin and Reinert (147) defined globalization as “the ever-changing process of integration and interaction among governments, people and companies.” The key three things that promulgate globalization include investment, international trade and information technology (Goldin and Reinert 158). Globalization is analogous a wave that takes the world to another level and places it to greater heights every day. Globalization can be defined as a collection of processes that represent a transformation in the spatial organization of socio-economic and political relations, as well as, transactions worldwide. These relations generate interregional or transcontinental networks and flow of activity, power and interaction (DuBrin 89). Social, economic and political relations link distant localities in a way that events occurring miles away significantly affect local happenings and vice versa (Carbaugh 48). For example, political instability in the MiIDle East affects trade in Europe, Asia Africa and the USA. Reported Cyber attacks on some banks and Google in America by hackers in China, adversely affects the trade and political relations between the US and China. Change in oil prices affects the economy as a whole (Gangopadhyay 147).

Development is a complex concept, with various definitions that are sometimes contentious (UNCTAD 15). A basic perspective defines development as a state of advancement, growth, expansion or progress (DuBrin 158). Development is simply empowerment. It is about giving people control over their welfare. Development can take economic, social, technological or political dimension. Globalization has a direct link to the general development. Any of the development dimensions provides greater quality of life for humans (UNCTAD 56). In the process of globalization, actions, policies and initiatives emerge to improve the standards of living worldwide. Globalization influences the development of individuals, business entities and states. Through international interactions, developing countries benefit from grants, aids and technological assistance from developed partners to promote the standard of living and economic health (UN para. 10). Developed countries also benefit from ready market and outsourced labor from other countries. China is one of the largest exporters of technology and electronic products to Africa.

Advantages of Globalization in Terms of Development

Globalization is associated with a number of trends, most of which have developed since the postwar period. These include advancement in technology, development of infrastructures, legal systems and organizations. Other trends include greater global flow of money, commodities people and information (Lane 201). The actual benefits of globalization in terms of development are usually discussed along these trends since development is a desired result of some actions, policies or initiatives.

Globalization fosters both economic growth and human development (Prasad 25). According to Maeroff (25), economic development and human development is a two-way relationship. This means that human development is catalysed by economic developnent and vice versa. An increase in economic growth translates to an increase expenditures since people have good incomes, which in turn leads to progress in human development. Further, improved health, education and human consumption contributes to economic development (UNCTAD 45).Through Globalization, there is an increase in international trade. For instance, a farmer harvests coffee or tea in Africa, which is then procured in Europe or China for processing. Once the beverages have been perocessed, they are sold to the global market.

Lane (45) highlights that globalization leads to an increase in the global flow of capital including direct investment. International relations lead to international agreements, which in turn leads to the establishment of organisations such as the Organization of the Petroleum Exporting Countries (OPEC) and WTO. OPEC ensures the smooth flow of oil from investors to customers. As an international development agency, OPEC is dedicated to promote development in areas that are economically underdeveloped. WTO provides a platform for international economic cooperation which is meant to promote development in its member states (OECD 45).

Development of the global financial systems is linked to the process of globalization. Most banks and other financial institutions operate on a global scale as way of maintaining their market share or gaining sustainable competitive advantage. The flow of capital to new markets translates to development in regions that are underdeveloped. Global financial institutions also enhance fiscal transactions between distant countries hence empowering people at different regions (Rudestam and Schoenholtz-Read 125). Such institutions also provide support to developing countries as they try to  to connect to the international financial system. These include IMF, World Bank and PayPal.

Globalization has also led to increase in economic practices such as business process outsourcing (BPO) and foreign investments by individuals or companies operating in different countries. This has resulted to an increase in the establishment of Transnational Corporations (TNC) or Multinational Corporation (MNC) such as Coca-Cola and the US fast-food chain McDonald’s. McDonald’s owns over 37000 restaurants in 119 countries. When a foreign company invests in another country, perhaps, by setting up an outlet or factory, the host country earns foreign exchange and revenue through tax (Prasad 12). The host country also benefits from the created employment opportunities. Such interactions result in industrialization, which is beneficial to both parties. Inward investments and revenue earned through foreign exchange can be used by a state to develop social amenities and infrastructure, as well as, provide basic needs to its citizens. A micro-enterprise in India may produce rice for the global market given that it is guaranteed to access the global marketplace (OECD 14). The availability of market for local products results in development of Small Scale Enterprises (SMEs) and businesses, which in turn helps to reduce poverty and promote decent employment.

Globalization enhances communication around the world due to improvement in the flow of technology and information. An informed society is more aggressive, and this translates to increased production. Technological transfer enables developing countries to profit from  the benefits of implementing modern technologies in sectors such as agriculture, education, banking, aviation , insurance, construction and manufacturing. The improvement in agricultural activities ensures food security. In China, advanced agricultural technologies have led to progress in rice cultivation (OECD 23). Sustainable agricultural technologies and rural development policies adopted from other countries have increased production and enhanced food security in developing countries. Effective agriculture also provides employment and raw materials for industries. Infrastructures such as roads, water and electricity grids, as well as, airports can be developed in developing countries at a lower cost through the implementation of modern affordable technologies adopted from advanced states (Lane 101). Globalization also creates awareness is environmental issues such depletion of oil reserves, extinction of some species, global warming and deforestation. Corporate responsibility at the global scale advocates for environmental protectionism policies and measures. Globalization eases the process of alerting people on environmental issues and provides a framework for informing the global population on the need for sustainable development.

Advancements in communication technologies increase awareness of global events in distant regions of the globe. For example, in 2004, most countries were quickly made aware of the Tsunami tidal waves and which lead to timely response to the disaster. Information and communication technologies have a potential to provide or design new achievable solutions to development challenges in the context of globalization. Information and communication technologies harnessed from globalization can foster competitiveness, poverty eradication and social growth, access to information and knowledge as well economic growth. The United Nations organization also instituted a World Development Information Day meant to create awareness of the world public about development challenges and a need to strengthen international cooperation to come up with solutions for sustainable development. This day is observed annually on 20 October (UN para. 12).

Given that Globalization provides a platform for sharing lifestyles, ideas, experiences and cultures, people can adopt other foods and commodities not previously available in their locality. When trade is conducted on a global scale, people benefit on the availability of a large pool affordable commodities. Accessibility to affordable commodities and basic needs reduces the gap between the rich and the poor. A healthy society is motivated and exhibit high performance in its endeavors. Performance and productivity are integral elements of development from an individual perspective to the overall national development (Prasad 58). Political instability and Wars are some of the factors that undermine development irrespective of the availability of resources. Through globalization, people tend to develop a common understanding or the concept of mutuality for survival or existence. Globalization improves international relations through agreements and trade unions. These organizations provide an avenue for solving internal and cross border disputes. For example, the United Nations (UN) and the EU (European Union) strives to settle disputes in MiIDle East.

Disadvantages of Globalization in Terms of Development

As much as globalization synchronizes our cultural, economical, social and technological endeavors in a unified society and function, disadvantages should not be overlooked. Disadvantages are also discussed in line to trends linked to globalization. The critics of globalization often argue that the negative implications of globalization are portrayed in employment, economics, culture and health.

First, as the world economy tends to become a global village, disruption at any part of the global village adversely affects other nations that are directly or closely to it in terms of agreements or trade. External disruption of related economies was experienced in recent economic recession between 2007 and 2009. Closely related businesses or countries were experienced financial crisis. For example, members of the EU had to bail others from bad debts. Extreme levels of globalization dictate that a disturbance in one economy would result in disruption in the other, and the cycle would continue.

The perception the globalization is promoting employment is preemptive, since the reverse is happens, especially in advanced countries (Lane 147). People in developed countries tend to lose jobs as a direct impact of outsourcing jobs offshore. As much as BPOs in developing nations in Africa and India employ their locals, citizens in the source countries lose their job. This is evident in the US and UK where major firms have outsourced most of their non-operations. In the event that production decreases in the source countries, unemployment emerges in the outsourced countries. Uneven employment constricts development because of the widening gap between poor and the rich (Gangopadhyay 78). Another aspect of unemployment is the introduction of machinery to INSERT people.  As pointed out by Goldin and Reinert, some workers in developing countries find themselves suIDenly unemployed due to the introduction of new technologies. A poor and hungry society is less productive and underdeveloped.

Liberalization and ease of movement from one state to the other because of improved transport and legal structures leads to brain drain in developing countries. Developing countries lose professionals to developed states due to appealing wages and better working conditions. Inadequate qualified personnel such as engineers, doctors, and strategic policy makers have led to underdevelopment in developing countries (Prasad 78). This is subject to the fact that developing countries have to acquire labor and consultancy services from developed states at a cost.

Globalization also propels the spread of diseases. As people tend to move freely either for business or personal reasons, they become more vulnerable to health issues. An example in history was the outbreak of SARS (Severe acute respiratory syndrome) flu in Hong Kong the November 2002 and July 2003. According to the World Health Organization (WHO), there was a 9.6% fatality. Reports indicate that the flu had spread to 37 countries within weeks with 775 deaths worldwide.  Mobility is one of the factors that promote infidelity and spread of STDs, as well as, HIV/AIDS (Lane 47).

Globalization and culture also seem to be at strife. Cultures from more powerful states tend to erode other the age-old cultures. Globalization eases mobility thus indirectly linked to cultural degeneration. As people move traverse regional or continental boundaries, they tend to influence cultures and traditions at their destinations. One trend that propagates cultural erosion is increased tourism. Cultural degeneration due to influence from western culture is witnessed in Southeast Asia and Africa. In developing countries, westernization has led to spread of materialistic lifestyle and attitude where consumption is perceived to be the ultimate route to prosperity. Some corporations that control world media also limit cultural expression (DuBrin 78).

As developed countries quest for resources and fight for superiority in developing countries, there is an increase in the chances of civil unrest within the developing countries.  Economic powers tend to support opposing sides in developing countries. In Africa, rebels tend to get support from other countries that share common ideologies or have a stake in the warring nation. In Somalia, the Alshabab group gained support from terrorist groups such as Al-Qaida.

Conclusion

Globalization has its merits and perils; nevertheless, it is a wave that cannot be curtailed. As a result, people need to be aware of how they are involved in order to gain from its benefits and limit its cost. This can be achieved by understanding its impacts, provide solutions to the challenges and equally spread the benefits. Globalization influences the development of individuals, business entities and states. Through international interactions, developing countries benefit from grants, aids and technological assistance from developed partners to promote the standard of living and economic health.

 

 

 

 

References

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