Global economic markets

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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.

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