The Benefits and Drawbacks of Globalization

Globalization is the process of operating business activities on an international level.It is the process of interaction among people from various countries in the world through the enlargement of business activities.It is the extension of capital, manpower, technology and information to different countries.It is a process by which economies and cultures have been drawn deeper together and have become more inter-connected through global network of trade , capital flows, and spread of technology and global media.Globalization has three main aspects that are economic, political and socio- cultural.(University of Leicester 2009). Economic aspects focuses on the intregation of global issues as well as flow of trade across nation borders.Political aspects focuses on the rules and regulation that to be followed during the trading process. And socio- cultural aspects focuses on the social and cultural aspects of the nations where the business activities are carried on.The goal of globalization is to provide the competitive standard and producing goods in lower cost to gain more pofits Developed countries are specific countries which meets certain socio economic criteria based on economic theory such as gross domestic product (GDP), and Human Development Index (HDI).
Gross Domestic Product (GDP) is the process of measuring the market value of all goods and services produced within a country which calculates economic output of that country.Globalization has positive effects on the economic growth of that country.The impact of globalization can be measured through the help of per capita income,capital flows and foreign direct investment.Globalization helps in boosting the avearge rate of the countrys economy.It increases the labour productivity. The exchange of technologies is possible through the help of globalization. Globalization can be more beneficial and profitable to the firms than domestic firms because through the help of globalization they can produce their goods in lower prices and they can sell that goods in the developed or under developed countries where they can gain more price in that goods.It helps in the mobility of capital. When the process of globalization occurs between two countries there is the mobilization of capital and technologies from one palce to another ie the host countries to worker country.Globalization must be expected to influence the distribution of income as well as its level.In an editorial in the British magazine “The Economist “on January 27th ,2000 it was stated that multinational firms, on of the most representative contemporary factors of economic progress ,,,spread the work ,wealth work,advanced technologies and contribute to raising the standard of living and to the improvement of the business environment… being the most visible side of globalization “(The Economist, 2000).Expansion abroad and growth of business are the main strength to getting benefits of scale, thus achieving significant cost reduction for the unitcost of production, sales system costs etc.It provides the employment facilities in various countries where the business activities are carried on. It helps in building strong and good trade relationship betweeen different countries.It also helps in building trade dependencies between different countries.Globalization helps in reducing International trade as this process occurs in different countries. It spreads job opportunities to those people who are from under developed countries due to lack of economical development. Globalization helps in sharing of cultures, social values and norms between different countries.Globalization helps in fighting with literacy and it promotes education between different people.The benefits of technologies can be spread throughout the world.When globalization process occurs in different countries for carrying out business activities the technologies are also transported to the underdeveloped countries.Globalization helps in friendliness relation between different countries. It helps more countries in decision making in order to solve international issues.Economically globalization spreads jobs and employment to countries with high unemployment due to lack of economic development. This helps poorer countries develop economies they might not otherwise be able to develop. It brings the cost of products down by bring the cost of labor down by having people with lower income needs, hence lower salary needs than people in more developed countries. (Henry, 2000, pp 125-26) Politically, it brings more nations into the decision-making process on international issues. This probably leads to better understanding of philosophies by people of different cultures.Increased free trade and communication between nations, along with increased access to technology, media, education, healthcare, consumer goods, and other resources are often considered advantages of globalization. HYPERLINK "https://www.quora.com/What-are-the-demerits-of-globalization-and-their-effects-on-India"
In a way, globalization has contributed towards increasing the gap between the rich and the poor. Rich and wealthy people are able to exercise more control over the national resources through the application of science and technology.The environment has suffered greatly due of globalization. On one hand, the increase in traffic between countries has polluted the tourist destinations. On the other hand, the poisonous gases released into the air by large industries have caused environmental pollution.Globalized business have exploited the natural resources of the earth beyond the tolerable limit. Some places on earth, which was once rich in minerals and forests can no longer claim their richness.Globalization tends to make the world a more homogeneous place. As a result, many communities failed to preserve their old tradition, custom, and culture. Being attracted by the culture of developed nations, many people in under-developed nations have shed their traditional dress, food, and rituals. This is yet another disadvantage of Globalization.Local businesses, hand-loom industry, Cottage and small-scale industry suffered a lot due to globalization. The highly specialized and efficient multi national companies take advantages of large-scale production and put products at throwaway prices. The local industries could not compete with their global counterpart.The global economy is now inter-connected. The economic downfall of one major economic nation adversely affects the entire global community.Globalization has caused specialization of labor. On one hand, there is an increase in demand for skilled labors. However, it has caused enough disadvantages for the unskilled labor group. There are few employment opportunity for unskilled labors in a global environment.The more technologically advanced countries are able to sell their products to less-developed countries. Hence, the less developed countries become dependent upon the superior nations.The adverse effect of globalization is not restricted to financial and economical imbalance. Last century has witness spread of diseases from one country to another country. Diseases spread to local places when a diseased person from a foreign country comes in contact with local inhabitants.Globalization is responsible for the emergence of large number of multi-national companies. Very often, it is found that they do not provide good working condition to the workers. Further, forests have been cut for setting up large industries. The industrial discharges have widely contributed towards environmental degradation.It puts people in developed countries out of work because they have higher income, hence higher salary needs and cannot compete with others in other countries. This creates higher unemployment that government taxes might have to help out. This harms the economies of more developed countries bringing down standards of living. (Berberoghlu, 2008, Pp 79-80) Politically, it could force nations to take actions that are not in their best interests for the benefit of other nations, thereby depriving a measure of sovereignty that individual countries expect.Politically: It could force nations to take actions that are not in their best interests for the benefit of other nations, thereby depriving a measure of sovereignty that individual countries expect. Some disadvantages of globalization include exploitation of developing countries, cultural homogenization, and adverse effects on local economies and the environment. Globalization is a complex issue, and while some argue that it reduces global poverty, others argue that it actually increases wealth inequality worldwide.
The Milken Institute's "Globalization of the World Economy" report of 2003 highlighted many of the benefits associated with globalization while outlining some of the associated risks that governments and investors should consider, and the principles of this report remain relevant.Some of the benefits of globalization include:Foreign Direct Investment: HYPERLINK "https://www.thebalance.com/what-is-foreign-direct-investment-1979197" Foreign direct investment (FDI) tends to increase at a much greater rate than the growth in world trade, helping boost technology transfer, industrial restructuring, and the growth of global companies.Technological Innovation: Increased competition from globalization helps stimulate new technology development, particularly with the growth in FDI, which helps improve economic output by making processes more efficient.Economies of Scale: Globalization enables large companies to realize HYPERLINK "https://www.thebalance.com/economies-of-scale-3305926" economies of scale that reduce costs and prices, which in turn supports further economic growth. However, this can hurt many HYPERLINK "https://www.thebalance.com/small-business-3305963" small businesses attempting to compete domestically.Some of the risks of globalization include:Interdependence: Interdependence between nations can cause regional or global instabilities if local economic fluctuations end up impacting a large number of countries relying on them.National Sovereignty: Some see the rise of nation-states, multinational or global firms, and other international organizations as a threat to sovereignty. Ultimately, this could cause some leaders to become nationalistic or xenophobic.Equity Distribution: The HYPERLINK "https://www.thebalance.com/globalization-good-or-bad-for-developed-countries-4011193" benefits of globalization can be unfairly skewed towards rich nations or individuals, creating greater economic inequalities.
Writing in the quarterly Milken Institute Review in late 2017, Dani Rodrik, author of “Straight Talk on Trade: Ideas for a Sane World Economy,” argued that a rebalancing of globalization is necessary to restore more voice to labor and its needs for job and income stability while focusing attention globally on where the biggest economic gains can be made.
For example: Bangladesh’s economy grew rapidly during the 1990s as the country liberalized its markets and became increasingly integrated into the world economy .Until the 2001 global recession, Bangladesh ranked third for improvement of human development behind only cape Verde and china thanks in large part to exports from its blossoming garment industry. Bangladesh faces the challenge of achieving accelerated economic growth and alleviating the massive proverty that affects nearly two-fifths of its 140 million people. To meet this challenge, market oriented liberalizing policy reforms were initiated in the mid 1980s and were pursued much more vigorously in the 1990s. These reforms were particularly aimed at moving towards an open economic regime and integrating with the global economy.
In conclusion, Globalization has huge impact globally. It has both prons and cons in the world.It is helping the world in many ways like spreading of technology, maintaining good relationship with different countries, sharing of cultures and traditions, reducing international poverty, giving employment opportunities etc.It has negative impact on the environment.When the business activities are carried on various types of chemicals are used due to which the environment is changed which leads to various types of environmental problems.In my view globalization must be carried on between different countries to reduces international poverty. Most of the globalization works must be carried on underdeveloped countries like Nepal , Bangladesh for the overall development of those countries.GDP can be used for measuring the marketing value of the goods and services which are produced within a country which helps us to measure the economical develpoment of the country. GPD should be used by every country to measure their
Economical status. It has positive effect on the economy.

Reference

 

  • Milken Institute. " HYPERLINK "http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.841.4255&rep=rep1&type=pdf" \t "https://www.thebalance.com/_blank" Globalization of the World Economy," Page( 2-13) Accessed Jan. 16, 2020
  • eNotesEditorial,10Nov.2009,https://www.enotes.com/homework-help/list-the-advantages-and-disadvantages-of-113517. Accessed 27 Jan. 2020.
  • HYPERLINK "https://www.assignmentpoint.com/arts/modern-civilization/globalization-and-its-impact.html" https://www.assignmentpoint.com/arts/modern-civilization/globalization-and-its-impact.html