Impact of Globalization on Usage of Natural Resources

Categories: Natural Resources

There is a necessity of international economic and developmental cooperation, mutual trade, which exist during many decades. Many worldwide organizations have been established over the last millennium. Globalization in the world has begun to gain momentum. This led not only to the positive results that were expected in the beginning but also negative.
In order mutual trade and economic cooperation to guarantee peace between of all nations on the planet, profit for all countries should be equal. Otherwise, it cannot be called as real peace, because developed countries, main players in the world are getting advantages from cooperation while developing or emerging nations are suffering from their actions.

To understand whether the peace between nations is ensured through mutual trade and economic or developmental cooperation it is important to understand the benefits and harms of this.

Advantages and disadvantages of mutual trade

Advantages of international trade are quite clear. The first benefit is intensification (1.Wilhelm Krelle, Karl Zeman, “The Future of the World Economy: Economic Growth and Structural Change”, 1989, p.

444) of the reproductive process of national economies. It is all about product specialization. For countries, that are engaged in mass production international trade plays one of the most useful roles. They may integrate their products into foreign markets, which, of course, will improve their economies. The second positive impact of mutual trade is opportunity to improve and increase efficiency of technologies and technological processes. As almost all countries are involved in production of resources or goods, every country has to find new ways of production and unique items.

Top Writers
Verified writer
4.7 (348)
Prof. Laser
Verified writer
4.8 (435)
Sweet V
Verified writer
4.9 (984)
hire verified writer

The third plus is that increase in export supplies positively influence employment. New factories are potential workplaces for population. It also has negative sides, about which will be said later. Next one advantage is that mutual trade between nations forms international competition, which causes enterprise improvement. One country actually tries to overcome others on a global marketplace. It is quite hard to imagine the peace between nations through it. Revenue from the export is a kind of capital aimed at industrial development. It helps national economies, but only those countries, which are successful exporters on the global market.
In addition, the increasing share of world trade by creating new branches in different countries stimulates its improvement. In order to be leading player on the global market many countries try to produce really high-quality items. Moreover, mutual trade between nations assures effective mechanism of international economic relations. Trade among nations via the use of comparative advantage promotes growth, which is attributed to a strong correlation between the openness to trade flows and the effect on economic growth and economic performance. Additionally, there is a strong positive relation between capital flows and their impact on economic growth. [2]
There are also several advantages of mutual trade for countries which import foreign capital. Balanced and regulated imports contribute to qualitative and quantitative economic growths of those countries. Again, import may influence positively on workplaces.
Like in other spheres, here, in mutual trade there are also many disadvantages. No matter how strange this sounds, the export of capital abroad without attaching foreign investment has a bad impact on the development of national economies. Furthermore, there are a lot of minuses connected with employment. In fact, this point is very controversial. In advantages it was mentioned that level of employment through mutual trade is growing. Actually, some benefits are all about developed countries. Developing countries and emerging national virtually do not see any advantages for their national economies, because developed countries hire their citizens on top positions and it also again shows us that there can be no talk of a peace between national economies since every country is looking for their own benefit. One of the best examples of non-equal employment is Microsoft Windows which is done in United State of America but the technical support is provided in India which provides support to Indian economy. Of course, there is a profit for Indian economic situation also (for instance, in terms of taxes), but it is so tiny comparing with benefits of United States of America. In one sentence this revenue is spend in other countries along the globe and the ultimate benefit goes to the company’s home country. For example, Nike Company is one of the companies around the globe where ever in the world Nike products sale the ultimate benefit goes to America but the Nike enjoys the cheap labour and resources of that country. It also eliminates the difference of skilled and unskilled persons. [3]
There are some more harmful effects which are caused by mutual or international trade. For example, capital exports adversely affect balance of payments of those countries who export their goods. For countries that import production from other foreign countries there is a big harm like crowding out local capital. In reality it hurts national economies, because one country gets profit and manipulates other countries. So it again tells us that peace between nations cannot be achieved through that way. Initially, peace is a concept of societal friendship and harmony in the absence of hostility and violence. It also demonstrates us that peace between nations cannot be assured by mutual trade, because some countries are getting profit, while other countries are suffering. Furthermore, capital imports are associated with pushing goods that have passed their life cycle or that have poor quality properties. So it also shows an inequality between different nations.
Moreover, there are many different international trade organizations or funds exist in the world. In actuality all of them are created by some powerful, mostly groups of countries.
It is a political plan that seen at work in the activities of transnational organizations like the World Trade Organization (WTO), the International Monetary Fund (IMF), and the Organization for Economic Cooperation and Development (OECD), and has been a significant objective of United States involvement. Part of the impetus for this project was the limited success of corporate/state structures in planning and organizing economies. However, even more significant was the growth in influence of neo-liberal ideologies and their promotion by powerful politicians. (4. Unmasking Social Science Imperialism: Globalization Theory as a Phase of Academic Colonialism, Tatah Mentan, Amartya Sen, 2002, p.151)
All of those trade organizations have a well-performed strategy for several, maybe, decades. It says and shows that developed countries have really big influence on decision making in developing countries. Here it is more about politics. Politicians of developing or emerging nations maybe even understand the harmful effects from developed countries’ manipulations, but they pretend that there is a peace in the whole world and accept all decisions. Otherwise, they may suffer themselves.
On the one hand there are some advantages of World Trade Organization. The biggest influence has World Trade Organization. The first advantage of WTO is just the same – promoting peace between nations. Obviously, it is an important point because it provides international cooperation and confidence between nations. Of course, when it comes to trade, trade raises income. There are fewer barriers for countries who are members of this organization in export and etc. In addition, people in different countries have more opportunities to buy products that they really need and want. For example, even through the Internet, because the Internet is also a result of globalization. One of the benefits of WTO is that it makes life easier, even in developing and emerging countries. Maybe, the real situation is vice versa, makes life of emerging countries harder, but when we talk about advantages of WTO it is customary to mention this. WTO reduces inequalities and gives developing countries some voice. Moreover, WTO stimulates economic growth. With upward trend economic growth, jobs can be created and this can be enhanced by WTO through careful policy making and powers of freer trade.
On the other hand there are even more disadvantages of WTO. The first one is that there is nothing about democracy. The WTO rules are written by and for corporations with inside access to the negotiations. For example, the US Trade Representative gets heavy input for negotiations from 17 \"Industry Sector Advisory Committees\" Citizen input by consumer, environmental, human rights and labor organizations is consistently ignored. Even simple requests for information are denied, and the proceedings are held in secret. [5]
The second disadvantage is that it does not make life and humanity safer. They would like us to believe that they are creating a peace between nations through the world free trade. The real situation is again exactly the opposite, because there is a domination of rich countries that get profit and fulfill their individual interests. It makes other countries feel anger. If they really want to build the peace or friendly relationship between nations, they need respect all people’s rights.
Which is more awful WTO destroys the environment and kills people. The WTO is attempting to deregulate industries including logging, fishing, water utilities, and energy distribution, which will lead to further exploitation of these natural resources. [6]
Throughout the “peace” of nations, with the improvement of globalization, the level of medicine is obviously increased. But not everything is so positive. There are many viruses and infections are transmitted with the development of mutual trade or cooperation between nations. And in the end it destroys the national economies of countries.
From this subtopic about advantages and disadvantages of mutual trade some mini conclusions can be done. Theoretically, peace between nations can be assured by mutual trade, because there are some positive sides. But in reality the situation is quite harder that it seems. Maybe, even many scientists who are or were supporting globalization really believe in pluses. It is primitive, but always explainable – human factor (but, of course in negative way). This will exist every time, even after million years. Until people have it, peace between nations cannot be assured. Every country as every human wants to be upper than others. They want others to listen to their orders and rules or something like that. I am sure, if developing and emerging nations have power, they will do the same as developed nations are doing now. The more country have, the more they want (like human beings).

Advantages and disadvantages of economic/developmental cooperation

The first advantage is extensive range of goods and falling prices. If you weigh the advantages and disadvantages against each other, one of the advantages of economic or developmental cooperation is the extensive range of goods. This applies to food as well as to other goods. Examples include electronics items from China, fruits and vegetables from South America, machines and vehicles from the USA and Japan, and raw materials and fuels from Russia. In fact, Germany is and remains the most important trading region in goods trading in Europe, where 68.4% of German imports came from in 2017, in Facts about German foreign trade, as of October 2018, published by the Federal Ministry for Economic Affairs and Energy. Next advantage is boosting the global economy. Another argument for globalization is that the economy is being boosted worldwide. It is particularly the developing and emerging countries for which an increased job offer offers advantages. In connection with globalization, numerous companies from industrialized countries have settled in these countries and created jobs. In a nutshell, this in turn led to an increase in economic output in these countries and thus contributed to combating poverty. Examples are India and China, which have seen a significant economic upturn with increasing economic rates in connection with globalization. These are the reasons why the unemployment rate in China is comparatively low. With globalization, companies worldwide have better opportunities and requirements to produce their products worldwide and open up new markets.
One more benefit is in greater mobility of goods and people. Due to global networking and increasing mobility, it is possible to transport goods to destinations all over the world within short periods. These advantages apply not only to the trade in goods, but also to people. Traveling to other countries has never been so easy, quickly and without red tape. This mobility of goods and people has not only boosted the trade in goods and the tourism industry. Worldwide freedom of travel also offers advantages and the best conditions for the labor market, so that globalization and corresponding agreements have made it much easier to work in another country in the world.
There are also some disadvantages or harmful effects of economic and developmental cooperation between nations. One of the worst is that international integration intensifies problems and crises. When considering the advantages and disadvantages of globalization, one argument in particular has a negative effect. It affects economic globalization. If problems and crises arise in this area, they are intensified by international integration. National responsibility takes a back seat to a high degree of international cooperation. It is difficult to achieve them due to the different interests of different nations. And as the latest examples, in particular the refugee crisis and Brexit, show, a consensus cannot even be reached at European level.
Moreover, it has negative impact on the job market. It is economic globalization that has disadvantages and negative consequences, particularly for the labor market. The reasons are that jobs that are occupied by less qualified workers are increasingly being shifted to low-wage countries. This applies in particular to the production of goods. Examples are the textile production in Bangladesh, in China, in Hungary, in Romania and in India, where clothing is mainly produced by women at starvation wages and under miserable working conditions. Child labor is still a hot topic in some of these countries.
Furthermore, there is an increased competition benefits the strong. Due to the large number of global players, competition is intensifying on the international stage, where hard bandages are used. It is obvious that the weak have little chance of advancement, while the strong get stronger. The strong are mainly the large corporations, which have the best conditions due to their resources, contacts and financial means and which establish themselves faster in foreign markets. In addition, the large corporations are crowding out the small businesses on site.
As a result, these powerful corporations also influence the politics of the respective country, so that international interests override the national interests of a country. It is profit maximization that is in the focus of large corporations and not the well-being of people and the respective society, which are fed off with poor working conditions and starvation wages. Globalization has disadvantages for the environment. The high degree of specialization has meant that goods are no longer produced and assembled in one place. Instead, they are a construct made up of individual parts that are manufactured all over the world and transported around the world.

Cite this page

Impact of Globalization on Usage of Natural Resources. (2021, Oct 31). Retrieved from

Impact of Globalization on Usage of Natural Resources
Let’s chat?  We're online 24/7