One of the key processes of the world economy on the brink of the XX-XXI centuries is progressing globalization, i.e. a qualitatively new stage in the development of the internationalization of economic life.
These days, globalization is being discussed very often; it is a buzzword, which quickly turned into some kind of a slogan, a key, which can open the door to any existing and future mysteries. For someone “globalization” is all that he needs for happiness, for others—the cause of all the misfortunes. However, for all of us, globalization is an inevitable fatality of our world, irreversible process, the process, which equally affects everyone.
Globalization can be viewed from thousand of perspective, therefore, for this assignment the decision has been made to look at the economic globalization, and it’s impact on people from different countries: developed, and under-developed. The level of globalization of the economy depends on the level of development of the productive forces of modern technology. However, very often, the term " globalization " is perceived as an imposed by Western countries led by the U.S. ideology. Significant number of people in poor countries does not see the benefits of globalization. Human problems and globalization are interrelated. These are military-political, scientific, technical, financial, economic, environmental, demographic problems, struggle with high mortality, hunger and poverty in developing countries and other problems. In order to understand all pros and cons of the economic globalization were chosen two articles.
The first article, being discussed is named “Does globalization help or hurt the world’s poor”. In this work, the author, Pranab Badhan, asserts that globalization does both: helps and hurts world’s poor, and the aim of the article is to find ways of maximizing the help and minimizing the hurt.
Another important, and also controversial issue, brought up in the article is “garment factories”. On the one side, these factories enable people living in East, South, and South-East Asia to hope for a better life, due to thousands of new work places. On the other hand, poor working conditions on such factories have made the world communities to take actions about it, and some of the garment factories were shut. Of course, that might be a good thing, if all the people, who were left out without jobs, had alternative choices. Moreover, they agreed to work in poor conditions, as they (conditions) “are poor by world standards but better than those in alternative occupations such as domestic service or street prostitution”. Here we have two sides of one coin, and no one knows which one is better. From this problem, one can conclude that globalization is not the one cause of the problems in underdeveloped countries, as well, as it is not the only cause of improvement.
In the third part of the article, the author talks about possible ways of influencing different issues, to make people’s lives in underdeveloped countries more favorable. He talks about the need of control of capital flows, as well as launching different social programs, which will help those, who lost their jobs to cope with that, and “get retrained and redeployed”. Also, rich countries could carry out immigration reforms, allowing bigger amount of unskilled workers to come to the country and work as a “guest worker”. Of course, their actions cannot be taken in one month, or even one year, but at least we know about the possible and alternative ways of solving the problem.
As for the second chosen article, under the title “Globalization: Curse or Cure? Policies to Harness Global Economic Integration to Solve Our Economic Challenge”, it gives the reader a slightly different view on economic globalization. The main theme of the article is the impact of globalization on developed countries. The author of the aforementioned work, Jagadeesh Gokhale, claims that globalization has a great impact on developed countries as well, and such an impact is not necessarily positive.
First of all, the author claims that the faster pace of globalization may cause, the higher rates of unemployment, and wage declines in developed economies. Also, globalization exposes all the countries to other countries’ economic policies, as well as the offshores economic shocks. Such influence is inevitable in a global economy, and everyone should understand that it cannot always be positive, no matter how rich and stable the country’s economy is.
Secondly, “In developed countries low-and intermediate-skilled workers are faced with stagnant wages or at least increasing wage differentials when compared with high-skilled workers”. As a result, these workers demand more social protection, what in future might lead to higher explicit or implicit government debt. Such an effect is also a result of two sides of one coin. On one hand, developed countries have access to cheaper import, what can positively influence consumer’s welfare, however, on the other hand, they get stagnant wages, what eventually might have a negative impact on the economy as a whole. Also, it is worth mentioning, and the increased amount of cheaply imported goods has greatly reduced the amount of savings in the developed countries.
And the last, but not the least important point highlighted in the article concerns specialization and its negative impact on society as a whole. And here is why. Because globalization is present in all the spheres of our lives, most of the counties produce only those goods and products that are considered to be the most expedient economically. As a result, the countries have become more “susceptible to external economic shocks”.
In the second part of the article, the author discusses the ways of eliminating the formidable influences of the economic globalization on both: developed and under-developed countries. He asserts, “success will require considerable improvements in business conditions, economic policymaking, corporate governance, and political stability in developing countries”. However, while doing that, policymakers should be careful with forces that could interrupt the globalization, as well as those, which would promote it, as they still both exist.
Looking at both articles, one can make a conclusion that all of the countries depend on globalization, and it’s influences, some of them more, some less. The question if globalization makes rich richer, and poor even poorer remains unanswered, but it is a fact, that globalization is not the only force that influences people’s welfare. Globalization has a significant impact, but it is not crucial. There are a lot of different aspects to worry about; besides the level of influence globalization has on today’s world.
Attitude to globalization of both: specialists and all the inhabitants of our planet are very ambiguous, and sometimes opposed. This is due to different points of view on the consequences of globalization processes in which some perceive a serious threat to the world economic system, and see other means of further economic progress. Sure, the effects of globalization can be both positive and negative, but there are no alternatives, in connection with which the main attention is paid to the study of hazards (threats) that carry these processes and capabilities and benefits arising from the globalization process.
Scores of scientists assert that developed countries benefit from economic globalization while underdeveloped—only suffer from it. Such a claim has a right for existence; however, no one can prove its truthfulness. From the analyzed articles, it can be seen that despite of the fact that globalization places a very important role in our lives; it is not the only cause of the prosperities or losses.
Recently, humanity understood that the openness of societies and economies is essential not only for progress, but also for survival. However, in the modern world there is still nationalism, extremism and other problems. They hinder the development of international economic relations. Globalization processes do not affect a huge portion of the world's population in the under-developed countries. Nevertheless, globalization—is the main trend in the development of today's world, its economy and international economic relations.
Bardhan, P. Does globalization help or hurt the World’s poor? atmosedu.com. Retrieved February 20, 2014, from http://www.atmosedu.com/Geol390/articles/Globalization.pdf
Gokhale, J. (2010, February 1) Globalization: Curse or Cure? Policies to Harness Global Economic Integration to Solve Our Economic Challenge. object.cato.org. Retrieved February 20, 2014, from http://object.cato.org/sites/cato.org/files/pubs/pdf/pa659.pdf