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Essay by   •  May 29, 2017  •  Research Paper  •  2,111 Words (9 Pages)  •  969 Views

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        In the past few decades, there has been a sudden shift toward free-market economies in Latin America. By this time nearly all Latin American countries have adopted stabilization and structural adjustment programs prescribed by the Internationals Monetary Fund. These programs are in accordance with the globalization process, which consists of expanding their economies to international markets. In the past 30 years, the process of globalization has increased at an alarming speed, resulting in both negative and positive impacts on developing countries. Lately there has been a rather large controversy on whether the positive impacts outweigh the bad. As some point out that it could be a big step in the right direction for developing countries like those in Latin America, others say that it is only making it more difficult for these countries to achieve self-sufficiency. This paper will assess both the pros and cons of globalization to be able to analyze what exactly is the impact of globalization on the prospect for economic self-sufficiency in Latin America.

Supporters of globalization say that countries integrating rapidly with the global economy have a much higher economic growth than countries with economies that are locally restricted. This then results in higher levels of national output and incomes. They argue that although growth does not always progress smoothly, but it is more favorable than not globalizing at all. According to the Center for the Study of American Business, “From 1970 to 1998, the global economy grew 140 percent to almost $40 trillion in annual output of goods and services.” These findings show that through globalization the global economy, could positively impact the developing nations in Latin America.

 Many see globalization as an important asset to developing countries as it makes it possible for them flourish by blurring borders and opening a passageway for communication. Globalization blurs borders between countries when they begin to reach out to one another and share ideas, goods, and resources. Through this, they can use each other’s resources to self improve. Globalization can open doors for Latin America as it can give it the economic prospect to thrive.

Globalists encourage globalization by stating that open markets and cross-border investments are crucial to developing nations’ rise into industrialized economies. Through this, they can achieve a better standard of living.

        The amount of resources found in Latin America is definitely its strong suit. In fact, South America alone is home to 20% of the world’s oil reserves, 26% of global mining investment, and 25% of the world’s arable land. With these kinds of resources, all Latin America has to do to be able to profit and sturdy their economy is be able to share the resources with other parts of the world that have big markets for them. To be able to do so, Latin America must obtain the technology needed to be able to access these markets. In addition to technology, Latin America also needs to reach out to international investors. Globalization makes it possible to do this as it makes it easier for countries to communicate with one another.

        Through globalization, companies can expand and reach out to wider markets and consumers. This would help not only the companies themselves, but also the countries they are reaching out to. On one hand, the country becomes a completely new class of consumer for the companies to target. On the other hand, the country also has a completely new target audience to reach. Globalization would have such a positive effect on Latin America in this way. With the opportunity to expand its merchandise trade, Latin America would be able to boost its economy, giving it the chance to move forward towards self-sufficiency.

        When money is being poured into developing countries through exporting and importing, it is giving them the chance to be able to expand their economy. While they are still somewhat depending on other countries at this point, it is a push in the right direction to get on their feet. In addition to getting financial help from other countries, it also creates competition. Competitiveness pushes countries to work harder towards improvement. Latin America can use the accomplishments of other countries to set goals for themselves and further progress. If countries are not communicating, they are not seeing what is happening in other countries. For example, if Latin America does not have communication with the rest of the world, they might not see what kind of triumphs they have been achieving. If they do not see other countries making progress, the would not be motivated to do better and eventually come up on top in comparison to other countries.

        While competiveness between countries could push Latin America to strive for success, it would also keep the prices of their goods in check. Through intercommunication, Latin America could see the quality and value of products around the world and use that to shape their own. Latin America could use globalization to see the worth of certain resources and goods in other place around the world and then use this information to evaluate the cost of their own and maximize profit.

        While globalization gives Latin America the opportunity to learn from the successes of other countries, it also gives them a lifeline. Through the internet and media, other countries could get a glimpse into what is happening in Latin America and push them to help them get through any problematic times. An example of this is the struggle in Venezuela right now. Since the government has begun cutting down the country’s communication to the outside world, the rest of the world cannot really see what is happening there. It makes it difficult for anyone on the outside to intervene and help. This could only lead to a downfall in the country.

        By globalizing, Latin America could see what working systems are functioning well in other places and implement them. If policies are working well in other places, it must be for a reason. Through implementing new systems, struggling countries could have a new start and begin to push for success. This goes for laws as well. Through globalization, Latin America could see what kind of laws are working well for other countries. If Latin America were to see that other countries are prospering with certain laws, they too could implement these laws only to further improve their own countries.  

        Just as globalization could have a positive impact on Latin America’s hope for economic self-sufficiency, it could also affect it negatively.  Links have actually been found between globalization and poverty. According to Paul Streeten, of the Copenhagen Business School Press, “The economic restructuring, liberalization, technological changes, and fierce competition, both in the markets for goods and labor, that went with globalization have contributed to the increased impoverishment, inequalities, work insecurity, weakening of institutions and social support systems, the erosion of social identities and values.” Some argue that globalization increases vulnerability and income inequality. While globalization can help to increase productivity and improve technological capabilities, it will not redistribute current wealth to help the poor. Globalization actually redistributes the wealth among the already wealthy, leaving the poor exactly where they are.



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