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The Globalization's Impacts to Developing Countries

Essay by review  •  February 14, 2011  •  Research Paper  •  1,573 Words (7 Pages)  •  1,239 Views

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Globalization is an often used word today. If we search in the internet using the search engine Google turns up 7,340,000 links using the word globalization, during I write these essay. Despite the fact that the word is used so frequently, it is rarely defined clearly. Indeed the breadth of meanings attached to it seems to be increasing rather than narrowing over time. Maybe because of this reason the globalization issues if often debated and resulted the supporters and contradictors. And also because of this reason, globalization has become one of the most controversial issues within twenty years because it has more disadvantages than the advantages.

There are several definitions about globalization. Globalization according to William K. Tabb (2004) is "The result of advances in communication, transportation, and information technologies. It describes the growing economic, political, technological, and cultural linkages that connect individuals, communities, businesses, and governments around the world." From the socio-cultural sense, we may have globalization definition as "The formation of a global village - closer contact between different parts of the world, with increasing possibilities of personal exchange, mutual understanding and friendship between world citizens" (Wikipedia, 2004). This definition is very broad, but the narrower and the most common definition of globalization is in the economic sense, "The observation that in recent years a quickly rising share of economic activity in the world seems to be taking place between people who live in different countries (rather than in the same country)" (PREM Economic Policy Group and Development Economics Group - World Bank Group [PREM], 2001, para. 1) or according to Case and Fair (2004), "The process of increasing economic interdependence among countries and their citizen" (p.713). Almost all these definitions have similarities. Globalization has been take places and as the consequences, it cannot be avoided and actually its not necessary to avoid that, the most important things is how to get the most out of the advantages, and diminish all the disadvantages of globalization.

There are so many advantages that come along with globalization. Firstly the globalization will create the economic interconnection; this mean there will be no entry barriers for countries to market their products or services globally. The market's entry barriers here usually are the taxes, duties, tariff, subsidies from the local government to protect the local producers, etc. The elimination of barriers will make the companies easier to reach the economic of scale. According to Wheelen and Hunger (2004) to reach the economies of scale necessary to achieve the low costs, and thus the low prices, needed to be competitive, companies are now thinking of a global (worldwide) market instead of a national market (p.5). And yes, the globalization system has success in making these objectives come true. As the result, in the globalization era, we can find easily good products or services that comes with high-tech, good quality, in the low price. And of course here, we, as the consumers will get the advantages.

Secondly there will be increases in trade and capital. Because of there's no barrier within the countries; the number of trades will increase rapidly. The capital will take off over the globe and capital market will have grown faster than before. "From 1950 to 2001 the volume of world exports rose by 20 times. By 2001 world trade amounted to a quarter of all the goods and services produced in the world. As for capital, in the early 1970s only $10 billion to $20 billion in national currencies were exchanged daily. By the early part of the 21st century more than $1.5 trillion worth of yen, euros, dollars, and other currencies were traded daily to support the expanded levels of trade and investment. Large volumes of currency trades were also made as investors speculated on whether the value of particular currencies might go up or down" (William K. Tabb, 2004, para.4).

Thirdly the globalizations will make an improvement in technology, communication, and transportation system. Advances in communication and information technologies have helped slash the cost of processing business orders. Vast amounts of information can be processed, shared, and stored on a disk or a computer chip, and the cost is continually declining. People can be almost anywhere and remain in instant communication with their employers, customers, or families 24 hours a day, 7 days a week. The World Wide Webs and computer that store vast amount of data allow instant access to information exceeding that of any library. In the transportation system, the advancement has made the world becomes smaller due to next-day delivery by jet airplane.

But the disadvantages of globalizations exceed all the advantages. The globalization system will cause serious problems, especially in developing countries. First and one of the most serious problems is the increase of inequality. Globalization will create a gap within the rich and the poor. The rich will become richer that before and the poor will become poorer. This not happened to the people, but also for the countries. The capitalist countries will control over the world through global economic system. These inequalities in living standards and participation in the global economy are a serious political problem in an era of globalization. Some countries have been unable to function at even a minimum standard of basic competence in the globalize economy.

Second, the globalization will create uncontrolled migration. Migration, both legal and illegal, is a major feature of this era of globalization. Uncontrolled migration will create many problems, especially in socio-cultural senses. The cultural problems related to the excess numbers of employment in many countries. There will be also problem in labor right, because to stimulate economic development many developing countries have established free-trade zones where investors are given special benefits, such as low or no taxes, and labor unions are discouraged or not allowed. These benefits have led to violations of human rights. Some people also fear a loss of cultural diversity as U.S. and others western media companies become dominant. These cultural wares are distributed worldwide, and along with reruns of U.S. television shows, tend to replace local alternatives.

Third, there will be knowledge and technological gap. Differences in the educational system

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