Overview Weaknesses And Strengths Of Globalization Economics Essay

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Globalization can be defined in a variety of ways since it is a very important term as it influences the global economies. It can be defined as the movement toward communications, financial, economic, and trade integration. Globalization entails opening out beyond nationalistic and local perspectives to a wider outlook of an interdependent and interconnected world through free transfer of goods, services, and capital over national frontiers.

Globalization is a term that is frequently employed to place a trend in the direction of increased flow of ideas, money, goods, and services across national borders and the resultant consolidation of the global economy (Waters 2001, pg.36). Globalization is closely related to international trade which can be defined as the exchange of goods, services, and capital across territories or national border.

The increase in the international trade enhances the continuance of globalization. If there were no international trade, then apparently nations would not get access to the variety of goods and services produced in different nations of the world (World Bank 2008, pg.56). It has been found that globalization does not involve unhindered labor movement, and as intimated by some economists, globalization may hurt fragile or smaller economies if practiced indiscriminately.

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Globalization is generally recognized as being goaded by a combination of technological, political, economic, biological and socio-cultural factors. From some other perspective, globalization can refer to the multinational circulation of languages, popular culture, or ideas by acculturation (Tomlinson 1999, pg. 123). This paper will provide an outstanding analysis of the weaknesses and strengths the term globalization.

Strengths of globalization

Supporters of globalization contend that globalization can possibly better the world economically by solving many problems which are deep-seated for example poverty and unemployment. According to the economic theory, increased globalization will lower the wage of unskilled labor in developed nations and raise the wage of unskilled labor within the developing nations as the two groups start to trade with each other.

Globalization generates resources and encourages the transfer of ideas that can be utilized for both individual and community improvement. Among many other things, globalization makes rural economic diversification and agricultural productivity gains more achievable. Globalization also makes environmental stewardship, improved conditions of living, and food security more attainable.

Due to globalization, the marginal can now get the opportunity to exhibit themselves in the world market (Bauman 1998, pg.121). Globalization encourages the industrialized nations to provide significant market places for exports of poor individuals within poor countries. The global agricultural and food companies can assist the third world countries incorporate required safety, and quality practices by getting access to markets in developed nations.

Since globalization means de-localization of various enterprises within the word, many people can get access to many industries and in due course globalization promotes economic growth in the global world, brings about competition among companies, enables producers and retailers to reduce the prices of various commodities so that consumers can afford them and therefore increases the demand on the commodities.

Because of the increased efficiency, the welfare is raised by offering more affordable goods and services such that the purchasing power is increased. Globalization reallocates capital and labor to more efficient and effective lines of production. Globalization helps poor countries by infusions of technology and foreign capital which enhances economic development.

The economic development due to globalization brings modern ways of connecting people, from roads to electricity to telecommunications. The global companies offer training to employees and provide time, money and talent that helps them to address needs of the community, lifting communal and individual aspirations and providing ways for accomplishing them.

Since globalization brings about spreading of prosperity, it enables various countries to possess conditions in which respect for human right and democracy can flourish (Appadurai 1996, pg.65).

Globalization encourages the existence of foreign direct investment. The foreign direct investment is a fundamental part of an effective and open international economic system and it acts as a chief means to development. Countries in transition, developing countries and emerging economies have realized that foreign direct investment is the source of modernization and economic development, employment and income growth.

Many nations have freed up their foreign direct investment regimes and acted on other policies in order to attract investment. Foreign direct investment enhances a chief source of capital that is accompanied with up-to-date technology. It has been found that to generate this capital by domestic means is a difficult task, and even if there is a possibility to generate it locally, importing the essential technology from abroad would still be a difficult task.

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This is because, the transfer of technology to companies without prior experience of how to use it, is expensive, difficult, and risk. Foreign direct investment forms many externalities over along period of time in the form of benefits existing to the entire economy.

These comprise of upgrading the telecommunication services, establishment of trading and finance related networks, creation of modern accounting and management methods, industrial upgrading, work experience necessary for labor force, and specific technologies and general knowledge in production and distribution.

The foreign direct investment in services has a great influence on the competitiveness of the host country as it raises the productivity of capital hence enabling the host nation to attract new capital on encouraging terms. Foreign direct investment brings about the existence of services that can be utilized as strategic inputs within the traditional export sector so that to expand the volume of trade as well as to upgrade production through process and product innovation.

Foreign direct investment finds its application in the economically developing countries. For the 90s decade, foreign direct investment was among the chief external sources of funding for many countries that were experiencing growth in the economic perspective. Foreign direct investment has aided many countries during the time of economic hardships.

For instance, in some nations of East Asia, it was seen that during the fiscal problems of 1997 to 1998 the amount of foreign direct investment that was made in these countries was reasonably steady. Foreign direct investment promotes the creation of new employment opportunities in a given country, and it enhances the increase of salaries for the workers. Due to this, many people have led better lifestyles and have obtained many crucial facilities in life (Featherstone et al. 1995, pg.76).

The biggest significance of globalization in the global world is the rise in competition, which has in turn benefited many nations worldwide in terms of economic advancement. Competition has a positive influence both on the well being of consumers and on the economy of a country as a whole.

It has been seen that competition bolsters international competitiveness and productivity of the business sector and as well it enhances economic growth and dynamic markets. Due to globalization, the whole world has become just like a country simply because people are allowed to cross the national frontiers into foreign countries.

The advance in technology has also encouraged a lot of interaction between different nations of the world. As most of the countries in the global world remain in touch with economic advancement in other nations, they look for alternatives to catch up with the advanced countries hence bringing about worldwide competition. Consumers have benefited a lot from completion as they obtain goods and service from their retailers and producers at competitive prices.

When the prices for goods and services in a given country are higher than those in the foreign countries because of lack of competition between the markets, the firms well become less competitive and therefore suffer within the marketplace. Competition also is very important in promoting efficiency and productivity.

It has been seen that, those companies faced with strong competition are persistently driven to become more productive and more efficient in the production. This is because they are aware that their competitors are persistently looking for ways to reduce the costs of production so as to gain a competitive advantage.

Owing to the persistent pressure, the firms in competition ensure that efficiency and improvements in productivity are made so that they can not in their market position or even evaporate altogether. It is the process of severe competition between rivals that drives companies to put more effort in offering better services, quality goods, and lower prices.

Competition has positive influence on innovation. Innovation is very crucial to success in today's world which is technology driven. Competition brings about pressure to different companies, encouraging them to introduce new production techniques for new products. Without the pressure, a country's economy will lag behind other countries' economies as a center of innovation hence losing international competitiveness (Michael & Porter 1990, pg.120).

It has been seen that globalization has got its strengths on the advancement of world economies. Many nations in the world have experienced the positive effects of globalization, for instance poverty has been reduced to greatest extent, modern and new methods of production have been realized, a good number of employment opportunities have been created, and most countries have obtained the advanced modern technology.

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In spite of all these benefits of globalization, it has also been found that globalization has its own negative impacts on world economies. Globalization has encouraged spread of diseases, and has brought about loss of cultural identity.

Weaknesses of globalization

Globalization has influenced emergency and spread of various infectious diseases. This is because people are allowed to cross the international frontiers and get into foreign countries. The free movement of people, vectors, commodities, food, decision-making power, and capital, alongside global demographic trends, has brought about the incidence infectious diseases in the place of destination.

The unprecedented speed and volume of human mobility are the most blatant manifestation in today's era of globalization. The global population is seen to grow at an increased rate such that the social and economic disparities between the poor and rich countries become intense.

This has brought about increased number of migrants as they search for employment opportunities to better the quality of their lives. Many demographers and political scientists have observed the twenty-first century as characterized by migrations.

Migrant populations comprise the most susceptible group to emerging and reemerging communicable diseases and have been seen as the major causal factor in the worldwide spread of such infectious diseases such as the multi drug resistant tuberculosis.

The modern modes of transportation that enable more products and people to get to different place in the world at faster speed have also opened airways for the movement of disease vectors from one continent to another.

For instance, mosquitoes can possibly cross the seas and oceans by riding in the wheel wells of an airplane. The incidence of West Nile virus in New York City in the year 1999 is a very good example of the disease that was availed in North America by vectors transported in airplane.

Beyond this transportation of disease vectors, there is evidence that global warming is causing the changes in distribution of disease vectors worldwide and therefore increasing the incidence rates of different tropical diseases like dengue and malaria. Global warming is caused by man's activities like industrialization which results into increased amount of greenhouse gases in the atmosphere.

Individuals from rich countries have invaded poor and developing countries with the intention of establishing their firms most of which emit greenhouse gases into the atmosphere. Therefore globalization brings about the possibility of global warming in the world.

The demand for global food market as well as the movement of food from one nation to another has also been significant for food borne diseases. Global transportation of food has also raised the concern on the issue of antibiotic resistance in man. The animals that produce food products like milk and eggs are usually administered with drugs to prevent diseases and increase production.

However, these drugs have been found to cause microbes to gain resistance against drugs that are used for human disease medication. Therefore due to social and economic interaction, incidences of many diseases have been caused (Giddens 1990, pg.67).

Because of globalization, people from different countries throughout the world have interacted and therefore their cultures have been intermingled. The consequence of different culture coming together is to lose the cultural identity. It is true that globalization has brought about changes which threaten the application of products that are made locally.

For instance, the availability of new foreign goods such as foods in market, which might even be cheaper cost wise, have displaced the local framers who from time and again have been earning a living by selling their farm produce locally.

Apart from the increased availability of foreign-made products and disruption of local producers, globalization has also increased international trade that deals with cultural goods and services, for instance music, publication, and movies. The other countries are faced with difficulties in exhibiting their local cultural goods and services that they have put their effort to produce, to the global market and thus are unable to compete with the foreign firms.

The natural consequence is that the local countries are notable to enter those areas of influence that are occupied by transnational firms of developed countries. As the trade in cultural goods and services intensifies, most of the local societies get exposed to foreign cultures.

This exposure to foreign cultural products encourages changes in local traditions, cultures, and values. No consensus on the effects of globalization upon national cultures, a number of people feel that people's contact with the foreign culture can weaken their local cultural identity (Friedman 1994, pg.123).

Most of the cultures are now using the language of the dominant cultures since the foreign languages such as English is spread very fast through internet and media (Deng 2005, pg.40).

English is used more frequent as compared to local languages for somebody to express himself or herself. It is true that in today's world most people cannot be able to reach their people by use of local folk songs and local literature and therefore the cultural identity of the earlier generation and that of today's generation is different altogether.

The native songs, tales, stories, and celebrations have been replaced with modern computer games that are produced in various continents, and therefore an individual becomes part of the global and general culture (Featherstone 1996, pg.76).

Conclusion

Globalization is a very important term that can be defined in a variety of ways, one of which is, the movement toward communications, financial, economic, and trade integration. Globalization is also seen to entail opening out beyond nationalistic and local perspectives to a wider outlook of an interdependent and interconnected world through free transfer of goods, services, and capital over national frontiers.

It is closely related to international trade which can be defined as the exchange of goods, services, and capital across territories or national border. The increase in the international trade enhances the continuance of globalization. If there were no international trade, then apparently nations would not get access to the variety of goods and services produced in different nations of the world.

Just like many other issues, globalization has got its own strengths and weakness to the global world. It has been seen that globalization has got its strengths on the advancement of world economies. Many nations in the world have experienced the positive effects of globalization, for instance poverty has been reduced to greatest extent, modern and new methods of production have been realized, a good number of employment opportunities have been created, and most countries have obtained the advanced modern technology among many other strengths.

In spite of all these benefits of globalization, it has also been found that globalization has its own negative impacts on world economies. Globalization has encouraged spread of diseases, and has brought about loss of cultural identity among many other weaknesses.