Drawbacks And Benefits Of Globalisation example essay topic

Introduction Globalisation is defined by the IMF (The International Monetary Fund) as the increasing integration of economies around the world, predominantly through trade and financial flows. The term sometimes also refers to the movement of people (labour) and knowledge (technology) across international borders. The term globalisation has come into common usage since the 1980's, reflecting technological advances that have made it easier and faster to complete international transactions. (World Bank Policy Research Report Overview, 2002) Understanding globalisation Globalisation can be understood as having economic, political and cultural dimensions where companies are selling products the same way throughout the world, treating it as a single market. It is the process of business structuring in a worldwide market; creating growth and profit opportunities in production and distribution. Globalisation can also be seen as the process of rapid economic integration between countries, and increasing international trade and foreign investment has further driven it.

(World Bank Policy Research Report Overview, 2002) Globalisation refers to the many ways in which society is being drawn together by the international flow of goods / services, capital and information. (World Bank, 2002) The global economy assumes a kind of uniformity of demand and insight about products that operates separately of local cultural, political and traditional values and beliefs. It involves the impact that human interactions, among social and economic life, have on the natural environment and it refers to the worldwide consciousness about the human and natural world as a whole. Thus, since globalisation became such a big factor of international business and industry, it ushered in a new era of political, economic and social debate in the history of humankind. Humanity had to grapple with the dichotomy of globalisation, in time recognizing both the benefits and the drawbacks associated with globalisation.

Hence over time as society became more conscious and educated about the world economy, etc. and the level of awareness about globalisation was raised questions around the consequences of globalisation were soon being posed. The question; is globalisation good or bad? was increasingly being asked. This essay will therefore discuss the value of globalisation to the world. It will focus on very pertinent issues that have been debated in the area of globalisation.

These include aspects involving the drawbacks and benefits of globalisation. The Drawbacks of Globalisation A key drawback of globalisation is that first-world countries misuse and abuse poorer and struggling third world countries. First-world super power companies and corporations see people in third world countries as cheap and inexpensive labour that can easily be controlled and manipulated. This misuse of people is easily allowed because people (labour) in struggling countries do not have the choice to use or cannot afford legal protection when companies endorse dangerous working conditions.

It is also allowed for the reason that labourers in third world countries are poor and desperate for money and will work for much less than people who are skilled and educated. National job losses in the multinationals country of origin are another significant drawback. The majority of union employment depends on the manufacturing and industrialized division of the economy. This sector has been most negatively affected by globalisation as international companies and corporations increasingly take advantage of unskilled cheap labour abroad, especially in low waged countries. (World Bank, 2002) Environmental organisations are against one of the drawbacks of globalisation because they believe that it sanctions and promotes policies which enable multinationals to escape trade-barriers on business practices. These organisations accuse corporations and companies of dominating the politics of third world governments.

They believe that globalisation economic super powers easily and knowingly exploit the environments of struggling third world countries. Poorer countries are easily convinced to ignore laws about air pollution and environmental harvesting when it benefits the economies and their nations financial system. Another unfortunate drawback of globalisation is the fact that small non-international businesses have no way of competing with multinational companies and corporations. Small businesses do not have the resources, funds or capital to compete. There would be no way a little corner shop would be able to contend with a multinational corporation. Poor nations and their advocates' argument against globalisation is that free trade is a benefit for wealthier nations at their expense.

This is because tariff barriers are necessary for economic development. They also argue that the World Bank's lending policies force poor countries to adopt economic policies which benefit only their wealthier trading partners. This is obviously a negative aspect associated with globalisation. (LeGraina, 2002) As can be seen from the above, there are negative consequences associated with globalisation policies. While the principle in and of itself seems fair and benign, the ramifications of globalisation on vulnerable countries and people are significant and sometimes severe. While this essay, thus far, has discussed the adverse aspects associated with globalisation, there are benefits that go along with globalisation.

These will now be focussed on. The Benefits of Globalisation For less developed third-world countries, globalisation offers access and contact to foreign capital, global export markets, and advanced technology while breaking the domination of inefficient and protected domestic producers. Faster growth, in turn, promotes poverty reduction, and higher labour and environmental standards (Free Trade Org., yr unknown). While globalisation may confront government representatives with more difficult choices, the result for their citizens is greater individual freedom and choice. In this sense, globalisation acts as a check on governmental power that makes it more difficult for governments to abuse the freedom and property of their citizens. Most people in poor struggling countries know that huge multinationals bring in investment, jobs and products they can use.

They know that these companies give away millions of dollars a year by paying taxes, employing people and setting up scholarship programs. Many corporations set up campaigns such as anti-AIDS materials or cancer research as marketing strategy but that actually does help others in the end. (Legrain, 2002) To uncover further benefits one can pose the question; is globalisation really that bad? It is certainly considered a negative consequence when multinationals misuse and exploit labourers in third world countries by making them work long hours and underpaying them.

However, according to (reference), these conditions are slowly being improved. Devils advocates' argue that a job with bad working conditions is much better than not working at all and thus not having an income. The fact is that people in struggling countries usually do not have the skills or education which opens the way to find good jobs and therefore settle for what they can find, no matter the working conditions. In many cases the alternative is to exist below the poverty line, or as subsistence farmers.

Thus, in this way, it can be argued that the job that comes with globalisation has more positive consequences than the alternative. However, it can be further counter-argued that just because the consequences of globalisation are in some cases 'better' (but still not perfect) than the existing conditions, it should not necessarily be judged as a 'good' outcome. That is, globalisation as a new politico-economic ideology should be judged according to high benchmarks and standards, so that the current poor state of the world economy and the mistakes which brought us here, especially in developing economies, are not repeated (or at least minimised). Furthermore, according to a study done by John Charles (1998), it is seen that as the global economy grows the pollution of world environments keep falling. Some of the statistics he uses to back up his statement are persuasive: Between 1970 and 1997, the U.S. population increased 31 percent, vehicle miles travelled increased 127 percent, and gross domestic product (GDP) increased 114 percent - yet total air pollution actually decreased by about 31 percent. In the North American manufacturing sector, the pounds of material used dropped from 2,750 pounds of packaging per gross production unit in 1989 to approximately 2,100 pounds in 1993-94.

Charles' (1998) reason for the decrease in environmental pollution over the years is the fact that market competition imposes a never-ending drive for efficiency and innovation. Since pollution results from the waste of a resource input, rising industrial efficiency results in lowered pollution. This argument however does not excuse the fact that multinational misuse struggling countries by not taking greater care to control the damage and pollution to their environments. Globalisation has the potential to do immense good. Freer trade makes companies and countries richer. Foreign opposition keeps multinationals competitive, new technologies are designed and spread faster and countries specialise in what they do best and sell to others (international trade).

"Freer markets of foreign investment and technology" can help improve other countries to. (LeGraina, 2002) If poor countries get richer the global economy could rise as richer countries gain new markets for their products. Globalisation and South Africa The optimistic liberal scenario is that economic growth will spread across the world and that technological transfer would facilitate the spreading of the gains of globalisation to all parts of the world. Meanwhile, advanced countries invest heavily in poor nations, whose poverty declines. "And growing middle classes clamour for more democracy" (Samuleson, 2002).

Unfortunately the world economy works differently in reality. These benefits do occur but have not reached the entire globe, especially poorer third world countries. South Africa is one of them. In 1994 South Africa was sharply divided and it was experiencing a high unemployment rate among socio-economic groups.

But South Africa was determined to do the right thing economically by committing itself to becoming a global citizen and to play by free trade rules. South Africa has since privatised its big companies, such as Telkom and SAA, so as to attract foreign capital. It also eased exchange controls and the Rand became more competitive. According to Sibuyi (2001), South Africa did everything it needed to do (and did it correctly) to become a 'global player' but it did not benefit from globalisation. There was no record of better economic growth, no increased levels of employment, no rise in incomes and no foreign capital and investment came flowing. (Sibuyi, 2001) There have been some benefits: Industries are a lot more efficient and technology continues to play a transforming role on the South African economy.

However, the drawbacks far outweigh these benefits. Employment and income levels have declined, industries, such as the textile industry, have been completely wiped out and the Rand has continued to fall. South Africa had failed to fully benefit from globalisation. Conclusion Thus, as can be ascertained from the above discussion, there are benefits as well as drawbacks associated with globalisation.

The advances made for humanity through globalisation have been significant to poor countries and struggling economies. However, the drawbacks associated with globalisation in the shape of the misuse of struggling third world countries for cheap labour, and the damage to the environment etc. are also significant. This inconsistency that globalisation has brought the world makes it very challenging to decisively say that globalisation has been and entirely adverse or entirely favourable thing. I recognise the benefits that society has derived from it.

Poorer countries have benefited from it in many ways, and they have benefited better from it than if globalisation had not existed. It is for this reason that I recognise the value that globalisation has brought the world and thus would have to agree that globalisation is a useful thing. This however is not an endorsement of some of the drawbacks previously discussed. Perhaps the true effects of globalisation on humanity can only be judged sometime in the future. That is, perhaps the negatives and positives associated with globalisation will 'work themselves out' over time and a true judgement of the globalisation ideology can be made.

Bibliography

Charles, John A (1998) The Environmental benefits of Globalisation.
Cascade Policy Available: web [18 May 2003] Free Trade Organisation.
yr. unknown) The Benefits of Globalisation. Free Trade Organisation Available: web [18 May 2003] International Monetary Fund (2000) What is Globalisation? IMF Available: web [18 May 2003] LeGrain, Philippe: Free to Choose: What Kind of Globalisation Do We Want? (Reader pp.
56-67). Open World: /The Truth About Globalisation. Great Britain: Abacus; 2002.
LeGrain. A) LeGrain, Philippe: Giants with Clay Feet: Why Companies Don't Run the World (Reader pp. 68-77) Open World: /The Truth About Globalisation. B) The New Wave of Globalisation and its Economic Effects. In World Bank Policy Research Report. Globalisation, Growth, and Poverty: Building an Inclusive World Economy. A co-publication of the World Bank and Oxford University Press; 2002.
Overview (Reader pp. 7-17). Samuelson, Robert J (2002) Deflation: The Global Economy's downside.
Washington Post, 4 September. Available online: web [18 May 2003] Sibuyi, Nkosana (August 2001) Branding South Africa to the Global Village.
Government Communications and Information Centre. Available: web [18 May 2003].