Question

What are the arguments for and against globalization? To what extent has globalization contributed to world economic growth?

Your response should be at least 500 words in length.

Answer 1

Globalisation is the process of expanding economic activities and businesses in the international market with increased integration among countries. Globalisation helps regional economies, culture and societies to expand and integrate in the international level removing social,political and economic barriers. Globalisation has changed the concepts of trade and commerce by increasing cross border movements of people and information, trade and services, capital and technology making international investment, international trade and international finance more easier.

There are arguments for and against globalisation due to its numerous positive and negative impacts on world trade and economies which are discussed below.

Arguments for globalisation:-

1) Globalisation helps regional economies to grow higher with increased international trade and commerce. It helps in eliminating most of the trade barriers allowing all the developed and developing countries to participate in trade and commerce across the globe and making profits out of it.

2) Globalisation has made it possible for countries to expertise in the production of those products which are available locally and import the products from foreign lands who produce those items at cheaper rate. This has helped in growing export and import business of countries making avenues for them to raise their GDP.

3) Employment opportunities have also increased with globalisation as more and more business opportunities for traders with the easy doing of export and import of trade. Domestic markets of countries are growing as there are more foreign investments which enable businesses to increase their productivity and efficiency leading to the opening of more positions in the production activity.

4) Even consumers get the chances of choosing goods and services from various ranges of quality and prices. Globalisation has increased the competition among companies and industries which forces them to keep the prices of products lower in order to increase their revenue allowing consumers to buy things at their affordability.

5) Living standard of people have gone up as now people get various options to buy products at cheaper rates as same product is offered by various companies at different price ranges with higher quality.

Arguments against globalisation:-

1) Globalisation has allowed companies to shift their plants to foreign lands where the tax rate is minimal causing great loss of revenues to their own countries. Besides job loss of people is another negative impact of globalisation when companies shift their production base to foreign lands leaving behind the local workers jobless.

  2) Increasing inequality is an another point of criticism for experts as introduction of new technologies have reduced the necessities of manual labour leaving many people jobless and forcing many to work at a very lower wage rate. MNCs are taking the advantage of globalisation by paying lower wages to their workers and earning more profits.

3) Globalisation has allowed big businesses to grow many fold while small businesses are facing losses and closing their shutters forever.

4) Many people have believed that globalisation has enabled the rich to become more richer while poor are getting more poorer due to uneven distribution of income and resources leading to the path of growing capitalism in all regional levels.

With the expansion of international trade, average world income also grew substantially which helped in going down the rate of poverty continuously with globalisation. Post globalisation, per capita GDP of the world increased by 3.5% and 5% in 1980s and 1990s respectively. Efficient market system with increased competition due to globalisation has increased competition and reduced conflicts creating net benefits for regional economies. Increased openness toward international trade and capital flow has resulted in rising GDP per capita index in developing nations. Developing countries are now able to deal with their poverty problem, unemployment, illiteracy etc with increased amount of FDI receiving from developed nations to increase their economic growth. Market reforms and radical changes in the developing countries opened many business and jobs opportunities for their natives which helped in removing poverty and backwardness.   Globalisation has positively impacted the developed nations more by giving them the access of natural resources of other countries and making use of it for the welfare of their economies and public. The developed countries attract the most skilled intellectuals to work in their territories with lucrative salaries which help them to innovate new technologies and ideas making them more powerful in the world and reign in the world economy. Many poverty stricken countries of Africa have been funded by developed nations in order to create job opportunities in these countries and eradicate poverty.