What Are Some Negative Effects Of Globalization – When we talk about globalization, many people don’t seem to realize that it is actually a man-made phenomenon but we evolved into this situation. We live in a globally interconnected world that complements each other. Because countries are always interdependent, we cannot reverse the process of globalization. To have a complete understanding of the effects, one mt take a closer look at the different areas of society that are affected by this process.
It is a process of interaction and integration in which people, biness, and government of different countries come to improve contact with each other. It is the interdependence of the world community. These processes are driven by technology, international trade, and investment, and have impacts on the environment, culture, economic development, political systems, and general human well-being.
- 1 What Are Some Negative Effects Of Globalization
- 2 Will Covid 19 Have A Lasting Impact On Globalization?
What Are Some Negative Effects Of Globalization
Globalization has affected people and communities around the world and has become a controversial issue that is widely debated in the public sphere. Depending on the interpretation of this phenomenon, some historians argue that at least some form of globalization has existed since the trade between Sumer and the Indus Valley Civilization during the Bronze Age in the 3rd millennium BC. If we adopt a stricter definition of the concept, globalization began in the 15th century when Portugal and Castile sent the first exploratory voyages to the Cape of Good Hope and America.
Pdf] Stories On The Positive And Negative Effects Of Globalization On Workers In Developing Countries Abound. But A Comprehensive Picture Is Missing And Many Of The Stories
Today, it has become a buzzword with mostly positive connotations such as the increase in the exchange of knowledge, trade, and capital around the world that is driven by technological innovations such as shipping containers and more recently the internet. Globalization is considered to enrich the world both culturally and scientifically as well as benefit most people economically. The United Nations has gone so far as to predict that this process may have the power to eradicate poverty in the 21st century.
But not everyone agrees on the positive impact of globalization. It has received severe criticism, especially from those who oppose free market economics. The likes of Joseph Stiglitz and Ha-Joong Chan have claimed that globalization does not reduce poverty but actually maintains it. Even the International Monetary Fund (IMF) states that the introduction of new technologies and foreign capital investment in developing countries can increase the level of inequality. According to the IMF, only a relatively small number of countries are enjoying the benefits of globalization. And negative effects have been observed in developed countries as well. This is mainly related to companies that have moved their production to cheaper countries, a phenomenon that has led to a negative impact on employment in developed countries. The question that arises is whether the advantages outweigh these disadvantages.
Technology has a special role in the globalization process. Many believe that technology is the number one driver behind it, making it easier for people, goods, and ideas to move across borders. The development of transportation technology, for example, made it possible to move large quantities of products and people in a short period of time. Automation allows an increase in the production and flow of goods and services, while telecommunications allow people to exchange information in seconds. The effect of trade is mainly based on its ability to strengthen interdependence between different countries. In today’s world, it has become almost impossible to be fully independent. Global markets are built by removing trade barriers and reducing restrictions on foreign investment. But it is international investment that drives globalization by increasing economic integration. Many countries experience the benefits of international investment, namely foreign direct investment, commercial loans, and foreign portfolio investment. This creates new companies, jobs, and sources of income.
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Will Covid 19 Have A Lasting Impact On Globalization?
If we look at the positive effects of globalization, there are four main benefits that have been brought, and many people tend to take them for granted.
The current level of competition in the market is a clear result of globalization. Competition on a global scale leads to higher quality products and services. As ctomers have more options to choose from, their demands also tend to grow, and companies must respond to these new expectations. Domestic companies that want to survive in the market need to improve their standards to satisfy their customers and be on par with foreign competitors. In addition to increasing competition, globalization has produced a more efficient market and stabilized security. Every market should strive for efficiency. In general, the market is efficient when there is an equilibrium between what buyers are willing to pay and what sellers are willing to sell for their goods and services. If companies can improve the way they produce goods or services by outsourcing the process or by buying from suppliers who offer discounts, they can then lower their prices which increases demand and capacity. And if some companies choose not to lower prices, they can divert these extra profits to increase employee wages or invest in expansion. Because in our globalized world countries are interdependent, they are unlikely to attack each other. In this way, globalized economic interdependence leads to stable security. In the same process, human rights have improved. Now there is wider media coverage and attention from around the world when these rights violations come to light.
While economists disagree on the impact of globalization on inequality, it is impossible to find examples of developing countries that can grow in the long term without opening up to trade. Globalization alone cannot be held responsible for poverty in the developing world. It has more to do with poor governance and ineffective economic policies and reforms. There is also no evidence that trade can increase poverty or reduce growth. Conversely, when countries open up to trade, growth tends to accelerate and living standards rise. The benefits of growth in developed countries also trickle down to poor countries. However, it is not always easy to pinpoint exactly how developing countries have benefited. This is because globalization has a huge impact on different levels, changes, for example, in technology and macroeconomic conditions. There is also no data available on the general well-being of people in these countries.
When it comes to the social effects of globalization, one mt look at the destruction of the environment, the insecurity of the job market, and fluctuating prices. Globalization causes an increase in production which means an increase in the utilization of natural resources. More trade also means increased transport and more fossil fuels. All this creates pollution and accelerates climate change which has become a serious threat to humanity. Increased competition in the market leads to price fluctuations. Developed countries are forced to reduce their prices in order to remain competitive against countries like China that can produce the same goods for a fraction of the cost. Globalization has also changed the job market, and now jobs in the global economy are more insecure and temporary. This mostly affects developed countries where companies can outsource some of their processes, especially manufacturing but increasingly also functions such as customer support. As a result, many people in the western part of the world lost their jobs. Globalization has also spread to culture. Some claim that it has caused the loss of cultural boundaries. Increasing interaction between western culture and local culture in developing countries has led to the melting of previously existing cultural barriers. The negative result is that the individuality of this local culture begins to fade.
Benefits And Challenges Of Globalization
Based on the analysis of these positive and negative effects, it is clear that globalization is a complex process that has a great impact on both developing and developed countries. The positive side is related to the efficiency and opportunity that open markets create. Companies can sell their products in distant markets as easily as in the home country. It also allows money to flow easily across borders and increase aggregate demand, resulting in large income growth. On the other hand, all this creates new risks and uncertainties as the market becomes more integrated and the competition more intense. Prices and profits also experience more fluctuations and companies find themselves under constant pressure from new competitors with little or no pricing power. Although some of these effects pose serious challenges, globalization is not a reversible phenomenon. We live in an interconnected world where countries depend on each other.
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