Essay - Costs and Benefits of Gobalisation

What are the costs and benefits of globalisation

Globalisation is the process in which countries, people and companies become increasingly connected and interdependent through increase in global trading and communication. It has huge social, economic, political and environmental impacts on society, and these are both positive and negative.

Social:

The increased connectivity of people from all over the world that globalisation brings leads to a spread of culture and the social benefit of increased cultural understanding across nations. This can alleviate cultural tension and make communities more cohesive. The spread of culture can also bring more range of goods from across the world, enhancing the consumers’ experience. Another social benefit of globalisation is the propagation of democratic ideals globally. An example of this is the increasingly important economic and political role of women in the developing world, an ideal influenced by western equality due to increase in interconnectivity of nations. However, a social problem with cultural diffusion brought by globalisation is loss of cultural diversity in many parts of the world. In Cuba for example, where tourism has seen a sharp increase, tourist enclaves are created, and western influence leads to a loss of Cuba’s traditions and parts of their culture.

Globalisation allows violations of human rights to be exposed in media coverage to highlight problems and to inhibit individuals from being exploited. For example, the poor working conditions of foreign employees of TNCs working in sweatshops in developing countries can be made visible globally, so there is more public action to stop exploitation of this kind. This global media communication also means that in the case of a catastrophic natural disaster, such as the Philippines typhoon Haiyan, the world can be made aware of it and so the public are more active in donating aid in response.

Economic:

Globalisation enables countries with emerging economies in the developing world to gain economic prosperity and opportunity. TNCs favour employing workers for lower skilled jobs in developing countries because they are able to pay a lower wage and there is less regulation on working conditions. These countries are then able to trade on a larger scale and so their economy increases and they attract more overseas loans and investment from developed countries such as the US. This then gives them a firmer foothold in the global economy and allows governments to improve the living conditions of its population. However, this can create a dependency of foreign aid in the developing world and countries with smaller economies could be controlled by multinational corporations.

Another economic advantage of globalisation is lower consumer prices. Globalisation means there is greater competition from all over the world and this protects from domestic monopolies, keeping prices low. There is also a ‘race to the bottom’, as corporations compete for the lowest possible prices to attract consumer markets. The standardisation of cargo ship containers and improvements to transport links also mean that transportation costs are lower so companies are able to make profits without driving up prices. Globalisation also means that goods are produced all over the world so this leads to greater specialisation of production in countries, leading to lower consumer prices and larger export markets for developing nations. In contrast, some of the least economically developed countries are left behind in economic growth as they are not set up for industry and trade, so while many countries become richer as a result of globalisation, the poorest of countries become poorer. This is the case in sub-Saharan Africa, where countries striken by ongoing conflict, political corruption, drought and famine, and a battle with Malaria and HIV/AIDS, are simply left behind in the global economy as there are not able to compete in trade and industry.

Globalisation leads to a freer movement of labour, as economic migrants move to different areas to search for employment opportunities. This benefits the economy of host nations as the immigrants are able to fill gaps in employment, for example, due to shortages in nurses in the UK, foreign migrants from the Far East were brought over to be employed. The movement of labour also benefits the source nations as remittances from family working overseas are sent back, which adds to the source nations’ economy. There are however problems caused by the free movement of labour because there is a ‘labour drain’ as a countries working age population is reduced as many move overseas to more economically developed nations, and so their economic growth is slowed. There is also a ‘brain drain’ has highly skilled workers move out of countries in search of better wages elsewhere, leaving the country with less trained workers and so there is less innovation and technological progress in the country.

An economic cost of globalisation in the developed world is the threat to jobs as multinational companies begin to outsource manufacturing and white collar jobs from overseas where they are able to pay lower wages in for example India. This creates job insecurity and large redundancies in countries such as the US. Moreover, local industries and shops can be taken over by multinational companies, whose offices are based elsewhere, threatening smaller businesses and subsequently the overall economy of an area.

Environmental:

Globalisation means that nations of the world can cooperate together to discuss and solve global environmental issues such as pollution, over fishing of oceans and climate change, at conferences such as the UN Earth Summit and the Kyoto Protocol. A combination of solutions from different countries can be made universal and more pressure can be put on developed nations to reduce their carbon footprints.

Another positive environmental impact of globalisation is that nations emerging in the global economy such as India have greater access to modern technology and are able to ‘leap frog’ older ones. For example, for decades, post-industrialised countries such as the UK and Japan used primarily coal, which, when combusted is a pollutant and contributes to greenhouse gases, however developing nations are able to use greener, more energy efficient technology which have less environmental effects. Despite this, however, globalisation means that the use of non-renewable energy is expected to grow, as more goods are able to be produced on a much bigger scale than ever before. This contributes to pollution and atmospheric greenhouse gases and therefore accelerates global warming. The transportation of raw materials and finished goods all over the world also requires much more oil to fuel cargo ships, trains and planes. Moreover, due to a higher demand for goods, multinational companies have to look for raw materials in ever more remote areas, and so previously untouched environments are being exploited, destroying habitats and the areas’ ecology.

In conclusion, globalisation does bring opportunities of economic prosperity and improvements to social equality and living standards for many. Additionally it brings a global reduction in consumer prices and there is a significant sharing of culture and ideals across the globe as people become more connected. Although, many are also left behind in the global economic growth and people in developing nations and also ecosystems can be exploited by multinationals competing for lower prices and bigger consumer markets. So whilst globalisation has many advantages, the costs of it are very important to consider in today’s society.