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.
