GLOBALIZATION - A BOON OR A BANE
Before analysing whether globalization is a boon or a bane, let us discuss globalization and its benefits and limitations to the society as well as to the nation. Globalization crosses national boundaries. It can be defined as the increase in the flow of goods, services, capital, people, and ideas across international boundaries.
Globalization resulted by connection between people across countries through commerce, trade, technology, and transportation. Centuries of technological development, and advancement of international corporations, progress of economic partnership among nations made the world more connected than ever before.
Globalization represents the growing interdependence of the world’s economies, cultures, and populations, cross-border trade in goods and services, technology, and flows of capital, people, and information. With Globalization the national economies are ever more tightly connected with one another than ever before.
Advantages of Globalization
Globalization as a tool for Interdependence of Nations:
Globalization resulted in the interdependence on the global economy for buys and sells of products and services and to expand businesses and make investments. Many products and services have become affordable through the coordination of production among nations.
The growth of Trade has skyrocketed. Direct investments coming into and going abroad have grown. Countries drop their prices to enter world trade. Establishing ownership or controlling interest of a business in another country is possible through foreign direct investment. Major economies dropped tariff rates and kept them low.
The import taxes of countries dropped considerably with globalization. Today, world trade is driven by global supply chains run by multinational corporations which provide standardization of products and services.
The involvement of foreign direct investment, securities, and debts generally held by or owed to firms, banks and other financial institutions, or governments made the world economy integrated and interdependent.
Globalization also introduced the purchase and sale of financial investments which is important from the world economic point of view.
Globalization a tool for Prosperity and Peace :
Globalization creates a better world with countries seeking to cooperate with one another to promote prosperity and peace. Free trade and the rule of law help to prevent most economic disputes among nations.
Globalization a tool for Better Quality and Variety Competition from abroad drives firms to improve their products and services.
Globalization encourages specialization. It makes production more efficient which promotes economic growth, and lowers prices of goods and services, making them affordable especially to lower-income households.
Consumers have better products and more choices as a result of competition.
Expanded markets enable companies to reach more customers to provide goods and services.
Companies earn higher returns on the fixed costs of doing business, like building factories or conducting research.
Globalization as a tool to Access Resources:
One of the primary reasons nations trade globally is to gain access to resources across borders by utilizing advanced technology of one country with rare and limited resources of another country.
Globalization as a tool for Job Opportunities:
Globalization lead to new job opportunities Job opportunities for high-skilled workers is expanded notably in business services, such as finance and real estate.
It expanded the path for high-skill services like engineering, legal, consulting, research, management, and information technology.
Workers in these fields have got more scope and benefited the most from globalization.
Globalization has helped to decline inequality between the poorest and richest people in the world with more and better employment opportunities.
Disadvantages of Globalization
Financial globalization led countries to economic crises due to over dependence on the global economy sudden stops in capital inflows. For example: The collapse of financial inflows to South Korea.
During the period 1997–98 Asian financial crisis and the global financial crisis of 2008-09, especially due to “other liabilities” like bank loans. Korea was hit in 2008–09 even though the crisis was epic centred in the United States and Europe.
Globalization leads to high tariffs, trade barriers, and unfair economic growth.
Globalization results in loss of jobs and earnings. Low-wage workers are severely affected. Workers face lower earnings and even job displacement due to labour-saving technologies, like automated machines and artificial intelligence.
Globalization resulted in rising inequality. A leading explanation for rising inequality is due to advanced technology which reduces the demand for certain low- and middle-wage workers.
Globalization expanded the disproportionate growth both between and within nations.
Within countries, globalization has the effect of increasing immigration which raises gross domestic product.
It is a boon to the recipient nation as a whole while imposing costs on people whose average income is lower than the average income of those already living in the country.
Increased globalization lead to various environmental challenges including :
Deforestation and loss of biodiversity caused by infrastructure development.
Greenhouse gas emissions and other forms of pollution resulted from increased transportation of goods and services.
Globalization a boon or a bane from an economic point of view without doubt globalization is a boon for the developing nation.
It provides a great opportunity for the prospering nations to rise through increased foreign trade and Investments.
Openness to technology, trade, capital, ideas and information has powerfully stimulated progress both economically and politically. Because of globalization the world has
become flatter, faster and more fashionable.
Globalization increases competition which results in production of better quality of goods and services at affordable prices.
From a social context globalization has a number of negative effects.
Globalization causes serious problems like brain-drain, outsourcing, environmental issues etc. It has an adverse impact on the local industries as they cannot compete against multinational companies.
The employment opportunities of low skilled workers are gradually decreasing with the advancement of new technologies.
But even if globalization has some negative impacts, it was a great opportunity for the developing nations to rise by accessing foreign trade and Investments.
There are people who believe that globalization can bring only harm to the nation.
From a social corner people argue that implementation of globalization has exploited the developing countries resources and labour force.
But when we analyse globalization by taking into consideration the benefits and advantages side we can find out that globalization has brought in better than bad to the society as well as to the nation.