globablization is for the benefit of us all
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Globalisation has benefited everyone. It helped all the people to increase their living standards, brought advantages to organisations and businesses and enabled economies to develop. Discuss.
Proponents of globalisation are of the view that it has benefited everyone and helped to pull millions upon millions out of poverty. However a close analysis of the affects of globalisation tell a very different story. While it is true that globalisation has benefited many, it has had an equally devastating effect on the lives of many others and made 'true' development more of a mirage rather than a reality (Dunning, 2003). This essay will critically analyse and discuss the benefits and disadvantages of globalisation and will conclude by either agreeing or disagreeing with the above statement.
Even though globalisation is the buzzword today, it has been in existence in some form or another for over a century. After World War II many regions of the world that were reeling from the devastating effects of the war, came together to create trade agreements that would help each of those regions to grow in the post war era. The European Union is one such trade agreement as is the NAFTA agreement, GATT, APEC, ASEAN and many others. Due to the advances made in technology, especially in the telecommunication industry, globalisation saw a rapid increase in the latter part of the 20th century (Guillen, 2001). The ultimate goal of globalisation was to liberalise formerly closed economies, integrate national economies and create one huge global economy that would not only decrease trade barriers and increase trade and corporation but would also help poorer and developing nations to become 'industrialised' - thus uplifting the living standards of billions (Grewal, 2006).
While the goals and objectives of globalisation are noble, such goals and objectives are not very easy to achieve. Even though the above may look good in theory, in reality it is easier said than done and usually causes more damage to economies, the social fabric of nations and the environment as a whole (Suárez-Orozco & Qin-Hilliard, 2004).
With the onset of globalisation in its current form, which began in the late 1980s and has been gathering steam, many manufacturing organisations in the west have seen their profitability increase. The reason for this positive effect on the bottom line has been chiefly due to the fact that globalisation allowed these companies to relocate their manufacturing plants to developing countries, where labour is cheap. In doing so they were able to reduce the cost of the products and become more profitable. While such a relocation, may have benefited the developing economy where the plant was relocated to, it left huge numbers of individuals unemployed in its home country (Helbling, Batini & Cardarelli, 2005). Thus it can be stated that while one economy gained jobs and was able to uplift the living standard of many, another economy lost jobs, which had an equally devastating effect, while the company in question continued to earn profits and prosper.
During the 1990s and to date, India is one such country that has benefited immensely from globalisation. Throughout the past decade or more many European and North American, technology companies have outsourced their software development to India, which rose up to the challenge and has become a global IT giant. While such a growth in employment has benefited the country and helped to create a new middle class, globalisation has not been as favourable to its closest neighbour Sri Lanka. Sri Lanka with a literacy rate of 90% has seen much foreign direct investment in the garment sector. While this has helped the country to keep unemployment levels down, the semi-skilled or low skilled nature of the jobs that are available to its citizens does not help the country to grow and prosper to the level that globalisation has aided India (Schmidt & Hersh, 2000). On the contrary, Sri Lanka has seen a severe increase in underemployment of its university educate youth, who due to the lack of 'white collar' jobs, have had to resort to working in the garment industry (Kiggundu, 2002). As is apparent from the above, while globalisation benefits one segment of the population, its affects are not equal, on the contrary they are mixed, thereby it can be stated that the above statement is not accurate in its view of globalisation.