Why some countries accepted the globalization and why some countries rejected globalization or embraced it only tepidly?

CS Professional · International Business – Laws and Practices · PYQS · December 2020
Why some countries accepted the globalization and why some countries rejected globalization or embraced it only tepidly?

Answer & Explanation:

Globalization means increasing integration of economics around the world particularly through the movement of goods, services and capital across borders. The term also refers to movement of people (Labour) knowledge (technology) across international borders. Some countries accepted the globalization because of its benefits which are mentioned below: Increase in competitive strength of domestic industry Access to advanced technology Access to foreign investment Reduction in cost of production Growth and expansion in participating countries Higher volume of trade Consumer welfare Benefits like help in professionalization of management, promotion of mutual cooperation, paving way for world peace. As some countries have embraced globalisation, and experienced significant income increases, other countries that have rejected globalisation, or embraced it only tepidly, have fallen behind. A similar phenomenon is at work within countries some people have, inevitably, been bigger beneficiaries of globalisation than others. Over the past two decades, income inequality has risen in most regions and countries. At the same time, per capita incomes have risen across virtually all regions for even the poorest segments of population, indicating that the poor are better off in an absolute sense during this phase of globalisation, although incomes for the relatively well-off have increased at a faster pace. Consumption data from groups of developing countries, reveal the striking inequality that exists between the richest and the poorest in populations across different regions. However, increased trade globalisation is not associated with a decline in inequality. The spread of technological advances and increased financial globalisation and foreign direct investment in particular - have instead contributed more to the recent rise in inequality by raising the demand for skilled labor and increasing the returns to skills in both developed and developing countries. The support for globalization is the lowest in the USA and even in certain other developed countries including Britain, France and German. People are generally wary of immigration that accompanies the opening up of the economy. These countries feel threatened as it could endanger their culture and environment. The dynamics of globalization process reveals that developed and developing countries participate in unequal footings. Developed countries along with their mighty MNCs exert a very strong force globally while developing country governments and civil society organization hold much less say. Developed country governments often reserve and exercise the right to take unilateral and bilateral actions. Economic efficiency argument in support of globalization ignores real social consequences. Farmers in developing countries commit suicides as commodity prices crash, workers lose jobs as they are retrenched from factories because developing countries like India, Mexico, and Philippines do not have the advantage of economies of scale. Globalization is often accused of contributing to the rise in poverty in developing countries. Poorer countries (Africa, the Balkans, parts of Caribbean) share in world trade has fallen over the past 20 years. Income inequality has risen in most regions such as in developing Asia, emerging Europe, Latin America. Despite all claims of welfare in the globalized era, more than a billion people in the world still live on less than a dollar a day. On an average, developed countries impose tariffs on developing countries four times higher than those on developed ones. Rich countries incur cost three times more in trade restrictions then they give in development aid. Globalization pushes workers from the organized to the unorganized sector where they enjoy much less job security and sometimes lower wages as well. Some Countries oppose Globalization because of the following reasons: Unequal economic growth: While globalization tends to increase economic growth for many countries, the growth isn't equal—richer countries often benefit more than developing countries. Lack of local businesses: The policies permitting globalization tend to advantage companies that have the resources and infrastructure to operate their supply chains or distribution in many different countries, which can hedge out small local businesses—for instance, a local New York hamburger joint may struggle to compete with the prices of a multinational burger-making corporation. Increases potential global recessions: When many nations' economic systems become interdependent, the likelihood of a global recession increases dramatically—because if one country's economy starts to struggle, this can set off a chain reaction that can affect many other countries simultaneously, causing a worldwide financial crisis. Exploits cheaper labor markets: Globalization allows businesses to increase jobs and economic opportunities in developing countries, where the cost of labor is often cheaper. However, overall economic growth in these countries may be slow or stagnant. Causes job displacement: Globalization doesn't result in an increased number of jobs; rather, it redistributes jobs by moving production from high-cost countries to lower-cost ones. This means that high-cost countries often lose jobs due to globalization, as production goes overseas.

Topics: Globalization

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