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(2113.) „Neoliberalism and the world economic crisis”
In 2007 United States of America faced the biggest financial crisis since the Great Depression in 1930’s. It lead directly to great economic crisis which influenced economies around the world. The result was collapse of various financial institutions, bailout of banks and stock exchange downturns. Crisis affected many people by the growth of unemployment rate or losing their saving and jobs.
The basis of financial crisis leads us to so called “housing bubble”. Until 2008 value of real estate sector in USA was increasing systematically. It was thought to be the most stable and trustful way of investing the capital. However, due to subprime loans – given to people which were not able to payback – such a pattern collapsed. To strength the absurd of such loans it is worth to mention so called NINJAs (no income, no jobs/asset) which were not able to pay back the money borrowed from the bank. This case wasn’t applied to one or two mistakes, these were hundred thousands of people whose life was affected. Such loans were put into trusts, insured by giant companies and given high safety level by rating agencies. Pension funds decided to invest the money in such financial product thinking that not only it is very profitable but also secure. Unfortunately to them, most of the cash was lost, founds bankrupt and retirement of society simply lost. How is that possible that banks who were supposed to be the most secure and trustful institutions started to be main players in financial speculations, selling products which were main cause of the financial crisis? This question I will try to answer in my essay.
General mistake which lead America to financial catastrophe is inconsistency in policy of neoliberalism. Such term was established by Friedrich Hayek and stayed for economic liberalization, open market, free trade, privatization and deregulation of policies. He thought that the government should ingrate in economy on a minimum level focusing only on unemployment rate and inflation. When Hayek moved to Chicago and started to work at city University he made such a doctrine familiar to bigger spectrum of scientists, and this is how the majority of professors thought that neoliberalism is the best solution for American market. From this group appeared Milton Friedman, main proponent of monetarism which he applied to the countries’ economy while being the advisor in Nixon’s and Regan’s Administration. In short term policy of Nobel Prize winner was very efficient for American economy as it resulted with lowering unemployment level as well as inflation and taxation. President Regan faced a huge problem called stagflation which was destroying economy and that is why he decided to implement Friedman’s ideas. So called “reaganomics” was very similar to what was happening on the other part of Atlantic Ocean by Margaret Thatcher. Neoliberalism was then not only new doctrine in American economy, but also British and Chile’s . On the other hand this was the main cause of latest financial crisis. This is because the theory of Friedman didn’t consider bank’s greed or complicated financial architecture and didn’t work in long term thinking. In other words, banks could sell products that were overestimated and still secured by insurance companies and rating agencies. This was the government luck of control that allowed banking sector to make such moves.
World Economic Crisis started because of American Financial Crisis and affected lives of people in almost every country. This situation was unique as none recession on such scale happened due to neoliberalism doctrine. What is crucial to mention this particular case could affect in collapsing entire financial sector. In my opinion banking lobby was so strong in America that it could easily influence in changing government’s policies, making them more convenient for themselves. Investment banks became the biggest players in market speculations earning their money on estimations. What would be the best solution and further on doctrine, for modern economies? I think that the main ideas of neoliberalism are positive for economy, however, inconsistency of FED and strong influence of the biggest players failed. This case shows that none economy should work without governmental regulations, and even they should stay on a certain level not to ingrate in free market to much, there is no doubt that they are needed. Furthermore neoliberalism is valuing people only through money perspective and supports none social security system. It could appear only in Anglo – American system where capitalism is strong. That is why New Keynesian theory of economics could be considered to be the new dominant doctrine in world’s market. Economy simply won’t work long with treating government as not important and weak group of people being not able to act when it is necessary.
I must admit that we live in the most fascinating time in the history of the modern world especially if it comes to economy models. Until now both Keynes theory and neoliberalism failed in some point and it is crucial to apply new ideas into current market to find out where is equilibrium in governmental influence and respect for free market. New Pragmatism is a very promising and logic doctrine and I think that it is just a matter of time when it will become the leading, especially in Europe.
(2112.) Globalization of the economy – it is a phenomenon and at the same time the process that was unfolded at the end of XX century. In general, in the briefest form globalization can be described as a highest level of internationalization of economic life and its core.
Globalization of the economy poses a serious basis for the solution of universal problems of mankind.
As the positive benefits of globalization processes include:
1. Globalization contributes to the deepening of specialization and international division of labor. In terms of more effective tools and resources are allocated, which ultimately contributes to the average level of life and enhance the life prospects of the population (at a lower cost to it).
2. An important advantage of the globalization process is the economies of scale that could potentially lead to reduced costs and lower prices, and thus to sustainable economic growth.
3. The benefits of globalization are also associated with the gains from free trade on a reciprocal basis, which satisfies all parties.
4. Globalization increases competition, stimulates the further development of new technologies and their distribution among countries. In terms of its rate of growth of direct investment is much greater than the rate of growth in world trade. In these circumstances, the introduction of new solutions is in the short term and at relatively lower cost.
5. Globalization exacerbates international competition, creates tougher competition in traditional markets. Globalization processes in the global economy are beneficial, especially for consumers, as competition gives them a choice and lower prices.
6. Globalization can lead to increased productivity as a result of rationalization of production on a global level and distribution of advanced technology and competitive pressures in favor of continuous innovation on a global scale.
7. Globalization allows countries to mobilize greater financial resources, as investors may use greater funding for the increased number of markets.
8. Globalization poses a serious basis for the solution of universal problems of mankind, first and foremost, environmental, due to the joint efforts of the international community, the consolidation of resources, coordination of actions in different areas.
The end result of globalization, as many experts expect, should become a universal welfare in the world.
It is also fair to say that the globalization of the economy – rather contradictory phenomenon. On the one hand, the features discussed above, in general, contribute to the effectiveness of the global economy, economic and social progress of mankind. On the other hand, as will be shown below, the manifestations of these traits often affect the interests of the general population worldwide, and entire countries. By contradictory and negative sides of this model include primarily the following aspects.
1. Globalization has become the medium for acceleration in the spread of criminal activity. Thus, the globalization of commodity markets with particular intensity in the proceeds of illegal weapons and drugs markets. Turnover of drug industry represents approximately 8% of world trade. It is advantageous for drug trafficking to have an international platform and taking advantage of global liberalization, has managed to globalize the cross-border trade.
2. The processes of globalization reduced economic sovereignty as an attribute of the power of nation states and the potential for economic regulation of the respective national governments find themselves in a growing dependence on multinational companies. Nowadays multinationals operate as autonomous entities that define the strategy and tactics of its behavior, regardless of their country’s ruling political elites, who are more dependent on their own and were very responsive to them. In other words, there is a fairly sharp contradiction between globalization and national sovereignty (especially in economics) in many countries.
3. Globalization has significantly weakened the traditional system of state regulation of national economy, has not led to the creation of international, which would have made up for any resulting gap. An exception to the rule to a large extent this is the euro zone, which covers not the whole space, which was developed and continues to develop the globalization of the economy. At the same time as a result of poorly performed enlargement to 27 countries, put it on the economic crisis, the EU was in a state of severe crisis.
A very interesting fact that out of 7 billion people on Earth at least 1 billion live in prosperity, and the others have a need or poverty. In this case, if the 1960 income of the richest 10% of the world’s population exceeded the income of the poorest 30 times, by the end of the twentieth century – as early as 82 times. This suggests that in a globalized economy in the world is increasing income inequality between rich and poor countries to the rich.
However, we prove the converse: reducing income disparities between the North and South, and a reduction in the number of poor. This question is difficult to answer, and perhaps it will become known only with time.
So what ultimately globalization brings countries – a threat or an opportunity? To find the answer to this question is almost impossible, because the balance of positive and negative effects of constantly changing. Globalization is an inevitable phenomenon of our time, which means you can slow down economic policies, but you cannot stop. Countries need to adequately respond to the globalization processes to adapt to new conditions and take chances, which provide the internationalization of the global economy.
(2111.) Globalization and its influence and economic growth
Barthélémy Mojon 24152
The word globalization refers to the increasing expansion and harmonization of the interdependence links between nations, human activities and political system, at a world wide level. This phenomenon touches people in almost all sectors, with different effects. Globalization also suggests the growth of international exchanges of goods and services, manpower and knowledge.
This term, which is specific to human environment, is often used to describe the economic globalization and all the changes it involves. Those changes can be considered at different geopolitical levels. Indeed, globalization does not have the same influence on economic growth in every country. It often depends on the geographical situation and its economic and political system.
Some studies show that Globalization leads to a virtuous economic circle that lifts countries out of poverty. The economic globalization includes two essential benefits. The first one is an access to a large range of goods available for consumers at a low price that was allowed by the reducing of international trade barriers such as tariffs, export fees or import quotas. This abundance of goods is the fundamental point of the consuming society, and that very type of society was the leading of the industrial development and so an increase of incomes that turned their economy into a higher growth. The second benefit of globalization refers to the owners of capital who get better output of their capital, due to the larger market potential and so the larger possibilities that involve Globalization.
With the development of a common international market, came along international competitors. That fact drove the country’s industries to change their system to be more competitive. Therefore they got into the phenomenon of specialization. This change made the countries focusing on the products where they have the best comparative advantage. Then countries would buy and sell the best products of each other which led to a harmonization of the market which affects positively the economic growth of each rich country.
Globalization gives another opportunity (for the developed countries): the Brain Drain effect. As a matter of fact, the better carrier opportunities and working conditions in those countries attract skilled worker from the poor countries who work for lower wages. This phenomenon satisfies the constant need of skilled worker that allows the company to make saving on the base of their wage and the concentration of “Brains” ensure to the richer countries a faster development which benefits to their economy.
On another hand, Globalization has also bad sides and can effect economic growth in a bad way. Some studies tend to say that the benefits of Globalization are overstated and its costs underestimated.
The first problem that everybody agreed on is the problem of unequal distribution of the incomes that Globalization creates. At a national level as well as an international level. At a national level, the great international companies with world wide power and relations take advantage over the small companies which have only the potential for a local market. With the economy of scales, the great companies reduce the price of their products and the local companies cannot compete with it. Therefore, those great companies take a large part of the incomes from the economic growth due to the Globalization and let few incomes to the local ones. At an international level, some countries take more advantage of the Globalization than others, especially the rich countries. For the countries which have comparative advantage of production less interesting than their competitors, the Globalization’s costs are higher than the benefits. Moreover, the fact that some foreign companies are leading the market in their country does not help their own industry and company to develop.
The poorest countries are widely put aside of the globalization process. Indeed, this require stable institutions, respect of private property rights, no corruption and a certain level of human development (health, education) which are missing in most of those countries.
Another problem caused by the Globalization, is the outsourcing industries, especially for rich countries. The increasing national and international competition pushes companies to outsource their factories in developing countries, with cheaper manpower, in order to decrease their productive cost and be more competitive. But in the same time this means that there is a shortage of jobs in this very industrial sector, due to the outsourcing. This signifies less income and more unemployed for the country, then a bad effect on the economic growth.
Lastly, as the Brain Drain effect can be considered as a good point of the Globalization by the countries which receive them, it is a very serious problem for those from where they emigrate. The “Brains” could have helped those countries to develop and make the economy more efficient. So it is obviously that this has a bad influence on the economic growth.
To conclude the topic, the influence of Globalization is to be put in perspective. We can observe that Globalization has a good influence on economic growth, in a way that it pushes countries to be more competitive and so to develop themselves as a consuming society and specialized industries. It is the base of a market economy. Globalization has also bad influence on economic growth as it drives countries to a bad repartition of incomes and wealth as well as outsourcing creates unemployment.
(2110.) As I understand, globalization is the process of global political, cultural and economical integration and unification. The globalization of the economy is a very complex and contradictory process. On the one hand, it facilitates the economic interaction between different countries, creates the conditions for access to the best achievements of mankind, helps to save resources and stimulates the progress of the whole world. On the other hand, there are some negative effects of globalization such as: consolidation of the peripheral model of the economy, the loss of their resources by countries outside the “golden billion,” the destruction of small businesses, the spread of globalization of competitors on the weak country’s markets, declining living standards, etc. So I think that the main challenge which international community need to face is to make the benefits of globalization accessible to the maximum number of countries.
The main engine of economical globalization are the companies , or rather the desire of this companies to maximize their profits by way of the intensive development (introducing new technologies, improving the final product or service), or extensive development (quantitatively increasing the production of products, services simply by entering new markets or industries, in the deployment of where production costs are minimal). One of the main manifestations of economical globalization is the free movement of capital into the country in which capital in the format of investments will work in the most effective way.
So as we can understand processes of globalization in the world economy are perceived and evaluated differently. Developed countries are very happy with a globalization processes, but from the other hand all this globalization process cause serious apprehensions in the developing parts of the world. I want to start with a positive sight and effects of the globalization:
* Increased production of high quality goods (huge economic growth);
* Increased consumer’s demand (growth in income and job creation) to them witheffective overflow of capital;
* Received the full development of road and air transport, tourism and migration;
* Formed a broad infrastructure of computer connections;
* There was a “green revolution” in agriculture.
Second part, less pleasant, than a first is a negative consequences of globalization:
* Evaluation of developed countries the standard of living of low-skilled specialists drastically reduced;
* Unemployment is rising in developed country markets, as production moves offshore;
* Over-industrialization of the bad influence on global climate;
* Leveling of life leads to cultural devastation;
* The gap between rich and poor (not just in people case, countries too);
* MNC operations have a negative impact on the macroeconomic policies of individual countries;
* Is the erosion of national borders and the growth of ethnic conflicts;
* Exacerbated the problem of external debt and economic dependency;
* MNC monopoly means lower efficiency.
In order to maintain its competitive position and enhance them, industrialized countries are restructuring their economic system to create favorable conditions for entrepreneurship, attract foreign investment and active capital accumulation expanded their economic systems.
Thus, the industrial countries in terms of economical globalization speed with the development of business transition to a post-industrial economy.
Post-industrial countries contribute to the development of entrepreneurship to maintain a competitive state of their economies under the influence of economical globalization on the world’s market.
It can be concluded that the economical globalization contributes to the development of entrepreneurship in the community of countries with industrial and postindustrial economies, using the trend of active competition in the global economy and the development of an economic system with the introduction of STP products and active implementation of human capital.
So, to sum all this information up, briefly note the following. Globalization – the process of global economic, political and cultural integration and unification.
The globalization of world economy include: involvement in global economic processes of almost all countries of the world; creation of inclusive markets for goods and factors of production; creation of a global infrastructure of world economic relations; recognition of all the countries of market economy principles as the most effective form of economic development; universalization of the rules of economic life and international economic relations, establishment of an international legal framework of foreign economic cooperation in the global economy; the emergence of international production, based on the consumer anywhere in the world atstandard national industrial country
the global nature of international competition; convergence of the sectoral structure of economies of different countries. The main consequence of this is the global division of labor, migration across the planet’s capital, human and production resources, the standardization of legislation, economic and technological processes, as well as the convergence and merging of cultures of different countries. This is an objective process that is systemic, that is, covers all aspects of society. As a result of globalization, the world becomes more connected and more dependent on all its subjects. Occurs as an increase in the number of common groups of problems and expanding the number and types of integrating subjects. Globalization is an inevitable phenomenon, and therefore need a more humane course of it, giving the global economy a human face, more attention to social and environmental issues, monitoring the activities of the GOC, etc.
(2109.) Main features of contemporary globalization
Probably every modern person who reads newspapers, watches TV and uses the Internet knows that we live in the era of total globalization and all processes in the world occur under its influence.
Globalization is a many-sided phenomenon which includes the association of the countries and peoples, the emergence of a unified economic and informational space, an intensive exchange of knowledge and technology, the establishment of new cultural values.
So, it is possible to identify the main features of modern globalization like increases of world trade, intensification of capital movements, population’s migration and development of new technologies.
International trade and capital flows are the main elements of the economic globalization. Growth of world trade’s volume associated, first of all, with technological advances that have lowered the costs of transportation, communication etc. In the modern world we can see a tendency of free trading promotion instead of protectionism policy. If we speak about capital we have to admit this liberalization tendency on the market: a lot of countries are refusing to protect national manufacturers from foreign competition or influence outside. Movement of capital provides continuity of production process and its expansion, restructuring the world’s economy due to flow capital from less profitable to more profitable sectors and industries. Also increases the size of capital accumulation.
For different countries, which take part in this process there are some benefits like larger markets for producers, for national economics it means competition that gives better quality of products (manufacturers produce more efficiently due to foreign competition and consumers get bigger number of different goods at lower prices). Also these countries get benefits from the new technologies and they getting a lot of experience from their partners. It helps to implement new equipment very quickly, to reduce production costs and to reduce the price of the product.
On the other hand, it is a big risk for national manufacturers due to serious competition on the international market. So, many countries successfully use increasing in world trade to improve their prosperity.
Another feature of globalization is dissemination of new technologies. This scientific research results, especially in the field of information and communication technologies, have had the effect of connecting and bringing the world closer together in time and space, making possible new ways of doing business and profoundly altering social interactions.
Never before has it been possible to exchange information so fast, in several minutes or even seconds all over the world. Cyber-space communication through e-mail and the World Wide Web is a daily experience in the industrialized, technologically developed part of the world. But this possibility has developed countries, but, for example, in many African countries people cannot use these technologies, because it is the poorest countries in the world.
Despite these asymmetries in relation to access to technology, most of us are influenced by the instant communication flows that shape information and global media. This process brings very important changes in consciousness.
As a result of greater access to markets, new technologies and new ways of doing business, many aspects of globalization have stimulated growth and prosperity and expanded possibilities for millions of people all over the world.
Last time geographical borders between countries became more conventional. This is stimulates migration processes around the world and especially labor migration. The interdependence between more developed and less developed countries is realized through the mechanism of international labor migration.
The essence of the migration interdependence is that at the present stage of the world development international labor migration is a factor that fundamentally changes the relationship between the more developed countries (importers of labor) and less developed (exporters of labor). Redistribution of resources for development take place through the mechanism of international migration, without which neither the one nor the other group of countries cannot exist. These countries (a group of countries) are in a relationship of mutual dependence, pushing them to seek partnership forms of interaction and strengthen integration with each other.
From the less-developed countries, this dependence is determined by the possibility of access to labor markets of other countries. This feature not only reduces unemployment in the national labor markets, but also provides additional resources in the form of cash transfers of emigrants.
From the more developed countries, this dependence is determined as a participation in the international migration which is caused by current trends of demographic development and which is expressed in the principle of quantitative and qualitative changes in the population. This occurred transformation in the labor markets of developed countries make the presence of foreign workers as an important part of their economic development. In addition, the flow-in of foreign labor is a factor of inflation control and improvement of the competitiveness of enterprises and other branches in developed countries. Mutual deficiency of production factors takes place through the mechanism of international labor migration.
The process of globalization has important cultural consequences for people. For the first time in history form a real global culture, although this process is far from completion, and is ambiguous, contradictory valuation.
Now we see a big influence of American culture on the whole world with the help of fashion in clothes, movies, food etc.
Globalization also includes multiculturalism. People in a local place from various cultural and religious backgrounds live next to each other as neighbors. Cultures are seen as monolithic and static, living side by side on an equal footing and with mutual respect. Reality is much more complex and asymmetrical. Many neighborhoods are segregated along cultural, ethnic or religious lines, which in practice often entail economic inequalities.
In conclusion, globalization is a many-sided phenomenon which includes the association of the countries and peoples, the emergence of a unified economic and informational space, an intensive exchange of knowledge and technology, the establishment of new cultural values. In this essay, I have argued that contemporary globalization is mainly expressed through the global flow of labor and ideas in economic sphere. Also it has an influenced on every aspect of our life and it is extremely important to contextualize the changes because the main characteristics of globalization have always been occurring throughout history.
References
Проскурин, С. Глобализация как фактор поляризации современного мира / С. Проскурин // Соц.-гуманитар. знание. − 2001. − № 4. − С. 41-65.
(2108.) Globalization and its influence on economic growth
Globalization is a multifaceted process that consists of liberalization, integration and interdependence of countries. It has social, political and cultural dimensions. Many people argue whether it is a good or a bad thing that the world is becoming more and more integrated but what is certain is that it has more positive than negative effects when managed properly. It is often argued that it has helped to decrease poverty around the world, increased the GDP growth of countries and narrowed the gap between the rich and the poor. As Professor Grzegorz Kolodko well describes it in his book “Truth, Errors, and Lies: Politics and Economics in a Volatile World” (2011, p.82) it is a process with many faces: “Like all the great processes of complex economic transformations in human history so far, it will solve some problems while creating others. When the number of problems being created exceeds the number of problems solved, the process breaks down, the economy collapses, and the system fades away. The same thing will happen to globalization someday.” The truth is that there have been many economic processes in history and what will happen with this process is yet to be seen since it is still incomplete.
Many economists share the viewpoint that globalization has significantly boosted the economic growth of various economies. Especially East Asian economies have profited greatly from trading with other countries. For example, it has definitely affected positively the economies of India and China which used to rely more on their own domestic markets and later on started to trade more with other countries. The globalization process of these countries can be seen in their growing GDP per capita (%). For India the GDP growth per capita was 4.3% in 1980 but in year 2010 7.3% and as for China the stats were 6.5% (1980) and 9.8% (2010).* However, not all developing countries have been able to benefit from the globalization as much because they have not been as engaged in it. The countries located in the Sub-Saharan Africa region are a good example of this. Actually, the share of these countries in world trade has been continuing to drop since the late 60s.
One of the main benefits of trading with other countries is that there is a bigger demand for specific products in the global markets and if a company has access to these markets it also has access to more customers. In addition, a company can benefit from the international division of labor as well as from the need to face competition in international markets. If a domestic company has an international specialization and the pressure coming from foreign competition it means that it usually produces more efficiently. This also benefits the customers: they have a bigger amount of different domestic and imported products with cheaper prices to choose from.
Countries that trade actively also benefit because this is a way for them to learn about new technologies and they can use this knowledge to create their own products with similar innovations. This is especially important for developing countries because in terms of productivity they have an opportunity to catch up more rapidly with the developed countries. Exchanging of these new technologies also boosts the economic growth of a country because technological improvements and accessibility affects the GDP growth positively.
Globalization can affect the economic growth of a country through the principle of comparative advantage and through increased specialization but it can also have bad effects on the economy. For example, actively trading countries can face many risks because of fierce competition from abroad, and this kind of competition can force the not-so-well-performing domestic companies to go bankrupt.
Governments of developing countries sometimes reduce selected imports by putting quotas, or make imports less competitive and more expensive by implementing tariffs. This is because they claim that these actions would protect their own domestic companies. These kinds of protectionist policies can become economically dangerous since they allow the domestic companies to continue producing less efficiently. This might eventually lead to economic stagnation. Thus, I think that protectionist policies should never be implemented without a thorough consideration of an option of simply increasing the international competitiveness.
Globalization can also result in that the workforce of a one country moves into another country for example from the poor countries to the rich ones with hopes of a better standard of living and this can cause problems because less workforce can drop the GDP growth of a country. Also, this can change the employment structure of the richer country because the newly moved people are taking the jobs of the original people and this can cause riots. Though, as Kolodko explains in his book, the real wages in rich countries have grown rapidly and the standard of living is continuing to grow thanks to globalization.
In addition, the benefits of global trade on a country’s economic growth depend on the size of the country’s domestic market, the location of the country and its natural resource endowment. This is why countries that have big domestic markets usually trade less than countries with smaller domestic markets. They just do not need to trade as much if the domestic demand is big.
I think that globalization is a complex process. It is something that is hard to avoid and economic globalization is something that can profit many countries including the ones that are still undeveloped as can be seen from the charts already presented. Though globalization can have some negative influences, increasing foreign trade has mostly accelerated the economic growth of countries. An important thing is to manage the globalization process -how fast it proceeds based on the country in question and what policies are made in order to reduce its unfavorable economic and social side effects to the specific country. The government plays a huge role in this matter; how well the country benefits from the process relies on how well the government manages it.
As Jagdish Bhagwati, an economist and professor of Economics and Law at Columbia University, shows in his book “In Defense of Globalization” (2004), the reason why South East Asia experienced its financial crisis in 1997 was not free trade but poor public policy outlook of the governments. In this book he also argues that it is dangerous to allow unrestricted capital flows into countries with undeveloped financial structures. I have similar thoughts with Jagdish Bhagwati that countries should open their borders to allow free trade but it is also important that they simultaneously try to solve the problems of their own domestic economies. As he explains: “I have always argued for freer trade, not as an objective but rather (in the context of poor nations such as India, from where I come) as an often powerful weapon in the arsenal of policies that we can deploy to fight poverty”. I think Bhagwati has many good views on globalization because he is in favor of it since he believes that it would help the undeveloped countries but at the same time he is concerned how some of the poorest countries will cope with it.
Professor Grzegorz Kolodko describes globalization in his book “Truth, Errors, and Lies: Politics and Economics in a Volatile World” (2011, p.83) as follows: “…globalization is a historical and spontaneous process of liberalization, along with the accompanying, systematic integration into a single, independent global market in goods, capital, technology, information, and – belatedly and on a smaller scale – labor, which previously constituted markets that were isolated or bound by loose functional ties.”
What both Bhagwati and Kolodko argue is that globalization is spontaneous and it must be managed in order to profit from it. I share this view and I think that governments should be prepared to manage crises that result from globalization in order for it not to effect the economic growth negatively.
Kolodko also argues in his already mentioned book (p.95): “The liberalization and deregulation of those markets (financial markets), followed by the integration resulting from the convertibility of national currencies and the information revolution, lead to a chain reaction.” I share this view as well. The interdependence of the world market resulting from globalization might cause a chain effect: if there is a crisis somewhere in the world it is likely to affect the other country elsewhere, and this chain effect is something that has to be managed because it might affect the GDP growth of a country which likely cause many problems.
* http://data.worldbank.org/indicator/NY.GDP.PCAP.KD.ZG
(2107.) 4. Regional integration versus globalization: contradiction or synergy?
Newspapers and politicians speak about globalization every day, and in our Western countries, it is unclear if it is a good or a bad thing. Nonetheless, nobody says that we backed this process by encouraging free-trade and liberalization through institutions like the WTO (World Trade Organization) or the IMF (International Monetary Fund), and the development of free-trade organized area like the European Union or the Mercosur.
The globalization describe here is the contemporary sense of this word. So it is, according to the definition of Grzegorz Kolodko, “a historical and spontaneous process of liberalization, along with the accompanying, systematic integration into a single, interdependent global market in goods, capital, technology, information, and – belatedly and on smaller scale – labor.”
In relation to this definition, we can ask: is the regional integration thanks to free-trade area a part of the globalization, or a contradiction with it?
For answer we will define these organized areas, and then try to find which links exist between them and the globalization.
The main economist to describe regional integration has been the Hungarian Bela Balassa. He explained that four stages of integration exist:
_ the free trade area, with trading agreement (without or decrease of trade barriers)
_ the customs union, which is a free trade area with a common external tariff
_ the common market, a custom union plus free circulation of capital and labor
_ the economic union, which add a common economic policy
We also can add the economic and monetary union (with a common currency and eventually fiscal system), and the complete economic integration as a process totally achieve, as it is in a single country (for example between the states of the United States of America).
According to this definition, we can see that different organization exist. For example the European Union is an economic and monetary union, with the Euro as a common currency, but without a real common fiscal system. It is one of the most achieve regional integration, which allow the development of this territory thanks to the common market and common economic policies, especially the southern part in the 80’s and 90’s, and the central and east part since the integration process of 2004.
The North American Free Trade Agreement (NAFTA), is an organization which include the United States of America, Canada, and Mexico. Create in 1994, it is a free trade area established in order to promote free-trade in North America. It allowed reinforcing the economic link between these countries, but also the political links because of the increasing economic exchange in the area. Mexico improved its economic structure thanks to NAFTA, competing with American and Canadian, especially attracting direct investments from the United States along its border with this country, in the well known “maquiladoras” (plants on Mexican territory producing goods design to the United States).
The Mercosur is another organization in the Americas, but in Latin America. It has been founded in 1991 by an agreement among Argentina, Brazil, Paraguay, and Uruguay, plus Venezuela since 2006. Bolivia, Chile, Colombia, Ecuador, and Peru are also associate members. The Mercosur is a customs union, with a free-trade agreement of goods, services, and – partially – capital, with a common external tariff and trade policies. The member states also did some adjustments to their laws to strengthen the integration process and are engaged in the process to enter in a common market, allowing the free movement of manpower and capital across the area. The organization is also engaged in the integration of all the countries of Latina America, through the Union of South American Nations. This Union plans a progressive integration into a political and economic union (following the example of the European Union), from a merger of Mercosur with the Andean Community (Colombia, Ecuador, Peru, and Bolivia), and the integration of Chile, Guyana, and Suriname.
All these organizations allow countries to meet growth thanks to the competition between states, enforcing competitiveness, and the exchanges between them, allowing them to export some goods and import some others not produce locally. Thus countries which take part of this kind of organization meet an increase of welfare among their population. For example as members of the Mercosur, Brazil and Argentina strengthened their commercial relations and curbed their exchange currency, allowing them to develop their economy and increase the standard of living of their population.
The integration in an economic regional area is also a way to find its place in the globalization. It could be a practice in order to develop competitive advantages and to be able to export into the area of which the country is member. And after that, to come to the world market, help by the experience of the regional trade.
Moreover, it could be a solution to countries to protect themselves from other countries which have not the same rules to respect, for example for condition of work, taxes because of social security, or ecological regulation (as carbon emission quota). Thereby they can trade between countries with the same rules, and establish a common policy to others countries.
But a risk of these agreements between countries is the protectionism and the withdrawal of the world market to trade only in the area. It is why it is important that international organizations as the WTO to be careful about these issues and force them to cooperate on the world market to avoid the creation of enemy blocks of countries.
So the economic regional integration is a reality for a lot of countries around the world, and it seems that it tends to go more and more into the common market stage. It well responds to a need to protect a region from the globalization, or at least for countries a way to reinforce their competitive advantages before to compete on the world market. Indeed, the globalization lacks of rules in order to regulate the market, and then all countries have not to follow the same laws, which is unfair.
(2106.) Main features of contemporary globalization
One might say that contemporary globalization, is an important characteristic or parameter within the nowadays economic environment. It has undoubtedly provided a significant stimulus, for participating economies, to economic growth. A term globalization relates to the process of strengthening integration between the various countries and economies and the increased impact of international effect on all aspects of life and economic activity.
The pursuit of globalization has led to greater economic growth on a global scale, through the opening up of barriers to international trade, yet this increase in world output is very often associated with adverse effects in relation to the stability of a national economy, being susceptible or sensitive to the rise and falls of the international business cycle and also both positive and negative effects on the common standards of living or quality of nowadays life with in a country or nation.
So we can say that the main features of contemporary globalization are first of all the rapid growth of international trading. Today, nothing stands still, the various companies are trying to outdo the others, to expand their businesses, improve their profits, income, to try yourself on a new international market, to become recognizable around the world, to win their place in the world market. Second, the internationalization of production and services of big companies, now we easily can get almost any product, from any continent of the world. Lots of companies became international, global and well-known between countries and people. There are many different big businesses and companies which has franchiser around the world. That’s why humanity can share their achievements, products and innovations with the world and its definitely very important if we want our planet to grow and evolve. Also we can’t forget about the growing importance of the multinational corporations, all of them don’t have to stand at one point, it is becoming more and more important for them to grow, because now humanity really need their products, development. And refuse them and their products no one can nowadays. We became so used to using them that we can’t even imagine life without them, without all this discoveries and findings they made. An increase in the capital transfer through national borders. People are allowed to travel, but only with following the rules and laws of the countries they visiting. The boundaries. The globalization of technology. Companies using different technologies for developing, building and producing their products. The generation and transmission of technological knowledge is transformed by globalisation.
Also there always are some changes in manufacturing between countries, relationships are changing, some times in a bad way, some times in good.
Big role plays the increasing of the freedom and opportunity and firm to conduct business transactions on the national level. The fuse of domestic markets is really important feature, because its important to protect and collect information, money, power and so on. About the economic integration we can say that the process of development of stable relationships of neighboring countries, leading to their gradual economic merger, based on the conduct of the two countries agreed interstate economy and politics is important for countries if they want to grow.
But also we can’t forget about the global economic interdependence, it is important to cooperate with another countries, and have equal value for things and products. Also shift production to the international form (trans nationalization) and accelerated movement of factors of production and finished products within the global economic space. The orientation of the economies of most states on common standards. The emergence of supranational governing structures of international information systems, standards and so on. Many countries all over the world have the same rules and laws, but some of them still have some differences and features. The interpenetration of different forms of capitals and countries, including through the intensification of international mergers and acquisitions. Like the case with Europe Union. The elimination or weakening of the institutional barriers to international economic exchange. Countries leaders signing agreements between each other for cooperation.
The result is that first of all, the output of national economic actors beyond the national and state associations. Secondly, the transfer of their domestic economic problems at the global level, the growing influence on other states, increased integration with them, becoming a part of the global economic system. Thirdly, the emergence of the need for planetary economic policy coordination of individual states as a condition for stabilization of the international economic system, timing of development of its individual elements.
At the same time, nation-states did not die and are not canceled in favor of the international (the idea of global capitalism is not feasible), but only limited in their capabilities, especially those with weak economies. They are included in the process of global economic conditions on the submission requirements of Multinational companies of the major and powerful enterprises, companies or businesses and their associations.
The processes of globalization in the world economy are perceived and evaluated differently. The globalization processes in the developed world are welcome, and cause serious apprehensions in the developing world.
(2105.) Below is an essay on the topic Regional integration versus globalization: contradiction or synergy? for the class Globalization, Transformation, and Development :
It is difficult for economist and scholars to define regional integration and globalization. There is a huge conflict as to whether integration and globalization are terms that are paired well together or contradictory. On one side, the basis of globalization is “the wish to create a world free of barriers-especially of economic ones” but on the other hand, desiring “to cooperate with neighboring countries” (Janowski) which is regional integration.
It is important to define these terms and firstly examine both of them separately. As professor Kolodko mentions in his book, Truth, Errors, and Lies Politics and Economics in a Volatile Word, Integration is “the process of combining various fragmentary markets in goods, capital, and on a smaller scale, labor, into one large market”(86). He begins to develop the definition more by saying “it also has to do with supporting this process by developing appropriate market rules for the economic game” (86). From this integration, there have been many groups forming such as the World Trade Organization and the International Labor Organization so that they can create policies internationally.
Since the late 70’s there has been a lot of internationalization of trade dealings. This phenomenon slowly evolved into what everyone knows as globalization. Kolodko explains in the book, Truth, Errors, and Lies Politics and Economics in a Volatile Word that “in the economical dimension, globalization means the spread of the capitalist system over increasingly large areas of the globe” (98).
At first glance, it is easy to say that these two things can be functioning together in the world. One of the main similarities of the two is that regional integration consists of removing barriers to free trade in the region by reaching agreements, and economic globalization is the same idea, without the addition of international trade regulations that restrain global trading.
Even though globalization has helped decrease poverty in some countries, it has its advantages and disadvantages. One of the main problems in globalization is that there is an inequality growing throughout the world when it comes to the developed and underdeveloped nations. This is most likely due to restrictions and regulations which prohibit international trade. So in this way, one may see that regional integration and globalization cannot coexist. This one observation cannot be the only proof because according to an article, Kolodko mentions that the “Processes of regional integration are neither a contradiction nor a brake on globalization efforts, yet merely the vehicle by which one may attribute a progressive nature to this epoch-making movement”(Kolodko).
An easy example to follow from Kolodko book, Truth, Errors, and Lies Politics and Economics in a Volatile Word, explains the advantage of globalization. He explains that instead of sending a product from a manufacturing plant, whether it is cars or furniture, through globalization, countries would develop a manufacturing plant in that region. In this way, globalization can become a positive aspect in regards to the economy. In Kolodkos words, “Globalization does not eliminate competition; instead it sharpens and changes it”(87). He explains that there are more competitors looking for something bigger, and in most cases politicians are looking at national interests.
It is hard to differentiate between regional integration and globalization. Kolodko explains in his book, Truth, Errors, and Lies Politics and Economics in a Volatile Word, that “we should remember that the progress of economic integration as a constituent part of globalization is nothing more nor less than the coming together of markets as a result of their opening, the raising of political and economic barriers, the introduction of convertible currencies, and the lowering of the costs of transport and communication”(89). In this excerpt, he mentions that it is important to create integrated international institutions. An example of this would be the European Union, or also more specifically the Euro zone countries.
There are a few advantages to regional integration. A region with more integration means that there is a larger market, meaning lower transaction costs, and countries are better able to predict the amount of manufacturing and the amount of trade between these regions. Kolodko mentions that “where there is more integration, there is more prosperity” (91). Exchange rates also affect countries that are not regionally integrated because they have to worry about the costs if the monetary value goes up or down.
Looking back at a historical viewpoint of the two worlds Kolodko explains that “in the decades after World War II in terms of liberalization, openness, deregulation, cooperation, or integration, it was not globalization”(100). This was because most of the population was not following this development process. It would be otherwise, if all of the countries including that of the third world countries were taking part in the transformation.
In order for successful globalization, all of the nations have to be economically equal, have the same currency, have the same economic growth, with the most powerful economic countries moderating their economic growth and the poor ones speeding up to their level. It may be possible that only then, it would be fair for regional integration that would not hurt anyone. It is also mentioned in Kolodkos book when he says, “An effort should be made to limit the number of national currencies and support efforts to create more common currency zones, not only as instruments of regional integration, but also stepping stones to a world currency…”(352).
In our present day world, with various economies, some growing more rapidly than others, it is hard for regional integration and globalization to interact. For now, since it is quite difficult for nations to be of equal economic growth, politicians and policy makers should focus on regional integration though organizations and associations and adjust during changes of globalization.
Works Cited:
Kołodko, Grzegorz W., and William R. Brand. Truth, Errors, and Lies: Politics and Economics in a Volatile World. New York: Columbia UP, 2011. Print.
Kolodko, Grzegorz W. Globalization and Social Stress. New York: Nova Science, 2005. Print.
Kolodko, Grzegorz. “The Warsaw Initiative.” http://Www.diplomacist.org. 4 May 2011. Web. 21 Apr. 2012. .
“Program on America and the Global Economy.” Book Discussion: Truth, Errors, and Lies: Politics and Economics in a Volatile World. John Coit, 1 Feb. 2011. Web. 21 Apr. 2012. .
Akira, Kudo. “A Note on Globalization and Regional Integration.” 4 Nov. 2000. Web. 21 Apr. 2012. .
“Managing Globalization in Uzbekistan.” Web. 21 Apr. 2012. .
Janowski, Cordula. “Globalization, Regional Integration and the EU.” Web. 21 Apr. 2012. http://aei.pitt.edu/7086/1/dp_c162Janowski.pdf
(2104.) Main Features of Contemporary Globalization
Through this paper, the progress of the word ‘globalization’ will be shown. The globalization has been extremely vital to the global economic growth in the past until the very present. The changes in the meaning of the word and the maturity of its existence have been effected through various events that are in our history books.
Initially, in order to look at the evolution of the word, we must first know its meaning. Globalization maybe defined in many ways and may have a different understanding to individuals personally. It has a vast understanding in the economic growth and its impact focuses on the inter-relations between nations.
“The development of an increasingly integrated global economy marked especially by free trade, free flow of capital, and the tapping of cheaper foreign labor markets” – Merriam-Webster Dictionary.
The above definition of globalization covers the theory of the concept through its initial steps. However, contemporary globalization has taken a huge leap into a more sophisticated idea of connecting various nations to one global economy.
According to Gregorsz W. Kołodko (Truth, Errors and Lies: Politics and Economics in a Volatile World) contemporary globalization has evolved after two stages of Globalization. In his book, Kolodko mentions about how ‘globalization’ has described events in history from the era of the conquest of the great empires through to the transition from capitalism to socialism.
As said above, globalization can be described in many ways and may differ from person to person. Kolodko had described globalization in a very interesting way, showing a universal perception of the word. “In our lifetime, it is without a doubt the most popular term to describe the broadest, worldwide dimension of a rapidly changing reality – not only economic, but also cultural, social and political.” (Kolodko, page 79)
As Kolodko mentioned in his book, “The English word globalization was probably used for the first time in The Economist as long ago as 1959, and it was already in the 1961 Webster’s Dictionary,” the concept behind it existed much before during the first phase of the theory as he explained.
Globalization occurred in the fifteenth and sixteenth centuries. This form of globalization was referred to as the “era of great geographical discoveries” (Kolodko, page 99). Globalization at this time was conquering of geographic locations by the more powerful empires. Even though this was not the term used for the events past, the process of empires taking over geographical lands in search of resources could be integrated within the present definition of globalization.
Kolodko defined the second stage of globalization as the “era of great scientific-technological discoveries and applications” (Kolodko, page 99). This phase of globalization included the features of international trade and the flow of capital through international borders.
During this phase globalization has been the term for the integration of government connections adjusting to an international platform. According to Kołodko, capitalist countries, after World War 2, faced a transition of liberalization, openness, deregulation, cooperation or integration. This at the time was the concept of globalization that connected the capitalist countries to the rest of the World. As much as this had come to be known as the definition of the word globalization, the theory has taken a much more elevated meaning of the word.
Contemporary globalization, similar to the previous two stages in some way,has developed new features. The new concept was based on a higher substantial process that was above the time of liberation of colonies, and the even more dynamic transition of the post-socialist countries. The new concept was defined by Kolodko as the “era of the great digital revolution” (Kolodko page 101). Contemporary globalization has created original characteristics as to the previous stages, however, it has also continued the scientific- technological revolution.
According to Kolodko in terms of contemporary globalization, there are six fundamental characteristics.
The first of these characteristics is that “world trade is growing nearly twice as fast as world output”(101). This shows that countries have greatly increased their trading between each other rather than relying mainly on their own production.
The second characteristic that Kolodko mentions is “global capital transfers increasing at a faster rate.“(101). What this means is that people are investing more money in different places in the world in order to achieve lower costs and as well as maximizing their sales according to the geographical location.
The third characteristic mentioned is how “the streams of migrating people are growing and escaping from the control of nation-states”(101). People are moving to different nations in search of better life opportunities.
The fourth characteristic states, “new technologies is spreading exceptionally quickly, changing the way we do business and creating new types of interdependence on a worldwide scale”(101). Recently, technology has development so rapidly that a person’s everyday activities has completely changed to what it used to be. Through contemporary globalization, sharing of the developed technology has changed a lot of country’s way of living to a more common society.
The fifth characteristic of contemporary globalization as stated by Kolodko is, “the post-socialist system transfer has picked up speed, bringing as many as 1.8 billion people from thirty-five countries into the unrestricted world economy” (101). This goes back to previous stage of globalization that was describe by Kolodko.
The last characteristic mentioned by Kolodko is, “Multidirectional cultural changes, involving the interpenetration of a wide range of values, are underway” (101).
Contemporary globalization can be summarized by the above six characteristics. The new theory of globalization presented by Kolodko in his book, doesn’t only show that countries are expanding their borders or resources and exchanging goods and services. Contemporary globalization includes far more as in sharing and bringing together the globe into a more common society where there is a sharing of culture, technology and social interests.
Sources:
Kolodko, Grzegorz W. “Chapter 4 – Globalization – and Then What?” Truth, Errors, and Lies: Politics and Economics in a Volatile World. New York: Columbia UP, 2011. 78-127.
“Globalization.” Merriam-Webster. Merriam-Webster. Web. 21 Apr. 2012. .
(2103.) 12 Great Issues of the Future
1. The rate and limits of economic growth
Basically, the world’s economic growth was very fast for a last couple decades ( I was considering economic growth like an increase in gross domestic products). To my mind nowadays countries in different degree suppose to slow down. Of course countries in Africa are a big problem nowadays. How Africa with so high birth rate with a possibility to see how other countries are living will be staying there? So probably they need to grow much faster because they are the poorest.
2. The evolution of values and their cultural implications for development processes.
Every country has its own culture. Now, more and more people are obligated to explore the ‘abroad’ countries in order to achieve success. They are making partnerships with companies in foreign countries. So the lines/barriers between countries are becoming more and more invisible. If it will be a possibility to decrease amount of conflicts I think that situation will positively develop.
3. The institutionalization of globalization versus the growing chaos and lack of coordination.
I think the main point here is that institutionalization of globalization will help us to analyze the global situation (stop increase of chaos) in more details and coordinate in a closer way.
4. Regional integration and the way it meshes with globalization.
We can see the example of integration of neighborhood countries into groups by looking in EU. It is the example of good coordinated and effective operating union. Now the Shanghai Cooperation Organization will be also a good example. It includes countries like Russia, China, Kazakhstan and etc. So to my mind regional integration is a step forward to further globalization.
5. The position and role of nongovernmental organizations (NGOs).
NGO’s is operating in the areas where government or companies are not. It can be these areas: culture, education, health, environment protection, etc. So their role is to run their enterprises as good as it is possible. Their success will result in faster devilment.
6. The natural environment and competition over dwindling natural resources.
Now more and more talks are going around the topic natural resources. How to be more sustainable? Re-cycle, re-use. Petroleum is the biggest trouble segment today. Of course, because of big demand for raw materials the prices are continuously growing. Even during the crisis the price for the oil barrel grow from around 80$(2008) to around 140$. So somebody getting richer by selling this, but how much money is going to the future development? If we look in Russia example, we will find a lot of oligarchs there and we will still see that the level of life is very low. So are this people worries a lot about sustainable use of natural resources or they just aiming bigger profit? I think the question is easy to be answered.
As it was mentioned in the book, Truth, Errors and Lies, there are still some optimistic news are coming from Ghana and Brazil. So my personal opinion is that we will be able to find the way of controlling natural resources better than now and we will not run out of the resources in the next couple of centuries.
7. Demographic processes and human migration.
US predict that the population will be systematically grown. Even though that we are facing some positive news about population grow rate now. So it’s much slower now but it is still not going to be decreasing there (now – almost 7 bill. , expected 9 bill. in 2050 ) Of course, now there are places with enormous high birth rate. Actually four countries that are leaders are among 10 most poor countries. So this is leading for human migration.
Living in Belarus, I can say that citizens that getting more information about EU are more kindly to support Europe. They are migrating to the Europe in searching of better life.
8. Poverty, misery, and social inequality.
The places with a high poverty and misery rates are the least attractive places for the investors. We can’t close eyes to this problem now. The income inequality is also a big problem now. By analyzing the countries income rates we can see that countries with less inequality are developing much faster than the countries with a huge income gaps.
9. The knowledge – based economy and society.
Knowledge is the thing that can help us to come in the future in the right direction. However now it is still high level of uncertainty in the decision making. But nevertheless buy looking to the past we can avoid some ‘viruses’ that are waiting for us.
10. Scientific and technical progress.
Nowadays we face a very fast growing scientific and technological progress. If we look to the past we will see how much innovations we had during the last decades. However new technologies and new studies give us a lot of new questions. Let’s look in Large Hadron Collider (LHC). Now with a help of this huge Swiss machine scientists can get so much answers. That will lead to the further scientific development.
But such huge technological progress is subject of worries also now. How to manage with nuclear power plants, improved weapon with a huge radios of targeting?
11. The evolution of networks and its economic consequences.
The efficient way of using network will lead to the better further globalization. So evolution of networks will be going in the positive direction.
Big corporations can merge in order to expand their network and to win the competition. Then big companies that want to expand will be obligated to join these networks.
12. Conflicts and security, war and peace.
I think the main aim is to decrease amount of conflicts and avoid the wars. Nowadays the strength of the army depends on capitol and size of population.
(2102.) Globalization and its influence on economic growth
We live in high developing world, progress doesn’t live on the same place and forms its inherent part. Globalization, in turn, suppose formation really interdependent world, in which geographical boards of social, economic and cultural systems are blended; this is a process of national economics’ integration in one whole property and that’s why makes a great influence on economy in general and economic growth particularly.
Globalization – is a multi aspect occurrence that involves policy, law, culture and others spheres of society life-sustaining activity. But it should be noted, that economy makes the foundation of all globalization processes, projects it’s generate. Other spheres of public activity are more inactive, by theirs tempos and depth of impact they surrender to economy. It explains that way, globalization occurs definite barriers in the scope of policy, culture and social activity, which is hard to tide over in force of existence national sovereignty, traditions, mentality, moral values of nation and others factors. As economy is a fundamental of globalization, I would like to account globalizations influence on economic growth in this aspect more detail.
The main «engine» of economic globalization are the companies, but rather its desire to maximize their profits by way of intensive or extensive development .
Globalization, at the present stage of its development, became a catalyst for economic growth. The catalytic effect on the economic system is expressed in the accelerating of development, growth and qualitative improvement of system performance, increase the potential for economic growth due to greater mobility and the perception of innovation systems, globalization makes one of the main factors of economic growth and development. The positive impact of globalization on economic development can clearly traced in the global economy. Movement toward the establishment of integrated economy stimulates competition between companies at all levels, promotes de-monopolization of the market, development of existing and creation of new financial instruments. For example, instead of exporting cars, planes and other hard transported goods – is much easier to open a factory for assembling at the country of destination.
Is known, that for the quantitative measuring of economic growth is used the index of real GDP, expressed in current year’s prices. In order to increase this index, it is necessary to provide a stable tendency to raising the production of goods and services.
One of the most essential factors for the outputs growth, is the presence of natural resources, which are the basis of material production. Under the influence of globalization, economy more and more requires them, but their stock at the same time declines. Natural resources allocated very uneven over the earth, therefore, different countries are provided by them in varying degrees. This situation of resourcing disbalance is solved by using the tools of globalization. It creates the special network of commodity exchanges, through which, a country with an excess of resources can realize them to countries, which have the deficit of them for the further rational consumption of resources.
Contemporary globalization is particularly contributes to the restructuring of the labor market and labor resources. The difference in economic status between countries implies the presence of labor migration. The most highly exposed to migration high-skilled (scientists, engineers) and unskilled labor. Migration of unskilled workers tends to come from economically less developed countries to the advanced economic countries, or post-industrial economies. Employers in the developed countries hire low-skilled migrant workers, primarily due to the reduction production costs by the extremely low salaries. Another aspect of labor migration is the migration of highly skilled labor force. Preparation of highly skilled workforce is vital in today’s globalization, as a successful adaptation to the modern market performance of this type of workers, it has a qualitative impact on economic growth. For example, if a highly skilled worker, for whatever reasons can’t get a job in his country of residence, then perhaps in another country, in his experience and knowledge are needed more, and by migrating to this country, he can do more profit and impacts on economic development. It can be concluded that under the influence of economic globalization, is forming the global labor market with the redistribution of labor resources by country, which contributes to economic growth in specific countries and the world economy in general.
The most mobile factor of economic growth is the capital. Under the influence of globalization, it easily integrates into economies of other countries for the most profitable functioning, contributing to the greatest returns, for both investors and the consuming countries of capital. Capital movement at the international level promotes to international division of labor and economic growth in developing countries. It should be noted that a large concentration of capital at private persons and their desire for make a profit leads to the creation of various investment funds that contribute its more effective redistribution, and as a result – GDP’ raising.
Scientific and technical progress – is a strategic direct factor of economic growth. Appearance of STP products leads to the formation of international markets for the exchange of products of technological progress and the results of R&D they become more available to companies, which makes possible implementation them into their production and consequently GDP’ raising. It follows, the formation of the international market of STP’ products – is a direct impact of economic globalization, in particular, its catalytic effect. This way under the influence of economic globalization, STP’ products become more affordable and more popular in all areas of production to improve competitiveness and achieving sustainable economic growth.
Business activity inside the community – is the result of successful economic development in the competitive environment of economic globalization. For active business development are needful conditions, that will facilitate this. Currently, under the action of globalization – it’s a transition majority of countries from the industrial way of development to post-industrial. There is a tendency to reduction of using labor resources and implementing process’ automatization. This leads to intensive economic development and stable economic growth. In order to keep its competitive position and reinforce them, industrialized countries rebuild their economic system for creating an enabling conditions for business, attract foreign investment.
In conclusion, I would like to say, the catalytic effect of EG observed as the direct factor of economic growth in the form of impact on each factor separately, quality increasing its impact on economic growth and synergies direct factors of economic growth on each other. Based on fundamental impact of globalization on economic growth, economic globalization should be viewed as a direct factor of economic growth.
References
Tenyakov I.M. The quality of economic growth as a factor in national development: Abstract. Dis. … Candidate. Econ. Sciences. – Moscow, 2007. – 24 p.
Dyuvina N.V. Structural changes as a factor in the new economic growth: Abstract. Dis. … Candidate. Econ. Sciences. – Samara, 2008. – 25.
(2101.) 12 Great Issues of the Future
1. The rate and limits of economic growth
If you define economic growth as an increase of GDP it is impossible to keep the average global growth we have witnessed over the last 20 years. The world as a whole needs to slow down the growth to stay sustainable. The economic growth should not be decreased by the same rate everywhere. Africa needs to grow much faster than the rest of the world.
2. The evolution of values and their cultural implications for development processes.
Globalization has made close work ties across the globe possible. Across the global we have nations composed of entirely different cultures. We must be prepared to work in a global environment in the future. The challenge we are facing is to decrease conflicts and tension, and to increase tolerance. “The world is not going to become one big North America, but it is not going to become one big Bhutan either. It will be somewhere in the middle, between these two extremes.”
3. The institutionalization of globalization versus the growing chaos and lack of coordination.
It is of importance to institutionalize globalization as it will decrease chaos and the lack of coordination. There is no institution that has legislative powers on a global level. United Nation is the closest we come and acts like a global institution, but has no definite legislative powers. If we leave everything to spontaneous processes in emerging countries, then informal institutionalization such as organized crime and corrupt government will take over. Like what is happening in many governments in Africa.
4. Regional integration and the way it meshes with globalization.
The biggest and well established regional grouping is the EU. The Shanghai Cooperation Organization established in 2001. China, Russia, Kyrgyzstan, Kazakhstan, Tajikistan and Uzbekistan are the current members. India, Mongolia, Afghanistan and Iran are observers. All these members account for 40% of the human population. This is seen upon as an attempt to close the gap to the West and thus mesh with globalization. “The integration of neighboring countries into regional groupings will continue.”
5. The position and role of nongovernmental organizations.
Roles of NGOs include actions that profit-oriented businesses and governments are simply not interested in or good at. These organizations will inevitable meet challenges mostly in education and culture. But not only, also social welfare, environmental protection, health and preventive medicine will be a challenge in the future. NGOs will have a role of advising developing countries on how to run their enterprises, and they will do so better than highly paid advisers and emissaries from governments who care only about their own interests. NGOs should not be operating on the behalf of commercial and governmental entities, instead they got to stand alongside these entities as a third party. It is how the position of NGOs should look like from the global perspective.
6. The natural environment and competition over dwindling natural resources.
The environment is a great concern for the future. The challenge is to make the globe sustainable, so that our future generations can have a good use of it. The battle for natural resources is another area for concern. This century we will encounter “peak-oil”, which means that at some point the extraction will only fall. To provide the energy needs to human kind we have to look towards biofuel and renewable energy.
7. Demographic processes and human migration.
The overall rate of population growth is decrease, and that is good news for us. Especially in western Europe fewer children are born. However, we are still facing overpopulation because of countries with an enormous high birth rate; in addition these countries are also very poor. This results in migration to wealthier countries. The response to the challenges that migration poses to the globalized economy must be undertaken on comprehensive action by the richer part of the world community. They have to initiate economic growth in the poorer economies and create a broad cultural, institutional and political framework.
8. Poverty, misery, and social inequality
It is important to be aware of the consequences that inequality and poverty can lead to. Never has a revolution started in the name of inequality, however the risk is the injustice of excessive inequality. Many of the poor have allowed themselves to be misled. Many of them do not even know they are being oppressed. Classical economics suggest possibilities for reducing income inequality. This would occur as a result of free flow capital. We know that this theory failed the test. It turns out that the places where the need for capital is the greatest is also the place where nobody wants to invest. Without appropriate intervention on global scale we should not expect any significant change.
9. The knowledge – based economy and society
We have the knowledge about why certain events happened as they did, and in hindsight various events could have turned out differently. This will continue to be the case in the future. The future is is partly predetermined, and there is nothing we can do about it except to wait and take advantage of it. However a lot depends on our actions, which in turn are influenced on what we have learned from the past. To have a perspective on the economy and society we really need to understand history.
10. Scientific and technical progress.
We are facing rapid scientific and technological progress, which again grants us opportunities. Our challenges is to increase our energy and agriculture output. Sometimes third parties are blocking the use new technology due to lack of knowledge. Technology will force the desired cultural changes no less than politics, and the economy will benefit. Politics will interfere, spoiling things at times but encouraging development at other times.
11. The evolution of networks and its economic consequences
The evolving networks will help countries create strong relationships with each other. Information traded with the use communication channels can have a negative effect. There is a possibility of intercepting or manipulating information flow, thus ruining relations and affecting the economy.
12. Conflicts and security, war and peace
The BRIC countries have a rapid economic growth. Together with big populations they have a potentially huge army. Since after the cold war, the US has been the only superpower. But now China and Russia are increasing military spending, whilst US had to decrease. More powerhouses are emerging and it can have an effect on our peace situation, chances for war can be higher due to power struggles.
(2100.) The means and the ends of economic growth and socio economic development
For some people growth is seen as an end, and for others only human development can be an end for a country. In the first situation, the central mean is to increase the productivity, whereas in the second, the mean is to improve the people’s “capabilities”. Government can prefer fostering the one or the second one but some tools used reach the goal are relatively similar. So, to identify most of them and understand their impact regarding the end considered I propose to wonder, what is the link between the economic growth and the human development? In order to do so, we will first focus on the effect of growth on human development, then we will see the impact of human development on growth and finally we see how to create a virtuous and sustainable circle of growth and development.
In one hand, the economic growth aims at increasing the labor productivity in the economy and so the outputs. Means and tools in order to do so are quite numerous and well-known by policy-makers.
In the other hand, the human development aims at improving the people’s “capabilities” what is to say the the “range of things that people can do”. “The most basic capabilities for human development are to lead long and healthy lives, to be knowledgeable, to have access to the resources and social services needed for a decent standard of living and to be able to participate in the life of the community. Without these, many choices are simply not available, and many opportunities in life remain inaccessible.
So first, regarding the growth-oriented economy there are two main types of tools that government can use to boost the economy and increase the outputs. The first type is the adjustable elements that are also known in the model Hicks-Hansen (or IS-LM), such as the investment, the budgetary expenditures, the interest rate, the consumption, exports or the taxes. Regarding those means, the governments are able to impact them insofar due to their policies like monetary policy for the interest rates, inflation, currency level or state budgetary one for the taxes, investment projects, or the consumption (even if other factors are to be taken into account). The second type of means is those which are more related to the environment of the economy such as the facilities for the companies, the liberalization of the economy, the decentralization of the state, and the level of corruption and so on. Thus, government can use one or more of those tools to influence the level of productivity in order to increase the level of outputs. In that case, the consumption and state budget should increase and leads to economic growth translated in terms of growth.
Thus, the economic growth impacts directly and indirectly the human development level. As a matter of fact, the income growth enables household and government to spend more money on health and education, for example, which is a contribution to the human development. But economic growth can also have an indirect impact on the human development, moreover due to an incomes redistribution policy. As a matter of fact, if the government performs such redistribution, the growth of incomes will enable the households to increase their consumption and thus to respond to their real (basics) needs. This effect have an even more positive impact on human development when the redistribution of incomes is done toward the poorest part of households as they allocate a highest part of incomes to goods and services which have a greater impact on human development such as food expenditures and education.
Thus, we saw that the means used to the economic growth can also have (directly or not) an impact on the human development even if it is widely linked to willingness of reducing the inequalities, like inequality of incomes. Nevertheless, the human development is not only the health and education. It also refers to the political system, the transportation facilities or the housing quality.
Second, some of the human development’s means are quite similar to those of the economic growth, such as investment, innovation, productivity of factor of production, and the economic environment. But, human development also refers to other means like, education, health or the political system.
According to the Sen’s theory of the “capabilities” having a positive influence over those means enable the government to improve the human development. Moreover, as the human development widely refers to the concept of human capital and the human capital have an impact on the economic growth, so the human development can also have an impact on the economic growth. As a matter of fact, such means of the human development as the education of the health affect positively the labor productivity, inter alia thanks to their impact on the innovation and technologic improvements and so may affect the economic growth as an endogenous source of growth. In the same way, education can improve the quality of some other important determinants of the economic performance of a country such as the investment decisions, the public policy-makers (and so the economic and political environment), or private entrepreneur. Moreover, the means of human development can have an indirect impact on growth through the redistribution of incomes due to the education. Thus, in a society where the education is fostered, poorest people could benefit from the social mobility which tends to lead a more equal income distribution and to economic growth.
Now, we saw that the human development throughout several of its means, and moreover the health and education, can have an impact on the economic growth, but also on the political system.
As a conclusion, even if economic growth and human development have different ends they are very closely connected and it seems possible to set up a virtuous circle between both. However, according to Ranis, Stewart, and Ramirez, human development seem to be a prerequisite to enable governments to turn it into a sustainable economic growth.
References:
“Human Development: Means and Ends”, Paul Streeten, the American Economic Review, Vol. 84, No. 2, Papers and Proceedings of the Hundred and Sixth Annual Meeting of the American Economic Association (May, 1994),
Wikipedia, “human development”
“Human development and economic growth”, Gustav Ranis, Yale University, May 2004
“Human Development: A New Paradigm or Reinvention of the Wheel?”, Srinivasan, T.N.
“Human Development – Human Development Reports (UNDP).” 22 October 2009
(2099.) Globalization and its influence on economic growth by Boris Petrovic
Globalization is a term used quite frequently nowadays and is generally referred to as a process that is helping us humans understand each other better and simultaneously bringing prosperity and progress to each and every one of us. Although this short theory of globalization sounds astonishing, not everybody has the same opinion and it can be said that it has its own positive or negative effect on our basic personal values, but this should be considered as a normal general opinion of people since not everyone will or can be satisfied with introducing new ways of thinking and lifestyle because we are not living in an ideal world. Anyhow, the major topic that I have interpreted was the correlation of economic growth and globalization’s overall influence on it. Ever since the start of the term ‘globalization’, its primary idea was to prosper and further develop all the countries included, meaning the specific countries’ personal interests, including especially the economic development. Post-socialist countries as referring to countries such as Poland,Slovakia, Hungary, Czech Republic, ex-USSR and so on, have encountered many problems during the transitional period that was taking place when globalization firstly kicked in, which they have more or less successfully tackled in order to steadily increase the economic growth and stabilize their local currency. Strong multi-corporations have been waiting for the moment when these countries would finally undergo political reforms and offer their services there, since the people would have an enormous interest in purchasing these products and services since it was something revolutionary and new for them therefore it was a win-win situation for everybody. Twenty years ago, the battle that capitalism and communism were waging was won by capitalism since communism collapsed in Europe, meaning that the engine of globalization was coming from the Western part of the world. Therefore globalization was a package that contained capitalism in it and this package was sent and accepted in many countries and in the case of Poland this can be considered as a success, being the 20th largest economy in the world and contributing 1% of world GDP, something thought to be unimaginable 20 years ago. However, this system did not breach to certain global powers that we have now in 2012, for example China. The country that was lead by a communist Mao Tze Tung under whose reign Chinese people suffered by resulting in millions of deaths from starvation in the 60’s. This exact same country is now a number two economy in the world and thought to be number one in 2030 with over three trillion dollars of foreign exchange reserve and still has kept the same communist system since the 60’s. There are many opinions on whether the Chinese system is modern capitalism or still communism and the closest answer would be that China is still a communist country just that it has managed to integrate globally by undergoing big economic reforms, but keeping communist values internally within the society. Therefore, the stage of globalization that we have now is truly an interesting and exciting one since we have BRIC countries now (Brazil, Russia, India, China) that are rapidly developing since their potential is far from used and are catching up with the developed countries such as France, Germany, Britain and so on. When America and Western Europe were by far the strongest and most advanced in every aspect, the rest of the world ‘danced’ and agreed on the regulations that suited them since they were proposing, but if the dice will turn and this shift of power will turn in the future to BRIC countries, will America and Western Europe ‘dance’ to the rest of the world? It is very hard to predict and even harder to say who will show flexibility and adaptation to the world and who could even isolate themselves from the rest of the world and play by their own rules, like for example North Korea. Although, America has shown determination with their new president Barack Obama in opening a strong and healthy foreign relationship with BRIC countries, especially Russia and China since those two countries are already inevitably two superpowers in Eastern Europe / Asia and will naturally contribute to each others’ economic development. Better days are also coming from the poorest continent in the world, Africa having in mind Russia’s investments , for example Gazprom in Nigeria, and especially China’s large investments placed there , racing past America’s investments. Although the political situation has barely changed and the general situation for globalization to take place does not look promising with public unrests (for instance what happened in Egypt, in Libya, now happening in Syria), such unrests and feeling of anarchy in the air was sensed and still is present in the very European Union, more specifically in Greece since the economic and national crisis and also last year summer’s intensive riot across England resulting in over 100 million pounds of damage, however the people’s causes were different. Another interesting area where globalization took place was the boiling Balkans. This geographical area is nowadays usually referred to as the place where the last modern war took place, a hard collapse of socialist Yugoslavia resulting in bloodshed and international intervention. Now there are six countries (seven, with some arguing KOSOVO* being a country) present instead of one, with closest ones to Europe: Slovenia being the only one in EU whilst Croatia, expected to join in 2013, and Serbia has become a candidate in 2012. Taking a deeper look into Serbia it can be said that it has a well placed strategic position in the heart of Balkans, and its foreign strategy with a pro-European government for 12 years now is fulfilling European standards and is thought to be a trustworthy member of the EU. However, the NATO bombing in 1999 and taking over the territory of Kosovo seems like a fresh wound to Serbia and its people, therefore logically euro and global skepticism can be found in a fair amount. Therefore Russia, the historical ally of Serbia and China the symbolic ally of Serbia have a big influence on Serbia with China having over 2 billion euro investment in Serbia and Russia planning to build a gas-pipe that will go through whole Serbia and supply Europe with gas in 2013 and with this giving Serbia the key of gas supply to Europe. A country of barely over seven million is feeling global pressure on its shoulders and is now facing a tough decision whether to sit on two chairs and risk to fall, or just hang on to one chair and not fall – a typical example of global clash between two sides in which Serbia has to prefer the one from which it will have a long-term economic benefit without harming local values and beliefs – this can be achieved only by a decisive political, economic and social vision.
(2098.) We are homo sapiens – wise humans. We entered the great story of Earth about 200,000 years ago. We could use the 4 billion years of legacy bequeathed by the planet and we did. Despite our vulnerability we have taken possession of every habitat and conquered swathes of territory, like no other species before. We are the ones responsible for disrupting the Earth’s perfect balance due to our greed, crave for development and shallowness. How come we call ourselves wise humans when we let so many disasters to happen? We are our own enemies thus it is our fault that we struggle with number of problems nowadays.
Those great issues of modern world could be divided into three types: economic, socio-demographic and environmental. All of them are linked, all of them coexist and follows each other. We changed the perfect life cycle that mother nature gave us into the new toxic one which results in problems discussed below.
1. Overcrowding of the planet.
It the last 60 years the Earth’s population has almost tripled. In November number of inhabitants reach 7 billion. The last billion raise was through the last twelve years! How is this possible when we are surrounded with alarming news of decreasing number of birth and society getting older? The overcrowding problem is usually considered in terms of food availability, which is true, but to fully understand the issue we must look on the planet as three different worlds: the industrialized, where the population is aging and shrinking; less developed countries, where population grows slightly and there is much poverty; and the 49 poorest countries, where over half the population vegetate for the equivalent of a dollar a day, with a population that climbs up dramatically. The reason behind that is children are family’s only asset. Extra pair of hands is a necessary contribution to its survival. That is the irony – poorest lands where death haunts old generations remain to cultivate fertility, celebrate each birth as the win against death. There, however, where death had disappeared from everyday life, where it has moved to an extreme old age, people act as if they are immortal and cease to reproduce. Overcrowding not only raises the problem of food but it has a negative impact on society. It increases deviant behavior and stress level within the population.
2. Inequalities
Every fourth person in the world live as people did 6,000 years ago. They only use the energy provided by nature and the power of their own muscles. It is the way of life of over 1.5 billion people, more than combined population of all wealthy nations. Considering poor societies makes education a rare privilege. Most of these people are cultivating soil and over 75 percent of them by hand. Agriculture is still the occupation of half of world’s population. Discovery of oil enabled people to make some significant changes. Many people moved to the cities. Today over half of the mankind live in cities. On the contrast 500 million people live in the deserts (more than the whole population of Europe) without access to drinking water. On the other side of the world, in United States, 700 liters of water is consumed by one person per day. Contrary 70% of the population of Nigeria lives under the poverty line despite being the biggest oil exporter in Africa. Resources are there but local people do not have access to them. The same seems to be true all over the globe. The difference between rich and poor is greatest than ever before. Half of the world’s wealth is in the hands of 2% of population and 20% of the world’s population consumes 80% of its resources.
3. Hunger
A recent UN report says that currently on the world we have nearly 1 billion people suffering from hunger. If we would collect all the hungry people they could easily fill the whole continent and its population would be larger than those of North America and Western Europe combined together. It is assumed that a minimum daily intake of human body requires 2,400 calories of food ordering. Globally, the world’s food production covers the demand. According to estimates of World Bank total cereal production guaranteed the consumption of 3,400 calories per day to every inhabitant of the world. Unfortunately over half of the global resource of grain is used as animal feed, enabling the production of meat and milk, and biofuels. Since 1950 fishing catches have increased fivefold from 18 to 100 million metric tons a year. Thousands of factory ships are emptying the oceans. Three-quarters of fishing grounds are exhausted, depleted or in danger of being so.
Most large fish have been fished out of existence since they have no time to reproduce. At the current rate, all fish stocks are threatened with exhaustion. Fish is the staple diet of one in five
humans. We have forgotten that resources are scarce.
4. Water deficit
Earth is called a ‘blue planet’ because 75% of its surface is water. Drinking water account for only 3% of the whole and 70% of it is trapped as ice. Over 1 billion people have no access to safe drinking water and 5,000 a day die because of dirty drinking water. Water shortages could affect nearly 2 billion people before 2025 because no spring escapes the demands of agriculture, which accounts for 70% of humanity’s water consumption. It takes 100 liters of water to produce 1 kilogram of potatoes, 4,000 liters for 1 kilo of rice and 15,000 liters for 1 kilo of beef. One cup of coffee takes 140 liters of water and tea 30 liters. As mentioned before US citizen uses 700 liters of water per day, Polish 200 liters per day and African 5-10 liters.
Across the planet, one major river in ten no longer flows into the sea for several months of the year. Deprived of the Jordan’s water, the level of the Dead Sea goes down by over one meter per year. Las Vegas and Palm Springs were built out of the desert. The Colorado River, which brings water to these cities, is one of those rivers that no longer reaches the sea.
5. Climate change
The atmosphere is heating up due to constantly increasing energy requirements. Transport, industry, deforestation, agriculture… Our activities release gigantic quantities of carbon dioxide. the effects of global warming are most visible on the pole.
The north-west passage that connects America, Europe and Asia via the pole is melting. Under the effect of global warming, the ice cap has lost 40% of its thickness in 40 years. Its surface area in the summer shrinks year by year. It could disappear in the summer months by 2030, some say 2015. Greenland’s ice contains 20% of the freshwater of the whole planet. If it melts, sea levels will rise by nearly 7 meters. Raising sea levels are often accompanied by more frequent storms and hurricanes, which are a huge threat to the islands and coastal areas. Decrease in salinity of seas causes the change of direction of wind streams and thus rain cycles are altered.. The geography of climates is modified. The average temperature of the last 15 years has been the highest ever recorded.
6. Deforestation
We live thanks to the trees that are producing oxygen and yet we destroy the green lunges of the Earth. Every year, 13-15 million hectares of forest disappear. Many of them are logged illegally due to raising demand for wood in rich countries. Within a minute disappear the forests with an area equal to 36 football fields. In barely 40 years, the world’s largest rainforest, the Amazon, has been reduced by 20%. Each year it is deprived of 27,000 sq km of its surface which is equivalent to the size of Belgium.
Stripped bare fields have nothing to hold the soils. The rainwater washes them down the hillsides as far as the sea. What’s left is increasingly unsuitable for agriculture. 40% of arable land has suffered long-term damage. Deforestation also affects in the loss of biodiversity and have a huge impact on global warming.
7. Excessive amount of waste
Each year we produce more and more waste. The Great Ocean Garbage Path is the largest floating on the Pacific. This waste field begins about 900 km from the coast of California and ends in the vicinity of Japan. Garbage is not just a problem of pollution of the seas and oceans. The ever increasing piles of waste goes to landfills, forests and is burned in home furnances. In Poland households produce 12 million tons of waste of which only 14% is recycled and almost 80% is going to landfill (rest is burned or goes to forests). Garbage can be reduced by selective collection and recycling.
8. Terrorism
Since 1960s the number of acts of terrorism has grown exponentially. It has an increasing impact on people, especially lately it is getting more intense. Terrorist activities are designed to frighten people and to kill the greatest number of them, which is supposed to be a massage for leaders of countries who sent troops to the Arab countries to withdraw them. Terrorism has a very strong influence on the world, particularly in terms of how the world is in a constant fear of weather there will be a terrorist attack in a place where we live. This raise social unrest. After a 9/11 attack terrorism has became a major global problem and many countries spend a huge amounts of money to prevent it. It even triggers military conflicts.
9. Oil deficit
Fossil fuels have allowed us to create and use a myriad of devices and tools that facilitate our work and daily life. Without them, there is no industry, energy, transport, and even industrial agriculture. There is no world that we now know. more than half the world’s oil and gas reserves were exhausted within a single generation. We extracted the easy half, now companies need to reach to less accessible reserves which is expensive to operate and gives small amounts of oil. Since the 80s of the twentieth century we extract more oil than we discover. Today, one barrel discovered already accounts for 3-5 barrels extracted. It results in price increase. Over the past 5 years the price of a barrel of oil has been growing at a rate of 30% per year. Oil is the cause flow of billions of dollars a day from oil importers to the exporters. This may cause energy blackmail producers which might further increase tensions between producers and countries dependent on imports.
10. Diseases of civilization
As a result of continuous development of civilization and the progressive industrialization and urbanization we have to deal with rapidly increasing number of factors that cause immediate danger to human life and health. The largest group are the risks associated with diseases of civilization. These include respiratory, cardiovascular, allergies, cancer, AIDS, Alzheimer’s disease, and also drugs, alcoholism, severe mental disorders (including eating disorders). In addition, the increasing environmental pollution for years meant that the air we breathe, falls far short from the standards to which we are genetically “programmed”. Cases described above are accompanied by another group of cardiac events – a sudden arrhythmia. This phenomenon is hitting the old and the young men and women. An additional problem is that these are largely unexpected cases.
11. Inflation
Local causes of inflation are different across the world, but the cause of global inflation is the use of agricultural crops as a fuel, which causes an increase in food prices. For example, during the year the price of rice has gone up by 147%. As is known rice is the mainly feed of billion people in Asia. U.S. attack on Iraq has caused a big jump in oil prices and natural gas. Threats of US-Israel axis at Iran, including possible use of nuclear weapons, causes disruption of peace in the Gulf region, which daily delivers 25% of the fuel to the world market.
12. Human ignorance seems to be the last problem feeding the previous ones.
(2097.) Globalization according to me is a global process which is generated and mainly influenced by information/knowledge, technological and scientific progress, cultural unification, shared mutual goals, political stability and economic progress.
Looking from the economical point of view the banks and the CEO’s of the banks have recently more and more to say in many countries economies and politics. The fact that all the banks talk universal language which is mainly concerned about economical growth may be very important when it comes to globalization. Banks now days have huge and unquestionable power and these banks are to some extend trendsetters when it comes to globalization. By being present almost everywhere and introducing the equal universal laws banks play very important role in the process of globalization.
Of course saying that banks are most important instruments in process of globalization would not be wise. What I try to point out is the unification that banks use towards their clients everywhere around the globe. I simply used the banks as an example of one of many factors influencing the process of globalization.
I will make it clear that I agree with professors point of view on the equal importance of the economical, cultural, social and political factors that contribute to the process of Globalization.
The process of globalization influences the economic growth in various ways. The free marked, information flow and convertible currencies make doing business on the global scale much easier than some decades ago. Also the computer revolution is very important to mention in terms of impacting the economic activities. The internet has taken over huge parts of economic activities and all the things that happen it the virtual world happen on the global scale. The fast and direct access to information allows both individuals and companies optimizing use of resources such as human resources, financial resources or natural resources. If this is taken advantage of it will have direct impact on the economy.
In a globalized environment with capital mobility and free trade the countries are under big pressure to ensure business investment and jobs associated with it. By creating new policies and eliminating some restrictions governments enhance their competitiveness on the global market and use the process of globalization to their advantage. The businesses choose to locate their plants or outsource to the countries with business friendly environment which have good combination of some key factors for the given company. As the financial capital is more mobile this days the big companies are able to act quickly and take advantage of arbitrage opportunities. It is governments responsibility to make sure that the country is competitive on the global market and perceived as good place for investment.
Globalization is liberalization and integration of different markets and labour market is a very important one. Attracting foreign direct investment (FDI) is a essential part of the development strategies for some of the developing countries. Citizens use the money they earned working for foreign investors on the domestic market and this stimulates the economy. Globalization makes also migration of labour force possible. The low-skilled labour force might migrate to better developed countries. For the highly skilled labour force the is a competition between the countries. Attracting highly skilled labour and developing domestic is a necessity in a global market. This type of labor migration has qualitative effect on economic growth.
Let’s look at the impact that globalization has on few other factors that make economic growth possible. Some of these factors are natural resources and national technical progress
Natural resources are the core for production and are crucial for modern economy. With the increasing amount of people on this planet the need for natural resources is constantly growing while the amount of the resources is diminishing. The problem is uneven distribution of these resources between the countries. While we have surplus of natural resources in one country we have shortage in other. Thanks to globalization the problem of uneven distribution of resources is getting better.
National technical progress affects all the various sectors of economy. By implementing new ways of production, creating new products/services, expanding the range of products and investing in R&D the countries that drive the global innovation support their economy.
As the word becomes more connected and interdependent the responsibilities are being constantly distributed more equally. As professor mention in his book now is the time to find the way to govern and institutionalize the global economy. It is nice to live in a globalized world but there has to some institution that controls the global economy.
Also the impact on the environment must be looked at as the issue of everyone on this globe. Even if many parities/countries have some contradictory interests they will have to find a peaceful and mutually satisfactory ways to solve these.
What is very important is the fact that globalization makes everything interdependent. Some happening at one continent affects peoples life at the other. This interdependence is also reflected in the global economy. As professor tends to say “Things happen the way they do because many things happen at the same time” this proverb is applicable in the description of globalizations impact on economic growth. If the countries are able to adjust themselves and manage the globalization process astutely they can gain very much and can boost up their economic growth.
(2096.) 12 Great Concerns for the Future
1. The rate and limits of economic growth
If you look at economic growth as the increase of gross domestic product, it is not possible to sustain the average global growth we have seen over the past 20 years. As a whole, the world must slow down if it wants to stay sustainable. However, the economic growth shouldnt be decreased everywhere and for everyone, at the same rate. For example Africa as a continent needs to grow much faster than the rest of the world. From 2005-2008 Africa grew at 5.8% while the world average was 5%. This means 2% less per capita in Africa.
2. The evolution of values and their cultural implications for development processes.
The globalization of the world has ensured that international work relationships have become much more common. As we all know the different continents are composed of entirely different cultures from one another. In the future we must be prepared to work in a different global environment. “The world is not going to become one big North America, but it is not going to become one big Bhutan either. It will be somewhere in the middle, between these two extremes.” A challenge will be to minimize conflicts and tensions, and to increase tolerance.
3. The institutionalization of globalization versus the growing chaos and lack of coordination.
If institutionalization of globalization is neglected there is a large chance that chaos and lack of coordination will increase. In the future we will have to avoid economic reforms such as those seen under Boris Yeltsin in the 1990s.
If institutional arrangements are neglected and left to spontaneous processes and unleashed forces of too soon and too fast liberalized markets, then informal institutionalization (such as mafia, organized crime, corrupted bureaucracy, etc.) fills the systemic vacuum. The best (i.e. the worst) case in point for the most of the 90s had been the Russian “emerging market”
4. Regional integration and the way it meshes with globalization.
“The integration of neighboring countries into regional groupings will continue” (354). The strongest and most well established of such regional groupings is the European Union. However there is the new player that entered in 2001. The Shanghai Cooperation Organization. Currently the members are: China, Russia, Kyrgyzstan, Kazakhstan, Tajikistan and Uzbekistan. With India, Mongolia, Afghanistan and Iran as observers. Including the observers, that accumulates for 40% of humanity. According to Truth, Errors and Lies, this is an attempt to close the gap to the West.
5. The position and role of nongovernmental organizations.
NGOs will position themselves in a role of advising developing countries in the future. They can provide better solutions for developing countries on how to run and develop their enterprises, than their governments interfering, because personal interest will lead to setbacks. From a global perspective NGOs should be run separately as a third party without government interference.
6. The natural environment and competition over dwindling natural resources.
The environment has become a topic of great interest. It is very important to build a sustainable global practice where we make sure it can also be taken advantage of in the future. For example stop overfishing. This century we will encounter “peak-oil”, the point where extraction can only fall.
7. Demographic processes and human migration.
The overall rate of population growth is decreasing, and that is good. In Europe we are having less kids, but in less developed countries they more often than not, have a much higher birth rate. The four countries with highest birth rate are also among the 10 poorest. Situations like this will lead to more migration to wealthier countries.
8. Poverty, misery, and social inequality are all aspects of life where we most likely will not see any significant change in the future. The sad truth is also that the places most in need of capital and investments, are also the places no one wants to invest in. To prevent migration, the rich economies should give some of their GDP to the poorer ones in a sensible way to reduce migration related costs in their own country.
9. The knowledge – based economy and society.
We have the knowledge to analyse past events in the economy or society, and in hindsight predict what actions should have been taken and the influences they would have had. Of course we will continue to do this in the future, because in economy it is always better to have more information, and the past is a good measurement tool. Parts of the future is predetermined, like population growth, but for everything unknown we will continue to gather and store information.
10. Scientific and technical progress.
Globalization has taken technologies from richer countries and introduced them to developing ones. Although the gap between Africa and the West will remain in the future, globalization is still an effective way of developing the continent. In the future, one of the most important technological progresses will have to be advances in energy use and production. In the future output will be much higher, but the weight of the output will be less because of technology.
11. The evolution of networks and its economic consequences
In the future, networks between organizations or even within organization will strengthen and expand. Companies will become so strong that outside competition will have a very difficult time to even operate. Advances in technology has made it possible for large organizations to work much more efficiently on a global basis. In the future companies have to be more transparent because they hold so much personal informations.
12. Conflicts and security, war and peace.
Globalization has made it possible for large follower nations like China, India, Brazil and Russia to grow at a rate much faster than what the lead economies do. Especially when countries also have large populations, it presents an opportunity to create a strong army, especially once the money is there. Since the end of the cold war, the US has been the ruling “superpower”, but now, both China and Russia are investing heavily in their militaries, while the US has had to reduce its spendings. One or two ´powerhouses´ are thought to be a quite peaceful situation, but if there are more the proneness for war is much greater because of the struggle for power.
(2095.) Globalization and its Influence on Economic Growth
As we all have learned, globalization does not affect all countries the same way. There are many winners and losers when it comes to the game of globalization. One of the most popular ways to get a hold of how this phenomenon has influenced a given country is to check its openness to trade. A country like India, for example has one the lowest level of trade in the world – 1,5%. Another way that is widely used in order to get a correct measurement is the participation in international capital flows, in particular the FDI (Foreign Direct Investment) in which a country like India, for example is also lagging at about 0.3-0.4 % of the total ($ 1 trillion). The above mentioned are the factors, but other than that it is safe to say and most would agree that globalization (in general terms) boosts economic growth. One interesting fact that we cannot omit here is to say that it has been proven that in richer countries the globalization has a positive effect and in the underdeveloped countries it has a negative effect. This is actually quite an uncomfortable situation because the gap between countries (rich and poor) will continue to increase. Let’s continue to take India under account.
It is crucial to remember that at the beginning of the Christian era, India was considered to be the world’s biggest economy. It accounted for almost 33% share of the world GDP, and about 32.5% of the world’s population lived in India. India has definitely gained a lot from the long and tiring process of globalization, we saw the international trade as a proportion of GDP go up to 24% in 2006 from only 6% in 1985.
There are also many improvements that can be noticed throughout the country, and not only strictly .economical, but prove to help the economy usually in the long run. In 1999, there were only three shopping malls in the whole country! In 2010, there were already about 700. In 2005, the country had problems to keep up with the red hot demand for luxury accommodations in the city. A few years ago, India was the first emerging retail market in the world, people simply love to shop. The retail sector was worth a whopping $300 billion and was expected to double in the few years coming. Thanks to the process of globalization, now we have a worldwide market for the companies. On the same note, the people have access to products of different countries. There is quite a steady inflow of cash to the developing countries, which gradually decreases the difference of the dollar. The options for production have drastically increased now because of the worldwide market.
The current global order deregulates domestic markets and opens them up to competition, privatization and the retreat of the state from economic management. As I mentioned before, there are winners and losers in this game, but in the overall picture the world output has been expanding. The cross-border trade and investments are increasing.
Globalization means other countries being able to do business with each other in ways that were impossible or much harder before. Many countries have experienced a high inflow of FDI, which automatically makes job positions for the local people, this in turn, of course means lower unemployment. Globalization is often spoken of when talking about the European Union, thanks to the EU it is much easier for citizens to travel within. This provides more touristic opportunities and therefore increasing business within areas they didn’t use to do it with. Globalization meant jobs being lost in production, since all of it were getting moved to countries where there is cheap labor, China being the best example. From this instance we see that there were poor countries hitting a jackpot from globalization. And the example of production moving from countries like America to China, we see the USA taking a major hit from the globalization.
Fast Food chains like KFC or McDonald’s were able to spread their business efficiently across the whole world.
What seems to be the benefit here is that globalization has been opening up niche markets, which before were not even heard of. Such niche markets, can turn out to be great opportunities for people looking to not only expand, but also use their knowledge and hard work. For instance, thanks to the internet, we can become SEOs (search engine optimization) specialists, while a decade ago nobody even heard of such profession. For some countries this could mean lower costs for this like national health care. Thanks to globalization, many expensive job occupations such as medical analysts can be literally outsourced to another analyst (very often a doctor), and receive arguably the same quality, for cheaper, and sometimes even faster. Every coin has two sides. While the governments can start to perhaps benefit from such tactics, someone can get hurt. The home countries (for example American doctors), may start to lose jobs. Maybe during a time of crisis when cost-cutting is inevitable, it will be difficult for the highly-paid American positions to keep their spots.
All in all it seems like globalization primarily makes people able to consume goods of better quality at cheaper prices and in turn, enjoy their life just a little more and in turn boost productivity and other crucial areas, all thanks to advanced technology
To sum up, globalization has resulted in greater competition all around the world, but at the same time opened up gave many nations fresh visions, of which we probably would have never heard of otherwise. Thanks to this, some nations are able to exchange something that they are good (not really a case of China especially in the beginning) and efficient at doing, later feeding off of each other at the same time.
(2094) Globalization and it’s influence on economic growth
The phenomenon of globalization began in a primitive form when humans first settled into different areas of the world and officially such terms as globalization, economic integration through trade, migration, capital flows and communication flows has been settled around since 1870. It has shown a rather steady and rapid progress in recent times and has become an international dynamic which, due to technological advancements, has increased in speed and scale, so that countries in all five continents have been affected and engaged.
So what is globalization? Basically it is a process that, based on international strategies, aims to expand business operations on a worldwide level, and was precipitated by the facilitation of global communications due to technological advancements, and socioeconomic, political and environmental developments. There are some economic approaches to globalization. The most famous of them is D. Ricardo’ economic theory of comparative advantage that states that each country should produce those products/services, which they can produce/provide with the lowest opportunity cost and total production cost.
The main purpose of globalization is to provide a better communication flow amongst More Developed Countries (MDC) and Less Developed Countries (LDC). Another important purpose of globalization is to provide organizations a superior competitive position with lower operating costs, to gain greater numbers of products, services and consumers. This approach to competition is gained via diversification of resources, the creation and development of new investment opportunities by opening up additional markets, and accessing new raw materials and resources. The process of globalization should provide diversification of resources as a business strategy that increases the variety of business products and services within various organizations; diversification strengthens institutions by lowering organizational risk factors, spreading interests in different areas, taking advantage of market opportunities, and acquiring companies both horizontal and vertical in nature. Industrialized or developed nations are specific countries with a high level of economic development and meet certain socioeconomic criteria based on economic theory, such as gross domestic product, industrialization and human development index as defined by the International Monetary Fund, the United Nations and the World Trade Organization. But on the other hand, providing this type of communication between countries, globalization has enabled trade to grow, capital and education flows to increase and a better allocation of resources to be met around the world. There are many gains from globalization for companies around the world, some Multi-National Enterprises (MNE’s) that locate themselves in LDC’s bring along growth and development, like for example employment, technology knowledge, and profit reinvestment among other factors to host countries.
The fact that illustrates the point is that, MDC’s have a tendency to profit from globalization in various ways when negotiating with LDC’s. MNE’s that go to LDC’s for example, gain from cheaper labor force, cheaper land and tax rates. In the end however, some MNE’s end up negatively affecting the host country’s economy by taking all profits back home, socially, by polluting the environment and finally also politically by paying bribes to the local governments to reduce tax rates or other fees.
However countries like the Asian tigers or the Asian New Industrial Countries have gained incredibly from globalization in the past 30 years. Other continents however, have proved themselves not yet ready for such a change. An example of the latter is Africa and South America, where due to different factors like corruption, low education level, weak political policies and poor transport infrastructure globalization hasn’t been able to benefit them in a high rate like in Asian. It is therefore up to Globalization has enabled trade to grow, capital and education flows to increase, and a better allocation of resources to be met around the world each county to decide and control Foreign Direct Investment (FDI) and gain from it or not.
Summing all of the above, globalization does not necessarily bring a negative outcome to LDC’s. As noted with the NIC’s, they have profited and develop into a more successful region due to globalization. However, countries that are not able to successfully participate in the globalization process because they are lacking crucial factors for globalization to develop and perform beneficially. Some of the decisive factors they lack are, good geographic location, institutions and supporting policy. If a country has a bad geographic market location, it will not be able to trade optimally, thus not profiting enough. Good institutions and supporting policies are needed to fight against corruption and poverty in some other cases. When a country has a good geographic location, good institutions and policies it is able to focus on its real competitive advantages.
(2093.) Globalization, Transformation and Development
12 Great Issues of the Future
Nowadays, the economic environment in which businesses operate is constantly changing. Globalization issues are omnipresent in political, social and economics debates. Our globalized world deals with news communications media, Internet, new commercial and cultural exchanges, allow developing exchanges between different countries around the world. Today the economic world is experiencing an unprecedented crisis and companies must demonstrate alternatives in order to cope with the current situation. Let’s focused on twelve great issues of the future.
The fist great issue of the future could be the rate and limits of economics growth. Actually there are different steps in growth: deceleration and acceleration. Economically speaking it’s not always right for countries. For example, in the future we can imagine China will slow down, Africa should speed up and rich countries will moderate their economics growth. According to W.W Rostow a famous American economist and historian, if a country wants to develop a strong growth they have to use EU model and not URSS model. Thanks’ to the globalization; post-socialist countries of East-central Europe should develop their activity with EU because transformation and integration should expand this phenomenon. In case of poor countries they have to stay focused on long-term national development strategies to be competitive because most of them don’t have competitive advantage.
The second issue is the evolution of values and their cultural implications for development processes. Norms and values are changing and depend of cultures. Cultures are changing around the world. Here the main risk is a confrontation between both developed countries and emerging countries culture.
The third issue is the institutionalization of globalization versus the growing chaos and lack coordination. First, new institutions are good tools to control a stable financial situation. For example the World Trade Organization coordinate exchanges around the world in the way to liberalize international trades. WTO is able to manage conflicts between different countries. “The institution of free trade can do more than almost anything else to maintain a high growth rate for the poor countries, without harming the rich ones” said Grzegorz W. Kolodko. Secondly, new institutions play a more and more important role in the global economy if countries respect rules.
Nowadays more and more countries try to create association between border countries. ASEAN, CIS, NAFTA, EU, SADC, SAARC created association in the way to liberalize trades into this area. According to Grzegorz W. Kolodko, first of all regional integration can be seen as an antidote to globalization because the regionalization allows protecting themselves behind a powerful association. Secondly, it can be seen as an alternative to globalization because some countries are closed to each other both geographically and culturally, globalization should be blocked and regionalization favored. Thirdly, regionalization is a vehicle for further globalization. Indeed, regionalization is a simple process of globalization.
The position and role of nongovernmental organizations (Greenpeace, Oxfam, amnesty international, Medecins sans frontiers) are more and more important in globalization and will be more and more omnipresent in the future. They have an influence on governmental organizations. Also, they play an important role with social and human development. This is one of the great issues of future.
Currently working in a society where people are wasting and polluting, countries have to find the way to work efficiently. Natural resources are not unlimited. Countries have to take care about our planet so; the sixth issue is the natural environment and competition over dwindling natural resources. The first fundamental thing for example, is to respect Kyoto Protocol if our children want to evaluate in a healthy planet.
The population is growing very faster last few years. Indeed, “each year almost 80 millions people come into the world, the equivalent of the population of Germany” said Grzegorz W. Kolodko. This is a huge problem for the future perspectives. The main problems will be, the extreme differentiation of natural growth, the overpopulation of certain regions and the aging of the population and great migrations.
The eighth issues are poverty, misery and social inequality. Today more than 3 billions of humans use to live with a daily budget of 2 dollars. There are more competitors with cheaper labor and this fact creates social inequalities for example so globalization increases poverty. ”Classical economics, including its neoliberal variant, suggests possibilities for reducing income inequality. “
The portion of the GDP attributable to the knowledge based economy will grow rapidly all over the world, but it will grow most during the next few decades in the countries that are already highly developed” Economically speaking it’s not always good because inequality will increase between poor countries and developed countries. Also, without the knowledge-based economy and society, new inventions and new technologies are impossible.
Innovation results from globalization. This quotation illustrates this phenomenon: “this will result from research progress in physics, chemistry, generics, and biology, assisted by the computational and modeling power of computers”. By the way technological gaps step inequalities between different countries. It will be a fundamental issue in several years.
One of the last issues is the evolution of networks and its economic consequences. Internet is a powerful tool because thanks’ to it, it’s possible to communicate and deals with information around the world, “the computer revolution of the latter twentieth century has been referred to, with good reason, as the information age”. Unfortunately, Internet allows hackers to deal private information and some regions don’t have Internet. Also, Internet could be a dangerous issue in the future because each information is available everywhere.
To conclude with the last issue, globalization, transformation and development generate conflicts around the world. Violence and terrorism activities are increasing last few years. Countries have to understand how to work together in the best way to be fair. In this way, globalization, transformation and development should have a positive impact in society.
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(2092.) After listening to your lectures and reading the book, I have started to analyse how the on-going process of globalisation is affecting the heterogeneity of various cultures around the world. Since the begging of human history the process of globalisation has been an important factor, from the creation of first settlements, creating internet and, who knows, maybe in future to one society. Concept of regional integration is also known since millennia (e.g. Otton III tried to create universal Empire). Those two processes are similar but not the same.
If one is in favour of “outside the box thinking”, globalisation can be understood as a bit broader term, as making something global. This implies that life is also subject to this process. From the biological point of view, the most important function of an organism is to transfer genetic material. Viruses, bacteria, fungus, animals, plants and other life form do that constantly. At the same time those organism enters new habitats; move further and further. From simple carbon compound, life has spread all over our planet. Single carbon compound has evolved into billions of forms which has populated nearly every corner of the Earth. That is why globalisation not always means unification. If certain conditions are created it can lead to extreme diversity and at the same time to preserving common features- biodiversity which is basing on combination of few basic elements, which are required for life to exist. On the other hand, what we observe now is a contradiction to that. We experience Americanisation of the world. This language, life style, mentality (…) is pouring through television, internet, Facebook (…) and is displacing original elements of culture. Languages cease to exist, traditions are forgotten because everybody wants to have computer, smartphone, tablet and “socialise” on Facebook. This is a normal process. What is more problematic, most of cultural artefacts come from one source- America.
Regional integration is in fact a globalisation, but aims to achieve the same goal with different methods. The great example is USA. This country has begun its history as a group of separate states, which realised that by creating union, they can cut tremendous cost and become an important player on the world market. By gradual unification they managed to create the most important economy on Earth in relatively short period of time. The integration enabled them creating bigger market and military force- key success factors at that time. Nevertheless growing too much is not recommended. The example of Roman Empire shows that growing without long term strategy and neglecting the environment will eventually lead to destruction.
Compared to globalisation, regional integration (relatively) preserves the culture of individuals regions, because it unites people with common feature, like ideology. This enables inclusion of similar units and greater understanding of differences among participants. This results in retaining the diversity, increased cooperation and effectiveness of the groups. Globalisation is just too extensive to maintain the differences. It imposes the culture of other region much quicker, what leads to assimilation or clashes of societies. Regional integration can be extremely beneficial for its members and can lead to synergy. Theoretically the European Union is excellent idea. By uniting 27 countries and integrating them into quasi-country, enormous economy has been created, which increased its bargaining power on the world market.
In the very, very, very… long run regional integration and globalisation lead to the same point but not the same effect. Eventually more and more regions integrate. It results in the increase of importance of the specific entity and thus more and more regions are willing to start the negotiations and accession process (assuming the structure of the entity is efficient). One example could be the situation of Turkey right now. Although completely different culture, religion, ideology and other factors, Turkey is negotiating to join the European Union. Because they are threatened, Turkish government tries to get the protection of the EU, knowing that common denominator is negligible. In optimistic view, regional integration will lead the great unification, but the entity is not homogenous, it preserves the differences and understanding of the importance of them (to grater extend than globalisation). The worst example of bad influence of globalisation on culture is China or Japan. After western culture entered, those who did not assimilate and did not give up traditional way of living where punished and mocked. In half a century, tradition which was cultivated for millennia was pushed aside. There was no true respect for domestic culture. Despite the fact that for example Japan became one of the most important economies, the cultural heritage is disappearing.
From strictly corporate point of view, globalisation is preferable. One, big, homogenous market is a perfect solution for multinational corporations. There is no need of such an extensive (and expensive) market research, legislation is similar, companies’ structure could be simplified and so on. This situation would increase the revenues and cut costs in relatively short period of time. On the other hand local firms use the diversification as a competitive advantage. It enables them to compete among each other and with “big players”. Local companies use the knowledge about the society they live in to attract customers.
I have concentrated mainly on the negative side of globalisation, because in my opinion, regional integration is the better path. It preserves our heritage and uniqueness and at the same time gives the ability to connect with others, understand other perspective and broadens our minds. Multicultural cooperation is a good way to reach a synergy, a way to become more efficient and gain knowledge.
(2091.) Regional Integration versus Globalization: Contradiction or Sinergy?
When we talk about Regional Integration and Globalization, it can be a truism to think that they are a contradiction just by their names, even though if you go a bit further and you go to their definitions, it will be easy to think that both of them are still a contradiction, as the Regional Integration it is defined as the process in which states enter into a regional agreement in order to enhance regional cooperation through institutions and rules, the objectives can range from economic to political, but it has generally become a political economy initiative where commercial purposes are the means to achieve broader socio-political and security objectives, the degree of integration depends upon the willingness and commitment of independent sovereign to share their sovereignty; also Regionalism is an expression of a common sense of identity and purpose combined with the creation and implementation of institutions that express a particular identity and share collective action with geographical region, in our history we find a few examples of Integration, one is the former European Economic Community, that gradually became in the European Union, this is the major example of Regional Integration, but we can also find the NAFTA (North American Free Trade Agreement), also in Latin America we find MERCOSUR and CAN.
In the other hand we have globalization as the increasing of the global relationship of culture, people and economic activity (goes further than a particular region) it is based on the global distribution of goods and services through reductions of barriers and reduction of restrictions on the movement of capital and investment; as a result of that we have the Free Trade Agreements between among countries or regions. So we can see that we are talking about a different concept, as one is based in local development that also includes partially protection in the region, the other, globalization, wants a global relationship and abolish every kind of barrier among the countries or regions. At the same time both of them have a lot in common, as they main engine are the commercial relationship, the flow of goods and services as the instrument to strength this relationship.
As we have seem in their concepts, they can look like a contradiction even though the way of functioning is almost the same, as one is focus in one region, the other one is focus in the whole world. Nevertheless if we take a glance in our history we will see that the Regional Integration has been in some cases the previous step in the Globalization, two of that examples are show with the United States of America and the European Union, both first regions, strengthen their self within the great regions and then through themselves in the globalization, as they realized that protection and self-sufficiency systems, defend by the Soviet Union would only weigh down the economy and impaired the capacity for adaptation. The problem of Globalization is that the size of some countries or regions are unequal, but we are not referring about the geographical size, we are talking about their level of development, there is where resides one of the main problems of the Globalization, where there are countries that are not able to compete or some of them die incapable of competing. we can see then between the different free trade agreements between North America and countries of South America, where the balance of payments of the second ones are based on the exportation of raw materials and the importations of semi-finished products or finished products coming from the same raw materials, this an example that can be extrapolated to any other part of the world. But this differences in the economical frame haven’t been really reduced thanks to the globalization, neither implementing the Neoliberals recipe, as their naïve slogan that “one sizes fits all” have been proved wrong, and it was a expected the failure on the implementation in different countries as reality changes overtime and space. Each region try to strength their forces and develop their areas while their participating in this global flow of goods and services.
But we can just think that globalization has one side, there more aspects in globalization where the positives consequences are much more recognizable, that comes from information, culture and technology, this three aspects are the ones who are making more in reducing the differences between richer and poor countries, as the ideas can go from one corner of the world to another. So we can see how different regions try to imitate the recipes of develop of some countries and try to implementing to their self, but they should know that what it works for one country it will not necessary work for theirs, but it is good to try to follow and copy those attitudes that can make a country more competitive, because the development can also be reach through imitation.
So as I tried to show in this paper, we can see that Regional Integration and Globalization are two sides of the same coin that can also contradict each other, but they condition each other at the same time. We see Regional Integration as an instrument for economic and political development in developing countries, also the facilitating trade in a region fosters prosperity and may help to overcome intra-regional conflicts we have such a examples between China and Taiwan in their relationship with the European Union, also in Latin America we can see it between Peru and Chile, and Peru and Ecuador, rivals not more than a century ago, but the integration have approach these countries. So we can say that Globalization and Regional Integration are interdependent progress at the challenge of developing countries.
Franco Sandoval Quispe – 24174 (Erasmus Student)
(2090.) Globalization has been always complex to define because “many things happen at the same time” , and there are many definitions which are common accepted about this topic. According to David Held, professor of political sciences in London School of Economics, Globalization “can usefully be conceived as a process (or set of processes) which embodies a transformation in the spatial organization of social relations and transactions, generating transcontinental or interregional flows and networks of activity, interaction and power ”. On one hand, Globalization is seen as a negative phenomenon that destroy environment, culture, States, exploits the developing world and increase the level of poverty for the “losers” of the game. On the other hand, globalization is seen as a positive process that increases the exchange of goods and services, the employment rate and conditions of living through economic growth. The financial crisis, which has started in the United States and then propagates to the rest of the world, shows that this interconnected world we are living in is threaten by multiple issues we must deal with. What are these issues? In this essay, I will try to explain what I think is the most important future issues for the world.
The first important issue, according to me, is the way that we compete with others for economic growth. In others words, the measurement of the economic growth seems not to be relevant in our days due to the fact that there are more and more criteria which have an impact on society and economic growth as well. I am not saying that we should completely forget economic growth and concentrate only on others criteria, but we have to think differently by being more open minded and pragmatic. Measuring economic growth with gross domestic product is not enough, and particularly, in the most advanced countries in the world where the economic growth has to slow down. What are the reasons? First, we must reduce the gap between the richest countries and the poorest one in order to reduce the tensions such as energy resources and immigration for example. However, it is really difficult to change the trend because we are brainwashed by Politics and Medias into thinking that slowing down the rate of economic growth is dangerous for Western countries. Moreover, there is a fear of transferring the wealth of advanced economic countries to the developing world.
The second main reason is that others criteria such as sustainability, conditions of living, well-being, security, and so-so have to be consider. According to some economists, despite the economic growth that we have known in the last fifty years, we are less happy and a just a little healthier than fifty years ago. In 2009, the French government wanted to form “new measurement of economic vitality that account for factors others than growth ”, based on the report made by Joseph Stiglitz and Amartya Sen. I truly think like Armatya Sen which proposed soft economic indicators related to the well-being of citizens, the population health, the access to education, and the importance of leisure time.
Look at the Scandinavian countries today, they are the richest countries in the world but they are the countries where the well-being of people is the highest because they focus on health, environment and education.
Indeed, an OECD report (2011) on social justice based on 6 criteria (poverty prevention, access to education, labor market inclusion and social cohesion, health and inter-generational justice) shows that Scandinavian countries are all in the top five . It proves that with a slow or moderate range growth of GDP, we can increase the well-being of people with an efficient social policy and a fair share of the output. Nevertheless, it means that we have to change the way we are thinking and it takes time.
The second main future issue that we have to deal with is the environmental one. More and more we know that, with the global warming, and the waste of natural resources made by each countries, we are creating a dangerous environment for future generations. It has, at the same time, economic, political, and social consequences which create many tensions in the world. This issue is often related with the demographic one because the increase of the population exacerbates the competition towards energy resources. In the book Environment and Globalization: Five Propositions, the authors highlights the fact that “not only does globalization impact the environment, but the environment impacts the pace, direction and quality of globalization ”. With the important growth (economic and demographic too) of the developing countries like China and India, the needs of natural resources and raw materials is more and more important whereas there are a limited amount of resources in earth. Indeed, according to the World Resource Institute (WRI), “water scarcity is projected to increase from 1.7 billion today to 5 billion by 2025” , whereas it is already a major issue.
In consequence, the environmental issue increases the risks of war and violence across the world as we could see with the case of Afghanistan. Global security is nowadays linked with global environment and this is the reason why more and more governments try to have an energetic independence as important as possible in order to be competitive as well. Nevertheless, pursuing a sustainable development needs social and political stability, which is extremely difficult in a certain parts of the world where conflicts train many countries in a negative spiral. However, some countries succeed to implement green strategies in their policy like Sweden or Germany. It has been proven that be more “environmental friendly” in political, social, and economical level increase the well-being of people and labor efficiency, which have a positive impact on companies ‘productivity . Slowly, but surely, we begin to think that sustainability can be related with stable economies, but the way is still long to achieve it.
To conclude, with the interconnected world that we have today, it is difficult for political leaders, companies and citizens to deals with the major issues of our societies. Therefore, this uncertainty highlights the need of being more pragmatism in order to implement new way of thinking and change usual behaviors.
Sources:
Grzegorz W. Golodko, Truth, Errors, and Lies: Politics and Economics in a Volatile World, (2008).
David Held and Anthon McGrew, Globalization theory: approaches and controversies, (2007).
Eben Harrell, Searching for a Better Wealth Measure than GDP, Time Magazine, Wednesday, Sept.16, 2009.
Bertelsmann Stiftung: Social Justice in the OECD – “How Do the Member States Compare?” (2011).
Adil Najam, David Runnalls and Mark Halle, Environment and Globalization: Five Propositions, International Institute for Sustainable Development, (2007).
Adil Najam, David Runnalls and Mark Halle, Environment and Globalization: Five Propositions, International Institute for Sustainable Development, (2007).
Jonathan T. Scott, Managing the New Frontiers: An Introduction to the Fundamentals, (2008).
(2089.) The challenge of Global Governance
For the first time the term “governance” was used in 12th century France. Then it crossed the Channel and in England came to designate the method of organizing feudal power.
Central power didn’t exist as such. However, a body whose purpose was to settle disputes peacefully and see that any conflicting interests were reconciled by consultation with those involved.
Thus, unity of interests was the focus of governance. In other words, a concept that affords a basis for the organization of power, or the elements of consultation and dialogue necessary to securing greater harmony.
In the 16th century the concept of governance disappeared with the emergence of the nation state, because the two notions “governance” and “government” are profoundly different. Governance removes the political dimension from government.
Governance is a decision-making process that seeks to ensure coexistence and, in some cases, coherence between different and sometimes divergent points of view through consultation, dialogue, exchange and mutual respect.
This involves seeking some common ground and extending it to the point where joint action can be envisaged. Globalization, for its part, shows a new sphere of common interests that transcends states, cultures and national histories.
We need to go out of the classical inter-nations system. Indeed, the disproportion between the enforcement role of states and their actual capacity to handle issues calls for new forms of governance.
As with any system of power within the nation-state, “good” global governance is needed. That is, a system that offers a good balance between efficiency and legitimacy, adapted to this new universal context.
So, which specific challenges of global governance could be existed as opposed to the classical systems of national governance?
Personally I think, institutions and procedures are bases of elements of legitimacy. Citizens choosing their representatives collectively by voting for them are entailed by classical legitimacy.
Nevertheless, it also relies on the political capacity of the system to bring forward public discourse and proposals that produce coherent majorities and provide citizens with the feeling that they can debate the issues.
In other words, the political system must represent the society, and allow it to see itself as a whole, with all its members experiencing the same feelings and using the same language.
The first challenge of global governance is distance, since legitimacy depends on the closeness of the relationship between the individual and the decision-making process.
The other legitimacy challenge refers to the so-called democratic deficit and the accountability deficit. When there are no means for individuals to challenge international decision-making, both arise.
Classical definitions of domestic accountability and democracy cannot be simply transposed and applied in the international institutions context, although transparency remains crucial to ensure that governments are both accountable and challengeable at home.
It has to be explored how to ensure that citizens can influence the choices made by their society, recognize themselves in their representatives and have the feeling that they belong.
The specific challenge of legitimacy in global governance is therefore to deal with the perceived too distant, non-accountable and non-directly challengeable decision-making at the international level.
The second element in the validation of power is efficiency. Governments are able to identify the problems and expect results from institutions with political responsibilities – that what citizens expect. Nonetheless, quantifying efficiency in concrete terms is not so easy. The task becomes even more complicated when power is remote and when there are multiple levels of government.
The first efficiency challenge of any global governance system stems from the fact that the classical Westphalian order is based on the full sovereignty monopoly of nation states.
Ways must be found to address the opposition from sovereign nation-states who resist more or less intensely – depending on the state and on the subject matter – transferring or sharing with international institutions their jurisdiction over certain matters.
The second specific challenge is that of the lack of coherence among international institutions. It is handed over only to very specialized international institutions whose direction/instructions come solely from nation-states’ authorities and whose mandates are limited, even when traditional state power is (partly) transferred to an international institution.
As the saying goes, “coherence begins at home.” It lies first and foremost with states. However, it is well-known that states are often not related and do not act coherently. So in which way the actions of their institutions can be coherent?
To deal with partial and incoherent efficiency, there is overall specific efficiency challenge of global governance.
To conclude, handling global problems in relying on classical models of domestic democracy has important limitations. Still, feelings of legitimacy and efficiency must be ensured. Otherwise, citizens will lose trust in their local/national government if transnational issues that affect them daily cannot be adequately dealt with. In this sense, there is a strong relation between the credibility of domestic democracies, which is under the risk if global governance does not find its own democratic credentials.
Sources:
Pascal Lamy | Tuesday, November 07, 2006
http://www.theglobalist.com/storyid.aspx?StoryId=5740
(2088.) Globalization and its influence on economic growth.
In recent years globalization has become a mainstream everyday word. Although, it is understood and used by many in various ways, some vague and some very specific. Kenichi Ohmae stated in 1992 that “globalization means the onset of the borderless world.” His definition is quite vague and can be incorporated into many different subjects. On the other hand a more specific definition is of Robert Cox who states that the “the characteristics of the globalization trend include the internationalizing of production, the new international division of labor, new migratory movements from South to North, the new competitive environment that accelerates these processes, and the internationalizing of the state… making states into agencies of the globalizing world.” A definition which I think is best for globalization is that of Professor Grzegorz Kolodko, “Globalization is a movement aimed at limiting and abolishing limitations in international economic exchange. This applies to overcoming natural and physical barriers, as a result of which fewer and fewer things are “over the hills and far away,” and more seem to be close at hand.” (Kolodko 82) This definition is best because through globalization we can see and touch things that are at the other side of the world from us, we can share ideas with those whom seem to be worlds apart.
Globalization has a great influence on economic growth all over the world. By some it might be perceived as a bad influence and by others as a good influence. Those who are against globalization may state that it brings extraordinarily large amounts of inequality and suffering to the poor. These individuals believe that the weakness of global rules and global institutions is to blame for further and further marginalization of the poor. They also believe, that the benefits of globalization have not yet reached the poor or developing countries due to globalization having only enlarged the gains of the ruling elite in developing countries and the rich corporations or individuals in advanced countries. I have always been a pro-globalist although I do agree with the idea that the benefits of globalization are not spread out evenly everywhere, into every little part of the world like we would like to believe. It can be said that globalization is a selective process and which has failed to acknowledge that capabilities and opportunities amongst various countries and individuals differ; sometimes quite greatly. When studying for example China one can see that globalization has a great positive influence on the economic growth of the country although it is also a great example of how many inequalities it can create amongst individuals and businesses.
From 1978 to 2009 China’s average annual GDP growth rate was 9.37%. Recently China has overtaken the US as the country with the largest FDI and being the largest exporter in the world. In addition, the number of Chinese firms on the Fortune Global 500 has grown from 3 in the 1990’s to 37 in 2009. It can easily be seen that through globalization and interaction with the rest of the world the Chinese economy has been transformed boosting its economic growth. Even though China’s economic growth has been great recently and has gotten people talking all over the world, one of the country’s biggest problems today is inequality amongst its’ citizens. The reason for this is said to be the influx of multinational firms which have been more of a benefit to the skilled and affluent middle class giving the ability to enjoy better wages, accommodation, and comfort that is totally out of reach for the lower class individuals. As one can see even though China’s economic growth has shot up due to globalization it has also created very great inequality through all parts of the country.
Unlike the individuals who are against globalization there are individuals who believe that globalization is a win-win occurrence. These individuals believe that globalization provides opportunities for both the rich and the poor. The rich and poor countries have to take advantage of what globalization offers and find the best way to maximize their gains. In one way if globalization leads to growth than growth leads to the lowering of poverty, seems pretty simple does it not? Even though in some countries for example as previously mentioned, China, inequality and poverty has increased due to globalization, I believe that due to economic globalization bringing liberalization and integration if done in the right way it should be a very great advantage to less advanced countries, giving them a direct link to the rest of the world.
Let us look at rural farmers as an example. When globalization was not in full effect yet or in those countries where it has not touched yet, farmers had little or no contact with the outside world, it was just too far or too expensive. In this time there was a very high need for middlemen who would work between the farmer “the producer” and the buyer. This created many problems, such as the producers being cheated by the middlemen. When the farmer would sell through a middlemen he or she could state any price they wanted for the produce that the producer offered, this was because the farmer had no clue what the supplier was willing to pay or what the average price of his or her produce was on the market. With globalization and the development of technology, today these so called middlemen barely exist. The farmer can be in direct contact with the buyer, for example over the phone or through the internet. In addition the internet gives these farmers the opportunity to see what their crops and produce is worth so that they are not cheated ever again. It can be said that globalization is breaking economic enclaves in many parts of the world.
Performing such research on the topic of globalization and its influence on economic growth has really opened my eyes. I have always understood what globalization is, but never thought that it has bad sides to it. I guess I only looked at it in a positive way, that it brings people, ideas, and things together making the world better and helping it develop faster and faster. After writing this paper, I know that globalization has varied influences mattering on who and where we look. In some scenarios it can be very beneficial to countries economically, but on the other hand it can also have a very negative influence.
Sources used:
Grzegorz W. Kolodko. Truth, Errors and Lies. Politics and Economics in a Volatile World. (pg. 78-126)
Baafi Antwi, Joseph and Oppong Kwakye, Francis. MPRA. Globalization and its influence on economic growth performance. (pg. 1-15)
http://idv.sinica.edu.tw/wwchu/Globailzaion.pdf
(2087.) Main features of contemporary globalization.
The word globalization is the name for the process of increasing the connectivity and interdependence of the world’s markets and businesses. This process has speeded up dramatically in the last two decades as technological advances make it easier for people to travel, communicate, and do business internationally. Two major recent driving forces are advances in telecommunications infrastructure and the rise of the internet. In general, as economies become more connected to other economies, they have increased opportunity but also increased competition.
Contemporary processes of globalization have several dimensions, such as: cultural, technological, economic, religious and political, because of this topic being so extensive I will concentrate my paper on only some of the main features of contemporary globalization.
One of the main features of globalization would be the integration of economies. The key indicator of this feature, the international trade flows. The trade in goods and services throughout the world has grown very rapidly in recent years and also the annual growth in the value of trade has kept up being around twice the level of the world economic growth. Much of the consequence of this rapid increase in international trade flows could be contributed to the influence of global companies, which dominate the global product and factor markets (TCNs) and also to the result of various trade agreements. Globalization refers to the continuously increasing level of complex interaction between national boundaries, however it is much more than just the growing amount of export and import. Due to issues, that have arisen through the past few years, global awareness has increased and caused by this as well a number of organizations, which are aimed to dealing with the global problems. Such organizations are called non- governmental organizations that bring together people that can be globally or nationally focused and that are not affiliated with the government. Most of the international non-governmental organizations deal with issues concerning energy use, child labor regulation, climate change, these issues to which borders do not pay attention. Amnesty International is an example of a NGO.
In result of increased communication and transportation countries are connected to the rest of the world and they all together form a market. This means that a particular population represents more citizens that would buy a particular product or service. As new markets are opening up, people from the field of business from around the globe are coming together to form multinational corporations in order to enter these new markets. Businesses go global for one very important reason, most jobs can be done by foreign workers for much lower cost than the domestic workers, saving companies a lot of money.
Globalization is lessening the boarders, there are becoming less important, because countries are dependent on one another. Some scientists claim that governments are being less influencing in the increasingly economic world, on the other hand others disagree and claim, that it is the other way around because of the need for order and regulation in such a complex system as the world is.
The following features also occur for example raw materials from different countries are outsourced to manufacturing plants. The sales of products manufactured in these plants include sales in locations other than where they are situated or other than where raw materials are supplied. The next would be the collaboration of people from different cities deigning new products and in processes of manufacturing. Another attribute, investment of people and companies in other countries than their parent, also the employment of all kinds of nationalities, diversification of companies, employing people in locations other than their home countries. All the above mentioned conclude into the process of simply outsourcing businesses around the world.
Thanks to the opportunity, awareness and the improvement of transportation technology and the impact of outsourcing, people have decided to move all around the world in search of a better life, by looking for new homes, jobs or just simply running away from places of danger. The migration process in mostly common for citizens of developing countries, it happens so, because individuals are pushed to seek for places where standards of living and wages are higher and to locations where there is a greater chance for economic success. As the result of electronic transference and notation of investment opportunities, the movement of capital was possible. A lot of investors have noticed the opportunity of placing their capital in developing countries seeing that they have the biggest potential for growth.
A key characteristic of globalization for sure is the improvement in technological telecommunications and transportation . During the last centuries now human-being would have thought that it would take a fraction of a second for people to communicate with other all around the world. They did not have the ability as we do nowadays and in the past interaction was very difficult, however now a call, fax, an instant message or video conference call can easily be by people to connect. Additionally the advancement in the way of transportation has changed dramatically. In the times we now live in almost anyone can book a plane flight and fly across the world and it is just a matter of a few hours. We can state in a metaphorical way, that the world has begun to shrink, taking into consideration the minimized ‘friction of distance’. The diffusion of knowledge would be as well a feature of globalization. Information spreads out really fast nowadays, it is nearly impossible to keep something as a secret. An example of this would be the introduction of automotive faming machines in Asia.
Globalization is a very controversial topic. There is a heated debate about the true effects of globalization and if it really is such a good thing. Good or bad, though, there isn’t much argument as to whether or not it is happening. Globalization for sure has affected the whole world in nearly all possible areas. The features of contemporary globalization mentioned above, where just a few out a long list of characteristics, however it is easy to notice that it has a big influence on our lives and the whole world itself.
(2086.) The term “globalization” has gained great prominence and has been one of the most highly debated topics in recent decade. As Professor Grzegorz Kolodko puts it, globalization is multi-dimensional and it is an economic process that has cultural, anthropological and philosophical dimension. Simply put, it is the bringing of national economies together. In the book, Truth, Errors and Lies, Professor Kolodko discusses six main features of contemporary globalization. Interestingly, the author describes contemporary globalization as the “blink of an eye compared with a whole lifespan” of human existence.
One feature of contemporary globalization highlighted by Professor Kolodko in the book is the rapid increase of world trade volume. Between 1980 and 2002, world trade has more than tripled while world output has only doubled. The rise in trade relative to output is common across countries and regions and this phenomenon is due to several reasons. Falling cost of trade such as transportation, communication and currency exchange and tariffs is one factor. Over the past 20 years, these frictional costs have fallen tremendously as technology improves. Tariffs and non-tariffs barriers to trade have fallen through successive multilateral and bilateral trade agreements and might continue to do so as part of trade agreements such as the Uruguay Round. Rapid increase in world trade is also facilitated by the rising income per head. As a country’s income improves, consumers tend to shift their spending away from basic necessities such as food and clothing products and into manufacturing goods which may offer more scope for product differentiation, diversification and international trade.
Steadily increase in capital flows is the next feature of contemporary globalization. Over the recent years, large capital flows in emerging economies such as China, India and Brazil has taken place. Despite the recent financial crisis, we can observe that the general trend of capital flow across borders is still increasing. While acknowledging the importance of the flow of capital for the countries to develop, we should be cautious against the dangers of the short-term flow of capital. China, Brazil and other fast-growing nations have struggled to contain their countries’ inflation and take control of their heavy inflows of investment money. International Monetary Fund was concerned about the consequences of overheating in these economies. It was clear that globalization brings about more opportunities than harm, but the question lies on whether the country is ready for the expansion.
Population migration is the third feature of contemporary globalization. Although the modern-time movements are not as extensive as in 20th century, recent labour movement is considered significant with at least 10 percent of the world population changing their permanent residence. People leave their countries for better economic opportunities and better social environments. Brain drain is another issue closely discussed along with population migration. More often than not, the direction of such migration is greatly skewed and it favours the more developed countries. Highly skilled workers will be attracted to developed countries where more opportunities are available, leaving behind low skilled workers in the local workforce.
Fourth feature of contemporary globalization worth discussing is the dissemination of new technology. In this knowledge-based economy that we have today, information and computer technologies play an important role. Modern communications and the global spread of information have contributed to the toppling of undemocratic regimes and a growth in liberal democracies around the world. Improved technology has dramatically reduced costs and prices changing the way the world communicates, learns, does business and treats illnesses. The focus is no longer just on manufacturing technologies, but also to innovations in management and marketing methods, which greatly boost productivity and hence increase the output.
Fifth element which Professor Kolodko mentioned, also one of the indispensable elements of modern globalization, is the post-socialist systemic transformation. The communist population is a big market and therefore cannot be left out of the global market. The countries had to be linked to the rest of the world. The market facilitates the transformation of former centrally planned economies. Professor Kolodko states that the process “complements and completes the globalization process itself.” He explains that to have global capitalism to take place, it requires the inclusion of Central and Eastern European countries, China and Indochina. A perquisite to this process would be liberalizing these market economies.
Cultural change is the final element of this current phase of globalization. We witness greater ease in the transfer of ideas through new mediums. Thanks to the invention of the Internet and increase in migration movements, our world has shrunk considerably. Globalization has led to greater recognition of diversity and respect for cultural identities which is improving democracy and access to human rights. Indigenous and national culture and languages can be eroded by the modern globalized culture.
Characterized by these six features, the permanent and irreversible process of modern globalization has already begun. Countries should emphasize on having a sustained and enforced regional integration that will encourage cooperation and contribute to the health of the global economy. With interconnected trade and policy-making, actions of one nation will have a greater impact on others. Multilateralism will be the key strategy and it would be crucial to every nation’s survival.
Sources used:
Kolodko, Grzegorz W., Globalization and Catching-up in Emerging Market Economies.
Kolodko, Grzegorz W., Truth, Error and Lies. Politics and Economics in a Volatile World.
(2085.) Globalization and its influence on economic Growth
There are a lot of definitions about Globalization, but from my own perspective and virtual understanding, Globalization is the act of being globalized, the state of being globalized, especially in the development of an increasingly integrated global economy marked especially by free trade, free flow of capital, and the tapping of cheaper foreign labor market.
People always seem to have a misconception about Globalization and Internalization. But these words are of different terms and categorically and literally have different meanings.
Internalization comes from a Latin word, which originally mean “between” “mutual” and others. For example when a nation is taken as a country, “international” can be interpreted as “between” or among countries”. And its verb form “internationalize” can be translated as “making relations, effects or scopes international.” Or specifically, “bringing under international control or protection. So therefore I think it is fair to say Internalization is derived from the word “ International”, while Globalization deals with relationships of culture, people and economic activity.
Over past decades, world input has been expanding and lots of countries are benefiting from increased cross-border trade and investments. Many other suffer because economic regimes are inefficiently managed, and this weakness reduces their capacity to successfully compete globally. For instance, International mobility of capital, resulting from advances in communications liberalization of financial markets has intensified a the world economy witnesses the unleashing of markets, their openness to competition, privatization and the retreat of the state from economic management are also features of the current global order.
Taking a looking at my country of birth, Nigeria, it has made giant strides towards global economic integration through privatization. It is also liberalizing capital markets with increasing scope of mergers and acquisitions especially in the financial sector. The country has continued to relax capital controls, which posed a significant obstacle to foreign direct investment (FDI). More importantly, Nigeria is an active participant in the New Economic Partnership for African Development (NEPAD) a development plan that seeks to liberate African underdevelopment, poverty, warm and corruption. These are indicators that Nigeria fully supports and encourages globalization.
By integration the world into a global economy through unhindered movement of goods and services, globalization can undermine the development of the library and information sector in Nigeria. This is where national information policy becomes necessary, so that while the nation’s library and information industry benefits from globalization, its side effects can also be properly controlled. It is not intended to portray globalization as a destructive mechanism. Rather it is a universal pursuit for the general welfare of nations. It requires careful acceptance and application in an economy such as Nigeria’s. This can be achieved by certain regulatory guidelines.
There are two opposing views on the issue of globalization. For instance, Anti-globalization scholars perceive it as an underdevelopment strategy, a way of opening up all economies and all production, services, and natural resources to the business operations of expansionary global corporations. To them globalization is a risk to world economies; another form of imperialism that encourages economic exploitation and deceit where a few powerful and greedy individuals and nations seek to subjugate and exploit an unsuspecting majority. To anti-globalization scholars, globalization is championed by developed countries to control the flow of good and services so that weaker countries will remain perpetually disadvantaged.
To globalization apologists, it is a source of global development. It shows the growing influence exerted at the local, national, and regional levels by processes that are global in nature with emphasis on universal growth. It is a new form of humanism that bridges the differences between the human beings, a concept that expresses the universal humanism designed to make the world a better place for all.
According to Scholte, globalization can be appreciated when viewed as an intensification of cross-border interactions and interdependence among nations, as the spread of various objects and experiences to people at all corners of the earth, as a shift in geography where borders lose some of their overriding influences, or as cultural imperialism and systematic imposition of the culture and tradition of dominant nations.
Nigeria’ s Library and Information Environment
The need for information policy in Nigeria in a globalized economy can better understood when viewed against the backdrop of concern raised by anti-globalization movements. There has been a public outcry against the policies, treaties, and agreements that underlie globalization. People have questioned the rationale of international bodies and organizations like the World Bank, IMF, and World Trade Organization (WTO) which champion globalization, on the benefits of austerity, trade liberalization and privatization measure underlying globalization. People have questioned the impact of globalization on the commercialization of information. IFLA has raised alarm on the negative effects of globalization on the information Industry.
Globalization promotes a massive glow of goods and services across borders. It is necessary to develop national policy that will encourage globalization and at the same time regulate its practices. A national information policy would ensure that information is provided to the right person, at the right time, and in the right format. It would ensure that appropriate information is provided to all Nigerians in all spheres of activities by properly equipped libraries and information centers. It would also encourage the provision of minimum standards of operations in acquisition, accommodation, personnel, equipment, and equality of services. It would ensure that the right technology, information-generation resources, publishing materials, and facilities are allowed into the country.
With the emergence of globalization, there has been gradual transformation of the nation’s information sector to have easy access to foreign agencies, which makes it possible for information resources, and facilities find their way into the country, sometimes unsolicited. This has continued to underline the development of the sector because resources from overseas are cheaper.
Conclusion
Globalization and national information policy complement each other. While globalization encourages commerce and industry without borders, so that good and services move freely, national information policy facilitates order and minimizes the side effects of globalization
(2084.) In my comment I would like to focus on globalization and its influence on economic growth basing my knowledge on Your book ‘Truth, errors and lies’, which I find very interesting and in some parts- controversial. I was also lucky enough to be able to attend Your classes, which made me question and rethink my thoughts on such important and widely commented subject as globalization.
Globalization is defined as liberalization of markets by which societies, cultures and economies became more integrated by an increase in world trade, communication and transportation availability. In Your book you say that main highlights of globalization are liberalization, integration and interdependence. There are also lots of unity processes- and example can be freedom in price setting or freedom in going from business to business (no significant exit barriers existing) as far as liberalization is concerned. If we focus on integration it means various markets can be combined into goods or capitals. However, global competition certainly is disadvantage as companies suffer of much stronger competition and smaller ones are not sustainable enough to compete on a bigger scale. Also we can stress that it tends to produce noticeable high levels of inequality due to the same thig- the poorest do not have enough resources to maintain on a decent level whereas the strongest gain the most. And last but not least- interdependence. What helped interdependence to appear was development of new technologies and easily accessible internet. What it means is that we have various trends from one area strongly affect another, even ones you wouldn’t think of like fashion and education.
What I am trying to get to is that you say the universal measures are still lacking. The question that comes to my mind is whether those common features should be any further explored. It may harm cultures which in my opinion should not be taking place as it is something our predecessors worked so hard on developing having so little technology wise comparing to what we have nowadays. Being a professional sports person I am lucky to able to travel a lot, experience different cultures, learn from them and definitely one good thing is that the effects of globalization have not reached the level where we can say we all share the same culture- I do believe that You can agree with me travelling so much yourself. I am not saying that interdependence is a bad thing- not at all. Accessibility to internet and education undoubtly has helped so many of us if not all. Having to travel a lot or work in different cross cultured multinational companies requires us to know cultures- things that are common in our culture often have opposite meaning in Asia. Americans for example are known for their openness and showing emotions, whereas Asians show little face expressions as a sign of being polite. And that in my opinion is a negative point of globalization because being able to observe independency and different values within every boarder is what I look for every time and what I enjoy, and I am sure most the people.
To conclude, I do believe that globalization already has and still will affect our lives in a positive way. I also do think that globalization due to the arguments stated above has a positive influence on the economic growth. However, I do think that globalization in a big term should have its limitations in economical aspects as well as cultural ones that are a part of it. Therefore I think that each country, especially smaller economies, should develop economic strategies that focus on and consider their specific needs.