45-DAYS BUYER PROTECTION.

Help Centre Contact Us 📑 NEWSLETTER     

WISHLIST  LOGIN CART / ₹0.00 0


HOME SHOP  BLOG VIRTUAL LEARNING CENTRE INFO 
TEAM BUILDING WORKSHOP

BUSINESS, HUMA N ISSUES

Globalization and its effects on developing

countries.
PO STED O N FEBRUARY 16, 2020 BY TO NY ZO HARI

16

Feb

Globalization – the growing integration of economies and societies around the world –
has been one of the most hotly-debated topics in international economics over the past
few years. Rapid growth and poverty reduction in China, India, and other countries that
were poor 20 years ago, has been a positive aspect of globalization.But globalization has
also generated significant international opposition over concerns that it has increased
inequality and environmental degradation. But what is the concept of globalization?
Globalization is the most talked and debated issue in the contemporary world. It is a
concept that escapes precise definition. In most cases, it is described rather than
defined. Some commentators have described globalization as a stage of capitalism or
late modernity and some remarks that globalization is a new way of thinking. However,
it does not mean the same thing for all. For some, globalization is a process of opening up
economies so that trade between countries could take place freely. For them increasing
globalization has helped the expansion of opportunities for nations and benefited
workers in rich and poor countries alike. Brings positive benefits for consumers, helping
to increase choice, drive down prices, improve services and create new jobs and
opportunities. Globalization can therefore be seen as a positive force for change that has
the potential to raise living standards and drive economies forward.

Globalization and its effects on developing countries.

However, this is not readily acceptable for all. Many think globalization as the concerted
strategy of the industrial world, particularly of the Multinational Corporations, to
safeguard their interest and spur a new form of colonization. After opening of market,
LDC[1] will become a supermarket of foreign goods, which are cheaper, killing local
industries, increasing many more jobless. For them, globalization means increasing
poverty and deteriorating living standard of the workers, widening disparity between
the rich and the poor within the country and also among the countries, and
internationalization of capital to the detriment of labour market. Even for the
moderates, globalization is a process of restructuring the world economy to find ways
for business to maximize profits. And even some ultra-skeptics have dismissed any
notion of globalization as myth; those analysts’ claims concerning globalization are
greatly exaggerated, if not utter fantasy.


Programs for Sustainability

Equity-Focused
Create a more s u s tain able, equ itable fu tu re s h aped an d s h ared by all. Don ate Today!

sustain.org OPEN

The IMF[2], the World Bank[i] and the WTO[3] and more generally, the high income
countries are held responsible for influencing and largely determining the course of the
globalization process. They are also seen as the driving forces behind the policy reforms
that the developing countries had to implement as part of their structural adjustment
programs under the supervision of the IMF[ii], the World Bank and the WTO. It is
obvious that those countries and organizations will only foster their own interests.
Globalization has become an unstoppable phenomenon affecting all aspects of our lives.
Some Governments, political parties and trade unions often view this development as at
best challenging and at worst sinister. Business and their representative organizations,
on the other hand, promote the benefits of open trade across political boundaries and
the integration of markets to create global opportunities.

Globalization is a process of increasing economic and non-economic linkages across the

world. In the broadest sense Globalization implies integration of economies and
societies across the globe. It is equated with the massive, irresistible cross-border flow
and integration in the movement of goods, technology, labour and capital, resulting
mainly from breakthroughs in transportation and communication. In a wider
perspective globalization, covers various activities such as cultural globalization,
political globalization, ecological globalization, economic globalization and so on. But
here I am mainly discussing economic globalization and as the same time try to cover
some other aspects of globalization too. Economic globalization implies increasing global
inter-linkages of the markets in goods, services, capital and financing. Such a process has
speeded up in the recent decade. The contributory factors for rapid economic
globalization are liberalization, deregulation, privatization, and declining costs of
transport and communication.

The micro-electronics revolution has irrevocably changed the essence of human contact
to earth. Distances are shrinking and information is spreading faster than ever before.
The internet and World Wide Web have helped this process. Perhaps the most
important catalyst for globalization is the spread of information and communications
technology. Through the magic of ICT[4], it is now possible to instantly access useful
information through the Internet and the latest computer technology.

While talking about globalization, we must understand that most LDC national economy
has not even internally integrated. Market institutions and forces are yet to emerge in a
competitive way. Nearly half of the world population lives in absolute poverty and
illiteracy. More than 70 per cent of the population earns livelihood from agriculture,
which, however, constitutes only about 40 per cent of the LDC national income. Lack of
proper planning process, commitment, accountability, and integrity of the governments,
and lack of people’s participation in development activities caused that the developing
countries, particularly the LDC, have not been able to substantially benefit from
international trade due to both external as well as internal constraints. The developing
countries have not been able to increase their share in international trade in spite of the
preferential market access opportunities provided by the developed countries. It has
been realized that market access for the developing countries is commercially
meaningless if they cannot increase their competitiveness in the sectors in which they
have preferential treatment. In the developing countries, lack of efficient production
facilities, adequate infrastructure, weak management capacities, low level of
technology and lack of technological capacity and inefficient transportation,
communication and education, limits their potential to specialize in crucial productive
sectors and to reap the benefit of preferential trading facilities.[5]

For economies like most LDC to integrate into the world trading system on terms and
conditions favourable to their development needs, they need to build their capacity to
negotiate at the multilateral level. This will happen only if they are able to increase their
ability to understand the multilateral trading regime espoused by the WTO and
formulate their national policies to benefit from it.

They also need to strengthen their capacity to benefit from international trade by
increasing their competitiveness through investment in infrastructure, development of
human resources, strengthening of institutional capacity, enhancement of technological
capability, and supporting local enterprises, including linkages between large and small
enterprises. By joining the WTO, they can now fully enjoy the rights that all members
have under the WTO agreements, such as non-discrimination by other WTO members
and the ability to use the WTO’s dispute settlement procedure. The membership will
provide tremendous international market opportunities for LDC. However, taking
advantage of the new opportunity will also be quite challenging. Most of LDC has few
industries and hence very little to export. Many of them do not have enough surplus
produce. Threats to domestic industries from cheap imports also loom.
ICT[6] allows trade to become simpler and more streamlined even need not and
arguably should not entail universalization, thus increasing the value and speed of
transactions. Companies are not limited to physical locations or their own organizational
boundaries for providing products and services. Networked information systems are
allowing companies to coordinate their geographically distributed capabilities and even
coordinate with other organization as virtual corporation. One major advantage of
promoting electronic commerce in most developing countries is that they can provide
relatively cheap access to global markets even for small and medium-sized enterprises
in remote areas. Small and Medium Enterprises (SMEs) have been playing a significant
role in the economic development of most developing countries. Potential benefits of e-
commerce for the developing countries are immense. Any company can enter global
markets where size and location have become rather irrelevant. Success in e-commerce
will have an immediate impact not only on productivity and profits, but also generate
new jobs employment, educational opportunity and livelihood. Even that most accounts
of globalization have been silent on its consequences for knowledge framework, Fredrik
Hären [7] believe that ICT has even generate fundamental different methodologies in
the developing countries. As the student in the developing countries can now attend
some of the best international university courses online and accessing almost any
information to educate themselves in the same level as their competitor in developed
countries. From not having access to any books to the all books in the world.

After accession of WTO, most countries have tremendous opportunities for exporting
their products in the international market. As even the former head of Iran’s National
Center for Research on Globalization says Tehran should prioritize joining the World
Trade Organization.[8] But to substantially benefit from international trade, LDC must
need to strengthen their capacity by increasing their competitiveness through
investment in infrastructure, development of human resources, strengthening of
institutional capacity, enhancement of technological capability, educational
improvement and supporting local enterprises, including linkages between large and
small enterprises. As Esfandiar Rahim-Mashaei [9] noted that it would not be possible to
attract investments without providing the necessary support to the private sector. We
have been experiencing the fact that the more technologically capable countries
continue to dominate their less capable counterparts, effectively monopolizing
opportunities for economic growth through their insurmountable advantage in ICT.
Given these diverse possibilities occasioned by globalization, it is of extreme necessity
for developing countries to re-examine the trends in ICT development worldwide and
devise ways by which their advantages can be maximized. This includes the need to
extend the breadth and reach of ICT to peoples and sectors that stand to benefit the
most, while curtailing its illicit and destructive uses. Even though there are those who do
not support globalization the fact is that it is here to stay and if we do not embrace this
thought we may get burned.

But the challenge for LDC is how to achieve a sustainable development in the globalize
world of rapid technological change, driven by inequalities of wealth and power. And
the main question is how LDC could achieve competitive advantage when the injustice
global competition for educated talent has distorted the local market for educated
professionals in many of LDC. As the population of the developed world ages, many
countries face shortages of quality educated professionals. Western nations are turning
to younger nations to fill this gap. Brain drain[iii] is a significant policy challenge for
developing countries undergoing globalization. Brain drain describes the emigration of
educated and highly skilled workers. Every day, in countries all over the world, people
leave their home countries in search of a better life for themselves and their families.
However to address the solution to those issues we may need to define sustainability
and the concept of sustainable production first.

Sustainability has now become world’s number one issue to be pursued for achieving a
concrete and long lasting development. It is a process, which tells of a development,
which commands all aspects of human life affecting sustenance. Sustainability means
resolving the conflict between the two competing goals: the sustenance of human life
and the integrity of nature. Sustainability involves the simultaneous pursuit of economic
prosperity, environmental quality and social equity famously known as three bottom
lines. In essence, sustainability is the ability of sustaining sustainable development,
which is a process of change in which the exploitation of resources, the direction of
investments, the orientation of technological development and institutional change are
all in harmony and enhance both current and future potential to meet human needs and
aspirations. The concept of sustainability is discussed at a time when environmental
problems caused by the various human activities are requiring serious attention.
Remedy lies with sustainable development, approaching the management of natural
resources and the adverse effects of globalization in order to address a range of
problems. In 1992, the international community as adopted at the Earth Summit in Rio
de Janeiro discussed Agenda 21, the world’s plan of action for sustainable development.
It was a landmark achievement, incorporating environmental, economic and social
concerns into a single framework. It contains over 2,500 wide-ranging and achievable
recommendations for action on issues such as, reducing wasteful use of natural
resources, fighting poverty, protecting the atmosphere, oceans, animal and plant life. So
sustainability is achieved when it “meets the needs of the present without compromising
the ability of the future generations to meet their own needs”.
As agreed in Rio de Janeiro sustainable development is associated with issues of social
justice and the environmental democracy which stands for the creative participation of
international communities in the construction of the new environmental rationality for
sustainable production[12], so following the Agenda 21 as the roadmap to achieve
sustainable development, brain drain in the developing countries can be solve by
creation of an independent, international organization in the interest of global
sustainable development to regulate the flow of people across borders and make sure
that the training and education of skilled workers will not be at the expense of LDC. As a
step stone for fighting poverty and promoting democracy, people in the developing
countries need to be trained and having access to the education and as the training and
education is still cheaper in the LDC then the developed countries. Developed countries
by compensating LDC can use those people as their source for the future labour
shortage and as the same time achieve economic of scale and creating a new market.

-20% -20% -5%

₹135 ₹108 ₹968 ₹195 ₹760

Buy Health products
Netmeds.com

Of course the economic policy is not the only core human and social values. But as the
most governments have engaged in sustainable development policies driven by the idea
of economic progress this can be a good starting point followed by the pursuit of other
primary concerns such as cultural promotion, ecological care, democracy and peace.

But does the globalization and economic progress help humanity to achieve or improve
our values such as ecological care, democracy and peace? To answer this question we
shall define and describe each of those elements separately in details which are clearly
beyond the space of this article. However as we all know economic inequality and the
poverty has been the base of most human conflicts even though Paul Hirst [13] believed
most likely that the environmental crises will cause the shortage of resources, raw
material, water, dry land and energy which will produce competing claims for resources,
and being the main reason for the future conflicts and wars. But even without at looking
at many studies and researches which has been done on the effects of globalization on
environment, democracy and peace, we can certainly claim that globalization and
economic progress will help and has helped to the improvement of our living standard
and so many of those values vital to us. However even though the discourse on
sustainable development is not homogeneous, but most people will agree that it will be
easier to overcome future global challenges with international cooperation rather
segregation whatever the challenges will be, environmental degradation or regional
conflicts.

By Tony Zohari

[1] Less Developed Countries

[2] International Monetary Fund
[3] The World Trade Organization
[4] Information and Communications Technology
[5] America Vera-Zavala, Global Justice is Possible
[6] Information and Communications Technology
[7] Funder of www.interesting.org
[8] www.presstv.ir
[9] Head of Iran’s National Center for Research on Globalization
[12] Enrique Leff, Sustainable development in developing countries
[13] War and power in the 21st century
 

[i] The World Bank is a vital source of financial and technical assistance to developing
countries around the world. World Bank is not a bank in the common sense. The World
Bank is made up of two unique development institutions owned by 185 member
countries—the International Bank for Reconstruction and Development (IBRD) and the
International Development Association (IDA). Each institution plays a different but
supportive role in The World Bank mission of global poverty reduction and the
improvement of living standards. The IBRD focuses on middle income and creditworthy
poor countries, while IDA focuses on the poorest countries in the world. Together The
World Bank provides low-interest loans, interest-free credit and grants to developing
countries for education, health, infrastructure, communications and many other
purposes.
 [ii] The IMF is an international organization of 185 member countries. It was established
to promote international monetary cooperation, exchange stability, and orderly
exchange arrangements; to foster economic growth and high levels of employment; and
to provide temporary financial assistance to countries to help ease balance of payments
adjustment.
[iii] International Migration, Remittances and the Brain Drain, A Study of 24 Labor-
Exporting Countries by Richard H. Adams, Jr. 

-20% -20% -5%

Buy Health products

Netmeds.com

     

This entry was posted in Business, Human Issues and tagged Globalization, Management & Leadership.

TONY ZOHARI
Marketing & Advertising Consultant | Producer | Educator | Art Lover |
Father

Advertising effectiveness… democratic

 How to write a practical promotional plan
primary 2020


BLOG CATEGORIES

Advertising & Promotion

Art & Design 

Business 