Economic Development & Globalization

Editor's Notes

• #5: Economic development is a progress of increasing national incomes involving social systems. It means structural change of economic and society having own development capacity that increasing of industry rate, reducing of movement of labour force and the rate of dependence of imports and international dependence of international investment with economical, social equalisation, improvement of social structure behaviour pattern, pursuit of welfare state and political development. Mainly economic development means an increase in quality while economic growth has the meaning of an increase in quantity. The measurements of economic development are GDP per capita, and Human Development Index (HDI). But, the most accurate method of measuring economic development is the HDI, that measures a nations’ achievement in three dimensions of human development: long and healthy life (indicated by life expectancy and birth), knowledge (indicated by literacy rate and education standards), and decent standard of living (indicated by GDP per capita). Economic development can affect mainly three factors. First, the growth of human capital indexes. Second, when there is a decrease in inequality figures. And lastly, when there is a structural changes that improve the general populations’ quality of life. The effect of economic development brings the qualitative and quantitative changes in the economy. The reason is that economic development is more relevant to measure the progress and quality of life in developing nations.
• #6: Economic globalization refers to the increasing interdependence of world economies as a result of the growing scale of cross-border trade of commodities and services, flow of international capital and wide and rapid spread of technologies. It reflects the continuing expansion and mutual integration of market frontiers, and is an irreversible trend for the economic development in the whole world at the turn of the millennium. The rapid growing significance of information in all types of productive activities and marketization are the two major driving forces for economic globalization. The Role of globalization has proven to be essential to a nation’s ability to yield the maximum potential from its available resources. The maximization of resources lead a nation to the improved economic development. The success of economic development of a nation hinges on its ability to globalize. Globalization plays central role in determining the future of the world. In other words, the fast globalization of the world’s economies in recent years is largely based on the rapid development of science and technologies, has resulted from the environment in which market economic system has been fast spreading throughout the world, and has developed on the basis of increasing cross-border division of labor that has been penetrating down to the level of production chains within enterprises of different countries.
• #7: increasing interdependence of world economies as a result of the growing scale of cross-border trade of commodities and services, flow of international capital and wide and rapid spread of technologies. The process of economy globalization is also the process of global industrial restructuring and readjustment. With the development of science and technology and increase of income level, industrial structures of all the countries have been also undergoing readjustment and upgrading. economic globalization has intensified the competition at the international market among enterprises from different countries. 7. A Multi-dimensional Process: Economically, it means opening up of national market, free trade and commerce among nations, and integration of national economies with the world economy. Politically, it means limited powers and functions of state, more rights and freedoms granted to the individual and empowerment of private sector; culturally, it means exchange of cultural values between societies and between nations; and ideologically, it means the spread of liberalism and capitalism. 8. A Top-Down process: Globalization originates from developed countries and the MNCs (multinational corporations) based in them. Technologies, capital, products and services come from them to developing countries. It is for developing countries to accept these things, adapt themselves to them and to be influenced by them. As a result, the values and norms of developed countries are gradually rooted in developing countries. This leads to the growth of a monoculture - the culture of the north (developed countries) being imposed on the South (developing countries). This involves the erosion and loss of the identity and the cultures of developing countries. Globalization is thus a one-way traffic: it flows from the North to the South. But this view of globalization has been contested. Some scholars have argued that globalization tends to provoke backlash at the community, local, regional and ethnic levels when the national government fails to resist or counter the invasion of globalization. In the face of aggression of globalization, the people, in protest against the failure of the national government to defend them, develop or strengthen their allegiance to their community, locality, region or ethnic group. In this process, local identity, regional identity and ethnic identity take root and get strengthened. Thus globalization goes hand in hand with localization, regionalization and multiculturalism.
• #8: Globalization is the system of international integration that often arises from the interchange of world products, views, ideas, and some aspects of culture. Today, it continuously generates in the interdependence of cultural activities and economic of a certain place or country. Most countries today are dealing with globalization starting from their detachment up to the competitive world. It is often integrated in the investments, trade, technology, and some of the mobile factors of manufacture such as capital and labor. All people today know that the presence of globalization is really a great thing due to the impressive benefits that it provides not only to a certain country but also to the whole world. However, there are some details they don’t know about it and these are the advantages and disadvantages of it Before you proceed to the advantages and disadvantages of the globalization, lets first take a look at the characteristics of globalization and its trend
• #9: The main features of globalization are stated below. 1. Liberalisation: The freedom of the industrialist/businessman to establish industry, trade or commerce either in his country or abroad; free exchange of capital, goods, service and technologies between countries; 2. Free Trade: Free trade between countries; absence of excessive governmental control over trade; 3. Globalization of Economic Activities: Control of economic activities by domestic market and international market; coordination of national economy and world economy; 5. Borderless Globe: Breaking of national barriers and creation of inter- connectedness; the ideal of 'borderless globe' articulated by Kenichi Ohmae. 9. Global State vs Global Civil Society: In protest against the harmful effects of globalization on the vast multitude of people all over the world, particularly in developing countries, protest marches, demonstrations and meetings have been organized in different countries. These protests have taken militant forms in the last decade. Protest groups have tried to disturb and paralyse the meetings of WTO, World Bank and IMF. They charge that these UN-based organizations have been the agents of globalization and that they have been used by developed countries as their instruments to exploit and dominate developing countries. These protest groups-environmental groups, human rights groups, women's groups, farmers' groups and peace groups have interlocked themselves at the global level. As a result, a global civil society, though yet not fully developed, has come into being, but a global state is a distant dream. The UN and its affiliated organisations which could have been the foundation of a global state have been weakened by many forces including glo­balization. http://www.ehow.com/info_8068052_characteristics-economic-globalization.html
• #10: Under the framework of GATT and WTO, many countries have gradually cut down their tariff and non-tariff barriers, more and more countries open up their current accounts and capital accounts. All of these have greatly stimulated the development of trade and investment. Moreover the transition of the former centralized planned economies to market economies has made it truly possible to for the world’s economies to integrate into a whole. Multinational corporations (MNCs) have become the main carriers of economic globalization. They are globally organizing production and allocating resources according to the principle of profit maximization. And their global expansions are reshaping macroeconomic mechanisms of the operation of the world economies. The signing of this agreement shows the determination of the Chinese government to firmly speed up the reform of its economic system and further integrate itself into the process of economic globalization. It is a win-win agreement. On one hand, the United States can increase its exports of goods and services to China, thus creating more employment opportunities. While on the other hand, China can boost its economic growth by increasing its share of the US market
• #12: The Advantages of Globalization 1. Education
Due to globalization, the rate of education is getting even higher. Almost 99 percent of people today have finished their studies and achieved decent jobs. They also learn lots of things which guide them to live in a wealthy or simple lifestyle. 2. Employment
Globalization generates employment opportunities for those people who still don’t have a job. Most companies today move to a well civilized country in order to give a chance to unemployed workers to gain a job that suits their abilities and expertise. 3. Cheaper Price
Most products in the market are offered in a cheaper price due to competition. 4. Quality of Product
Through the machines that were produced because of globalization, the products offered to the people come with great quality. 5. Communication
The technology today allows the people to achieve clear and continuous communication with their family or the VIP’s in different countries. The Disadvantages Of Globalization 1. Loss of Culture
Because entire things today are well built and well advanced, the former culture and tradition of the people disappeared. Most of the people choose the well advanced world rather than to live just like the way before. 2. Health Problems
There are many health illnesses that were developed when globalization existed. Most health issues that occur are serious. 3. Environmental Degradation
The business mutiny really altered the outlook and level of economy. Because most companies today are utilizing the natural resources, deforestation arises. They often destroy the land which often contains lots of minerals and resources. 4. Disparity
Even though globalization is widely open in the latest avenues such as employment and market, there is still a disparity that comes along with the improvement of the economy. Structural unemployment is obligated to the presence of disparity. The advantages and disadvantages of globalization above will surely give you lots of great learning. With the disadvantages of it, many people today are not happy primarily on the health issues and other negative things that affects in their everyday living.
• #13: Globalization of product and financial markets refers to an increased economic integration in specialization and economies of scale, which will result in greater trade in financial services through both capital flows and cross-border entry activity. The technology factor, specifically telecommunication and information availability, has facilitated remote delivery and provided new access and distribution channels, while revamping industrial structures for financial services by allowing entry of non-bank entities, such as telecoms and utilities. Deregulation pertains to the liberalization of capital account and financial services in products, markets and geographic locations. It integrates banks by offering a broad array of services, allows entry of new providers, and increases multinational presence in many markets and more cross-border activities. Some countries have profited from globalization: China: Reform led to the largest poverty reduction in history. Between 1990 and 2005, poverty rates in the country fell from 60% to 16%, leaving 475 million fewer people in poverty. India: Cut its poverty rate in half in the past two decades. Uganda: Poverty fell 40% during the 1990s and school enrollments doubled. Vietnam: Surveys of the country's poorest households show 98% of people improved their living conditions in the 1990s.
• #14: Globalization of product and financial markets refers to an increased economic integration in specialization and economies of scale, which will result in greater trade in financial services through both capital flows and cross-border entry activity. The technology factor, specifically telecommunication and information availability, has facilitated remote delivery and provided new access and distribution channels, while revamping industrial structures for financial services by allowing entry of non-bank entities, such as telecoms and utilities. Deregulation pertains to the liberalization of capital account and financial services in products, markets and geographic locations. It integrates banks by offering a broad array of services, allows entry of new providers, and increases multinational presence in many markets and more cross-border activities. Some countries have profited from globalization: China: Reform led to the largest poverty reduction in history. Between 1990 and 2005, poverty rates in the country fell from 60% to 16%, leaving 475 million fewer people in poverty. India: Cut its poverty rate in half in the past two decades. Uganda: Poverty fell 40% during the 1990s and school enrollments doubled. Vietnam: Surveys of the country's poorest households show 98% of people improved their living conditions in the 1990s.
• #15: Increased Standard of Living Economic globalization gives governments of developing nations access to foreign lending. When these funds are used on infrastructure including roads, health care, education, and social services, the standard of living in the country increases. If the money is used only selectively, however, not all citizens will participate in the benefits. Access to New Markets Globalization leads to freer trade between countries. This is one of its largest benefits to developing nations. Homegrown industries see trade barriers fall and have access to a much wider international market. The growth this generates allows companies to develop new technologies and produce new products and services. While an influx of foreign companies and foreign capital creates a reduction in overall unemployment and poverty, it can also increase the wage gap between those who are educated and those who are not. Over the longer term, education levels will rise as the financial health of developing countries rise, but in the short term, some of the poor will become poorer. Not everyone will participate in an elevation of living standards. The influx of foreign companies into developing countries increases employment in many sectors, especially for skilled workers. However, improvements in technology come with the new businesses and that technology spreads to domestic companies. Automation in the manufacturing and agricultural sectors lessens the need for unskilled labor and unemployment rises in those sectors. If there is no infrastructure to help the unemployed train for the globalized economy, social services in the country may become strained trying to care for the new underclass. But others have not: Many countries in Africa have failed to share in the gains of globalization. Their exports have remained confined to a narrow range of primary commodities. Some experts suggest poor policies and infrastructure, weak institutions and corrupt governance have marginalized some countries. Other experts believe that geographical and climatic disadvantage have locked some countries out of global growth. For example, land-locked countries may find it hard to compete in global manufacturing and service markets.
• #16: Increased Standard of Living Economic globalization gives governments of developing nations access to foreign lending. When these funds are used on infrastructure including roads, health care, education, and social services, the standard of living in the country increases. If the money is used only selectively, however, not all citizens will participate in the benefits. Access to New Markets Globalization leads to freer trade between countries. This is one of its largest benefits to developing nations. Homegrown industries see trade barriers fall and have access to a much wider international market. The growth this generates allows companies to develop new technologies and produce new products and services. While an influx of foreign companies and foreign capital creates a reduction in overall unemployment and poverty, it can also increase the wage gap between those who are educated and those who are not. Over the longer term, education levels will rise as the financial health of developing countries rise, but in the short term, some of the poor will become poorer. Not everyone will participate in an elevation of living standards. The influx of foreign companies into developing countries increases employment in many sectors, especially for skilled workers. However, improvements in technology come with the new businesses and that technology spreads to domestic companies. Automation in the manufacturing and agricultural sectors lessens the need for unskilled labor and unemployment rises in those sectors. If there is no infrastructure to help the unemployed train for the globalized economy, social services in the country may become strained trying to care for the new underclass. But others have not: Many countries in Africa have failed to share in the gains of globalization. Their exports have remained confined to a narrow range of primary commodities. Some experts suggest poor policies and infrastructure, weak institutions and corrupt governance have marginalized some countries. Other experts believe that geographical and climatic disadvantage have locked some countries out of global growth. For example, land-locked countries may find it hard to compete in global manufacturing and service markets.
• #18: . Globalization itself can not bring a fair and reasonable new international economic order, and some developing countries that are unable to enjoy the benefits and evade the harms are confronted with the danger of becoming outsiders. Therefore in the face of economic globalization, developing countries are bogged in a dilemma: On one hand, if they keep themselves away from this process, they will surely be left far behind the development of other economies. On the other hand, if they participant actively in the process, it is most probable that they will be reduced to annexes of developed countries due the latter’s dominance in the process. In view of this anticipation, the interests of developing countries must be guaranteed and their say enlarged in the process of developing a new international economic order. The precondition for the development of economic globalization to gain a sustainable driving force for its development is that growth sharing must be guaranteed. That is to say, the progress of globalization no only should bring huge benefits for the world economy, but also should make these benefits available to every country and to different departments and interest groups.
• #19: . Globalization itself can not bring a fair and reasonable new international economic order, and some developing countries that are unable to enjoy the benefits and evade the harms are confronted with the danger of becoming outsiders. Therefore in the face of economic globalization, developing countries are bogged in a dilemma: On one hand, if they keep themselves away from this process, they will surely be left far behind the development of other economies. On the other hand, if they participant actively in the process, it is most probable that they will be reduced to annexes of developed countries due the latter’s dominance in the process. In view of this anticipation, the interests of developing countries must be guaranteed and their say enlarged in the process of developing a new international economic order. The precondition for the development of economic globalization to gain a sustainable driving force for its development is that growth sharing must be guaranteed. That is to say, the progress of globalization no only should bring huge benefits for the world economy, but also should make these benefits available to every country and to different departments and interest groups.