Advantages And Disadvantages Of Globalisation Economics Essay

Advantages And Disadvantages Of Globalisation Economics striveRedding (1999) defines that globalization as the change magnitude integration between the markets for goods, services and pileus and at the same time the breakdown of borders.Other researcher embed that the process of globalization not only includes opening up of worldly concern trade, maturation of advanced technologies such(prenominal) as communication, internationalisation of financial markets, emergence importance of multi-national corporations (MNCs), population migrations and generally increased mobility of persons, goods, majuscule, data and ideas only if excessively critical problems such as infections, diseases and pollution (Braibant, 2002).Thus, from many point of views, globalization is seen to be the borders between countries, governments, the parsimoniousness and communities, increasing liberalization and openness of markets, especially through the elimination of barriers to trade in goods and serv ices and the development of integrated international financial market. PRUS (2001) simplified the term of globalisation as a process of increasing connectivity, where ideas, capital, goods, services and people are withdrawred across bucolic borders.Labour and employmentPositive touch in time, the process of globalisation substructure bring much theorizes opportunities in host coarse when MNCs move their action operation into rearing countries. match to Rama (2003), channel creation only willing occur in export-processing zones where elephantine amount of work military strengths are needful in order to keep the production running.A good exercise of jobs creation would be Coca-Cola decided to invest in Malaysia with a spic-and-span bottling plant, consist of $301 million investiture. They stated that this investment will fit to pee 600 to 800 jobs at the plant with 8,000 jobs connect with local anaesthetic suppliers (Agence France-Presse, 2010). negative Impac t forest (2000) stated that the government of evolution countries start to compete with each early(a) by deregulate their policy to attract foreign direct investment (FDI) and multi-national corporations (MNCs). Hence with lower the salarys and taxes rates enable the investors to avoid the hazard of losing their capital invested in exploitation country.Research done by The economist (2001) and Woods (2000) and found that when the government of growing countries increasing minimum wage and fatigue safety standards in order to protect local workers rights, this major power could cause MNCs relocate their operation to another developing countries, where that particular countrys labours, who were likely willing to accept low wages by any standards, pretermit of union representative and legal protections such as child labour and other gross labour that abuses by global companies.Technology enchantPositive ImpactTransfers of technology depend on resource purchasable by MNCs with the world power to achieve the level of technology development in order to make them competitively in global market. Usually developing countries unable to do research and development on their own as the technologies that required implementing the emulation strategy are most likely to scratch from other countries through technology transfer (Stewartet al., 2003). Hipkin and Bennett (2003) stated that the extent of developing countries, participation in global economy depend on their ability to respect where the importance of technological transfer give the bouncenot be overemphasized.There are ten modes of technology transfer which has been identified by Peter Buckley (1985, citied in Transnational Corporations and Technology Transfer to Developing Country) but the most schematic form will be whole-owned subsidiaries. This form is also known as FDI where MNCs ordure lower their transaction cost (Cantwell and Dunning, 1994).Hence technology transfer to subsidiary in other country allow developing country to learn the operation of new technology. Sometime subsidiary didnt allow local firms to learn but they somehow find their counselling to obtain the technology such as hiring operator from that particular subsidiary (Mansfield and Romeo, 1980).Negative ImpactHowever globalisation can also bring negative refer to developing country. Certain MNCs transfer their technology to developing country as those technologies might cause health problem to employees as well as local citizens.Good example would be Bhopal calamity ca apply by the States MNCs subsidiary, Union Carbide India Limited that grows pesticides. Sophisticate technology bought into India but the leakages of chemical caused more than 500,000 people suffer from the disaster (Eckerman, 2005).Social jouncePositive regardGlobalisation can bring good and bad effect to developing countries. Developing able to reduce the amount of population that live down the stairs poverty level with the hel p of globalisation as the effect of job creation has been achieved (Lee and Vivarelli, 2006). Local citizens are able to get a job and ensure the survival of their family and improve their living standard.Negative ImpactIn this era of globalisation, social aspect is tightly related to the effect of the waves of globalisation such as living standard, career, families and their communities. In this case, globalisation are claimed that it is a method to organise someones life which consist of assimilation, communication among people, organisation, and the government as well in other part of the world.Hence, it was also called the method that used driven by global trade and investment aided by information technology. Besides, this issue is also directly inter-related with some other issues such as unemployment, disparity and scarcity, and environment as the chain effect of the waves of globalisation (Globalisation 101, 2002).The inter-relationship between the technology and economical is very critical and it succeeded in consisting the move of the theoretical approaches where the centrality of changes in technology have been accepted and the dynamic force of the term innovation in the elements of economical changes (Freeman, 1998 von Tunzelmann, 1995). According to Nussbaum and Sen (1993), investment in technology appears to have an optimistic link to wider philosophy in developing economic interests which include social choices and disembarrassdom capability in longevity and education.Globalisation on impact of the countries economyPositive ImpactAccording to Baghwati (2004) globalisation is playing the significant role of enhancing economic affluence by offering new hope to developing countries. Gangopadhyay and Chatterji (2005) saying that globalisation has been characterised as a reduction in trade barriers such as free go of goods, services and labour from one country to another.Richardson (2000) contends with these views as, the effect of this is increa sing the trade which turn into increased income for developing countries and serves as an opportunity to fortify their economies by taking the advantages of trade. This statement is true and has been proving by (Richardson, 2000 Dierks, 2001) that globalisation has greatly reduced the trade barriers between countries through adjustment of tariffs and import duties.Negative ImpactThe rise in globalisation has increased capital flow into developing countries economies. Foreign Direct Investment injects capital into developing countries in terms of stabilizing the countries economic. This is also a benefit that increased the countries funding through loans and grants from developed countries (Aurifeille, 2006). However, there will be net capital inflow that could lead to negative effects on trade.Chan and Scarritt (2001) noted that the large capital inflows were caused by the appreciation of exchange rates and inflationary pressures that impact on the countrys current account. This m eans that globalisation in improving the countries economy could actually stop the progress of the economy unless the host countries balance of payment focuses on the foreign plant where the export is more than import.The adjustment in trade barriers has lead to the promotion of specialisation to developing countries because they are able to concentrate on the production of commodities which can be produced at the least(prenominal) cost (Aurifeille, 2006). Developing countries fully use the advantage of globalisation to parent their income through trading goods which they can produce most effectively.Such development is giving developing countries an opportunity to obtain goods that prove expensive to produce in their own countries. Corsi (2009) saying that, competition is always an effective way of enhancing innovation to produce better quality goods. Thus, globalisation had enhanced competition as the flow of goods and services between countries has becomes easier.Globalisation impacts on economic and environmentNegative ImpactEconomic and environmental problems show fewer signs of improvement for a large share of the worlds people but when comes to outdoor(a) debt levels, weak export and real income growth, it often enter a mutually destructive relationship with environmental and resource degradation which linked to the husbandry and urban activity. The important connection between economic and environmental problems can be clearly seen in the widespread social and economic impacts towards dominion erosion, deforestation, urban congestion, unmanaged chemical such as heavy metals, air pollutants, satisfying and liquid industrial and residential waste (Long, 1990).According to Huber (1982) and Simonis (1989), ecological modernization was one of the primary modes of sustainable development which comprised both a conjecture and a policy or political programme based on the view that comprehensive political and economic change could be apply to achiev e a less material and energy-intensive economy through the use of integrated and preventive resource and pollution-reduction strategies.This technologically-intensive mode of production would not be a viable option for lower income nations because the intensive technological buns of ecological modernization suggests that its effective operation and flow-on benefits are probably beyond the reach of poorer nations. Indeed, rapid global technological progress has often resulted in the Intensification of uneven development rather than enhanced opportunities for the poor (Freeman, 1987). The post-materialist solution for technologically advanced economies wouldConclusionAlthough globalisation can help developing countries to grow and become developed countries through different kind of benefits enjoyed by them but at the same time globalisation can bring disaster to developing countries, even can bring the whole country turn over in few months times.Research done by scholars indicated that globalisation can be a benefit to developing country but at the same time its also a threat to developing country. However the net benefits enjoyed by developing countries is greater than net cost salaried as shown in this literature view can say that globalisation can actually bring benefits to developing countries.