The Effects of Globalization on Australia

The Effects of Globalization on Australia
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EXECUTIVE SUMMARY
Globalization is the free movement of goods, capital and people throughout the globe. The recent wave of globalization has affected all the big economies of the world significantly, and Australia is one of those economies (Lofgren, 2009). The biggest driver of globalization throughout the globe is World Trade Organization (WTO). WTO has been establishing rules and regulations in order to enhance free trade between countries. Globalization is being viewed as an opportunity and a threat at the same time. Globalization is an opportunity because it accelerates the economic activity of a country and it increases the job opportunities in a country. It is a threat because it causes significant withdrawal of revenue from the cycle of economy of a country. Multinational Corporations also affect the local businesses of a country and they influence the market equilibrium as well. Globalization also causes exploitation of human capital, violation of environmental rules and influence over the cultural heritage of countries.
INTRODUCTION
Globalization is the unhindered movement of goods, people and capital throughout the globe. Globalization can be similar to a world having no borders. This phenomenon has its advantages but it is not independent of some disadvantages as well. Australia has always taken an active part in globalization. It has been active in global trade and exchange of capital for a significant period of time. The only thing that has changed now is the scope of globalization. The scope of globalization has widened significantly in the recent past. The recent acceleration in the exchange of goods, capital and ideas is the effect of increased economic integration and developments in the global communication. There has been an increase in investments by multinational corporations all around the world including Australia (Ball & Goodson, 2007). There are a number of companies that have been expanding their businesses on a continuous basis. Such companies are also conducting their businesses in Australia therefore there has been significant investment in the country in the recent past. Australia is considered to be one of the developed countries of the world therefore it is the one of those countries which is being affected by the recent wave of globalization. Multinational corporations seek to expand their business in developed countries in order to draw maximum revenue and to reach the customer base of developed countries. Globalization is not only considered to be beneficial but it is also described as a threat to the economy of a country.
DISCUSSION
One of the biggest drivers of globalization is the World Trade Organization (WTO) which has a growing authority over national economies. The decisions of national economies are being influenced by the WTO, and the decisions regarding the barriers to international trade and the independence of investment in foreign countries are also being taken by the WTO. Globalization is only possible because of the removal of a number of constraints and barriers over the free trade and free movement of capital from one country to another, therefore WTO has been setting rules and regulations in order to enhance free trade throughout the globe. WTO has acquired this significant influence because it is supported by some of the world’s biggest economies and multinational corporations. Such economies can easily influence the economic decisions of smaller countries. The economic power of multinational corporations in some instances is much higher than some of the national economies therefore they have significant influence over the economic decisions of such nations. Another factor that intensified globalization in Australia was the deregulation and floating of Australian dollar in 1983. Due to this decision, the value of the currency was greatly influenced by external factors and in order to retain the value it became necessary to remove the constraints over global trade and to encourage globalization in the Australian economy.
Globalization is described as the biggest opportunity and biggest challenge at the same time. It is an opportunity because due to free movement of capital and goods, the economic activity of a country accelerates. In Australia, globalization is the reason behind the diversified workforce in organizations. People from all over the globe have been moving to Australia in search of job opportunities or they are being moved in Australia by the multinational corporations to tackle their business activities. Diversity in an organization affects the productivity of the organization in a positive manner. Apart from diversity, globalization is the reason behind a number of job opportunities in the country. Foreign Direct Investment in a specific industry also helps in the development of that industry. It also provides exposure to the economy of the country for further investment by other countries. Thus, globalization is a source of diversity, investment of capital and the increase in the number of jobs in the country...