Positive and Negative Impacts of Globalization

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Social Sciences
24 03 2021
GLOBALIZATION, THE GOOD AND THE BAD
Globalization is a progression driven and engineered by numerous purposes and necessities. It is a process that consequences the exchange and flow of people, culture, money, information, goods, and services beyond continental boundaries. The world has been undergoing rapid and severe changes since the end of the twentieth century. Hence, globalization has emerged and affected almost every aspect of our lives. While many are still on the fence about the concept, its prosperous upsides in growing underdeveloped countries and reducing inequality between the rich and the poor cannot be ignored.
Economic historians affirm the existence of globalization dating several millennia back even before the late 20th century. According to O'Rourke and Williamson, some people may want to dispute that the 1913 world economy, just before World War I, was as well-integrated as the late-twentieth-century standards. But Andre Gunder Frank confirms that, from 1500 onward, the world had a unified global economy with multilateral trade and an international labor division (52). Moreover, Jerry Bentley asserted that trade networks had reached nearly all sub-Saharan Africa and Eurasia even before 1500, and commerce intensity enhanced industrial and agricultural production (7). Some historians, however, relate globalization's "big bang" impact to Christopher Columbus's 1492 American voyage and Vasco da Gama's 1498 end-run around Africa, while considering the phase after 1500 as initiating a genuine global era of world history (Bentley 768-9).
From the above illustrations, we can categorically state that globalization is not a new concept after all. It was similarly a critical terminology of the 1990s. During its contested debates of the 1990s in the U.S, optimists contended that trading with underdeveloped countries would lower the American inflation percentage, notwithstanding the ten years of high economic growth rate it had achieved. It was a belief that buttressed the great bull market run of Bill Clinton's Presidency. Conversely, pessimists reasoned that globalization brought a "global trap" into the world, thus escalating inequality and limiting the state's ability to address crucial social challenges (Martin & Schumann). However, a strong consensus between the two camps was that modern globalization was unparalleled.
Globalization has indeed changed the world for the better. There are numerous accounts of its positive impact and avid contribution to the world's development in developed and underdeveloped countries—a case in point, China's ascension to power in the late twentieth century. A few decades after World War II, organizations like the European Union (EU) and other various free trade unions led by the United States commanded most international trade growth. The Soviet Union experienced a similar trade increase, although not through a free-market model but a somewhat centralized planning system. The result was immense. Once again, trade grew to the 1914 levels globally: a second time, exports represented 14% of global Gross Domestic Product (GDP) in 1989. The phenomenon indicated a steady upsurge in the West's middle-class incomes. Conveniently for the underdeveloped countries, when the German Berlin wall dividing the West and the East fell and the Soviet Union disintegrated, globalization emerged as a dominant force worldwide. The freshly formed World Trade Organization (WTO) urged worldwide nations to embrace free-trade agreements, a call which most of them heeded, including several newly independent countries. The formation of WTO enabled China's ascension to the world's economic power to join other dominant Western countries. China, a secluded agricultural economy for the better part of the 20th century, joined WTO in 2001 and became the world's manufacturing giant due to its global cheap labor.
Furthermore, globalization plays a central role in the growth and opening of less privileged nations` economies. Over the years, it has put developing countries at par with the rest of the world in advancing their economies and tackling poverty problems. Previously, underdeveloped countries could not benefit from the global economy due to trade and tariff barriers. They could not enjoy the similar economic growth that developed countries achieved. Nonetheless, with globalization, the International Monetary Fund (IMF) and World Bank inspire developing countries to take huge loans to effect market reforms and radical economic changes in their countries.
The resultant market restructuring has seen the developing countries open their markets through tariffs removal and freeing up their economies. Consequently, the developed countries can stream investments in the less privileged countries in the form of Foreign Direct Investments (FDIs). The FDIs are often directed towards the countries` infrastructural development and enhancing their capital investments in the manufacturing sectors. Anthony Thirlwall identified the close interdependence between developing and developed countries. He opined that developing countries need technology and resource flow from developed countries. In contrast, developed countries require the less privileged countries for raw materials, the market for their industrial goods, food, and oil (Thirlwall). From Thirlwall's inference, it is evident that globalization opens the less privileged nations for commerce and trade while importing goods and services and exporting raw materials to the developed countries.
Globalization is a game-changer in addressing gender inequality and reducing the gap between the rich and the poor in developing countries. Globalization brings about economic growth, employment opportunities, and higher living standards in developing countries due to its openness to the international market for imports and exports globally. Dollar and Gatti surveyed the relationship between gender inequality and economic growth. The study found out that an increase in economic growth results in a decline in gender inequality. Hence, we deduce the importance of economic development to women's equal access to education, employment, and social amenities from the research. Stotsky further elaborated on the importance of globalized economic growth in reducing the gender inequality gap and poverty. She emphasized that high economic growth lowers gender inequality and reduces the gap between rich and poor. High economic growth, which is highly dependent on globalization, creates more employment opportunities in less developed nations. The poor in those countries take up jobs created by globalization in the import and export sectors, consequently realizing higher living standards, thus reducing the gap between the rich and the poor.
Besides, globalization has positively contributed to developing nations...