Pros and Cons of Globalisation
- Author Terry Guile
- Published April 6, 2012
- Word count 511
It is obvious that the world is experiencing an economic globalisation. That is clearly stated in the development of the global trade compared to the total global production - the GDP. The global trade has been significantly increasing since the 1990s only held back around 2001 due to the IT crisis and recently due to the current financial crisis.
As a result of the globalisation the economies of the world have become still more dependent on each other and especially economically, thus the trade with currencies and gilt certificates has increased too.
Organisations such as WTO - The World Trade Organisation - work hardly to ensure this economic globalisation by removing trade obstacles as well as creating an atmosphere of free and fair trade globally.
Another sign, which points in the direction of an economic globalisation, is the fact that the competition gets tougher on the global market, which is why company buyouts are seen together with cooperation in order for the companies to survive. Outsourcing of production has also become necessary for many companies to utilize the comparative advantages and thereby stay in the competition.
And exactly an optimised possibility for companies to draw on the comparative advantages by, for instance, outsourcing production is one of the most important advantages of the globalisation. Products can now be produced where a qualified workforce is available for the right price and where the conditions favour the production.
Another advantage of the globalisation is the increasing competition on the global market on especially the price and quality of products. This development will naturally be in the customers' favour.
In continuation of this, investors can now place their capital where it is most favourable due to the free investment possibilities.
The globalisation has also created the conditions necessary for an increasing trade between countries, which has turned out to be a vital part of the recipe for increased wealth. As a result of the increased world trade, technology is also spread around the world along with language. Western countries include more and more English words and many Asian countries get to know Japanese words and this development makes it still easier for everyone to communicate globally.
However, not everything about the globalisation favours it. One disadvantage is the social distortion because the advantages of globalisation are not shared equally and in the industrialised countries it is often the unskilled workers who have to swallow the bitter pill.
An increased distance between developed and developing countries seem to follow the globalisation. Many developing countries do experience growth, however, it is nothing compared to the growth experienced by the already developed countries.
Countries have got too dependent on each other. That is brilliantly shown by the current financial crisis, which started in the USA and spread throughout the rest of the world. Sovereign countries have therefore become easier to influence from abroad.
Finally, it is worth mentioning that big multinational companies get too much power since they often become absolute rulers with even more influence than politicians from smaller countries - a development that might undermine democracy.
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