Globalization and Its Biggest Winners and Losers - Essay Example

? Globalization and Its Biggest Winners and Losers Lecturer Globalization and its biggest winners and losers Introduction Globalization can be visualized as the gradual process in which the world is slowly being connected because of increased trade as well as cultural exchange (Jacobs and Michael, 2003). Globalization is characterized by many factors including increased international trade, multinational companies whose activities are based in several nations, great dependence on the global economy and free movement of capital goods and services. Although associated with many economic benefits to the participating nations, research has indicated that some nations fail to enjoy the benefits anticipated from globalization (Jacobs and Michael, 2003). The Biggest Winners and Losers in a Globalized World Several years of globalization efforts witnessed have led to an imbalanced economic scenario where economists have unanimously come into a consensus that globalization only favours some nations. A critical examination and comparison of both developed and undeveloped nations is a clear revelation of this reality (Bhagwati, 2004). Because of this imbalance, developed nations have emerged out as the biggest winners in a globalised world. These developed nations include America, china Canada and other nations in Europe and some parts of Asia. Undeveloped nations are mainly found in Africa and some parts of South America. Developed nation’s economies are largely industrially driven as opposed to undeveloped nations who mostly rely on agriculture as their main economic drive. The disparities evident in export levels between developed and undeveloped nations is a typical example how developed nations gain in a globalized economy as opposed to their undeveloped counterparts. A report published by an independent group of scholars and economic experts focusing on living standards in poor countries indicated living standard were worse than it was a decade ago. According to this report a fifth of the world’s richest nations were found to control 82 percent of the world export market. Direct investment is highly dominated by people from the richest with high figures of 68 percent. While majority of populations in poor countries still live below poverty levels characterized by widespread unemployment, a big population in developed nations are employed and they live above poverty levels (George, 2007). Globalization has led to opening up of market base, which has in turn triggered increased industrial production of various commodities in order to cater for the increased customer needs. This has seen a rapid increase of exports from developed to undeveloped nations. As a result, industrial sector in developed nations experiences a growth due to ever-growing globalization. Growth of industrial sector avails several benefits in developed nations. It facilitates growth of other sectors such as education and infrastructure further contributing to economic growth. Contrary to less developed nations, the rate of unemployment is much lower in developed nations due to ever-growing industrial sector. The level of innovativeness is also greatly supplemented by the wide variety of industries present in these nations (Roy, 2005). Over dependence of undeveloped nations for various products from their developed counterparts has led to emergence of market monopolies, which developed nations use for their own economic gain. There has been a rise in number on international companies originating from the rich nations and expanding their market base to the less developed nations. A typical example can be drawn from china, which has expanded its market base in African countries (Scholte, 2000). The country strategically produces low quality goods, which are affordable in the African market. Because of economic status of African market, such substandard goods often remain more popular as opposed to genuine but more expensive goods. The benefits leapt through this strategy are immeasurable and have played a crucial in the current Chinese economic status. Such developed countries often control the market, which at times leads to great exploitation of lowly developed countries (Waters, 2001). The standards of goods exported by developed nations are at times greatly compromised but market in undeveloped nations lacks any alternative and buys the substandard goods. Less developed nations have literally become the dumping sites for substandard goods (Scott, 2013). To further cement and strengthen their market monopolies, rich nations have of late been observed to form mergers of economic blocks. Through these economic blocks they are able to manipulate crucial aspects of economic growth e.g. prices of vital commodities such as fuel prices for their own gain (Woods, 2000). While developed nation greatly control both the price and standard of industrial product they export in less developed nations in a globalized economy, this has not been the case with less developed nations. The immediate result of this has been fully experienced by the less developed nations. While such nations often incur huge expenses for industrial imports, they also get so little from their agricultural exports to developed nations. This is evident from the cost of living evident in the two classes of nations (Siebert, 2013). A form of labour exploitation on the lowly developed nations by their developed partners is a common scenario evident in today’s globalized world (Scholte, 2013). Increased industrialization in developed nations has led to increased demand for labour in order to meet customer demands .Companies in these nations have in turn turned to outsourcing cheap labour from less developed nations in their attempts to maximize profits Fotopoulos.. This has led to great exploitation of workers from undeveloped nations since the ages paid does not often match the kind of work they. This has also led to quality being highly compromised a fact that is of low regard to these companies since most of them are purely profit driven (DFID, 2000 ). Whereas developed nations have emerged out as winners in a globalised world, their undeveloped counterparts have emerged out as big losers. Despite the fact that globalization has opened up the world market creating a favourable environment for economic trade, undeveloped fail to take advantage of the wide market Factors leading to this are both internal and external (Michie, 2011). In the wake of world globalization, poor nations fail to take full advantage of the vast trade market (Scholte and Schnabel, 2002). As a result, these nations continue to lag behind economically and at times rely for financial aid from developed nations to supplement their budgets. They are still faced with challenges of poor governance, illiteracy, civil wars and corruption among others, which does not a conducive environment to fully take advantage of the world globalization (Held, 2004). Undeveloped nations mainly rely on agriculture as their main economic driver. At times, such nations fail to produce enough agricultural products even for their own domestic consumption. This leaves them with nothing to sell at the wide global market therefore leaping no benefits from the globalized market (Gavin and Brigid, 2001). Lack of economic superiority and independence has often made these less developed nations vulnerable objects of economic exploitation by developed nations. The cost of producing industrial goods in these is extremely higher in these countries and a result they largely depend on developed nations for finished industrial products. This overdependence has led to a one sided flow of exports leaving the benefits to the only developed nations (Giddens and Anthony, 2002). The immediate result of this has been widespread exploitation of undeveloped nations in form of low quality goods and extremely high prices (Jacobs and Michael, 2003). Globalization has opened up numerous job and business opportunities in developed nations while these remain a big challenge in poor nations. This has negatively affected the poor nations owing to the current brain drain (Prakash and Hart, 2000). Intellectuals from poor nations migrate to rich nations in search for job or business opportunities. This deprives the poor nation’s fundamental skills and knowledge, which may play important roles in economic growth (Robertson and Scholte, 2007). Conclusion As the world becomes more globalized opening new and better markets for trade, economic disparities between developed and undeveloped nations continues to widen up Export index from developed nations to less developed nations continues to grow (Frieden, 2000). The positive benefits associated with globalization continue to be experienced by developed nations while poor countries seem to leap no benefits. The current economic gap between world globalization winners and losers is even expected to expand if recent economic trends are anything to go by. References Bhagwati, J. N., 2004. In defense of globalization. Oxford: Oxford University Press. DFID. 2000. Making globalization work for the world's poor. London: DFID Information Department.  Frieden, J.A, Lake, D.A and Broz, J.L. 2009. International political economy: perspectives on global power and wealth. London: Routledge Gavin, B. 2001 The European Union and globalization: towards global democratic governance, Massachusetts: Edward Elgar. George R. 2007. The Blackwell companion to globalization. Oxford: Blackwell Giddens, A. 2002. Runaway world: how globalization is reshaping our lives. London: Routledge. Held, D, 2004. A globalizing world? : culture, economics, politics. London: Routledge. Jacobs, M., Lent, A and Watkins, K. 2003. Progressive globalization: towards an international social democracy. London: Fabian Society. 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