Rising unemployment does not stops the advance of globalisation - Essay Example

According to Goyal (2006), globalization refers to the integration of the world’s economies through trade, financial flows, and mutual exchanges related to both technology and knowledge. Moreover, it entails free inter- country movement of labour, while, in the developing countries, it entails providing a chance for foreign direct investment through the provision of facilities to foster investment in different economic activities. Prasad, Rogoff, Wei and Kose (2003) contend that globalization has assisted the developing countries to manage the output and consumption volatility in their countries.

Therefore, importance of having a diversified global finance offers a chance of offloading their income risk in the world market to develop countries, and the developing counties benefit from international consumption risk sharing, whereby they sell off a stake of domestic output to gain returns from the global output. Unemployment is defined as the situation when people are facing crisis in job opportunities due to the unpredictable nature of economy. This happens despite the fact that people have education background and with eligibility for job they remain being unemployed.

There are various types of unemployment, which are differing with the causes in the economy. These different types of unemployment have different effects on people in an economy. Alteration in demand for these goods and services is caused by everyday launching of new products in any particular market; thus, it creates opportunities in certain areas and in the same way reduces job opportunities in other places. The reemployment can only be possible if the workers relocate to other places where there are opportunities and this facilitates globalisation.

Unemployment also occurs due to capital-labour substitution, which causes a reduction in demand for labour, and it can also be caused by long run decline in demand in the industry; thus, the unemployment increases due to a mismatch between skills and the requirements of the job vacant. Globalization relates to technology, whereby it facilitates the acquisition of technology especially in developing countries. According to UNDP (2007), the significance of technological advancement has a positive influence on the economic growth of developing counties through the increase of productivity of land, labour, capital, reduction of cost of production and improving the quality of outputs.

Globalization also offers a chance for developing countries to be internationally competitive depending on the level of technological advancement. In fact, this contributes substantially to the export development and domestic production in the local markets, and it also leads to trade liberalization. However, technological advancement may cause unemployment among developing countries fostered by the globalization, and this becomes a vital element for competitiveness and economic viability. Increasing unemployment among developing countries has been promoting globalization since people seek employment in other countries leading to interactions that promote globalization.

On the other hand, globalization to the developing countries relates to international financing of countercyclical safety net programs that are established in the market economies affected by the crises of global liquidity (Birdsall, 1999). There is a condition that is set out to make the financing appropriate, and it entails solid records of substantial fiscal policy in the countries that are beneficiaries. It also focuses on the political capacity that equates to programs that are free from corruption, hence unwinding them during the crisis and long-run capacity for servicing the resultant external debt.

Apparently, all this initiatives are made with a motive of dealing with