Is Globalization Unstoppable - Report Example

Is Globalization Unstoppable? A great number of arguments have come forth in the past decade seeking to support and refute the basic concepts that underline the process of globalization. As is well known globalization can be broken down to social, political, cultural, technological, and environmental components, but the version of globalization which has maximum impact is the economic globalization. After the recent economic crash, a great part of the blame went to the process of economic globalization since this caused an outflow of capital from the developed countries in the years preceding the crash-down. What started soon after the Industrial revolution, globalization raised its head mostly in the eighties and the nineties. The present study endeavors to understand the basic question as to whether globalization is unstoppable or not, and studies the process as it exists today. The different components of globalization that we see around in countries that have been affected by the process are indeed inducers of growth and development in every country that they have been incorporated in. But has the process of incorporation and development been smooth and steady? Have there been hassles posed by the changing scenario in countries that were not used to the Westernized lifestyles? Well, the answer is a yes. Although there has been immense amount of talk in creating sustainable globalization culture, thinkers and politicians have not been able to stop a few hiccups in the process of globalization in third world countries, which is where the question arose as to whether it can be stopped at all. Let us take a quick look at the different components and the impact they have had in society up to now. Main Aspects of Globalization: Financial, Social, and Technological Technological globalization has led to outflow of advanced gadgets and technological innovations to the developing countries and increased market space for companies that have gone international. While this increases number of buyers, overall expenditure in the process of internationalization has increased for every brand that has decided to go global, leading to heavy loaning from respective bank. Cultural globalization has gone down the drain over time as most generations which have adopted the free and liberal thinking of the Western world (Glennie, 2012) have not been able to create the right balance between their indigenous cultural practices leading to utter cultural confusion in countries like Indonesia, Brazil, and India. Social globalization is best defined by setting up of societal norms ad practices that endeavor to create an American set-up in the new country that is undergoing globalization (Bingham, 2011). While the process is more helpful in allowing the immigrants from developed countries settle in the new environment, it is not a great idea for local populations, since social habits unique to them are being replaced by the free thinking and lifestyles of the Western world. While students and entrepreneurs realize this transition is of no good, the need to cause monetary inflow renders them helpless as they watch the lifestyles changing. Political globalization has its own set of hiccups wherein, countries like Brazil, Malaysia and China are unwilling to adopt the political framework proposed by globalization because it is causing emigration, cultural degradation, and an increase in anti-social activities. Since these countries also suffer from over populations with high numbers below the poverty line, it has become important to address needs for food and sustenance in the populations and keep the onus on providing them with jobs in field that they are good in and not just overshadow the economy with opportunities that the local populations are not capable of handling (Stulz, 2005). For example, Brazil and Mexico have seen a huge chunk of the peasant population migrate to other countries leaving behind family and friends and actually send in money earned elsewhere. These emigrants are most likely to settle down in the new country and never come back to their motherland because the new trends in society are unable to strike a chord with their basic lifestyle and political thinking. Economic globalization has by and large caused serious outflow of the Dollar to countries that embraced globalization. While companies opened up their operations in countries like China, Japan, India, and other places, it was evident that the promise to make local populations rich and give them all the facilities that citizens of developed countries enjoy had been the most important principle of economic globalization (Yueh, 2009, p.150). However, how hard they try incorporating principles that lead to sustained globalization has always turned out to be a failure with the corporate giants, just as it has been a failure in political, social, cultural and technological arenas. Financial Implications That Restrict Globalization Understanding what restricts the process of globalization is easy when we count the tools that have propelled the process both economically and socially. We start with the economic aspects, wherein the most important tool in causing inflow of foreign exchange was the IT revolution. Computer technology had reached far corners of the world as early as 1995, and soon graduates fluent in software technology were looking for jobs in the developed countries (Warn & Witherick, 2003, p.162). While this did set in migration, it also attracted foreign investment into countries like India which was recognized to be one of the most powerful talent sources of the world (Prasad et al, 2003, p.13). Oil companies which tried to bank in on the reserves discovered in the middle-east countries set in another version of globalization in the Middle East and led to fast growth in economies like UAE, Saudi Arabia, and the rest. The third tool that helped globalization to a great extent was FDI. While the use of FDI came as an off-shoot of the market capturing tendency of major retail brands like Wal-Mart, the practice grew fast in nations which were looking for growth and equality by sporting more foreign brands (Williamson, 2002, p.15). There has been a steady growth in the number of people who dislike FDI just as much as they dislike globalization, since the local economic structure completely tumbles when FDI is sought. And what happens soon after is only gradual decay of local practices with social, cultural and environmental impacts. None of the above mentioned tools can keep the process of globalization intact in the present condition. Therefore all these factors coupled with GDP and FDI has led to restriction of the process of globalization. Impact of Globalization on the World Economy Talking of impacts, we must not miss out that just like industrialization, globalization has not left the environment very safe for us to use. In fact, it has only led to the doubling up of industrial growth causing more serious depletion of the ozone layer, death of more water animals due to pollution, and poisoning of the air in the cities and country-sides of these countries. While environmental regulation processes are being induced in most developing economies only recently, their absence has only led to poor working environments and culture (Scholtz, 2005, p.172). Cultural degradation is another impact of globalization that is leading to growing frustration amongst culturally conscious youngsters in the emerging economies. Ancient folklore, art, and dialects are rapidly vanishing in this world dominated by the World Wide Web. This in fact is considered the strongest failure of the trend of globalization that started around the mid-eighties. In our next section, we study these failures and get to know what the future holds in store, whether there is any brightness in this highly depressing scenario of failed globalization, and whether the power will shift from the hands of dominating countries that we have seen up to now -“Between 1980 and 2007, the ratio of goods and services trade to global GDP has risen from about 42 to 62 percent.” (Nsouli, 2008, p.5). Failures of globalization are glaring examples to mankind today, wherein, every developing nation is blaming the world powers of trying to silently dominate their political and social norms, and keep all the profits to themselves and not let much trickle out to the host countries. Also, promised economic prosperity and sustainable growth seems to be far cries out of the wood since inequality and distinction is still rampant in these societies (Brennan, 2003, p.183). Lessening of geographic boundaries and cultural intermingling are factors that have only threatened the growth of a sustained globalization structure in new countries. Main Tools That Propel Globalization Now On These changes and disadvantages were observed in society since as early as the nineties. However, globalization has continued spreading and has actually been unstoppable in spite of the efforts of the learned masses who have again and again called out for more economic restrain (Quest, 2000). Apparently, the damage had already been done by then and today, globalization stands in a half-demonic avatar that only requires countries to develop laws and regulations that entertain globalization to only a certain extent and not give up on its individual nationalistic interests. Yes, when the Brazilian government sees that the peasant populations are being rendered homeless and are forced to migrate to neighboring countries, it has to develop regulations that slow down the speed and impact of globalization and keep the local populations in mind (Muller et al, 2001, p.215). Thus, we see that globalization has failed to ensure that the promised results reach the new economies. Instead, the half guarantee is only leading to more international loans, fiscal deficits, and economic crash downs, one of which we saw in the first ten years of the 2000s. Are we done with such crashes? Most probably, the answer is a no. This is because, globalization continues into newer terrains even if the governments are trying to slacken the speed. The infection of westernized lifestyles that include free thinking, cultural degradation, anti-social activities and environmental impacts have eaten into many societies for generations now, and has caused economic dependency on globalization in these countries. Where Are We Headed? Surveys have shown that the average sentiment that globalization is good for the society has gone down markedly over the past few years. While in 2003, sixty percent of the Brits studied held a favorable opinion towards globalization and supported it while only a twenty seven percentage of the people studied were against its growth. BY 2010, these numbers had drastically changed. Around 34 percent of the people studied thought that it was bad for the British economy while an alarmingly low thirty percent felt supportive towards it (McFall, 2007, p.156). So, why are people living in developed countries turning their backs on the prospects of globalization? It is quite clear that the process has gone out of manageable control. People are more concerned about the insecurity and fear of dislocation that the rapid merging of economic thinking has brought in. Talking of reducing geographic distances, we must not forget that a great deal of globalization is seen in sports and travel. And to make matters worse, some of the best local talent is getting replaced by outside talent that comes into the new country owing to better career and study chances (Bhagwati, 2007, p.29). America and UK have seen growing number of demonstrations to fight debts and unemployment, caused due to saturation of American firms with professionals from Third World counties. In a recent speech, Barrack Obama even alluded to the need to create jobs through talent base within the country. The negative effects of globalization on developing and developed economies are totally different and in contrast with each other (Stigliz, 2007, p.59). The only point that is in common is the disgust of local populations. And we still are nowhere close to calling ourselves a part of a thoroughly globalized or flat world? Trade integration has not been as strong as was predicted and economic globalization is not the same as it used to be. In the earlier days, dominant economies of the world ruled and decided as to what would be the course of trade development in new countries. While this also dominated over how the people in the new countries would live, it gave away a lot of cultural and social respect (Ferguson et al, 2005, p.81) of the developed nations. Today, the picture is entirely different. All developing nations have understood the extent of impact that globalization can make in their life styles. While many abhor the idea of having foreign lifestyles incorporated in daily life, many have also gotten accustomed to the social humdrum and want to live by it since they think they are a part of a better world, a world that is more uniform and treats everybody equally. However, it is this mentality that the critics of globalization have always resisted from taking over the society. Yes, globalization may have reduced distances and international inequality, but it has led to local and internal inequalities, a direct effect of which we see in the increased unemployment and migration statistics around the developed and developing economies. While this is the present scenario, everybody is aware that the process is irreversible and globalization is indeed unstoppable. What happens next? According to predictions, developing economies are all set to take over world trade. Emerging markets like China, Korea (Kihl, 2005, p.161), Japan, and India (Nayak, 2007, p.25) are taking the reins of globalization (Ervin & Smith, 2008, 80) from the hands of developed economies. Soon, the entire concept of globalization will turn into a new avatar, one that is not governed by what the world powers like America or Britain think, but will be based on the neutrality and trade efficient approaches proposed by these economies. Brazil, Nigeria, Mexico, and many more countries have realized that their true potential lies in creating national policies that address the country’s goals more than trying to accommodate foreign trade and investment. “Foreign direct investment has risen from some six to 32 percent [between 1980 – 2007]” (Bozzo, 2011, p.12). In this regard, we must not forget that the FDI has increased greatly through the years. While earlier on it was unidirectional and often faced obstructions from economies like India, sooner or later, the developing economies will want FDI allowances in the developed countries (Goldstein, 2009, 270). The IT revolution has empowered these nations giving them the financial background that allows them to take a lead in the area of foreign investments. All said and done, if this means that we are headed to a new era of globalization then it definitely is worth its while. We say this because, when developing economies bring to fore the need to create policies that cater to national interests of not just their country but the rest of the world, then the world definitely will have a reason to sit back and relax. Most of these developing economies have been through hard times and have been using highly optimized policies to withstand the ill effects of bad policy decisions (Jones, 2010, p.145)made by the dominating countries of the world. As the picture stands today, these countries have better ideas, resources, and policies to make the globalization work in a different way for their economies. Since, the level of unemployment and insecurity (Ramesh & Palanithurai, 2005, p.5) is going up in the developed economies, it would be worthwhile to see how the emerging markets come up with policies that work for them in these countries. While the world has always acceded to showcase of money and power, if the policies used by these economies succeed, then the developed countries will be only grateful to follow in their footsteps, leading to a world order governed by talented nations and not by powerful nations. In spite of serious financial implications like falling GDP and massive FDI, globalization cannot be halted or stopped, but it can definitely be improved and modified. While the process of getting every nation equal power seems to be leading to internal hiccups for the developing countries, public awareness and sustainable globalization alone can ensure that the shrinking of distances that globalization sets in happens in a durable way. While we are extremely careful in ensuring that individual economies flourish, we also know that the task of defining world economy and formulating strategies that work for the developed and developing nations is a major challenge. References: 1. Bhagwati, J. (2007). In Defense of Globalization: With a New Afterword, Oxford University Press 2. Brennan, T. (2003). Globalization and Its Terrors: Daily Life in the West. Psychology Press. 3. Bingham, A. (2011). “Economic Globalization: An unstoppable force”. Amands Bingham Available at: http://amandabingham.wordpress.com/economic-globalization-a-reality/ (accessed on May 3, 2014) 4. Bozzo, A. (2011). Global Economy Haunts Developed Nations. CNBC. Available at: http://www.thestreet.com/story/11160460/1/global-economy-haunts-developed-nations.html (accessed on May 3, 2014) 5. Ferguson, I, Lavalette, M. & Whitmore, E. (2005). Globalisation, Global Justice and Social Work. Psychology Press. 6. Glennie, A. (2012). “Globalisation: a new wave?”. Global Dasboard. Available at : http://www.globaldashboard.org/2012/01/26/globalisation-a-new-wave/ (accessed on May 3, 2014) 7. Muller, J., Cloete, N. & Badat,S. (2001). Challenges of Globalisation: South African Debates with Manuel Castells. Pearson South Africa. 8. McFall, J. (2007). Globalisation: prospects and policy responses, fourteenth report of session 2006-07, report, together with formal minutes, oral and written evidence. The Stationery Office: London. 9. Nsouli, S.M. (2008). Ensuring a Sustainable and Inclusive Globalization. International Monetary Fund. Available at: http://www.imf.org/external/np/speeches/2008/072508.htm (accessed on May 3, 2014) 10. Quest, R. (2000). “Globalisation: An unstoppable force?”. BBC News Talking Point: Forum. Available at: http://news.bbc.co.uk/2/hi/talking_point/forum/710520.stm (accessed on May 3, 2014) 11. Williamson, L. (2002). Globalisation: good or bad? The Guardian. Available at http://www.theguardian.com/world/2002/oct/31/globalisation.lewiswilliamson (accessed on May 3, 2014) 12. Warn, S. & Witherick, M. (2003). The Geography of Sport and Leisure. Nelson Thornes 13. Yueh, L.Y. (2009). The Law and Economics of Globalisation: New Challenges for a World in Flux. London: Edward Elgar Publishing. 14. Stiglitz, J.E. (2007). Making Globalization Work, W.W. Norton. 15. Goldstein, N. (2009). Globalization and Free Trade. Infobase Publishing. 406 pages. 16. Jones, A. (2010). Globalization: Key Thinkers, Polity. 17. Ramesh, R. & Palanithurai, G. (2008). Globalization, Issues at the Grassroots. Concept Publishing Company. 18. Kihl, Y.W. (2005). Transforming Korean Politics: Democracy, Reform, and Culture. M. E. Sharpe. 19. Nayak, S.S. (2007). Globalization and the Indian Economy: Roadmap to a Convertible Rupee, London: Routledge, 20. Ervin, J & Smith, Z.A. (2008). Globalization: A Reference Handbook. ABC-CLIO, 293 pages. 21. Prasad, E.S., Rogoff, K., Wei, S., & Kose, M.A. (2003). Effects of Financial Globalization on Developing Countries: Some Empirical Evidence. Washington DC: International Monetary Fund. Available at: http://users.nber.org/~wei/data/prwk2003/prwk2003.pdf (accessed on May 3, 2014) 22. Stulz, R.M. (2005). Presidential Address: The Limits of Financial Globalization. The Journal of Finance, LX (4). Available at: http://citeseerx.ist.psu.edu/viewdoc/download?rep=rep1&type=pdf&doi=10.1.1.219.7429 (accessed on May 3, 2014) Read More