Globalization and Education - Literature review Example

Globalization and Education Globalization is a term used to refer to the economic order of the universe through the minimization of the international trade barriers which include import quotas, tariffs as well as trade tariffs (Scholte, 2000). The term designates the progression by which cultures, regional economies as well as societies have been integrated through transportation, trade and communication (Cornia and Court, 2001). The major aim of globalization is to increase goods, services and material wealth through a worldwide division of labour which is largely made possible by advances in specialization, competition as well as international relations (Jagdish, 2004). Economic integration on the other is the system of interaction of trade between various different trades’ states through the full or partial eradicating of the customs tariffs imposed on trade being carried out within the borders of these countries (Scholte, 2000). The main aim for this is to minimize the prices for consumers and distributors since no custom duties are paid and in return lead to an increase in trade (Cornia and Court, 2001). Furthermore economic integration stimulates effects that are a part of the modern-day economic Theory of the Second Best which implies that free trade that has competition and no barriers is the best option whatsoever (Dalimov, 2008 and Stiglitz, 2002). According to economists, economic integration is the second best option for the global market where hindrances to complete free trade exist (Scholte, 2000). There are two types of integration which are: the positive integration which purposes standardizing worldwide economic policies as well as laws and the negative integration which entails the breaking down of protective barriers as well as trade barriers which include tariffs and quotas (Jagdish, 2004). It is evident that the term globalization is wide and it encompasses various disciplines and perspectives (Scholte, 2000). In terms of education, the educational planners have to ensure they revise this phenomenon especially in terms of the various shifts present in the job market so as to adapt rightfully in the training system of their state (Scholte, 2000). This paper aims at evaluating the economic benefits of globalization and economic integration as well as discussing the possibilities of whether these benefits may allow for further expansion of globalization. According to Arndt (1996), it is apparent that a lot of global effects are related to globalization and integration. The changes brought about by globalization include; Improvement of the International Trade, due to the unification of trade between countries, the number of states where goods as well as services can be purchased or/ and sold has tremendously increased hence creating a ready large market (Scholte, 2000). This is as a result of the abolishing of custom duties and protective barriers which in return make it possible for free trade within the states (Barro, 1997). This leads to huge gains to these states as well as increased opportunities as the income generated could be invested to other programs such as education or health and safety with the aim of ensuring a continuous economic growth. Moreover, countries are able to gain access to the market for their technology and exports through the international transfers (Cornia and Court, 2001). The increasing shares of exports and imports in the gross domestic product highlight the growth of the state economies to the universal trade. Further, continued rationalization of the activities involved in production from the developed to under developed countries gives room for new opportunities to expand trade. This not only applies to trade in goods but also trade in services as it has become the main component to the global trade (Arndt, 1996). Globalization as defined unifies the markets, systems of finance, communication, technology commerce, the law that bypasses traditional national, social, ethnic and cultural boundaries as well as commerce (Scholte, 2000). This has had a greater contribution to greater specialization, higher standards of wealth, improved living, and efficiency of division of labour as well as eradication of poverty (Cornia and Court, 2001). Researchers argue that the current economic growth is greatly responsible for the improved living standards which are enjoyed by those living in the industrialized world (Birdsall, 2002). Evidently, globalization has led to the international production and trade of goods accompanied by the various structures in production structures (Cornia and Court, 2001). This trade is characteristically defined by intra product specialization which is the universal disintegration of a good to its sub- component parts as well as the distribution of the assembled product across the states (Birdsall and Hamoudi, 2002). The technology changes in the contemporary world affect the strictures of technology as well as product flows across these states. The improvements of technology as well as transportation networks greatly contribute to the reduction of the costs of transportation. Further, information technology avails information worldwide at close to no costs (Cornia and Court, 2001). Consequently, lower communication and transportation costs have significant contributions to production activities nature, the market it relies on as well as the flow of information (Jagdish, 2004). The reduction of these costs also intensifies the competition and stimulates the determination of the economic sites available for the manufacturing as well as marketing the products. In addition new technologies have led to a new aspect of globalization which is the introduction of dynamic production forms (Cornia and Court, 2001). Most nations have been able to turn from the vertically integrated means of production which were previously operated from one location to specialized production forms which are easy to spread across various countries. As a result global production has been able to attain network extensions and as a result most industries have become independent leading to intensification of competition of business development (Birdsall, and Hamoudi. 2002). The competitiveness as well as the dynamic production forms leads to the concentration by firms to their main competencies. With the dynamism to quickly respond to the market signals, companies and nations at large are able to enjoy the advantage of being specific within the rapidly growing market and trade. The high mobility of human resources across various states is linked to globalization. According to studies, globalization makes it possible for different states to source for manpower in the countries which have available cheap labour (Bourguignon, and Morrison 1999). For example, the shortages of manpower in countries such as Malaysia and Taiwan provides countries which export labour such as the Philippines an opportunity to bring in human resources form their country to these states for employment (Scholte, 2000). This will be an advantage to the exporting country as it will receive income as well as the importing country as its production will improve from the increased input of manpower. In addition, globalization allows for the greater mobility of human resources to other states (Kremer and Maskin, 2002). The developed states such as Europe and US always take an advantage of the cheap and skilled labour offered mostly by the developing countries such as India and Philippines. This way they are able to manage their productivity and economic development while ensuring a stable market for their produce Kremer and Maskin (2002) states that there is effect of globalisation on finance and capital flows. The raise in the technical capabilities for engaging imprecision finance for pricing, unbundling, redistributing finance risks, and repackaging; expansion of markets for products through integration, investments through improvement of host country or region funding, borrowers and bases into a global financial market place; engaged merging of institutions resulting in a situation of blurred boundaries; international financial corporations and globally oriented banks that secure development of most economies are all linked to globalization (Birdsall and Londono, 1998). Since globalization begun, states have experienced a tremendous growth in their economies. Furthermore, the increasing numbers of growing international trade as well as international capital transactions has led to a great increase in the everyday foreign exchange rates turnover (Brune, 2004). In addition, through the abolishing of restrictions imposed on the universe portfolio divergence in many developed countries, has largely attracted investors such as insurance companies to invest in other countries. Consequently these investors were able to control a large pool of capital which contributed to economic growth of these states. Furthermore globalization increases the influence of multinational industries (Kremer and Maskin, 2002). A multinational industry is an industry that has a number of subsidiaries across many states. Usually the head office is situated in the mother state of the industry and it is responsible of controlling the subsidiaries. The head office necessitates that the subsidiaries manage production by ensuring its increase as well as that of the profits (Arndt, 1996). These multinationals rely on the various chains spread across many nations. The ingredients as well as the raw materials are supplied by one nation, the assembling done by in another state and the marketing catered for in another country (Kremer and Maskin, 2002). Through globalization, the industries’ subsidiaries have been able to realize this because they deploy technology in the various stations depending on the local abilities to integrate and make use of the information and these in return makes it possible for them to penetrate the local market (Scholte, 2000). Other factors that have contributed to this success include strong interest by these companies to spread to other states in such of new markets, the reduction of the barriers to trade in these states as well as other states and improved macroeconomic performance of various nations in the region. As a result of globalization, the multinational companies enjoy access to market, human resources, good business conditions, and access to local resources, technology as well as a base from which to operate (Barro 1997, and Brune, 2004). According to Anderson (2000), globalization led to the integration of the three multilateral financial institutions. The integration is responsible for the fundamental change in the composition as well as the volume of the capital flows to these states. The official flows were mainly aimed at protecting and supporting profound economic and political changes in these regions which as a result paved way to the increased flow of more funds from private institutions. Power of World Trade Organization, World Bank as well as International Monetary Fund is also linked to globalization (Bourguignon, and Morrison 2002). It is believed to have strengthened and greatly influenced these institutions. This in return has made it possible for these institutions to serve as a means to acquiring a continuous process of liberalizing trade (Anderson, 2000). As a result it has significantly contributed to the creation of a good commercial environment for multilateral exchange of services as well as goods (Jagdish, 2004). Moreover, states have been able to borrow money from these institutions to improve their economic growth by implementing programs that have a significant contribution to their country’s economy such as education as well as health and safety. Further, economic globalization contributes to peace among the various countries. According to past researches, increased economic growth leads to reduced possibilities of war among the states (Boltho and Toniolo, 1999). Economists argue that when the economic unification of say two countries increases, each of the countries achieve a greater welfare and hence the countries develop a progressive stake in the intensification as well as the continuation in the interconnections with its supposed partner (Jagdish, 2004). In addition, because of the mutually beneficial and profitable contacts between the partners, they tend to have a strong incentive that hinders any form of disagreement to provoke military war. Generally, it is right to say that as the economic interdependence of two states increases, the nation’s incentives to resolve as well as manage disputes also increases, with the result of eradicating war as the world’s economic globalization intensifies. In spite of the contemporary benefits of globalization and economic integration, studies argue that these benefits do not justify further globalization since to begin with they are far from complete. Like in the case of capital flows and finance, the extent of integration of financial market remains unclear despite the mobility of capital increasing greatly (Boltho and Toniolo, 1999). Significant integration is evidenced by tests of capital mobility although investment correlations as well as domestic savings remain quite high and this means that the available national savings constrain domestic investment leading to a declining trend hence hindering full attainment of economic integration at large (Krugman, 1995). It is therefore right to say that future expansion of globalization might be impossible as full economic integration has not been attained. Similarly, inter country trade is far much exceeded by the intra states trade between regions even in instances where the geographical distance between the two nations is much smaller than the distance between the two regions within the same state (Krugman, 1995). A good example is that trade within the US states is more than the trade between a US state and a Canadian province or any other country. Scholars report that the likelihood of a country such as US to buy goods and services from it is higher even with controlled factors of relative size and geographical distance and this poses a threat to attempts of further globalization (Jagdish, 2004). The rules that govern the economic globalization are created through international law, trade agreements as well as the institutions that dominated the developed countries (Boltho and Toniolo, 1999). These rules always favour those with an access to capital by abolishing the tariffs, implementing intellectual property rights, eliminating capital controls, privatizing public services as well as weakening the regulations which protect the health and, labour as well as the environment. According to scholars, globalization is usually termed as American Economic Imperialism (Kremer and Maskin, 2002). The Americans used to competitive and individualistic culture tend to be insensitive of the rest of the world who face realities of culture erosion, abject poverty as well as environmental degradation (Birdsall and Londono, 1997). Consequently, exploitation of environment as well as labour goes unmentioned and so is the coercive pricing of services and goods, widening economic disparities, criminals evading legal controls, threat of traditional cultures, and tremendous growing debt among industrialized states (Barro 2000 and Agenor 2003). Of concern is the high concentration of wealth and power in the hands of the corporate elite in the developing world who set the terms of operation of many social as well as economic parameters in the contemporary world (Jagdish, 2004). All these factors create great despair and profound anger which catalyze religious and international fundamentalism that results to an increase in international terror and violence (Dalimov, 2008). It is evident that though improved international trade which is as a result of abolished custom duties as well as a readily available foreign market, different studies conclude that this has led to inequalities within the developed and developing nations (Agenor 2003, Cornia and Court 2001, Kremer and Maskin 2002). There has been a huge inequality in the income distribution of these states. According to Bourguignon and Morrison (1999), globalization is said to have weakened manufacturing employment of developed countries in indiscriminate “giant sucking sound” of the jobs lost to the under developed world. Consequently, the new jobs in the developing world pay their workers much less as compared to the pay of similar work in developed states and as a result the workers around the universe are losing as a result of globalization and this remains a challenge to further developments (Jagdish, 2004). Furthermore, through the abolishing of restrictions imposed on the universe portfolio divergence in many developed countries, globalization has largely attracted investors such as insurance companies to invest in other countries (Kremer and Maskin, 2002). Consequently these investors were able to control a large pool of capital. Though this can mean additional of the wealth that is flowing in this countries, the form of globalization brings about inequality (Bourguignon, and Morrison 2002). Further, it leads to large scale unemployment to the countries that these investors are located. In addition, the investors through multinational companies have such a huge influence on the national governments as well as transnational bodies which include the World Bank and European Union, regarding policy formulation for instance provision of basic facilities. They influence them to meet the needs of the corporate leaving the rest of the citizens suffering (Cornia and Court, 2001). Due to this full occurred economic globalization has not yet occurred. In conclusion, economic globalization is a very powerful force operating towards shaping the present world. As discussed in the essay, in significant ways, globalization is responsible for Improvement of the International Trade, international production and trade of goods accompanied by the various structures in production structures, globalization led to the integration of the three multilateral financial institutions as well as empowering and strengthening them, creation of peace among the various countries, as well as the influence of multinational industries and capital flows as well as finance (Kremer and Maskin, 2002). Also the introduction of dynamic production forms, the high mobility of human resources across various states, as well as the greater mobility of human resources to other states. In addition it also influences how we communicate, employ savings, how we conduct the businesses as well as influence where we situate them and what we consume. It has reorganized the structure of many societies by creating many new opportunities for a number of them but also wrenching and causing dislocations for others. It is evident that it has created awareness of certain cultures even in the far off lands but also has contributed to the erosion and threatening the cultures of the individuals who have managed to preserve their way of life to the present day. Further, globalization makes autarchy very expensive and less plausible for a state in the contemporary world, although it also makes very tight constraints on the independence of these state communities who have chosen to take part in the global economy. However, it draws a sharper relief when the market presents to its members; profound opportunities for growth, higher welfare, new consumption and new development; but also presents new threats for busts and booms, creates the problem efficiency co- existing with inequality. This brings out the question as to whether really market diversifications would overwhelm any states or communities social solidarity. The manner, in which societies both in the industrialized and non- industrialized nations resolve the tensions produced as a result of intensified economic interactions, is what will determine the sustainability as well as the scope of economic globalization as well as globalization in general. References Agenor, P. (2003). Does Globalization Hurt the Poor? Manuscript. Washington, DC: World Bank Anderson, K. (2000). Globalization, WTO and Development Strategies for Poorer Countries, London and New York: Oxford University Press Arndt, S. (1996). 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