Benefits of Globalization and Global Economic Integration - Essay Example

Essay (Student Name) (University Name) (Date) Part A-Question 3 Benefits of globalization and global economic integration Introduction Globalization as a term has several definitions and different scholars have different takes on it. Dicken (2003) argues that it is the economic globalization that is bringing about a lot of controversy around the world. The global market place that has emerged is also having great effects on both developing and developed nations. Some organizations and people are for economic integration while others are against it; in addition, technology is playing a huge part in global dialogue in economic integration. Global economic integration also helps in speeding up trade boundaries that have already been agreed between nations, which gives them freedom and an opportunity to trade that was not there previously. People on the other side of globalization argues that the freedom of trading increases the prosperity of economic integration around the globe, which then leads to more opportunity among nations. Individuals and organizations who are against globalization say that it has led to disparity, seen when economic transactions moves freely that leads to more efficient allocation of resources. Nevertheless, global economic integration brings about a comparative advantage where every nation shifts its resources to more productive and competitive industries. By using this principle, Boesak (2010) asserts that countries can enjoy an optimum distribution of resources to more industries that are seen to be much profitable, in addition to, shifting industries that are less profitable abroad. It is said that, by doing this, all nations get an opportunity to benefit from specialization. On the other hand, the nature of this comparative advantage entails an opportunity cost, which according to Kinley (2009) is the value of that product that produces or obtains products. However, in this theory, global economic integration allows an exclusive and attractive opportunity to both parties involved in transactions. This theory is therefore, an important factor to put into consideration when we talk about globalization, since opportunity costs do not necessarily apply. Internet and computers are some of examples that show that technology is playing a huge role in defining opportunity costs in terms of cultures. Therefore, technology differences should be assessed when it comes to analyzing economic transactions. A good example is when an individual doing this transactions on a piece of paper and pen only performs one at a time and have more time and opportunity to run his other errands when he finishes. The differences in economic transactions are therefore, crucial when it comes to manipulation of economic global transactions. There differences should therefore, be taken into consideration when it comes to analysing the possible advantage nations may have on each other. Dicken (2003) notes that globalization is the increasing association of world’s economic order through the decrease of barriers to international export fees, import quota and tariffs. Its goal is to therefore, increase the material services, goods and wealth through a global distribution of labour by efficiencies that are catalyzed by competition, specialization and international relations. For that reason, globalization describes a process where cultures, societies and regional economies become integrated through trade, communication and transportation. This is closely associated with the term economic globalization where it refers to national integration economy through things like migration, spread of technology, military presences, and trade among others. However, globalization is recognized as being driven by a combination of biological factors, political, economic, technological and sociocultural factors. According to Boesak (2010), the term can also refer to international circulation of languages, culture and circulation of ideas. Any nation said to have undergone this process is said to be globalized. Globalization has been driven by the global expansion of corporations that are multinational that are based in Europe and United States as well as the global exchange of the new progress in technology, products and science. The development and growth of international communication and transport has therefore, played a major role in today globalization. It has then been facilitated by technology which has reduced trade negotiations rounds and costs of trade. Under the leadership of General Agreement on Trade and Tariffs, globalization has been led by a series of agreements in order to remove restrictions on trade. Additionally, economic globalization has the effect of centering around four main flows of economic that well characterize globalization. To start with, good and services are a national income of the entire population around the world. It has other aspects which the world. The emergence of worldwide production of market and access to a broader range of unfamiliar products for both companies and consumers, affects the movement of goods and material within and between various borders. Because of this, International trade is seen to have increased more times than regional trade. Secondly, globalization has an effect on financial markets worldwide that have an improved access to external financing on borrowers. For example, in the 21st century, many currencies were seen to be traded daily in order to support the expanded levels of investment and trade. It also brings about realization of a global market that is common to all nations based on exchange of capital and goods. Further, in the job market, workers are said to compete globally in the job market indirectly. The fate of workers was once tied to a national economy. But with the latest information improvement in communication, this is no longer the case, since employees are competing globally in the market. Additionally, wages do not depend on the failure or success of economies individually. This is therefore, a major effect on income and wage distribution (Henderson, 1999). Additionally, in terms of politics, globalization has had a great impact on its developments, which comes along with the decline of the importance of state because of the creation of supra and sub states likes the European Union, G8, WTO among others. Palan (2000) argues that the state loses power of sovereignty and policy making. However, the relative decline in the power of US is being based on globalization because of its high imbalance in trade. Its consequences are therefore, tremendous. There is also an effect in the informational flow among remote areas in terms of geography. One can argues that, this is a technological change with the beginning of satellites, increased availability of internet and telephone and fiber optic. Nevertheless, some of the environmental global changes can be solved by international collaboration, for example, Issues such as, air pollution, climate change, and spread of foreign species among others. This is because; many factories built in developing countries are built in less globalism, free trade and environmental regulation which increase impact on precious water resources as well as increases pollution. In addition, when it comes to election times especially in United States, outsourcing jobs becomes contentious in terms of politics. Many organizations betray their workers by shipping their work abroad. Greenspan (2001) claims that developed countries benefit from this phenomenon, since the new jobs improve poverty, individual’s living standards, as well as provides a means of addressing their environmental and health challenges. This means that, globalization diffuses the best ideas when it comes to business management, sparks innovation and increases competition. Therefore, it leads to higher and lowers prices in addition to, bigger profits that organizations can reinvest in upcoming business opportunities. It is also seen to benefit the global economy, but this does not mean that it benefits all companies and workers. This is because off shoring of work abroad destroys some of the jobs of the employees in the third world countries and definitely loses out foreign competitors during the process. However, globalization affects the world’s industries by the emergence of global production marketplace and wide access to a variety of overseas products for both organizations and consumers, especially, the movement of goods and materials within and between national boundaries. Therefore, because of globalization, international trade has increased. Moreover, it has brought about the materialization of financial global markets for easier access to external financing for borrowers. Much currencies is also trade daily in order to support the develop levels of investment and trade. Additionally, many countries have come to realize the common market that exists globally because of the freedom of exchange of capital and goods. Further, in the corporate market, workers are competing indirectly in the global market because back then the fate of the employees was tied to the fate of national economies. But this is no longer the case in today’s century because of the advanced communication and information, where workers are competing in the job market globally, where their wages do not necessarily depend on the failure or success of the individual economies. Globalization has therefore, has a major effect on income and wages distribution. The global market is also surviving because of the increased and improved competition as well as productivity. This is well explained by the fact the globalization has influenced companies to produce goods that are of high quality, in addition, to using the updated technology in order to keep up with the competition. This is a big advantage to the consumers since they get to buy quality products (Prempeh, 2004). In terms of politics, globalization has had a significant influence in a wide range which goes along to decreasing the importance of state because of the conception of small states. Because of these upcoming states, countries have lost their power in terms of sovereignty and policy making. According to Kinley (2009), globalization has brought about the decline of US power due to imbalance of high trade. This consequence has shifted towards other countries like Asia and China. This global power has been shifted towards the Asian countries which have brought about a tremendous growth that will overtake United States by 2025. Furthermore, globalization has increased information flow between remote geographical areas, because of technological transformation with the advanced fibre optic satellites, communication and increased availability of internet and telephone. Cook (2008) asserts that it has increased the use of English as a language most used as Lingua Franca in globalization. This is because, it the most used language on the internet. It is argued that in developed countries, ecological advent of global environment challenges is solved by globalization, in terms international cooperation like climate change, air-pollution, spread of invasive species and overfishing. This is because factories built in developing countries are in a smaller amount of environmental regulation, because of free trade and globalism which increases the impact on precious fresh water and pollution resources. On the other hand, it has brought about the increase in cross-cultural contacts like the identity and consciousness which has embodied the cultural dissemination. In addition, it has increased the living standard of people, who enjoy foreign ideas and products, as well as adopt new practices of technology in terms of participating in the world cultures. Globalization, has improved the economic and social status women in third world countries. This is because, in the globalized world, the role of women has become valuable in most countries except from in Saudi Arabia where discrimination against women is common place. Societies which are seen to embrace the power of women often are seen to enjoy the spectacular social progress because women who have education get fewer children unlike those without education. They also enter into a work force that highly contributes to dramatic improvement of their countries’ economy. Concurrently, a country economic independence also increases because women are seen to spend their income much differently than men. They tend to focus much on education, nutrition, health and social progress of their family members, as well as other members of their community. Bill Clinton was right when he said that” we have to reaffirm unambiguously that open markets are the best engine to lift the living standards of built shared prosperity”(Dicken, 2003). I agree with his thoughts because only those states that have opened up their economies of trade to capital movements and to competition have seen significant gains in their income capita thus enjoying economic and social progress. The United Nations Centre for Human Settlements (2001) explains that in the past few years people have left poverty behind because of globalization. This is well explained by the fact that medicine, food supplies and other health policies have gone down due to low infant mortality and increase life expectancy. This is because, in developing countries, most children die at birth or before they reach their first birthday. As income increases, child labor is also seen to decline because when trade promotes growth, globalization outcome is less than child labor. Further, globalization has helped break the taboo that is responsible for discriminating people against race, gender or religious beliefs. This is because when people who are oppressed are seeing their other counterparts treatment they tend to demand for better treatment in the future. It is therefore, seen to give hope for the world’s poorest country, hoping that one day they may enjoy the liberal fruits of the West. Lastly, globalization is there to stay; it is benefiting individuals and organizations around the world. In terms of employment for example, it has effects on its economic activities that are drained in third world countries. This is because it has brought about the expansion of multinational activities that are as a result of a mixed political and economic factor. Henderson (1999) also argues that globalization has brought high profits which leads to a stronger access in global markets. It has also reduced the technological barriers in movement of factors of production, services, and movement of goods. There is also consideration of costs where there is a shift production to countries with low unit of labor. Moreover, openness in global economy can help increases the size of profitable market in order to encourage the transfer of knowledge and technology that will permit countries in order to specialize in those services and goods that will be produced efficiently. Benefits of global economic integration As explained earlier, economic integration is the trade association between different states by full abolishing of tariffs and customs that takes place with different borders. However, some of the benefits of economic integration are; firstly, they help in lowering prices for both consumers and a distributor since there is no custom duty that is needed as well as its main goal is to help in increasing trade. According to Greenspan (2001), economic integration is part of the contemporary theory, where in this theory the best alternative is free trade that comes with no barriers in trade, in addition, to free competition. Since the free trade is considered to be a better option and realized within those states that are developed, economic integration is arguably the best option for to trade globally where barriers are seen to exist. Moreover, the main objective of economic integration is the enhancement of welfare. Therefore, the increase of trade among other states in the economic union helps in increasing individual’s welfare one of the reasons of development in global scale, an idea which have been embraced by European Union, ASEAN, and NAFTA among others. Another key objective for the integration is to help in pursues nations to stay globally and regionally competitive, since its goods become expensive outside its economic blocks. However, global association of financial markets is said to have preceded the global unification economic that comes with 2008 turbulent economic crisis that raised an issue of global regulation in the market. The economic integration is therefore, pushed away by both political and economic level which also includes the different cultures among states. Therefore, the economic global integration can be able to solve those issues of reallocating the assets that are needed in order to develop those regions that are not developed. Since there is global competition all over, there are logistics and sourcing that becomes globally universal, this will therefore, turn to a regular harmonization of those policies that are outside and within the blocks. The necessities for the economic integration therefore, bring about successful development in globalization between member states. It comes up with decisions that touch on both political and economic concessions between developing and developed member states of the unification (Cook, 2008). Finally, global economic integration has been intertwined with the global economy that it has ever been before. For example, Clinton and his predecessors have continued to push for the elimination barriers in trade. NAFTA, has therefore, increased the economic ties between its trading partners as well as in the United States. Because of global economic integration, telecommunications systems in the world have been linked with financial market in unimaginable way. Americans have therefore, been convinced that the economic integration globally benefits all nations because of growing interdependence that has created dislocations. Workers are faring well when in comes to competition from other foreign countries that lower their labor costs because of the integration in traditional industries. The economic policy makers have therefore; found out that they have been forced to increasingly way their economic conditions in the domestic economy due to global economic integration (Palan, 2000). I therefore, think that, the benefits of both globalization and global economic integration are sufficient to justify further expansion of globalization. This is because as explained earlier, globalization is here to stay, as well as has outsourced a high visible component that is best in diffusing the very best ideas when in comes to talking business, management and intensifies competition. It also benefits an organization as well as the workers adding their income all over the world. Economic integration in globalization has therefore, helped in speeding up restrictions in trade among nations. This helps in giving nation a freedom in trading opportunity that did not exist earlier on. It has increased prosperity in economics in most countries where it give a great opportunity to those countries which are developing. Moreover, in economic integration or globalization, opportunity costs do not need to apply. Opportunity costs being the value of the product that has forgone to produce other goods. Economic integration allows an exclusive opportunity among all parties or individuals that are involved in the business transactions. Additionally, the integration is itself sufficient in achieving a great gain in income growth across and within the countries. The prosperity of concerned nations will reflect different choices that are agreed by different governments about certain institutions and policies. Global economic integration is therefore, a significant ingredient in helping nations achieve a growth that is self sufficient. It also offers a policy strategy that suggests a long-term policy that will directly help in relieving the pressures from both financial and economic integration. This is because some businesses only focus on the outer complement of institutions and policies that help improve the economies of scale and their capacities to help absorb shocks and adapt to changes. Countries which experience these benefits become integrated than those which do not undergo the type of economic integration and the type of infrastructure which helps in facilitating the resilience and flexibility to change (Boesak, 2010). However, according to Greenspan (2001), most Americans believe that economic integration globally is benefiting every nation because it is growing interdependently thus creating some of its own dislocations. Therefore, employees working in high class industries are doing well when it comes to competition with other individuals from foreign countries. This is because some have low wages that lowers the labor costs in those industries. Part B: Question 2 Globalization has brought about both negative and positive aspects in the today’s world. However, educators and development professional should be concerned with it because of several reasons. According to, xxx, he explains globalization is the most important word in today’s century. This is because its impact and nature has been the subject of concern and debate in the economic circle. However, there is a big controversy that surrounds the debate about globalization. Some think that the market forces will help in converging or diverging income across the globe. On the contrary, as Kinley (2009) suggests, globalization has helped in promoting a great understanding of cultures where is has helped raise individual standards. Additionally, globalization has helped increased the purchasing power of the nations that has allowed democracy to conquer communism. Those against it however, asserts that it is identical with imperialism, since it does little in encouraging organizations to relocate their factories to those countries that offers cheapest labour and has weak laws governing the environment. Henderson (1999) further points out that even in the developed world the freedom that is granted by the globalization, is leading to high insecurity in the industry. This calls for a greater concern for both professionals and educators to be concerned with globalization. This is because; workers who are unskilled are under threat since most companies are shifting their production lines to low-wage economies in foreign countries. This is also a concern to educators, since they thought that globalization will do away with poverty, help in protecting the environment, dissolve dictatorships, integrate cultures and most importantly help in reversing the gap between the poor and the rich when it comes to economic. Additionally, human rights is concerned with the loss of freedom that globalization has brought about as well as cooperating power. Small business owners are also complaining to have lost their market share in Mega Corporation because of the scales in economies. Question 5 Globalization is said to have deepened poverty in the societies. This is because it has led to prices when it comes to wages of the workers. The employees are seen to suffer because of globalization. It is seen to destroy jobs and workers in both companies and developed economies since they lose greatly to those countries which are more developed than them, especially to foreign competitors. However, its benefit and processes are seen to be uneven across the globe. According to Scholte (2000), a large part of the population in the world feel excluded from what globalization is seen to offer. Poverty is seen to deepen in all over since there is no fair distribution of resources when it comes to globalization. Thus, given all the uncertainties of globalization, there are those concepts that clearly explain how globalization has continued to spread poverty. To start with, there are those countries which are seen to enjoy the prosperity that is brought about by globalization, while others are seen to be complaining and languishing to what it has brought forth. This is because, the information revolution and technological innovation usually determines what a country is supposed to reap in terms of globalization or otherwise. The United Nations Centre for Human Settlements (2001) explains that the impact of globalization is determined by the way a country liberalizes its economic know how and the same time creates more safety valves to help in creating those industries that will determine how competitive the a certain country is in the global market. For example, some countries tend to specialize in the production of manufactured goods and other primary products that has continued to deepen the gap between poor and rich countries. Therefore, it is evident that the degree to which the technological innovation and information revolution takes place in a certain country will determine the benefits to which globalization is concerned. A high-tech based information economy also increases globalization thus shaping its business cycle in it. The benefits of globalization will therefore, determine as to what level certain and which country will reap the benefits of globalization. The ways in which such ideas come together helps in eliminating critical globalization issues in terms of the relationship between prosperity, national identities and cultures among others, cheap labor and interactions between individuals (Prempeh, 2004). References Boesak, A. A, Hansen, L. D and Beyers Naudé Centre for Public Theology. (2010). Globalization: Global crisis, global challenge, global faith: an ongoing response to the Accra confession. Stellenbosch, South Africa: SUN Press Cook, M. (2008). Banking reform in Southeast Asia: the region’s decisive decade. Newyork: Routledge Dicken, P. (2003). Global shift: Reshaping the global economic map in the 21st century. London SAGE Kinley, D. (2009). Civilizing globalization: human rights and the global economy. Cambridge, UK; New York: Cambridge University Press Henderson, H. (1999). Beyond globalization: shaping a sustainable global economy. West Hartford Kumanian Press Palan, R. (2000). Global Political Economy: Contemporary Theories. New York: Routledge Greenspan, A. (2001). Global Economic Integration: Opportunities and challenges. New Jersey: Minerva Group. Scholte, A. (2000). Globalization: a critical introduction. New Jersey: Palgrave Macmillan United Nations Centre for Human Settlements. (2001). Cities in a globalizing world: global report on human settlements. United Kingdom: Earth Scan. Prempeh, O. (2004). Globalization and the human factor: critical insights. New York: Ashgate Publishing Ltd. Read More