Measuring Globalization - Essay Example

Measuring Globalization There is a certain conviction that globalization is the financial and investment capability of penetrating international markets. This, to some extent, might be true. As a result of deregulation and advancement in technology and communication, it is much easier for the world to become globalised. Globalization, therefore, depends on the financial markets present in the world, today. The financial markets have an economic hold and impact on the world market. It is this hold that ensures many continents continue with their industrialization process. Globalization should be monitored by economists, around the world. This is vital in ensuring that every region has an equal opportunity at industrialization, and economic growth and development (Guinness 103). This paper will examine the manner in which globalization may be measured by comparing some of the indices of globalization. Globalization is a term that has been used for a long time. It is through open channels of communication that it is now possible for countries in different continents to connect (Guinness 121). Communication can be attributed to the growth and development of interaction among all the players involved. Domestic economies are now being controlled from international, more developed lands. The domestic regions are losing control over their own economies, which now depend on overseas countries. Regulation and balance of the world economies depends solely on the North American countries and Europe. This is what globalization is aiming at as the whole world seeks to have a share in the global market. Globalization and its spread may be slightly exaggerated. It is not clear why there are countless debates as to the extent of globalization, in the world. However, it is something that has economists working every day to address because the world is keen on understanding all about globalization, and what is represents. A lot has been going around on this issue. There has been the rise in groups advocating against globalization. They have their reasons for being against globalization, but it is imperative to have a distinct understanding of the advantages brought on by globalization (Guinness 135). The world is welcoming the idea of being a global village. Communication makes this possible. It is only right to open up borders for people, societies, and cultures to trade, interact, and communicate freely. Measuring globalization The spread of globalization, according to many, allows for free trade and free markets in most of the developing countries. This is with the aim of alleviating poverty. Many corporations, from developed countries, are responsible for running the lives of many individuals. Globalization, today, is seen as a means to try and calculate the gap that exists between the poor and the rich. Economists try to address globalization, and the effect it may have on different individuals and countries. If there is a constant or an even growth in a country, there is likely to be more satisfaction. This is unlike when there is an uneven growth (Guinness 194). This is because the latter indicates that some areas will be better off than other areas. The most common method of measuring the globalization level in a country is the use of Gross Domestic Product (GDP) per capita in a region. It might be; import or export or the total consumption on import/export GDP in the region. This represents the final market value of goods in a country produced or consumed or a sum of both these factors within a year. In measuring globalization through the GDP, an increase in exports increases the country’s GDP, thus; symbolising growth in the country’s economic stature (Maher 109). The higher the annual growth rates, the higher the economic growth, through time. It is through such a constant method that allows for a country to trade freely along international lines. This may be because; their products are capturing a wider, global market. This indicates that not only one region benefits. Export GDP is the term to refer to the above globalisation measure. It is keen on trying to find out the right amount of their exported goods, products, and/or services another country is consuming. As any measure of anything, this method is not perfect in measuring globalization in developing areas. It is hard to measure the exact amount of goods and products leaving a country or region to allow for the process to take place. The size of a country’s economy can affect the GDP calculated in that region. A country’s economy cannot be termed as globalized if the export of goods from that country is low (Maher 118). The loss of jobs due to trade in a country, and a resulting lower number of employment rates is likely to imply that a country is not entirely globalized. If the tariff rates drop in terms of export or import, and an escalation in the level of employment in a given month rises; it is an indicator of a globalized country/region. This measure of globalization is usually out to provide an outside view of the overall performance of a region. This implies that, different factors come into play whenever it is explored as a means of measuring globalization. For example, the country’s economic standing during the export or import of goods, and their trade standings on the international market (Maher 127). They provide a base for bias and lack of neutrality to take place. A majority of sales of a country’s produce usually occur outside the said country. The growth and expansion of international trade has increased in almost every country after the world war. In war torn countries, however, the global market has seen the decline in production of goods and services as this tends to be one of the effects of war. This reduces the globalization level of the region or country at war. The overall consumption of consumed products is higher than what is produced in the same region. The disparity between import and export presents a problem to the economy, hence; proving a challenge to means of increasing the level of globalization (Maher 136). There has been a growth of capitalist corporations in a number of countries over the past decades. The investment offered by multi-national corporations often counts as part of the high percentage observed in the world’s GDP. This constitutes to a high percentage of the overall globalization measure in the regions affected. The three dimensions of globalization are affected with the involvement of MNC’s in their regions of operation. These are the; cultural, political, and economic dimensions. All these dimensions are affected. It may be in a good or bad way, depending on what they offer the regions of operation (Maher 149). The other measure of globalization is through checking the capital movement of funds. This is both in and out of the region. It is sometimes referred to as internationalization. This internationalization provides economists with an avenue to confirm the total amount of capital brought into the country via the different channels available. It is vital to put this amount on a scale to assess how much capital a country is consuming as it is raking in over time (Chan and Skarritt 142). This provides an avenue for correct measures to be put in place to allow for the correct use of capital in all the areas present in the region. Through such internationalization, a country may be better placed to deal with foreign capital. These service sectors are a complicated venture altogether. Providing services and goods for an amount may provide an avenue for a country to measure its globalisation (Chan and Skarritt 153). It may not be as accurate as the previous measure, but it provides a rough estimate as to the extent globalization has spread. These sectors must strive to compete. They are inclined to participate in activities that bring profit to the region in which they operate. They create an avenue for openness, and an inclination to internationalize their activities throughout their period in business. In the third world countries, it is impossible for the accurate measuring of the annual amount of capital. This is because; there are a vast number of unrecorded businesses that run in most parts of the country. These are usually not calculated as they should when compared to other parts. This may prove challenging in trying to calculate or measure the extent to which the market in the third world has been penetrated (Chan and Skarritt 169). The retail sector, for example, where international competition is irrelevant, ends up selling most of the imported goods and products. This can be termed as goods that are similar to foreign goods, but are not from the same manufacturer. They need to do this so as to stay afloat in the ever-expanding market that promotes the sale of original products and goods (Chan and Skarritt 176). China has been in the limelight for such practices. It is responsible for most of the goods and products in many markets that are available in large numbers. They are, also, relatively cheaper than other products in the same market. It is vital to invest in such sectors as they have the potential to grow and expand a country’s economy for the better. Globalization is making this possible. As a means of measuring its growth, many factors come into play. The impact of such sectors is one means to visualise the growth of globalization in a region. The rapid sale of products to individuals in the area surrounding retail stores may measure the extent to which globalization has spread. If the position of these service providers is threatened by the external market, it is likely the globalization track of the region may go down (Chan and Skarritt 189). Products from different areas may fail to make it in this market restricting the opportunity in place to capitalise on the global market. As a continuous process of growing interaction and correlation between communities, societies, and nations across vast distances, globalisation is keen on opening more doors. Globalization cannot be measured as a single entity. Some of its composite indicators, therefore, come into play. In this case, the new globalization index is another method used to measure the extent of globalization. In this approach, globalization is created and structured in three dimensions, i.e. political, social, and economic. Each of the mentioned dimensions is represented by their own indicators, which play a part in showing whether a region is indeed globalized. This ensures that there is a feasible approach to which all the above are calculated and measured (Caselli 158). In the first case, which is the economic front, there is the expansion or spread of globalization through innovation. This innovation is sometimes brought into countries through interaction by the outside world. In this instance, a lot of brainstorming usually occurs by individuals from different regions who come together to bring forth new ideas. Globalization is measured by how much these individuals bring/take their expertise to different lands. Trading in this case is also pertinent. Through trade-in goods, and trade-in services, it is possible to introduce the geographical factor to measure globalisation (Caselli 198). The additional activities carried out by foreign markets, and companies ensure there is a slight chance of expanding the domestic markets available. In the political front, it is possible to identify a country’s globalisation progress through the number of countries it is in touch with, and their political relations. These interactions create rapport for all the groups involved, creating a diverse environment, which brings many people together. Environmental issues are often brought into the picture as many groups advocate for correct and proper use of energy and other elements to protect the world (Caselli 234). In the social front, it is possible to measure the progress of society through the number of educated groups, which might leave their homes into different lands for education. This may prove the extent to which people and societies intend to break barriers for the greater good. This leads to further globalization in most parts of the world, and its inhabitants. The indicators also fall on some of the most common grounds on which society is based on, in the modern world; technology. It is next to impossible to measure globalization without the involvement of technology. The extent to which technology influences almost every aspect of today’s everyday life is immeasurable. Economists and the people in the world need to comprehend the rate at which the internet is used on a daily business (Caselli 249). This could be for business purposes, and/or fun. In the most recent advances, technology is enabling diverse groups of individuals to reach many more individuals than they would have a decade ago. This is through social media, which comes in the form of innovation such as Facebook and twitter. All these variables act as a venue in which globalization can be measured, and its growth relayed to the world. It is vital to ensure all the factors are identified to prevent the lack of neutrality in the information collected. This works to ensure that every economic, political, and social angle is covered. Also, it may ensure no loophole is left uncovered in measuring the extent of globalisation in the world. Third world countries are getting the benefit of globalization as many seem to claim (Caselli 257). What they seem to forget is that, all these countries are eager to work out their place in the globalization process as any other nation or country. They trade and engage in commercial activities just like every other group. It would be wrong to assume that the indices favour one group over the other. Comparison between the aspects of globalization All the indices described above show of the fact that, globalization can be measured. It is through some of these indices that the extent to which the world is connected is shown. The relevant variables are used to measure the size of the country’s growth in terms of their economy. All these factors bring a better focus onto the policies that promote globalization in many areas (Caselli 291). Foreign corporate firms, which exist in a foreign land, must ensure the growth of their companies while adhering to the foreign policies in these lands. This ensures a constant growth of all the areas involved, whether directly or indirectly. One common thing between all the above measures is the focus they pay on overall expenditure and income a country exhibits. It is crucial to pay attention to these factors because; an increase or a decrease in any of these factors may indicate a rise, or a reduction in the level of globalization. It is meant to be a part of an on-going process which involves the world, and not just the more industrialized, wealthier nations that can easily penetrate weaker nations. Inequality should only act as a measure of threat in trying to find out; where globalization has gotten to, in terms of reaching the world (Ruttimann 280). It is tantamount to visually have a representation of all the countries that consider themselves industrialized. This may go a long way in finding out if any of them are globalized. Another factor that makes them comparable is the connection they place on international trade. It is vital for all countries to realise trade is one crucial factor that enables them to connect with the world through exchange of goods and products. All the competition factors that countries place on their trading are crucial in advocating for the growth and expansion of globalization as a worldwide phenomenon (Caselli 299). The effects of globalization are felt worldwide (Ruttimann 283). Trading might improve the situation in any area where exchange is taking place. Some of the tariffs in place that restrict or reduce the chances of trade among countries should be checked and re-evaluated. They need to check the situation to allow for smaller nations or less industrialized countries to have an equal opportunity at raising their economy. This further increases the chances of globalization in many of the regions, which are given the chance. Millennium goals have to be achieved. Through trade, this is made possible. There is no point of going against globalization and restricting other nations from globalizing as much as other nations have over the past. There is the need to have the needed resources in order to increase the possibility of globalizing an area. Education, addressing the advantages of globalization, works to prepare many people and societies for the changes that might come their way (Ruttimann 285). It is imperative that these groups be prepared to welcome the change. In many cases, there have been instances where societies and communities have resisted the interaction of people from outside their community or region. In Zimbabwe, for example, sanctions against the country are preventing the expansion of the economy, and the adverse effects of this are being felt and seen. Sticking to traditional ways of governance prevent progress. The same goes for traditional methods of trading. It is time to allow countries that are trying to expand through trade to have the avenue to do this. Age and skills should enable economists to have the authority to advocate for such rights for all the groups that need it (Caselli 321). This goes a long way in pushing for progress among many countries, and international borders. All the variables and dimensions observed provide the right information to increase efforts towards globalization. It is through some of the methods addressed above that push for such progress. There is no need to fight progress among the people of the world by insinuating that globalization promotes terrorism. If this is so, terrorism could be part and parcel of daily life as globalisation started way before the internet age. Such reasons retard the growth of societies, and the industrialization of many countries. The social, political, and economic fronts need to have a venue in which they can expand (Ruttimann 289). Globalization is providing this channel and avenue. It is only right to advocate for more techniques to increase globalization in more areas. In conclusion, globalization is out to ensure that the world is connected. Measuring the level at which globalization has reached is fundamental in understanding the economic standing of countless regions. Industrialization is crucial in the globalization process, and many countries need to accept this. Economists and governments should be at the fore-front in ensuring this is made possible. All the indices described aim at increasing the effects of globalization around the world (Ruttimann 279). Their value to the region they are being used can, therefore, be seen and felt. These values could be for the benefit or downfall of the regions addressed, and should be treated with the utmost care. Works Cited Caselli, Marco. Trying to Measure Globalization: Experiences, Critical Issues, and Perspectives. New York: Springer, 2012. Print. Chan, Steve and Skarritt, James R. Coping with Globalization: Cross-National Patterns in Domestic Governance. London: Routledge, 2002. Print. Ghimire, Ramesh. Economic Policy Analysis. Cambridge: Cambridge University Press, 2005. Print. Guinness, Paul. Geography for the IB Diploma Global Interactions. New York: PULP, 2011. Print. Maher, Eamon. Cultural Perspectives on Globalisation and Ireland. London: Macmillan Publishers, 2009. Print. Ruttimann, Bruno G. Modelling Economic Globalization: A Post-Neoclassic View on Foreign Trade and Competition. Oxford: Oxford University Press, 2007. Print. Read More