Problems and Solutions in Economic Globalization - Essay Example

ECONOMIC GLOBALIZATION of Policy Brief This refers to information and the analyses given to a policy maker1. The information should be terse, clear and the facts contained should be accurate in that, it helps the policy maker to decide on the course of action in a given situation. The subordinates or one of the organizers of a given organization deal with policy brief writing as the head of the organization cannot write the policy brief2. Globalization as the main focus, refers to the manner in which international integration arise due to the universal exchange of views, ideas, products and the diverse features of the culture3. This paper tends to analyze the problems and the possible solutions in economic globalization in relation international trade. Economic globalization is the rise in economic interdependence of the national economies all over the world. This may be due to rapid increase in movement of goods, technology, service and capital across the border4. Business globalization tends to focus on the diminution in regulations associated with international trade, taxes, tariffs and the obstacles, which suppress the global trade. Economic globalization leads to the development of the global bazaar or the single world market5. Economic global view is either positive or negative phenomenon depending on the prototype. Economic globalization entails the globalization of markets, production, competition, industries, corporations and technology. The policy brief, address the policy maker who is the director of world organization trade6. Trade Trade as the exchange of goods and services for other goods and services is a key factor to global economic growth. In international trade, countries export and import goods and services for trade. Businessmen import and export goods and sell them to the citizens of a given country. Increase in tax and tariffs on the goods discourage the traders, who increase the cost of the goods and may sometimes lead to loss in the business7. The import duty is a great determinant to any international business as the duty determines the price in the market of the imported product. Heavy import duty leads to increase in price of a product in the market8. Problems and solutions in economic globalization Political instability is one of the problems associated with economic globalization. Instability in the government of a country drives away any potential investors intending to globalize their business. A foreigner investing a given country leads to economic growth as the investor may attract many foreigners in the case of a stable and resourceful country9. The underdeveloped countries experience the problem of political instability as there may be an outside strong power influencing the top people in a given developing country. Competition among countries may lead to either promotion or failure the economic globalization. Healthy trade competitions between countries lead to economic globalization as many countries earn from the trade thus improving their economic status10. Healthy competitions include importing goods and services because of urgency and need in a country and not because other countries import the same product. Import of unnecessary goods in a country depreciates the economy of a country. A country should budget their expenditure in order to avoid misuse of funds11. The setting aside of a lot of money apart from the budget may be a contributing factor to the misuse of money meant for the growth of a country12. Infrastructure is a great investment to economic globalization as countries with good infrastructure, trade easily and quickly as their means of transport enable movement to and from the country. An accessible airport enables the landing of imports and flying of exports in a country. The movement from the airport to the required destination is easy as the roads are all weather and the businessman has the surety that their products will arrive in the market as planned. Perishable goods will never expire as the means of transport are well catered for. A country with unreliable infrastructure lacks the benefits of cross border business. A country requires another to enjoy economic globalization, thus without trading with other countries, a country may never grow economically. The governments with poor infrastructures should develop them in order to experience economic globalization13. Unequal distribution of income in a country causes the differences in preference of trade. Those with higher income tend to purchase goods and services of a higher value as they are able to pay for the services14. The higher income earners in a given country go to the extent of importing a product of their choice, thus enabling their country to enjoy economic globalization. Low income earners are unable to even purchase the local products due to little earn from their work place. Some of the civil servants live on the average wage as the government is reluctant in wage increase unlike in the private sectors where the organization motivates their employees through salary increases15. There should be an equal distribution of income for a country to fully experience economic globalization. Heavy taxes should be levied higher on those with high earning as their salary is easily distributed to the different levels of taxation. Problem with balance of payment affects a country in a great way as there is increase in external debt accumulation. The problem of balance of payment occurs due to increase in the number of imports as compared to the export16. The problem occurs in underdeveloped and the countries exporting the goods in the underdeveloped country claim the export earning later. The country never makes use of their export earnings to develop their countries and this adversely affects their efforts in developing the country. A country experiencing imbalance of payment never gets a chance to trade internationally as many countries will decline trading with a country facing debt problems, thus the country may never grow economically. Underdeveloped countries should regulate the amount of exports in their countries as the government utilizes the resources available to create jobs for their citizens, which will upgrade the standard of living of citizens in the underdeveloped countries. Unfavorable terms of trade are a problem affecting the underdeveloped countries due to their inability to comply with the adverse terms of trade. Unfavorable terms of payments of the underdeveloped countries make a huge part of the income go to the developed countries. The act affects the poor countries adversely as there will be no developments due to the exchange of imports for exports17. The underdeveloped countries, mostly deal with agricultural products where the supply curve is said to be inelastic due to the increase in the supply of agricultural products. The developed countries take advantage of the situation and favor offering better products for exchange, thus the income accumulates in the developed countries. The developing countries should develop new strategies in their terms of trade to avoid unfavorable terms of the developing countries. Conclusion Economic globalization brings countries of different cultural diversities together with the aim of growing their countries economically18. There are difficulties in achieving the togetherness as there are superior countries that tend to control the economic development of the underdeveloped countries. Technology is an important factor for a country to classify as an economically stable country. Some of the problems associated with economic globalization include, political instability, unfavorable terms of payment, unfavorable balance of payment, infrastructure, unequal distribution of income and competition. A policy maker should address the issues researched in the paper for a better organization of trade activities across the world. The developed countries should avoid the exploitation of poor countries and the underdeveloped countries should maximize on the resources available to avoid balance of payment problems. References Benedek, De Feyter, and Marrell. Economic Globalisation and Human Rights. New York: Cambridge University Press, 2007. Cavanagh, John. Alternatives to Economic Globalization. New York: Berrett-Koehler Publishers, 2002. Cavanagh, John, and Jerry Mander. Alternatives to Economic Globalization. New York: large print, 2010. Fung, Hung-gay, Changhong Pei, and Kevin H. Zhang. China and the Challenge of Economic Globalization: The Impact of WTO Membership. New York: M.E. Sharpe, 2005. Jain, TR, and OP Khanna. Development Problems and Policies. New York: FK Publications, 2012. Lynch, Katherine L. The Forces of Economic Globalization: Challenges to the Regime of International Commercial Arbitration. New York: Kluwer Law International, 2003. Rüttimann, Bruno G. Modeling Economic Globalization: A Post-neoclassic View on Foreign Trade and Competition. New York: MV-Verlag, 2006. Sampat, Preeti. Economic globalization today. New York: Books for Change, 2003. Schneiderman. Constitutionalizing Economic Globalization. New York: Cambridge University Press, 2008. Tisdell, Clement Allan, and Raj Kumar Sen. Economic Globalisation: Social Conflicts, Labour and Environmental Issues. New York: Edward Elgar Publishing, 2009. Read More