Effect of Globalization on the World Economy - Literature review Example

Globalization and the economy Globalization and the economy Globalization is the topic of 21st century. It means different things to diverse people but the most vital aspect is the economic dimension of globalization, which has led to opening up of economies to global competition, giving room to ideas, goods, capital and people to interact and move freely between countries (Gesteland, 2010). Globalization is not only the process of international integration required to increase the world market connections and relations in business affairs, but it is also a connection between and integration of cultures and religions in a way that will rapidly reshape the world. The unity should arise due to a common goal among member states. Through such integration, the economy of such countries is boosted. Domestic change of member states should be able to consider the losses and profits that can arise due to globalization. This creates an issue of discussion and debate on the impacts of globalization and its effect on the world economic growth. Some countries such as England have had economic improvement by joining organizations such as the G8 that exposes the economic status of such countries to other member states. The conferences held annually indicate that the member states share dignified economic plans among themselves and aid other third world countries. The information in many countries regarding the need to improve the economies of other countries is shared by these member states (Usunier, 2009). Globalization has destabilized the stand of poorer states and uncovered people to dangerous and harmful competition. Their concern is rational and understandable especially since the gap between the poor and the rich has become more prevalent in recent ages. Poverty can be deliberated in various ways, for instance, relative to a nation’s individual average consumption level or in terms of well being of citizens. By common agreement, globalization has increased rapidly since early nineteen eighties. If globalization leads to poverty, then Nations that have been economically incorporated through trade and investment should be worse. But, some nations in the world have become more integrated into global economy have made tremendous progress while others like Sub-Saharan Africa (Sudan, Uganda and Ethiopia) that have remained in isolation and have experienced a sharp decline (Usunier, 2009). Globalization, while justifying being important for success and progress in world market, it has its darker side which is less visible. It helps only a few third world nations, rich countries, and big multinational firms. However, it leads to collapse of economies of many countries and small businesses. In an attempt to improve competition globally, globalization has made it hard for a few companies that were successful locally to paste their success to world stage. It has also hindered investment and expansion of some poorer underdeveloped countries. Globalization simultaneously increases poverty in some countries while at the same decreases it in others. Major topics of discussion in conferences held annually arises due to the impact of globalization and can be used to analyze the living standards of the citizens and gauge the changing economy of countries in the world. The delegates avail each country’s data on how the poverty levels versus the living standards co-relate. This data is later analyzed and solutions on how to curb the growing or falling economy is later established (Hollensen, 2000). In third world countries, people have had, the impact of globalization has been manifested in terms of inequality especially in power and distribution of public funds to all citizens. Globalization has subjected many peasants to absolute poverty. Rise of poverty in Africa has been because of a non-open system in government activities. Africa for instance has not had a free market thus allowing for openness among the citizen on economic basis but has deteriorated in its global growth. Globalization is not similar in all countries as some developing countries have a different income equality as compared to other developed countries. The pattern of either rise or fall of income inequality depends on some factors such as domestic policies. For instance, difference in the market quarter system and the policies set out by one party deprives some states of the ability to dominate in the business thus killing global reform ideas thus creating unequal society (Tomlinson, 2010). The difference in economic status tremendously affects globalization as the rich benefit from the un-proportional economy. This is very evident among the third world countries as globalization benefits only the rich in society. This is opposite to the real situation in the developed countries where globalization provides the best medium for the economic growth. This is opposed to the fact that rich countries protect themselves from the hands of the poor. The notion that the developed countries protect their markets from other underdeveloped countries is not naturally true since they try to boost economies of the underdeveloped countries by easing tariffs and lending them money (Hollensen, 2000). The third world countries have not found and realized their fall in joint business because of poor management. In rich countries, the market system is free and the member states are open and have an open system of transaction. Globalization in the world is credited for world integration process that aids in improving global links. The distribution of the economy may be crowned among nations, citizens or within a country. The distribution may also be among the earning class and those in political ranks. Other methods of increasing the world economy can result from activities such as increase in the number of factories that create job vacancies thereby earning income to some of the citizens of a certain country. This should be dealt with in appropriate manner since some ideas may not be efficient and may be interfered due to inequality. With the free importation and export of useful products, has led to exchange of ideas that help improve the technological knowledge of many countries. Importation may not just be that of the goods and services only but knowledge of some factual points may also be imported. This is evident as some students go abroad to study which leads to cohesion and mixing of ideas (Tomlinson, 2010). To maintain globalization in all sectors such as agriculture, certain countries have put a lot of focus on the rights of ownership of land and other farm inputs. This is a true representation of growth of agricultural sector, which is boosted by price liberalization thus coming up with one common market, and common currency that helps traders to come up with common prices of the agricultural produce (Tomlinson, 2010). In addition, globalization can be boosted through creating internal markets. If this is taken in to reform the economy of the third world countries, then it will boost rates of investment in many countries. In agriculture, countries can reduce tariffs on specialized goods to lower the prices of the most important goods. The country can also improve her policies on the economy internationally. Foreign trade aids in improving the technology in science and mechanization of the agriculture (King, 2011). The creation of an open market also boosts the planning of trade internationally by improving its decision-making process and enforcement of the policies. With such ideas, Countries can adopt them to boost their international market and stands at a better chance to market their products with a good reputation. Any state has a state planning system, which deals with policies and their enforcement. Investors coming in from developed countries have gained a faster growth as compared to the local investors whose products have no newness as far as technology is concerned (Hannerz, 1996). The growth of a country’s gross national product is because of both planning in consensus with all government institutions and the treasury team. The market of the member states is also verified to align all the institutions without interference. The decline of some of the government agencies and the other related economic producing institutions arises due to disorganization of the top government officials. Apart from these reforms, a government can as well come up with its own strategy of economic growth. This method is quite risky which divides the investors and can affect the private sector by reducing its efficiency. The public sector can also be affected by reducing the economy of the state. Such policies can affect the decision of the policy makers in a certain country. This act of performance can lead to decline in economy and it forces a country to be debted to other country (Hannerz, 1996). In conclusion, the growth of world financial markets is beneficial despite the fact that it creates new threats and risks. The result of globalization is manifested from tough competition among trades, workers, foreign investments, and direct involvement of governments. The advantages of globalization outweigh the disadvantages as discussed in the paper. Works Cited Gesteland, R.R., (2010). Cross-cultural business behavior (marketing, negotiating and managing across cultures). 2nd ed. Copenhagen, DE: Munksgaard Intl Pub Ltd Hannerz, U., (1996). Transnational connections: culture, people, places (comedia). 1st ed. London, UK: Routledge Hollensen, S., (2000). Global marketing: a market-responsive approach. 2nd ed. London, UK: Financial Times Management King, D.A., (2011). Culture, globalization and the world-system: contemporary conditions for the representation of identity. 1st ed. Minneapolis, MN: Univ of Minnesota Press Tomlinson, J., (2012). Globalization and culture. 1st ed. Boston, MA: University of Chicago Press Usunier, C.J. (2009). Marketing across cultures. 5th ed. Upper Saddle River, NJ: Prentice Hall Read More