Globalization and Sustainable Development - Coursework Example

363031 Globalization and Sustainable Development Introduction Globalization is the process by which local or regional societies, cultures and economies have been integrated through an all round global communication network and trade. The integration of national economies into international economy through spread of technology, trade, capital flows, foreign direct investment and migration is called economic globalization. The integration of economies makes it more competitive for nations. It increases integration, interdependence and interaction among corporations and people around the world. In the view of global economy and financial markets industrial globalization is the expansion of multinational enterprises, financial globalization which is the emergence of financial markets worldwide and access to external financing; political globalization is the spread of political sphere of interests to outside countries; information globalization is the increase in the flow of information between geographically and remote locations; and cultural globalization is the growth of cross-cultural contacts (Victoria Capital Management 2004). Sustainable development has several definitions but the one that is widely acceptable is-development that lasts. It refers to the use of resources in meeting the needs of people while preserving the environment to meet the future generation needs. The satisfaction of these needs involves the satisfaction of the economic needs as well as having a healthy and a clean environment, and favorably in terms of social development. Therefore, sustainable development has three major dimensions: economic, social and environmental. It also has significant spatial and temporal components (Pearce, D and E.B. Barbier, 2000). Globalization is therefore seen widely as the principle vehicle for economic growth and wealth generation as well as providing sustainable development. Body Globalization has increased the local employment, foreign investment, integrated the economy, volume of trade by applying market-based instruments. The emergence of globalization encouraged free trade. World wealth creation today has a high record as investment across the border shores. Low costs of capital and labor have been taken advantage off by free markets and competition, making wealth creation the obvious outcome (Victoria Capital Management, 2004). Globalization has benefited nations in trading goods and services, movement of capital and financial flows. International trade results to resources allocation that is consistent with comparative advantage resulting in specialization and thus leading to productivity. There is reduction in tariff and non-tariff barriers in order to allow economic growth. The production base has been enhanced by the flowing of capital across the borders. Total world savings was distributed among nations which have higher potential in investment. For developing countries to experience capital flows they took an approach of foreign direct investment. The foreign exchange markets expansion and capital markets is the necessary tool for the international capital transfer (Rangarajan, 2006). Economic integration has a social impact on nations. The interdependence provides a sense of community which builds shared values, moral standards and commitment to taking care of the environment. The scope of demands people feel should be included in the baseline standards are deepened and broadened by the economic integration. As much as the way won’t be smooth for parallel and political integration process, it will be deepened by the economic ties. Another social effect of economic integration that comes as a result of globalization is the distribution of income both within a country and across nations, and also decreases in poverty. Trade and investment have grown significantly with globalization with the share of the world’s population experiencing severe poverty has dramatically reduced from 30& in 2001 to 23% in 2006 (World Bank, 2008). The aim of European Union was to bring prosperity, peace and stability to Europe. Countries in Europe have achieved an integration that has been successful in diversifying its key values. Countries have benefited from free trade and low tax rates that positively influence countries’ economies. Low inflation running in some countries has enabled creation of mortgages and credit to those who couldn’t reach financial intermediaries before. However there is structural decline in unemployment spurred by industrial globalization which is aimed at reducing the low-skilled jobs cost which is a contribution to the social dimension of sustainable development. There has been generation of dual labour markets which have created social tensions and inefficiencies in the economy. However globalization has been evident in the loss of natural resources due to trade and other negative consequences of abrupt investment shifts. According to Bardhan (2004), globalization can constrain some policy potions while opening the long-term capital flows and opening economies to trade, wiping out the existing jobs as well as entrepreneurial opportunities for the poor and small businesses. Globalization has made it possible to generate wealth and improve people’s living standards, especially countries that have skills, products and resources to benefit from the opportunities in the global market. However nations that lack the resources, the products and the skills are facing very significant drawbacks. This is because globalization policies focus largely on the business needs that individuals or countries are concerned with. It has also effects of the political and social implications in employment increase, disparities in wages and income as well as excluding the world’s population in large sections. Dealing with economic policy and behavior of corporates on a national basis has proved to be difficult. Globalization has taken part in increasing the gap between the rich and poor countries as well as individuals. According to the World Council of Churches (2009), the increasingly widening gap between the rich and poor due to structures of trade and finance through economic globalization is posing threats to the earth and global peace. The income gap in 1990 rose to 60 to 1 and to 75 to 1 from 30 to 1 between riches and poorest countries in the world (World Bank, 2008). According to World Bank report, there is a fall in Sub-Saharan Africa’s income level over the last twenty years by 0.7% while industrialized countries average incomes grew by 2.0% a year (World Bank, 2008). While this is happening, a big number of families are depending on low-paid jobs or insecure social benefits. Globalization also brought about liberalization in trade which saw removal of trade barriers, promotion of privatization and reduction of regulations that included legal protection for workers, which brought negative impact on many people’s lives. Poor countries work hard to produce exports and reduce inadequate spending on public services in developing their economies in order to repay foreign debt that has forced many people to live in poverty and uncertainty. The experience brought about by globalization is interpreted as a process that is driven by technology that one must accustom to it in order to prosper and survive. This forces millions of workers in developing countries and developed world to translate this into inferior conditions and job security. The impact of globalization on women is different from men. Women mostly in developing countries are affected when public services are reduced as their important responsibility is to care for family and children. Girls are prone to withdraw from school due to reduction in family income or increase in education cost. International trade has generated employment opportunities for women, but trade policies have most of the time cemented traditional roles that are inferior and assigned to women in developing countries. Women face discrimination in occupation, inequality in payment and unequal access to resources. Globalization is playing a big role in the sustainability of the environment. Services enabled by IT due to globalization provide planning for a sustainable future. This is through urban energy efficiency systems and traffic management that are being developed for local authorities like Amsterdam by Cisco. Consumers can through mobile telephones and web browsers be able to control applications, an internet-enabled system. The Tata Consulting Services (2007) Sustainability Report about IBM states that ‘Our greatest contribution to the environment is in the potential our services and solutions in Information Technologies have to offer, in order to help our clients contribute to the improvement of environmental management and thus benefit society in general.’ Globalization has enabled joined investment incentives with partnerships for sustainable development. These incentives are for off-shoring and outsourcing investments and governments providing these services are contesting for the same. A nation’s government may for example meet the graduates wages and recruitment costs in their first year or certain years of the employment in that area. Another country like India has encouraged investment in the private sector to meet the IT skilled professionals by deregulating the higher education sector. Tax breaks on capital investment for outsourcing sites are provided by Mexico and Senegal. There is more opportunity in coupled investments with private and public partnerships on social sustainability aspects, export zone design, e-waste and energy efficiency. Globalization has played a big role in the changing the way people think about the environment. Today many view environmental problems as a global concern and not just the interest of a country; atmosphere and ocean are protected from pollution. The environment is seen as the common living place of all human beings and all the environmental problems become a global subject as international efforts are increasingly put in to solve these problems in order to avoid effects across the border. Public international and non-governmental private organizations continuously seek solutions to these environmental difficulties by harmonizing the governmental policies on the protection of the environment. These organizations are World watch Institute, Greenpeace, and United Nations Environmental Program. There has been a proposition of World Environmental Organization to assist in international environmental policies creation. The current globalization trends promote interdependence among countries which cultivates the environmental international reforms. With this environmental responsibility goals are harmoniously achieved worldwide (IFD 2010). However, globalization has caused dangers such as global warming and economic damages resulting from minimizing regulations of natural resources. In order to protect the environment from the adverse effects a country establishes environmental regulations that are to be observed within its borders. These regulations bring a drag in the short-term economic growth due to disruption of industries and higher costs as they adjust to the regulations, and thus harming their competitive positions (Esty & Ivanova 2001). According to IFD (2010), the policies by IMF and World Bank organizations threaten the economic and political freedom of developing countries and produce ecological effects that are disastrous worldwide. These organizations have failed in committing themselves in the ecological preservation and their efforts in instituting environmental preservation program in future cannot be trusted. According to Panayotou (2000), globalization contributes to the growth of the economy and thus affects the environment. It leads to the increase in structural change which affects the structure of the countries’ industry, increasing the use of resources and level of pollution. Depending on the characteristics of environment to the technology or capital in existence, it may deteriorate or improve as capital and technology is diffused by globalization. Globalization transfers and widens market failures and distortion of policies that may spread environmental damage. Though it improves economic growth prospects worldwide and leads to increase in global overall output, it sometimes reduces individual countries’ economic prospects. The marginalization of people and some economies may lead to poverty, depletion of resources and degradation of environment. Liberalization of trade and the results it brought; free trade, manifest globalization and channels through which it impacts of the natural environment quality and natural environment. According to Najam, Runnalls & Mark (2007), globalization of economies has created opportunities for many but placed pressures on the natural resources and global environment, straining the environmental capacity to sustain itself and exposing the dependence of people on the environment. It has also produced externalities that are global, thus enhancing inequalities globally. More people are becoming involved in the integration process of knowledge as economies open up. Market connections depend on the flow of information as well as technology, culture and ideology. Technology has solved many old problems but it has also caused new ones. Technology to help protect the environment can go across the border but the same can happen to technologies that can destroy the environment. Just like it is easy for information to connect people in terms of outsourcing and social movements, they become a threat to local social and economic networks. Both environmentalism and consumerism have become global. In globalization governance, globalization makes it difficult for countries to rely on the regulations (national) to ensure that their citizens are well taken care off as well as the environment. As the environment has already become global there are watersheds and life-sustaining ecosystems crossing the borders, movement of air pollution across the borders and oceans and an atmosphere that is shared to provide climate protection from all. It calls for global coordination or regional governance to respond to environmental issues. Environment is linked to the development of economic development by providing natural resources that support growth and ecosystems that support livelihoods and life. This forces a growing demand to have global regulation in order to agree and build synergies in order to improve the performance of the environment (Najam, Runnalls & Mark 2007) According to Share the World Resources (2006), global relationships between North and South constitute of a big problem that needs serious action by all nations and the people. Social and economic policy framework has been sought for many years to engender fast economic growth among countries and people as well as ensure sustainable development globally. There has also been ways sought to alleviate or eradicate poverty from the earth, which will fill the gap between the rich and the poor countries and the existences of North and South imbalances. The Helsinki Process on Globalization and Democracy aims to make the world a prosperous, happy and equitable place. Competing ideologies and trading interests geared the war that destroyed the world. Global trade then emerging brought economic growth to the world and then later backed up the revolution of information and technology brought about by globalization. However, the economic and development growth has not been shared evenly neither has the distribution of costs among the nations. Disparities have been created between North and South where the South benefits very little while the North benefits much. This is because the South is being marginalized and excluded from participating in the economic opportunities that area being unfolded. This is to say, globalization has caused imbalances and disparities between the South and the North. International trade arrangements and rules have taken part in marginalizing and excluding the South. Sub-Saharan Africa is accounted for only 2% (Bardhan, P. 2004) of world trade despite having a growing manufacturing sector and rich in minerals, natural resources and agriculture. The North has manipulated the prices of the commodity bringing the affairs to its sad state. Frustrations have been bread by the resentment in the South which feels that the North with its arrogance and impunity is powerful than them. This situation doesn’t provide a favorable foundation for peace or development of international community. If any member from the South speaks up to defend their interest, they are told to be either for or against them. Unless the South speaks up through the United Nations legitimacy, they will be subjected to Northern dictatorship through economic and political power (Bardhan, P. 2004). Global institutions, global systems and structures in the globalization era, has provided Northern countries with powerful control to pursue their own interests. This is why Southern countries experience intrusion in national policy, governance and sovereignty and this is a threat to their sustainable development; the same sentiments are shared by the developing countries. International trade and capital flows that come as a result of globalization contribute to lasting economic development, providing a firm foundation for attaining and maintaining social and environmental goals. When environmental social, trade and investment policies are jointly supportive, the contribution of each of them to sustainable development is enhanced. All the countries worldwide should make it a point to reinforce this unity, both domestically and on the global arena. In order to grow in a manner that is socially and environmentally sustainable, developing countries have to access the global markets and active support from the developed countries that trade in the same markets. It is suggested that all the countries should continue to reconcile trade and investment elements in the global economy with the bigger objective of attaining sustainable development. Conclusion Globalization is seen as the principle vehicle for economic growth and wealth generation and providing sustainable development. The integration of ecomies has made it more competitive for nations. Te interdependence and interaction among nations has been increased allowing sharing of values and cultures. There is a high record today of world wealth creation as investment across the border shores takes place. Howevr, it is evident that as globalizations brings ways to solve the environmental problems, it creates new problems as witnessed in the loss of natural resources. References Adil Najam, David Runnalls and Mark Halle. 2007. Environment and Globalization Five Propositions. International Institute for Sustainable Development. Viewed on April 15, 2010 from http://www.iisd.org/pdf/2007/trade_environment_globalization.pdf Bardhan, P. 2004. The Impact of Globalization on the Poor. University of California at Berkeley BREAD Policy Paper No. 003 July 2004. Viewed on April 15, 2010 from http://ipl.econ.duke.edu/bread/papers/policy/p003.pdf Esty & Ivanova 2001. Campaign for a global environmental organisation: A French perspective. Yale Environmental Law and Policy; New Haven, CT. Esty, D.C. and M.H. Ivanova, 2001. Marking international environmental efforts work: The case for a global environmental organisation. Yale Center for Environmental Law and Policy. Rio De Janeiro IFD, 2010. Globalization at work Trade Council of Denmark Strategy towards 2010. London; Earthscan Publications Oshani, P. 2007. Poverty alleviation, environmental protection, terms of trade, north-south relations, International Institute for Sustainable Development Panayotou, P. (2000). Globalization and Environment. CID Working paper No. 53 Pearce, D. and E.B. Barbier. 2005. Blueprint for a sustainable economy. London: Earthscan Publications Rangarajan, Dr. C., 2006. Economic Advisory Council to the Prime Minister. New Delhi Share The World Resources (2006). International trade and core labour standards. London The Tata Consulting Services, 2007. Sustainability Report. India: Burma Victoria Capital Management. 2007. Global Financial Markets Perspective Fourth Quarter 2006 Globalization and Wealth Creation. Viewed on April 13, 2010 http://www.victoriacapitalus.com/review-outlook/VCM%20Perspective%20Q4-06.pdf World Bank. 2008. The Economic appraisal of environmental projects and policies: A practical Guide. Paris. OECD World Council of Churches. 2010. Poverty, wealth and ecology: impact of economic globalization. Viewed on April 15, 2010 from http://www.oikoumene.org/gr/programmes/public-witness-addressing-power-affirming-peace/poverty-wealth-and-ecology.html Read More