Globalisation Leads to Inequality - Report Example

GLOBALISATION LEADS TO INEQUALITY INTRODUCTION Globalisation is the relationship and the spread across the world of production, technologies and communication. This distribution around the globe is engaging the interweaving of cultural and economic activities.  Globalisation combines civilisation, humanities and economies through transportation, information exchange and commerce. With the advent of globalisation, there is an increasingly global connections of societies, majority of the people and trade and industry activities. Among the advantages of globalisation are trade and cultural exchange, This is leading to economic growth and investments expansions, migration and transfer of technology. Globalisation benefit some countries, firms or individuals but not all. Inequality is said to be happening as felt and claimed by some. Hence, this paper discusses and explores the relationships of globalisation and inequality. BACKROUND, KEY CONCEPTS AND THESIS STATEMENTS Historical and Current Background Information The key essay question is if I agree that globalisation leads to inequality. The start of globalisation can be traced back in the year 1295 when Marco Polo returned to Venice. He came from his journey in China. He brought with him stories about the wealth of the Orient, jewels and silk. His travels there rekindle interest in trade between the East and Europe which has been dormant for so long. As a word, globalisation appeared since 1960s. And nowadays, globalisation has left the world economically polarised between impoverished countries and nations that enjoy vast wealth. Since globalisation is a tool of capitalism, it necessitates inequalities. It has been noticed also that globalisation serves to limit the dominance of any one country alone inernationally. Poverty-stricken countries are exploited in the current globalised society. In several instances, incomes and earnings inequality is associated with liberalised trade and capital flows. Some countries observed that together with the increases in trade liberalisation and capital flows. Both wage inequality and skill premiums increases too. Definition of Key Concepts in the Essay Question The phenomenon globalisation, which is also called brobalisation, refers to a process consisting of economic, cultural, technological and political dimensions that interconnect governments, firms and individuals across national borders. In the earlier times, globalisation was regarded as a way of running financial markets or a way of doing business. But later on, it has become a process. Globalisation is a socio-economic term that means global relationships of economic and technological activities, culture and people. It pertains with the economic development of a country. Globalisation is the process of extending to all or other or parts of the globe through increasing the connectivity and interdependence of international businesses and markets. However, it is believed to cause inequality. According to the World Bank, inequality is the disproportion of the standard of living and income among the people and among countries. Globalisation may enhance or alleviate poverty. Poverty does not only mean material deprivation. According to the United Nation, poverty is the interplay of illiteracy, early death, malnutrition among children, poor health care, vulnerability to famine or flooding, poor access to safe water, lack of sanitation, a diet poor in nutrients, the absence of education and exposure to disease. Thesis Statement The thesis statement is that "Globalisation leads to inequality, however, this is true to some extent only". I agree that globalisation may contribute to aggravation or reduction of inequality. I do not fully agree that it is greatly or significantly contribuing to inequality. INEQUALITY AND GLOBALISATION Several studies are pointing that as a result of globalisation, inequality is being observed within countries. These researches are showing evidences that globalisation may generate pressures that could result to enhanced inequality in some parts of the globe . The scientific study of Borraz and Lopez-Cordova (2007, p. 8) showed that globalization has not raised income inequality in Mexico. Through household survey data, these researchers measured the variations in income inequality. They have related them to regional differences in the degree of globalization. Globalisation may impact on the quality of life. Sri Lanka have low income (Pal, 2009, p.98) but its quality of life is good. This is in terms of high life expectancy, low mortality rates, high literacy rates and low population growth rate. The country achieved this good quality of life through its social welfare system. They have installed and established the system since 1940s. Another good example is the case of Cuba. The income of most Cubans have stagnated due to limited trading opportunities. This limitation is a result of the United States boycott. Another reason for this is the cessation of Soviet support to this country. However, Cuba has improved its qualiy of life. This is evident by its education and healthcare systems. That is, social benefits that are being provided by the government to its people help enhance the quality of life in the country. In the Norhern countries, globalisation generates an inequality–unemployment tradeoff (Hellier & Chusseau, 2010, p. 1029). These countries are initially inequality-oriented. Unlike an egalitarian country which can easily avert this inequality–unemployment tradeoff. Egalitarian countries do it by increasing its relative endowment of skilled workers. Globalisation is said to be consequently causing an increasing tide of income. However, It is not the sole cause of income inequality. Worldwide, inequality in income generation has been widening and augmenting a result of interplay of several factors. Every goverment has roles to play that contribute to income inequality, like for instance domestic political institutionalisation and global governance. Globalisation provides new opportunities being made available to people. It has also been observed, however, to widen the gap between poor and rich countries. Some are claiming that inequality within many counries is increasing. Globalisation's reported effects on many countries is said to be escalating. The pressures that globalisation is effecting tend to heighten inequality. The different pressures have to be idenified and analysed. How these pressures operate in the increasingly integrated global economy affects global competitiveness. The global economy is a potentially powerful instrument that boost welfare and health. In order to support the global economy, there is a need to obtain adequate and stable global policy. Hence, the need to reform and strengthen the rules, customs and institution. In order to achieve this, the people have to complement the global market with collective management of the problems. Among these problems is the unjust and persisent inequality. This inequality cannot be resolved alone by the markets. Financial integration economic openness and trade policies, to poverty and income inequality, show various results. Some studies prove that globalization helps the poor whereas others claim the opposite. This is specially true in nations where the adoption of globalisation coincided with boosting their technological advancements (Nascia & Pianta, 2009, p. 332). Most of the supporters of anti-globalization movement are insisting on the ill effects of globalisation including what globalisation critics are referring to as dramatically increasing inequality between and within nations. Politticians opined that the underprivileged must invest on education. This, they claim, will make them take advantage of globalisation. Globalisation, they said, has marginalised the underprivileged in most developing countries. They also claimed that globalisation has left behind the poor nations. The abovementioned occurences, however, cannot be the basis of equating globalisation with inequality. In the research by Zhou, et al. (2011, p. 9), globalisation is found to help reduce income distribution inequality within countries. CONCLUSION While it is true that globalisation may lead to poverty, however, there can be several causes of poverty, or inequality for that matter. Among these factors are political, economic and social factors. Globalisation is just one of these causes, not the major cause. Inequality may enhance with the absence of increase in poverty rates. One good aspect of globalisation is that it may lead to poverty reduction. Still another advantage of globalisation is that it may lower income inequality. Still another good side of globalisation is that it may lead to growth economically and technologically. That is, countries that are engaging in trade internationally are able to enhance their rate of growth faster than those not engaging in international trading and communication. International trade has several beneficial impacts on countries as a result of these countries' willingness to open their society and their policy changes. On the contrary, countries that refuse to be part of the international trade chose not to grow. Nations that are refusing trade relationships with other nations are limiting their potential for development. It is said that the incomes of those countries that are least globalized have been stagnant over some years already. For some, their incomes have declined. Among these countries are Iran, North Korea and Pakistan. Comprehensive analysis revealed that based from most studies and researches conducted in the past showed that the impact of globalisation on earnings and income inequality has been negligible. This is specially true in less developed countries. It is also evident that inequality is felt mostly by those countries which have initially inequality even before the advent of globalisation. Inequality occurs as a result of interplay of several factors. Globalisation may have contributed to inequality, but not on a serious and significant level. REFERENCES Borraz, Fernando and Lopez-Cordova, Jose Ernesto. Has Globalization Deepened Income Inequality in Mexico? Global Economy Journal, Issue 1, Article 6. Berkeley: The Berkeley Electronic Press, 2007, p. 8. Clapp, Jennifer and Wilkinson, Rorden. (eds.). Global Governance, Poverty and Inequality. London: Routledge. 2010, p. 22 Hellier, Joël and Chusseau, Nathalie. Globalization and the Inequality-Unemployment Tradeoff. Review of International Economics, 18(5), p. 1029, Paris: Blackwell Publishing Ltd. 2010. Nascia, Leopoldo and Pianta, Mario. Inequality - Origins, Impact and Policies. Intereconomics, November/December 2009, p. 332. Italy: Springer Science & Business Media B.V. Pal, Gopal Krishna. Growth, Inequality and Poverty in China. Chapter 5 in China in the World Economy. Wu, Zhongmin (ed.). Oxon: Routledge Taylor & Francis Group. 2009, p. 98. Zhou, Lei, Biswas, Basudeb, Bowles, Tyler and Saunders, Peter J. Impact of Globalization on Income Distribution Inequality in 60 Countries. Berkeley: Berkeley Electronic Press, 2011, p. 9. Read More