The Impact of Globalization on Global Sustainable Development - Example

GLOBAL ECONOMY By Student’s Name Code + Course Name Professor’s Name University/College Name City, State Date Introduction The global economy is the general economy of the world majorly concerned with the exchange of services and goods on an international scale. This economy is greatly influenced by a variety of factors, with the major factors being globalization, internationalization, and neoliberalism. Due to the current pace of technology, especially information technology (IT), the world has been transformed into a global village with different nations interacting with each other in a way that guarantees mutual benefit in terms of economic, social political, and environmental growth. The principal aim of such interactions is to ensure sustainable development on a global scale. In this case, sustainable development refers to any form of development that not only guarantees the well-being of the present generation, but also that of the future generations. Case in point, human wellbeing refers to meeting of the economic needs of individuals, their aspirations for healthy and clean environment, and their social development preferences. As such, sustainable development entails three components that include economic, environmental, and social. Globalization, internationalization, and neoliberalism have different effects on sustainable development, with some of the effects being positive to sustainable development while others being negative and thus derailing sustainable development. The Impact of Globalization on Global Sustainable Development Globalization is the process through which the various production process, business decisions, and markets of an organization or a country show more international characteristics as compared to the national characteristics. As such, it involves a variety of structural underlying reforms including public-private interface, changed consumption patterns, business organization, and technology advancement (Stiglitz, 2007, p. 120). It involves both exogenous and endogenous elements. Case in point, exogenous factors that influence globalization may be out of reach of the government and thus inhibit their control over the process, while endogenous factors involve the decisions and policies of government that can be well designed and implemented to control the process of globalization, including investment and trade liberalization. Globalization has an astounding effect on global sustainable development in terms of the social, economic, and environmental aspects in line with the liberalization of investments and trade. Economic Impact Trade and investment on a global scale has a positive impact on competition and economic growth. As such, this directly contributes to the reduction of poverty and promotes opportunities for long-term development in developing countries. In addition, through technology, development and diffusion of technology is stimulated, and various structural changes that are essential for making efficient utilization of environmental and natural resources are promoted (Stiglitz 2002, p. 93). This improves the lives of the citizens of different countries especially from the third world, through reduction of prices on commodities as they are locally produced; increased diversity of the products; and increased purchasing power due to a rise in their wages as they are exposed more to job opportunities from both the local and multinational enterprises. As such, it has remained in the power of governments to promote investment and open trade policies that would promote contact with the rest of the globe and facilitate an increase in the economic growth rates as they would attract an increased portion of direct investment from foreign countries. Globalization and the promotion of open investment and trade has not benefited most developing countries. These countries have fallen prey of the already developed countries that target their resources and exploit their labor markets taking advantage of the poor people through purchasing cheap labor from them (Stiglitz 2007, p. 122). The returns received by these companies from countries due to such exploitation are directed back home, leaving the poor countries poor. As such, it is not enough to employ the openness of markets in promoting economic growth. Instead, it is important for different governments also to develop well-reasoned macro-economic policies and to promote social and institutional stability in order to foster economic growth. Social Impact Globalization, through the liberalization of trade and investments, has had significant effects on the social framework of the global society as a result of two effects, including effects on the equal distribution of income and labor market effects (Stiglitz 2002, p. 93). As much as foreign organizations create opportunities for employment in their countries of operations, there are various concerns on the quality of the employment especially in developing countries. In such developing countries with young economies, the governments compete in attracting more foreign direct investment, placing laws that protect the laborers through establishment and maintenance of labor standards at jeopardy. In addition, the decisions of investment location are not determined by major labor standards in most countries, an aspect that facilitates long-term unproductivity of government policy competition within the major labor standards (Stiglitz 2007, p. 120). On the contrary, the implementation of trade measures that emphasize respect for major labor standards may be less effective. For instance, restrictions on child labor in some contexts may move the economic condition of certain households from worse to worst and thus affect other aspects of the lives of the same children. As much as banning importation of goods that were developed through child labor may have a positive impact on the mitigation of the practice within the export industries, it is important to note that the same child labor may only be displaced to the economic sectors that are more informal. As such, developed countries may focus on introducing subsidies that will promote attendance at schools by children in developing countries instead of fostering trade interventions (Stiglitz 2007, p. 125). The distribution of income and poverty are other social areas that have also been affected by globalization. Through the spread of open investment and trade, individuals have been exposed to employment opportunities and thus they have been able to establish sources of income through seeking employment (Stiglitz 2002, p. 95). This has had an astounding effect on the reduction of poverty globally. However, there is still a large number of individuals especially within the developing countries who live in extreme poverty with significant variations based on the regions being exhibited. Nevertheless, it is not appropriate to relate the increasing level of poverty within developing countries with an increase in globalization. Environmental Impact Globalization has also impacted on the sustainability of the environment globally as a result of the consumption and production activities reallocation, economic output expansion, and stimulation of the development and diffusion of technology. Most of the effects of globalization on the environment have been negative, with pressure piling on the environment with every increase in the economic activity scale (Stiglitz 2007, p. 124). Countries that have poor environmental policies, or countries where such policies are not well enforced have the environmental quality at risk at risk due to such pressure. In such cases, the liberalization of the economy may magnify the weaknesses existing within the environmental policies. Nevertheless, a proper combination of investment and trade liberalization and strong environmental regulatory frameworks has had a positive impact on the conditions of the environment in the involved countries (Stiglitz 2002, p. 95). Case in point, apart from protecting the environment against scale effects that are negative, proper environmental policies also facilitate positive structural effects such as proper management and utilization of natural resources within the environment. In addition, such policies also promote positive effects of technology including a wide diffusion of technologies that are friendly to the environment. Moreover, proper environmental policies have an impact on economic growth. As such, by channeling the cost of environmental repair and maintenance to other developmental projects, the growth of the economy is facilitated. In addition, proper maintenance of the ecosystem through good policies ensures that a diversity of wild plants and animals are conserved and hence promotes tourism, which has a direct impact on the GDP of a country (Stiglitz 2007, p. 132). The Impact of Internationalization on Global Sustainable Development International regions involve limited numbers of nations that are connected by their geographical relationships and also by their level of interdependence. The development of the global village has significantly contributed towards the internationalization of various factors within the society in order to create a collective global community in which individuals from different nations can interact and share in different aspects that would contribute to sustainable development. Such aspect may affect the social, economic, and environmental contexts of the internationalized countries. Economic Impact Internationalization promotes a linkage of economic activities that have been geographically dispersed thus promoting interdependence of production activities and markets across different nations (Sartre & Taravella 2009, p. 408). Internationalization of both services and production process coupled with the increase in technology, especially IT, have provided the developing countries with both challenges and opportunities. Most developing countries have been able to develop new exports as a result of linkage of such products with various needs or complimentary products in other countries within the international region. This has promoted economic growth of such countries as a result of earning foreign exchange through such exports and the establishment of companies that create employment for individuals. In addition, such developing countries have been able to attract foreign investment in response to their vast resources that require exploitation. Moreover, the international environment has promoted migration of individuals from one nation to another in seeking labor with nations becoming importers and exporters of labor, an aspect that has contributed to an increase in earned foreign exchange and promotion of economic growth. However, one of the challenges faced by developing countries in the face of internationalization is poorly designed environments for regulation of both production and service industries (Sartre & Taravella 2009, p. 410). As such, the accessibility of the products or services generated in form of new exports remains minimal as the regulations in the international markets limit competition especially with local organizations, and thus minimize the economic productivity of any developed exports. This in turn reduces the economic growth of some countries, especially from the third world. Social Impact Internationalization, in addition, has enhanced the development of cross-cultural capability between different nations. This has further promoted communication between the various nations with different cultural backgrounds and hence promoted economic interactions between such nations (Ahmad 2012, p. 85). In addition, the level of tolerance and respect among people of different nations has been promoted by internationalization, with improved commitment among nations to human security, international solidarity, and creating a peaceful global climate. This has in turn reduced international political crises with most countries upholding peace and reducing instances and impacts of war. The internationalization of the education sector has also contributed tremendously to promoting proper communication of an individual’s subject across different races and cultures, an aspect that has expanded the labor market among nations, exposing organizations to high value employees from different nations, who contribute positively to the growth and the cultural diversity of the organization while exposing citizens to employment opportunities across borders with increased incentives and positive cultural interactions (Ahmad 2012, p. 84). In the current globalized world, such an international approach to education imparts students the appropriate values, knowledge and skills required to fit in the global world. It is important to note that the laborers who migrate to foreign nations for work purposes not only benefit their countries of origin with financial returns in terms of taxes and support for their families but they also return with new technologies and organizational cultures that are more effective in promoting development through changing the approaches to sustainability within organizations. For instance, an organization may borrow customer-focused approaches in its operations from an organization in a different nation, which may prove to be more efficient in the former's context. Environmental Impact Internationalization has also developed a focus on the environmental issues affecting multiple countries with the aim of improving biodiversity and preventing environmental degradation. Different nations have been forced to succumb to the international pressure concerning response to climatic changes through establishing of various environmental conservation policies, such as policies regarding the emission of greenhouse gases to the environment (Sartre & Taravella 2009, p. 410). In addition, the issue of biosafety has been emphasized in the international arena through establishment of foreign policies that regulate trading of living modified organisms (LMOs). Various conventions have been held between nations to discuss trade issue in relation to their impact on the environment in order to determine activities that put pressure on environmental sustainability and establish mechanisms to solve them. Various issues concerning Genetically Modified Foods (GMOs) have also bee raised among nations, leading to organization of a series of summits between nations to handle the issue and embracement of environmental friendly technologies that have facilitated further research and investment in GMOs. These crops have been modified genetically to promote increase in growth, to assist in dealing with various problems related to human health, and to be immune to disease and pests (Sartre & Taravella 2009, p. 411). However, as much as such development in the GMOs have advantages, various concerns have been raised concerning their impact on the environment. Through genetic modifications of crops, it is without doubt that highly resistant weeds and bugs may also develop an aspect that may completely change the ecosystem in the long-run. This is a major problem as the international environment has not developed much scientific research into such fears, an aspect that exposes the ecosystem to a danger of experiencing irreversible alterations before the impact is well identified. As much as the international response to such fears is through the ‘precautionary principle’, which emphasizes the need to promote prevention in the case of uncertainties, most organizations and countries that depend on trade do not support implementation of pre-emptive policies with the view that such policies may harm them and their businesses in an unfair way (Sartre & Taravella 2009, p. 411). In addition, they believe that such policies may encourage protectionists to develop other policies that may not be preventing harm, in the name of precautionary principle. The Impact of Neoliberalism on Global Sustainable Development Neoliberalism has dominated the agenda of development in most of the developing countries, with the driving forces being social inequality, market reforms, and enhancement of the economy’s supply and economic competitiveness. As such, most of the developing countries have left the identification of environmental and socio-economic development solutions to free-market mechanisms including deregulation, marketization, commodification, and privatization of natural resources including forest resources and biodiversity (Ahlers 2010, p. 215). Unfortunately, it is evident that the neoliberal economic regime in the modern society and the structural changes that accompany it operate in a way that is counteractive of what is expected to ensure sustainable development. Various policies that are neoliberal oriented including privatization and the minimalist state interventions have significantly affected social development and the environment in a negative way, an aspect that poses a further threat to the achievement of sustainable development. Economic Impact Neoliberalism is deep within developing countries, compromising the immunity of such countries from their influences. As much as neoliberals maintain that though through market-oriented strategies, competition, efficiency, and economic stabilization have been promoted, empirical studies show otherwise. According to Harvey (2007), instead of creating a basis for competition, market strategies enhance monopoly power (Harvey 2007, p. 155). For instance, in Mexico, such market mechanisms promote state-based monopoly in utility services supply. In addition, monopoly consolidation is evidently increasing in the privatization and corporatization of water services in South Africa by a handful of private organizations. On the other hand, various countries across the globe have also experienced an increase in corruption as a result of neoliberalism. Therefore, market-based strategies take the power of regulation from the state, creating room for corruption to thrive (Ahlers 2010, p. 215). Hence, it is clear that neoliberal policies have been less effective in developing countries with regards to promoting market efficiency. Social Impact Neoliberalism's social base is majorly embedded in the capital owning and professional groups in the relatively narrow, privileged, urban-based sectors within developing countries (Harvey 2007, p. 156). The neoliberal regime has allowed such groups to reap economic benefits on short term basis through creation of wealth. However, the social base remains susceptible and limited to the rapidly changing global economic fortunes, with their contractions and fluctuations. The regime set by neoliberalism has also led to an increase in social protests that emanate particularly from rural areas as exhibited in some of the countries such as Ecuador, China, Brazil, Mexico, and other countries which have intensified demonstrations over the past few years. Environmental Impact It is evident that there is a positive correlation between the quality of the environment and economic growth. Liberalization clearly indicates this relationship with the emphasis that trade promotes environmental quality through economic growth, technological changes, and rising income (Harvey 2007, p. 156). Neoliberalism creates an uneven ground through allowing the rich to have a high ability and control of the market enabling them to control significant assets of water, land, and forests. In turn, the poor are driven away from such assets. There has been a surge in land and water sources grabbing in most developing countries, an aspect that compounds such inequality. In addition, there is unequal distribution of environmental costs, especially in developing countries, where burdens of water and air pollution, defoliated lands, and degraded soils have been largely left to rest on the shoulder of the poor individuals (Ahlers 2010, p. 216). However, it is important to note that neoliberalism has also shown a brighter side in relation to environmental conservation with the increased focus on environmental governance mechanisms, an approach referred to as ‘green neoliberalism'. Through this, governments have embarked on internationalization of private property rights and externalities that has allowed for the recognition of all the resources within the environment as economic goods. In turn, this has promoted environmental preservation through facilitating various initiatives such as Clean Development Mechanism (CDM), Reducing Emissions from Deforestation and Degradation (REDD) and Payment for Ecosystem Services (PES) (Harvey 2007, p. 160). Conclusion It is evident that capital flows and international trade contribute to sustainable development and economic growth and establish a firm foundation for the achievement of social and environmental goals. Globalization has exhibited both positive and adverse effects on sustainable growth. Through globalization, markets and investments have been opened, allowing developing countries to attract investors who create employment and help them to explore existing resources, an aspect that contributes to both the economic and social development. However, the impact of globalization on the environment has been seen to be rather wanting with economic activity increasing pressure on the environmental resources. On the contrary, internationalization has allowed countries to merge their efforts towards sustainable development by identifying and handling available problems in unison. However, efforts to ensure sustainable development have been limited by national policies that disregard international policies that tend to interfere with their exploitation of economic resources. Lastly, neoliberalism has been seen to be a major drawback to sustainable development as it has concentrated wealth among a small population throughout developing countries. This grants such population monopoly power to control economic growth that is closely tied to social and environmental growth. Nevertheless, through various initiatives, neoliberalism has also been able to promote environmental sustainability. References Ahlers, R 2010, Fixing and mixing: The politics of water privatization, Review of Radical Political Economics, vol 42, pp. 213-230. Ahmad, S 2012, Internationalization of higher education: A tool for sustainable development, OIDA International Journal of Sustainable Development, vol. 4, no. 12, pp. 79-90. Harvey, D 2007. A brief history of neoliberalism, Oxford University Press, Oxford Sartre, XA & Taravella, R 2009, National sovereignty vs. sustainable development lessons from the narrative on the internationalization of the Brazilian Amazon. Political Geography, vol. 28, no.7, pp. 406-415. Stiglitz, J 2002, Globalization and its discontents, Penguin, London. Stiglitz, J 2007, Making globalization work: The next steps to global justice, Penguin, London. Read More