Globalisation Forcing Social Change - Essay Example

Globalization and Social Change Introduction Globalization has brought many social, political and economical changes in the world. Because of the wide canvass, globalization has been defined in many ways by different thinkers and authors. Some of them perceived it as the total integration of the global culture under one umbrella. In other words globalization policies were intended for decreasing the gap between; rich and poor, different religious beliefs, different political and social ideologies etc. According to some other scholars, globalization helps poor countries to mobilize their resources more effectively with the cooperation from rich countries. It is a fact that even in poor countries; immense resources are available which are unused because of lack of technology or infrastructure facilities. Such countries can seek the help of advanced countries to mobilize their resources more effectively. According to Lauder et al (2006), many people tempted to think that globalization is the process of transportation of jobs, ethnic and cultural composition of nations etc from one country to another (Lauder et al, p.32). Many countries have opened up their economies more. For example, it is easy for an American or British company to establish its subsidiaries in India or China and vice versa. Same way it is possible for Indians or Pakistanis to get work permits in America or UK easily. Moreover, the trades between countries were increased a lot because of globalization. In any case it is an accepted fact that globalization has brought many changes in political, cultural and economical circles in the world. This paper briefly analyses the global social changes with respect to economy, happening in at present because of globalization. Global economic changes because of globalization Holst (2007) has mentioned that economic interpretations of globalization centered around three forms of capital; financial, productive and commercial (Holst). In fact globalization has opened many opportunities in the financial, productive and commercial sectors. It is possible for a Mexican or Indian company to invest in the American share market at present because of globalization. Same way the exchange of manpower between countries resulted in mutual benefits. International trade has been increased a lot after the introduction of globalization. In fact America and UK like capitalist markets were conquered by the cheap Chinese products at present. It is impossible for China like bulk production oriented countries to sell their products internally alone. Mexico is another example to learn more about how well a country can exploit the opportunities provided by globalization for economic growth Mexico was a very weak exporter at the beginning of the 1980s. At the present time, Mexico has become the eighth exporting country in the world and the first in Latin America. Exports have grown steadily; in 1981 there were a mere 6.5%, in 1990 they were already 27%, in 1996 they were an impressive 66%. Manufactured goods represented 33.8% and in 1993, they already represented 71.9% in 1993. Productivity has increased very significantly since the opening of the Mexican economy, while at the beginning of the eighties it was decreasing at a rate of 0.7% and 0.8%, in 1982 and 1983 respectively, in 1987, 88, 89 it started growing at rates of 2.5, 3.2 and 4.1%, and at the end of the nineties it was reaching rates of 9.0, 2.7, 8.7% in 1994, 1995 and 1997 respectively (Bizberg, p.16-17) According to William I Robinson (2003), one of the distinctive features of globalization is the rise of transnational capital (Robinson p.12). In most of the capitalist countries like US and UK, big companies are almost in a saturated state. In other words, the scope for further developments is less for big companies in US or UK. For example, Starbucks engaged in coffee business in America and they have coffee shops literally in every corner of America. It is almost impossible for them to grow further in American market. Globalization has opened many opportunities in international market to Starbucks like big companies and they accepted it with both hands. According to MARIKO SANCHANTA’s article, Starbucks Plans Major China Expansion, published in The Wall Street Journal dated APRIL 13, 2010, Starbucks is planning major expansion in China and Japan like countries (SANCHANTA). On the other hand, China and India like countries which are eager to exploit the globalization opportunities, accepting the foreign capital with both hands now. Even though China had certain concerns about globalization and privatization earlier, now they seem to be the number one exploiter of globalization. The communist regime earlier looked suspiciously at globalization as they thought that the westerners had some hidden agenda in spreading globalization across the world. According to Hersh & Schmidt (2000), China like socialist countries perceived globalization as the continuation of capitalism (Hersh & Schmidt p.3). They thought globalization was intended for the exploitation of the wealth of the developing or underdeveloped countries by the developed countries. Now such apprehensions were evaporated and China opened their economy widely to attract foreign capital. They have realized that it is impossible for a country to develop properly only through the exploitation of the internal resources alone. Perrons (2004) has argued that because of globalization, people and place are increasingly interlinked through the organization of work, the flow of goods and services and the exchange of ideas (Perrons, p.1). Outsourcing of work is one of the major outcomes of globalization. America and Britain like countries have many opportunities for the professionals and they are facing shortage of skilled manpower there. On the other hand, India and China like countries have immense skilled manpower, but they are facing shortage of opportunities. Outsourcing helped America and Britain like countries to exploit the cheap labor markets in India and China like countries. A task worth $5000 in America can be completed in India for around $ 3000. On the other hand for the same task, Indian companies may offer only $ 2000 for the professionals. In other words, in the above deal of outsourcing, Americans saved $ 2000 whereas the Indian professional got $ 1000 in excess apart from getting an employment opportunity. In short, outsourcing of jobs is beneficial both to the service takers and the service providers. America was able to exploit the Indian expertise whereas India was able to collect some foreign capital through outsourcing. According to Dharam Ghai (1997), free market and private enterprise were the principal mechanisms for promoting economic activities in the sphere of economic globalization (Ghai 1997, p.1). Earlier most of the countries were not allowed the intrusion of foreign institutions or organizations in their soil because of the fear of problems such organizations may cause to the growth of their national economy. Before globalization, many countries thought that foreign companies may exploit their resources and hence entries to such companies were restricted. But now most of the countries are thinking deeply to formulate strategies to attract foreign companies and foreign direct investments. They have realized that it is impossible for a country to develop properly using the public organizations alone. In other words, private capital or foreign capital is essential for a country’s economic growth and hence most of the countries were liberalized their rules to welcome foreign capitals. Free markets and Special Economic Zones (SEZ) were thus came into exist. Mexico promoted the development of Export Processing Zones (EPZs) for economic and political reasons. The government of Mexico used the EPZ model to attract the foreign direct investment necessary to build those facilities. Mexico benefits from their proximity to the US. Mexico is the only developing country with a land border with the US. This is Mexico’s primary competitive advantage and the primary reason why export-oriented investment has continued despite lower labor costs in Asia and other parts of Latin America (Curtis, Hill, and Lin, p.16) Some people argue that poverty is still prevailing not only in underdeveloped countries but even in some of the developed countries as well even though globalization policies were implemented in these countries. We should remember that it is difficult to eradicate poverty over a night. The reasons of poverty are far deeper than the one we know and in order to eradicate poverty from the grass root level more comprehensive policies and approaches were needed. At the same time we can safely say that the current economic conditions or climates of the countries which embraced globalization was superior to the ones who failed to embrace it. According to Dreher (2003), those countries with the lowest growth rates are those who did not globalize. Countries like Rwanda or Zimbabwe insulated themselves from the world economy. They have poor institutions which repress growth and promote poverty (Dreher p.15). Proper infrastructure and other resources are needed to utilize globalization for economic growth. Underdeveloped countries are still struggling because they don’t have enough skilled manpower or infrastructures to exploit the globalization properly. On the other hand, developing countries like India were capable of exploiting the possibilities of globalization to their maximum advantages because of the huge manpower resources and infrastructure facilities available to them. Earlier many economic Gurus were of the opinion that huge population is a big problem for economic growth. But China and India have proved them wrong. The number one and number two countries in the world with respect to population were the most successful countries as far as the exploitation of globalization is concerned. Earlier the global wealth was concentrated heavily in the capitalist countries like United States, United Kingdom etc. In other words, instead of China or India like heavily populated countries, too much wealth were concentrated in the under populated countries. But globalization has brought many changes in the global wealth distribution. Now the heavily populated countries like India and China got more wealth; thanks to globalization policies. Even the recent global financial crisis has not affected these countries very much even though some of the richest countries struggled to overcome it. In short, globalization has brought many social changes in the world and the changes in wealth distribution seem to be the most critical one. Conclusions Globalization has brought many economical, political and social changes in the world among these three economic changes seem to be the vital one. Free trade or free market, special economic zones (SEZ), export processing zones (EPZ) etc are some of the new terms brought to the world by globalization. Many countries including developing and underdeveloped were able to achieve substantial economic growth because of globalization. The global wealth distribution after the introduction of globalization seems to be more justifying than the one before the introduction of globalization. In short, globalization principles are not good on paper alone; it is good in practice as well if the right strategies were taken by a country at the right time for their economic growth. Works Cited 1. Bizberg, Ilán. “Globalization and Democracy in Mexico”. Accessed on 8 July 2010 from 2. Curtis Tyler, Hill Shannon and Lin Chih Chia. 2006. “Special Economic Zones (SEZs): Chinese, Russian, and Latin American Cases and the Use of SEZs as an Economic Development Tool” Accessed on 8 July 2010 from 3. Dreher, Axel. 2003. “Does Globalization Affect Growth?”. Accessed on 8 July 2010 from 4. Ghai, Dharam. 1997. “ECONOMIC GLOBALIZATION, INSTITUTIONAL CHANGE AND HUMAN SECURITY”. Accessed on 8 July 2010 from 5. Hersh, Jacques & Schmidt,Johannes Dragsbaek. 2000. “Globalization and Social Change”. Publisher: Routledg. 2000 6. Holst, John D. 2007. “The Politics and Economics of Globalization and Social Change in Radical Adult Education: A Critical Review of Recent Literature”. Journal for Critical Education Policy Studies Volume 5, Number 1 (May 2007) 7. Lauder, Hugh Brown, Phillip, Dillabough, Jo-Anne & Halsey A. H. 2006. “Education, Globalization and Social Change” Publisher: Oxford University Press, USA (September 7, 2006) 8. Perrons, Diane. 2004. “Globalization and Social Change: People and Places in a Divided World” Publisher: Routledge; 1 edition (May 20, 2004) 9. Robinson, William I. 2003. “Transnational Conflicts”. Publisher: Verso, Meard Street. London 10. SANCHANTA, MARIKO. 2010. “Starbucks Plans Major China Expansion”.The Wall Street Journal, APRIL 13, 2010. Accessed on 8 July 2010 from Read More